A federal judge cast doubt on government efforts to restrict employers' use of criminal-background checks in hiring as he dismissed a lawsuit by regulators against a Dallas event-marketing company.
U.S. District Judge Roger W. Titus in Maryland said the Equal Employment Opportunity Commission didn't show that Freeman Co. discriminated against black applicants by using criminal-background checks or credit checks in its hiring process.
"The story of the present action has been that of a theory in search of facts to support it," Judge Titus wrote in a stinging rebuke to the federal agency. "But there are simply no facts here to support" the EEOC's claim that black applicants were improperly discriminated against, the judge said.
The lawsuit against Freeman, filed in 2009, was an early salvo in the agency's effort to regulate the use of criminal- background checks. In June, it filed suit against retailer Dollar General Corp. and a U.S. unit of German auto maker BMW AG, alleging that those companies discriminated against black applicants by checking criminal histories.
Those cases are pending.
Roughly 87% of employers use criminal-background checks in hiring, according to a 2012 survey by the Society for Human Resource Management. They include the EEOC itself, according to Judge Titus's opinion.
Civil-rights activists and the EEOC say the checks can be discriminatory because blacks are convicted of crimes at higher rates than whites. Last year, the EEOC issued guidelines that don't prohibit the use of criminal checks, but urge employers to consider the crime, its relation to an applicant's potential job, and how much time has passed since the conviction.
The guidelines also recommend that employers review each case individually, and allow applicants to show why they should be hired despite a conviction.
Judge Titus ruled that Freeman's use of criminal checks "appears reasonable and suitably tailored to its purpose of ensuring an honest workforce." He said that Freeman limited its review to convictions in the past seven years and didn't penalize applicants for arrests that didn't result in conviction.
Freeman Chief Executive Joe Popolo said he was pleased the judge agreed with "our ability to use common sense." Closely held Freeman has 4,100 full-time and 25,000 to 30,000 part-time employees, and had revenue of $1.7 billion in the fiscal year ended June 30, he said.
An EEOC spokeswoman said the agency was "disappointed" by the decision, but that the judge "did acknowledge that certain uses of criminal history or credit information can be discriminatory."
She declined to comment on whether the ruling would hinder the agency's broader efforts on background checks.