Jujitsu in EEOC v. Kaplan

I have always loved the passage from The Art of War about the general who is facing an enemy army on the other side of a river.  The two armies are at a stand off.  The general is informed that his forces are running perilously low on arrows (and won't be able to ward off an attack). What does the general do? He orders empty boats swung out at the enemy in a feigned attack.  The enemy volleys a multitude of arrows at the boats.  The boats are hauled back in and the general has his men collect the wasted arrows.

http://www.caiguoqiang.com/projects/borrowing-your-enemys-arrows-1

What a tactic; you start from a position of weakness, then use cunning to drain your enemy of his resources while simultaneously restoring yourself to a position of strength.

This isn't an exact parallel to the general on the river, but something about what happened in  EEOC v. Kaplan Higher Learning Edu. Corp. (N.D. Ohio 1/28/13) reminds me of it.  In that case, which issued earlier this week, Kaplan's attorneys turned the EEOC's policies back around at themselves (twice) and as a result won a motion for summary judgment.  How can you not admire that kind of lawyering?

As you may recall, as part of its statistical discrimination initiative, in 2010, the EEOC filed a suit against Kaplan University for its practice of using applicants' credit histories as a factor in hiring decisions.  Kaplan was not docking applicants for late payments or grading them on debt/asset ratios, but was only looking at large defaults and other red flags.  The EEOC alleged that Kaplan's practice was discriminating against minorities based on the disparate impact of these practices.

Kaplan's first legal Jujitsu maneuver was during discovery where it requested documents establishing the EEOC's own practice of using credit history to assess job candidates.  The EEOC at first committed to turning the records over, then balked, then was ordered to turn them over by a not so happy federal judge (Judge Patricia Gaughan).  As it turns out, the EEOC itself looks at applicant credit reports in 84 of its 97 positions because “overdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations”.  Although the case did not turn on this discovery request, there is a certain irony in that the rationale that the EEOC uses to defend its regular practice of checking applicants' credit history applies just as equally to every employer the EEOC regulates, and that irony does not appear to have been lost on Judge Gaughan.

Kaplan's second and critical act of Jujitsu came when it challenged the EEOC's prima facie case.  The EEOC's prima facie case was based on evidence that the applicants that Kaplan rejected on the basis of credit reports were disproportionately minorities.  To establish this prima facie case, the EEOC needed one critical piece of data: the race/ethnicity of the applicants.  Getting this information was an obstacle for the EEOC because Kaplan did not record the race of its applicants (the EEOC attempted to no avail to argue that the EEOC's model guidelines for employers call for gathering and retaining such information).

In order to find out the respective races of the applicants, the EEOC used their names and presumably their social security numbers to look up information about them from their local departments of motor vehicles.  However, only 14 of the 38 states from which the applicants hailed had records of race associated with drivers licenses.  For those states that did not have racial self-identification on the drivers license, the EEOC ordered the drivers license photographs of the applicants...With the pictures in hand, the EEOC had a panel of five "expert" "race raters" look at the pictures and determine the race of the applicants...You might be wondering, "What kind of credential does an expert race rater have?" The judge also wondered and was not at all impressed with their varied credentials of the raters who held advanced degrees in either economics, human development, psychology, or cultural anthropology, and had no established background in visually identifying an individual's race.  Further discrediting the "race rater" panel was its inability for 80% of its raters to reach a consensus as to the race of 11.7% of the applicants.

The lack of expertise and inability to reliably judge race was bad enough for the EEOC, but Kaplan's second Jujitsu move came in when they showed that the EEOC's own guidelines (the ones they tried to employ against Kaplan) deem visual identification as an undesirable way of identifying race and ethnicity. Thus Judge Gaughan noted that the "EEOC itself frowns on the very practice it seeks to rely on in this case" and ultimately dismissed the complaint on summary judgement for lack of a prima facie case.

Kaplan's attorneys did not exactly mimic the general on the river, but like him, they started from a position of weakness and used cunning to turn their adversary's resources against it.