Obama Adminstration Sends Sharp Warning To Employers
December 22, 2010, 06:45 AM
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The NYT runs a long, mildly gloating article over the Washington Post's Kaplan unit being sued by the Obama Administration for disparate impact job discrimination in a precedent-setting case:
E.E.O.C. Sues Kaplan Over Hiring

By STEVEN GREENHOUSE

Sending a sharp warning to employers nationwide, the Equal Employment Opportunity Commission sued the Kaplan Higher Education Corporation on Tuesday, accusing it of discriminating against black job applicants through the way it uses credit histories in its hiring process.
With the unemployment rate close to 10 percent, is it really a good idea for the Obama Administration to be "sending a sharp warning to employers nationwide?"
The lawsuit, an unusual intervention by the federal government on the issue, comes amid rising concerns that employers are denying jobs to applicants with damaged credit histories, even in cases where creditworthiness does not appear to be directly relevant to the job...
Private and government surveys have suggested that about half of all employers use credit histories in at least some hiring decisions.

Justine Lisser, an E.E.O.C. spokeswoman, said that credit histories were often inaccurate and might not be a good indicator of a person’s qualifications for a particular job. �Credit histories were not compiled to show responsibility,� she said. �They were compiled to show whether or not someone was paying the bills, which is not always the same thing.�

In the E.E.O.C.’s suit, which was filed in federal district court in Cleveland, the agency said that since at least January 2008, Kaplan had rejected job applicants based on their credit history, with a �significant disparate impact� on blacks.

�This practice has an unlawful discriminatory impact because of race and is neither job-related nor justified by business necessity,� the commission said. The agency did not specify what types of jobs were involved.

... The company added that it typically conducted background checks on all prospective employees. �The checks are job-related and a necessity for our organization to ensure that staff handling financial matters, including financial aid, are properly screened,� Kaplan said. Kaplan and other for-profit education companies have come under intense scrutiny from the federal government because of concerns that the industry leaves too many students unable to repay large federally backed education loans, while providing them with little help in finding jobs. The Department of Education has proposed regulations that would cut off federal financing to for-profit education companies whose graduates have high debt-to-income ratios and low repayment rates.

Let me see if I understand this: One part of the Obama Administration says that some of what Kaplan does borders on being a scam (which seems pretty plausible), so, another part of the Obama Administration demands that Kaplan hire more people with track records of untrustworthiness.

Sounds like a plan to me!

The bigger issue is not Kaplan, of course, but the Obama Administration choosing to make it riskier to hire Americans (instead of outsourcing or insourcing to illegal aliens less likely to sue).

The federal lawsuit is seeking a permanent injunction to stop Kaplan’s use of credit histories in hiring and other employment decisions. The agency is also seeking lost wages and benefits for people who were not hired because of Kaplan’s use of credit reports to screen applicants, and it wants Kaplan to make employment offers to those individuals.

Michael J. Zimmer, a professor of employment law at Loyola University in Chicago, said that, under federal law, �if an employment practice has a disparate impact on a certain race, you have a case.� He said that the E.E.O.C. would not have brought the case unless it had reviewed statistics about Kaplan’s hiring.

�I think the issue is going to boil down to whether it’s justified as job-related and necessary for business,� he said. �That’s the defense’s standard in a disparate impact case.�

As I said last month in VDARE, the most obvious area where Obama could use his political capital to boost hiring is:
... Obama could announce that his election as President shows that the civil rights war is officially over and it’s time to reap the peace dividend: the federal government can dramatically cut back its persecutions of employers for race-related reasons.

Nothing the President could do with a stroke of his pen would do more to cut unemployment by making it legally safer to hire Americans than Obama announcing that, between now and the 50th anniversary of the Civil Rights Act in 2014, he will lay off most of Equal Employment Opportunity Commission bureaucrats and other federal racial inquisitors.

And the business climate would be immediately improved by Obama abolishing the EEOC’s innumerate �Four Fifths Rule�

Sure, if Obama declared victory on civil rights, his base would howl. But, that's pretty much how you accomplish something as President: by stabbing your supporters in the back.

Conversely, could a President Haley Barbour abolish the Four Fifths Rule in 2013? Of course not, he'd have to boost pointless enforcement. But Obama actually has an opportunity here for statesmanship, which he's, so far, failing utterly to seize, and public affairs discourse is so braindead over anything approaching race that nobody even notices his chance.