Seyfarth Shaw's Pamela Devata Testified at EEOC Hearing on Use of Employment Credit Reports by Employers
Quoted in The Wall Street Journal, Portfolio.com and BNA's Daily Labor Report

Seyfarth Shaw employment partner Pamela Devata testified before the Equal Employment Opportunity Commission (EEOC) October 20 about the use of credit checks as a screening tool for job applicants. Pam's testimony cleared up some common misperceptions about what is contained in a credit report. She also provided practical insight into how employers generally use credit reports when making employment decisions. In Pam's testimony, she commented that "the use of credit checks has been an acceptable employment screening tool for over 40 years." She also noted that the federal government is, and has been, requiring credit checks on its employees as a condition of employment. One common misperception that she outlined was that employment credit reports include a credit score. They do not. Before "an employer is able to make a decision based on a credit report, the employer must review the content of the full report to obtain credit information and assess whether it is positive, negative, or neutral." Read Pam's full remarks on the EEOC's website.

Pam was quoted in The Wall Street Journal article, "Employer Credit Checks on Job Seekers Draw Scrutiny," which appeared online and in the print edition of the publication on page A5. Read the article here. The article discussed the EEOC hearing, which heard from advocates on both sides of the issue. Pam represented employers, who generally support the use of credit check as an important screening tool and a way to protect businesses against fraud. The WSJ article noted that some opponents argue that credit reports can cause a disparate impact, but as Pam explained, she's yet "...to see a study that shows the relationship between the use of credit reports and the disparate impact."

In the Portfolio.com article, "Bad Credit, Bad Hire?," Pam noted that credit reports "...provide a variety of information that cannot otherwise be confirmed by an employer. They are viewed as a valid indicator of a person’s judgment and potential risk to the company.” Read the article here.

BNA's Daily Labor Report also reported on the EEOC's hearing and discussed how employers who use credit checks would treat individuals with no credit history. Pam explained that an absence of such data probably would be viewed as a “neutral” factor. She added, however, that an applicant who refuses to consent to the release of his or her credit report would probably be viewed negatively by the employer.