In EEOC V. Kaplan Higher Education Corp., 13-2408 (2014), the Sixth Circuit rejected the Equal Employment Opportunity Commission's (EEOC) claim that Kaplan's use of credit reports discriminated against applicants because the credit reports had an adverse impact on African American applicants.
Kaplan offers graduate and undergraduate degrees. Some of Kaplan's students receive student aid through the Department of Education. Kaplan's employees have access to the student's financial information. After Kaplan discovered that some of its employees were stealing student checks and other irregularities involving the financial aid process, it instituted a pre-employment credit check for applicants to executive, accounting and financial aid positions.
Kaplan uses third party vendors to perform the credit checks. The credit report flags applicants who have filed for bankruptcy, child-support delinquency, garnishments of earnings, outstanding civil judgments over $2,000 and social security numbers that do not match the number the credit bureau has on file. If a credit report is flagged, Kaplan typically reviews the file and makes an individualized analysis on whether to move forward with the application. The vendor does not know the race of the applicants.