Tag Archives: discrimination

Big Data Can Solve Discrimination

Big data has the opportunity to end discrimination.

Everyone creates data. Whether it is your bank account information, credit card transactions or cell phone usage, data exists about anyone who is participating in society and the economy.

At Root, we use data for car insurance, an industry where rating variables such as education level or occupation are used directly to price the product. For a product that is legally mandated in 50 states, the consumer’s options are limited: give up driving and likely your ability to earn a living or pay a price based on factors out of your control.

Removing unfair factors such as education and occupation from pricing leaves room for variables within an individual’s control — namely: driving habits. In this way, data can level the playing field for all consumers and provide an affordable option for good drivers whom other companies are painting with a broad brush. In the lon term, everyone wins as roads become safer and driving becomes prohibitively expensive for irresponsible drivers.

This is just one example where understanding the consumer’s individual situation deeply allows for more precise — and more rational — decision making.

But we know that the opportunity of big data goes beyond the individual. For example, the unfair practice of naively blanketing entire countries, religions or races unfairly as “dangerous” is a major topic in the news. What happens if you apply the lens of big data to this policy?

See also: Industry’s Biggest Data Blind Spot

Causal Paths vs. Assumption-Based Decisions

With the increased availability of data, we are able to better understand the causal paths between data generation and an event. The more direct the causal path, the better predictions of future events (based on data) will perform.

Imagine having something as trivial as GPS location data from a smartphone on a suspected terrorist. Variables such as having frequent cell phone conversations with known terrorists or being located within five miles of the last 10 known terrorist attacks will allow us to move away from crude, unjust and discriminatory practices and toward a more just and rational future.

Ahmad Khan Rahami, who placed bombs in New York and New Jersey, was flagged in the FBI’s Guardian system two years earlier. The agency found there weren’t grounds to pursue an investigation — a failure that may have been averted if the FBI had better data capture and analysis capabilities. Rahami purchased bomb-making materials on eBay and had linked to terrorist-related videos online before his attempted attack. Dylann Roof’s activities showed similar patterns in the months leading up to his attack on the Emanuel AME Church in Charleston, SC.

The causal path between a hate-crime or terrorist attack and the actions of Dylann Roof and Ahmad Khan Rahami is much more direct than factors such as religion, race or skin color. Yet we naturally gravitate toward making blanket assumptions, particularly if we don’t understand how data provides a better, more just approach.

Today, this problem is more acute than ever. Discrimination is rampant — and the Trump administration’s ban on travel is unacceptable and unnecessary in the era of big data. For those unmoved by the moral argument, you should also know policies like the ban are hopelessly outdated. If we don’t begin to use data to make informed, intelligent decisions, we will not only continue to see backlash from discriminatory policies, but our decision making will be systematically compromised.

The Privacy Red Herring

Of course, if data falls into the wrong hands, harm could be done. However, modern techniques for analyzing and protecting data mitigate most of this risk. In our terrorism example, there is no need for a human to ever view GPS data. Instead, this data is collected, passed to a database and assessed using a machine learning algorithm. The output of the algorithm would then direct an individual’s screening process, all without the interference of a human. In this manner, we remove biased decision making from the process and the need for a “spy” to review the data.

See also: Why Data Analytics Are Like Interest  

This definitely provides a challenge for the U.S. intelligence community, but it is an imperative one to meet. If used responsibly, analytics can provide insights based on controllable and causal variables. The privacy risk is no longer a valid excuse to delay the implementation of technologies that can solve these problems in a manner that is consistent with our values.

This world can be made a much better and safer place through data. And we don’t have to sacrifice our privacy; we can have a fair world, a safe world and a world that preserves individual liberties. Let’s not make the mistake of believing we are stuck with an outdated and unjust choice.

Your Device Is Private? Ask Tom Brady

However you feel about Tom Brady, the Patriots and football air pressure, today is a learning moment about cell phones and evidence. If you think the NFL had no business demanding the quarterback’s personal cell phone—and, by extension, that your company has no business demanding to see your cell phone—you’re probably wrong. In fact, your company may very well find itself legally obligated to take data from your private cell phone.

New Norm

Welcome to the wacky world of BYOD—bring your own device. The intermingling of personal and work data on devices has created a legal mess for corporations that won’t be cleared up soon. BYOD is a really big deal—nearly three-quarters of all companies now allow workers to connect with private devices, or plan to soon. For now, you should presume that if you use a personal computer or cell phone to access company files or email, that gadget may very well be subject to discovery requirements.

Security & Privacy Weekly News Roundup: Stay informed of key patterns and trends

First, let’s get this out of the way: Anyone who thinks Tom Brady’s alleged destruction of his personal cell phone represents obstruction of justice is falling for the NFL’s misdirection play. That news was obviously leaked on purpose to make folks think Brady is a bad guy. But even he couldn’t be dumb enough to think destruction of a handset was tantamount to destruction of text message evidence. That’s not how things work in the connected world. The messages might persist on the recipients’ phones and on the carriers’ servers, easily accessible with a court order. The leak was just designed to distract people. (And I’m a Giants fan with a fan’s dislike of the Patriots).

But back to the main point: I’ve heard folks say that the NFL had no right to ask Brady to turn over his personal cell phone. “Right” is a vague term here, because we are still really talking about an employment dispute, and I don’t know all the terms of NFL players’ employment contracts. But here’s what you need to know:

Technology and the Law

There’s a pretty well-established set of court rulings that hold that employers facing a civil or criminal case must produce data on employees’ personal computers and gadgets if the employer has good reason to believe there might be relevant work data on them.

Practically speaking, that can mean taking a phone or a computer away from a worker and making an image of it to preserve any evidence that might exist. That doesn’t give the employer carte blanche to examine everything on the phone, but it does create pretty wide latitude to examine anything that might be relevant to a case. For example: In a workplace discrimination case, lawyers might examine (and surrender) text messages, photos, websites visited and so on.

It’s not a right, it’s a duty. In fact, when I first examined this issue for NBCNews, Michael R. Overly, a technology law expert in Los Angeles, told me he knew of a case where a company actually was sanctioned by a court for failing to search devices during discovery.

Work Gets Personal

“People’s lives revolve around their phone, and they are going to become more and more of a target in litigation,” Overly said then. “Employees really do need to understand that.”

There is really only one way to avoid this perilous state of affairs—use two cell phones, and never mix business with personal. Even that is a challenge, as the temptation to check work email with a personal phone is great, particularly when cell phone batteries die so frequently.

The moral of the story: The definition of “personal” is shrinking all the time, even if you don’t believe Tom Brady shrank those footballs.

For further reading: here’s a nice summary of case law.

When Are Background Checks Not Allowed?

The Equal Employment Opportunity Commission (EEOC) has been quite active in challenging employers’ use of criminal background and credit history checks during hiring. There is still significant uncertainty as to the current standards and law about the checks of criminal and credit history. The lack solid guidance makes it difficult for employers to determine how to evaluate their current use of this information, as well as to understand the legal pitfalls and hurdles that the EEOC has placed in front of them.

EEOC Directives

The recent activity emanates from the EEOC’s recent directive and key priority (as per its December 2012 Strategic Enforcement Plan (SEP)) to eliminate hiring barriers. This priority includes challenges to policies and practices that exclude applicants based on criminal history or credit check. The EEOC has a keen interest in this area, as it believes that criminal/credit checks have a disparate impact on African American and Hispanic applicants. As the EEOC pursues the directive, expect the EEOC to scrutinize failure-to-hire claims where a criminal history or background check was conducted. Even if the background check was “facially neutral” and was uniformly given to all applicants, the EEOC may investigate to determine if the check had a “discriminatory effect” on certain applicant(s).

The EEOC asserts that criminal background checks must be “job-related” and “consistent with business necessity.” Employers are advised to consider: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense, conduct or completion of the sentence; and (3) the nature of the job held or sought. The EEOC stresses the need for an “individualized assessment” before excluding an applicant based on a criminal or credit record.

Local/State/Federal Laws

Employers face additional legal hurdles regarding hiring practices because of recent local and state legislative developments. These laws are commonly referred to as “ban the box” (i.e., restrictions on the use of criminal history in hiring and employment decisions). Making matters even more difficult, employers have also been subject to a surge in class action litigation under the Fair Credit Reporting Act (FCRA). The FCRA regulates the use of and gathering of criminal histories through third-party consumer reporting agencies with respect to conducting background checks on applicants or employees.

Legal Actions

In pursuit of its directive, the EEOC has filed several large-scale lawsuits against employers. We expect that the EEOC will continue to file similar lawsuits throughout 2015 and beyond. Most have been brought as failure-to-hire claims. For example, an African-American woman brought a claim alleging that she was discriminated against based on her credit history. This claim started out as a single plaintiff action, but, after the EEOC conducted its initial investigation, the EEOC dramatically expanded the scope of the initial charge, alleging that the employer was engaging in a “pattern and practice of unlawful discrimination” against: (1) African-American applicants by using poor credit history as a hiring criterion and (2) African-American, Hispanic and white male applicants by using criminal history as a hiring criterion.

Reasonable employers complain that the EEOC has placed employers in a Catch 22. Employers have to choose between ignoring criminal history and credit background, exposing themselves to potential liability for criminal and fraudulent acts committed by employees or to an EEOC lawsuit for having used this information in a discriminatory way.

Takeaway for Employers

Claims involving criminal background checks and credit checks are an EEOC priority. At this time, employers have little guidance from the courts or the EEOC as to exactly what “job-related” and “consistent with business necessity” mean and just how closely a past criminal conviction has to correspond with the duties of a particular job for an employer to legally deny employment to an applicant. Moreover, employers continue to witness expanding restrictions dealing with criminal history at the state and local level based on ban-the-box legislation, as well as with an increasing number of class action lawsuits involving background checks as required under the Fair Credit Reporting Act.

Employers are encouraged to work closely with legal counsel as to what they should and should not ask on applicants as well as how and when they can use background information they obtain. Based on this evolving area of the law, we additionally recommend that employers purchase a robust EPL policy that will defend them in the event that the EEOC or a well-skilled plaintiff’s counsel pursues a claim against them for discrimination, or for failure to hire based on criminal or credit background checks.

3 Cardinal Rules for Managing EPL Risk

Last week, the U.S. Equal Employment Opportunity Commission (EEOC) released its data for FY 2014 for enforcement litigation related to employment practices liability (EPL). Continuing a recent trend, the EEOC reported that the percentage of charges that contained retaliation claims rose to a record 43% in 2014.

This is significant for EPL because the elements that an employee must establish with respect to a retaliation claim are quite different than the elements in a discrimination or harassment claim. Specifically, an employee does not need to establish that the employer discriminated against or harassed him to prevail on a retaliation claim. Rather, the employee only needs to prove that the employer took action against him in response to an internal or external complaint of discrimination or harassment that may deter the employee or others from lodging similar complaints in the future.

The EEOC report highlights that, for EPL, preventing retaliation is just as important as promptly addressing workplace complaints of discrimination or harassment.

A breakdown of all charges filed with the EEOC is as follows:

  • Retaliation — 43% of all claims
  • Race (including racial harassment) — 35%
  • Sex (including pregnancy and sexual harassment) — 29%
  • Disability — 29%
  • Age — 23%
  • Religion — 4%
  • Color — 3.1%
  • Equal Pay Act — 1.1% (but note that sex-based wage discrimination can also be charged under Title VII’s sex discrimination provision)
  • Genetic Information Non-Discrimination Act — 0.4%

In fiscal year 2014, the EEOC obtained $296.1 million in total monetary relief through its enforcement program for cases that were settled before the filing of litigation. Monetary relief from cases litigated, including settlements, totaled $22.5 million.


From a risk management perspective, the aggressive investigations and litigation filed by the EEOC only emphasize the need for employers to faithfully obey what we kindly refer to as Socius’ “Three Cardinal Rules of Employment Practices Risk Management”:

  1. Continually update employment practices (i.e., adapt personnel policies to always be current with the EEOC’s strategic initiatives, litigation trends and new statutes).
  2. Keep all management and supervisory personnel thoroughly and continually trained (this ensures a smooth implementation of procedures and education of management’s agreed strategies to respond to retaliation, harassment and other employment-related allegations), and
  3. Further mitigate this risk through the purchase of a robust EPL insurance policy.

Labor Dispute Drags at West Coast Ports: 3 Ways to Respond

With spring fast approaching, the continuing labor dispute at 29 West Coast ports could affect the ability of suppliers and retailers to stock seasonal merchandise. The backlog of ships at these ports — exacerbated in some instances by work slowdowns and closures — has delayed deliveries of agricultural and manufactured inputs and goods, depleted inventories and potentially harmed businesses across several industries.

This situation has resulted from a seven-month impasse between the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents shipping lines and port terminal operators, following the expiration of their labor contract. The White House dispatched Labor Secretary Thomas Perez to San Francisco to reinvigorate negotiations, which resumed on Feb. 17. Previous talks had stalled over the process for arbitrating allegations of work slowdowns, discrimination and other issues.

The economic damage from port disruptions could be significant. According to the National Retail Federation, cargo moving through the 29 involved ports represents 12.5% of U.S. gross domestic product. In recent earnings calls, several publicly traded retailers have identified the labor impasse as a potential risk, noting the possible impact on seasonal merchandise. Food and beverage distributors, meanwhile, have reported that port delays have led to spoilage of perishables. And parts shortages attributed to congestion at West Coast ports have led some auto manufacturers to announce plans to halt or cut back production.

Although the reinvigorated talks have brought some hope for a quick resolution, retailers and other affected businesses should still consider taking steps to mitigate potential losses from continued disruptions and future work slowdowns, stoppages, or strikes. Specifically, you should:

  1. Diversify your supply chain. The work slowdowns and port closures, coupled with the potential for a strike, have led many businesses to diversify their ports of entry, turn to domestic suppliers or make raw material and finished product substitutions as necessary. Although such actions may bring financial and other costs, they may enable your company to remain competitive until the dispute is resolved. If you have identified alternate suppliers or workaround procedures, consider implementing those strategies and engaging additional or alternate resources now. If you have not identified such resources, now is the time to do so.
  2. Develop crisis management and business continuity strategies. If they are not already significant, the business implications for your organization may soon become so. Consider activating your crisis management and other business incident response teams. Your teams should think about the immediate impacts and workarounds from the current situation and forecast potential impacts should these interruptions continue or a strike occur, allowing a strategy to be developed and executed.
  3. Review your insurance coverage. Some insurance coverage — such as marine cargo and property damage policies with extensions for business interruption (BI) and contingent business interruption (CBI) — may only respond in the event of a strike or port disruption where there is also actual physical damage to insured cargo or property. Your organization should review whether it has or consider obtaining the following additional coverage options:
  • Voyage frustration endorsements to marine cargo policies, which can provide coverage for ground transportation costs and other extra expenses in the event that a shipment is diverted to an alternative port. Such endorsements do not typically provide indemnity for lost sales, contractual penalties or other financial losses.
  • “Seasonal merchantability” coverage, which can sometimes be added to marine cargo policies. This coverage provides indemnification for actual loss in sales as a result of a delay in arrival of goods but may not respond in the event of a strike and usually comes with a lengthy waiting period.
  • Trade disruption insurance (TDI), supply chain insurance and specialty BI insurance policies, which can protect against supply chain disruptions resulting from a variety of causes, including embargoes, acts of terrorism, windstorms and other natural catastrophes, supplier bankruptcy and other events.

For more information, read West Coast Port Disruptions: Insurance and Risk Management Implications.