Friday, December 24, 2010

EEOC sues for-profit university corporation for misuse of credit reports in employment

The New York Times, in a story by Steve Greenhouse (Dec. 21), reports that the Equal Employment Opportunity Commission has filed a suit against Kaplan Higher Education Corporation, for disparate impact against black applicants as a result of the way it uses credit reports to screen applicants. The link for the story is here.

A number of states, including Hawaii, Washington, Oregon, and Illinois limit the use of credit reports in employment decisions. Generally, they may be used only for jobs involving hiring money.

Regulating the use of credit reports in hiring could have an unintended consequence: companies could stil to "social media" background investigations, which are likely to be really unreliable -- the "online reputation" problem.

Kaplan runs “for profit” universities and trade schools and has come under criticism when graduates, not finding good employment, haven’t been able to pay back federal loans.

Back in 1987, Chilton Corporation (a precursor of TRW and Experian), where I worked in Dallas, required all staffers to pass credit checks but TRW dropped the requirement when acquiring the company in 1988.

I’ve never attended a “trade school”, but after a layoff from RCA as an “Operations Research Trainee” in 1971, I applied for an was accepted by a COBOL programming school with a course that lasted about 14 weeks, in northern Virginia. But I dropped it when I got a job with the Navy Department. I would eventually learn COBOL OJT at Univac and then NBC, all in the early 70s.

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