Use of Big Data for Background Checks Will Be Closely Watched for Potential Discrimination Issues

In October of 2016, the U.S. Equal Employment Opportunity Commission (EEOC) held a public meeting at agency headquarters in Washington, D.C. on how “Big Data” – the use of algorithms, data scraping of the internet, and other means of evaluating thousands of pieces of information about an individual – was being used to make hiring and other employment decisions during background checks. The potential controversies surrounding the use of Big Data is Trend Number 10 in the Employment Screening Resources® (ESR) 10th annual ‘ESR Top Ten Background Check Trends’ for 2017.

 

“Big Data has the potential to speed up the hiring process and to give employers more tools to both select the right candidates faster but also to identify applicants who employers may consider unqualified or risky. But at the same time, the use of Big Data presents numerous challenges when it comes to fairness, accuracy, and avoiding legal pitfalls, such as creating a discriminatory impact,” says ESR founder and CEO Attorney Lester Rosen. The list featuring emerging and influential trends in the background check industry for 2017 will be available at www.esrcheck.com/ESR-Top-Ten-Background-Check-Trends.

 

EEOC Chair Jenny R. Yang stated in a press release about the EEOC meeting on October 13, 2016, that Big Data had “the potential to drive innovations that reduce bias in employment decisions” but also added that it is critical that Big Data tools “are designed to promote fairness and opportunity, so that reliance on these expanding sources of data does not create new barriers to opportunity.”

 

That same month, the EEOC – the agency responsible for enforcing federal laws prohibiting employment discrimination – also approved an updated Strategic Enforcement Plan (SEP) for Fiscal Years 2017-2021 that reaffirmed the Commission’s commitment to advancing equal opportunity in America’s workplaces while also recognizing new areas of potential concern such as the use of Big Data for screening.

 

The EEOC SEP focused on discriminatory recruitment and hiring practices that may include Big Data background screening tools “that disproportionately impact workers based on their protected status (e.g., pre-employment tests, background checks impacting African Americans and Latinos, date-of-birth inquiries impacting older workers, and medical questionnaires impacting individuals with disabilities).”

 

In May of 2016, the White House released a report entitled Big Data: A Report on Algorithmic Systems, Opportunity, and Civil Rights that revealed Big Data information “high in volume, velocity, and variety that it requires new forms of processing for decision making” could uncover or reduce employment discrimination but also risk enabling and automating potentially discriminatory hiring practices.

 

The report – the third in a series by the Obama Administration’s Big Data Working Group – challenged the assumption that Big Data is objective:  It is often assumed that big data techniques are unbiased because of the scale of the data and because the techniques are implemented through algorithmic systems. However, it is a mistake to assume they are objective simply because they are data-driven.

 

Instead, a White House blog about the report entitled ‘Big Data: A Report on Algorithmic Systems, Opportunity, and Civil Rights’ stated that while the report “illustrates how big data techniques can be used to detect bias and prevent discrimination. It also demonstrates the risks involved, particularly how technologies can deliberately or inadvertently perpetuate, exacerbate, or mask discrimination.”

 

Lastly, in January of 2016, a report released by the Federal Trade Commission (FTC) entitled Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues discussed the benefits and risks created by the use of Big Data analytics, the consumer protection and equal opportunity laws that currently apply to Big Data, and provided recommendations to businesses on how to properly use Big Data analytics.

 

These reports from the White House, FTC, and EEOC – all released in 2016 – indicate that the U.S. Government will be closely watching the use of Big Data by businesses during 2017. Employers will have to make sure that if they use Big Data while performing background checks for employment that they do not knowingly, or unknowingly, enable and automate potentially discriminatory hiring practices.