During a panel at a daylong workshop hosted by the Federal Trade Commission, EEOC Assistant Legal Counsel Carol Miaskoff, Advertising Self-Regulatory Council President C. Lee Peeler, Morrison & Foerster LLP partner Leonard Chanin and others explored the various anti-discrimination and consumer protection laws that could apply to companies’ growing use of big data, or large sets of consumer data aggregated from various sources, to make predictions about consumer behavior and decisions related to employment, housing, credit and insurance.
While concerns surrounding the potential for big data to discriminate against individuals, especially low-income or underserved consumers, has to date been primarily addressed by the FTC wielding its enforcement power under the Fair Credit Reporting Act, Miaskoff noted that employment laws such as Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act and the Genetic Information Nondiscrimination Act could be used to provide a check on discriminatory uses of big data in employee recruitment and screening.
“There are very settled employment laws — the Civil Rights Act just celebrated its 50th anniversary — with basic principles that can definitely be translated into the big data space,” she said.
For the purposes of both recruiting job applicants and screening those selected for consideration, whether big data is being used as a tool for inclusion or exclusion will hinge on whether the pitch being made to a targeted individual or the information that is being used to assess an applicant’s worthiness has a disparate impact that is not offset by business necessities or an applicant’s ability to perform a job-related task, Miaskoff said.
“Just because the tool used for [recruitment and selection] causes a disparate impact doesn’t make it illegal,” she said. “It’s only illegal if it doesn’t accurately predict the success of an individual at a job.”
Because escaping liability turns on whether companies can show that their big data analytics are operating in a way that is valid, it is vital that employers keep detailed records of the way they are using the growing reserves of data available to them to inform their recruitment strategies and hiring decisions, Miaskoff said.
“One of the things [that the EEOC] is pushing now is the kind of record keeping that can facilitate verification,” she said.
The panelists pointed to the emergence of detailed social media profiles as one of the newest challenges in the big data age for employers, who must decide whether it is worth the risk to try to extract information that can be predictive of job performance from a sea of disclosures that may contact protected data related to an applicant’s age, gender, religion or sexual orientation.
“Looking at social media as part of the screening of applicants puts employers in a vulnerable position,” Miaskoff said. “Even if they just take a glance at it, they are immediately presented with a plethora of information about protected statuses.”
The increasing availability and utility of social media profiles has also presented stumbling blocks for companies who use the data to make other types of sensitive decisions related to credit, housing and insurance, attorneys noted.
“Even though there’s no express prohibition against using social media profile information in [the Equal Credit Opportunity Act’s] Regulation B, companies should still be careful,” Chanin said. “If they’re going to look at it, there’s certainly going to be the potential for an allegation that it was considered [in making a credit decision], and questions will follow.”
The FTC has addressed the use of information gleaned from social media profiles and a range of other online and offline sources to make eligibility decisions protected by the FCRA in several enforcement actions brought in recent years.
The commission’s actions include a $800,000 fine for Spokeo Inc. in June 2012 for violating the FCRA by selling consumer profiles to potential employers for screening purposes, the first case to address the sale of data collected from online sources, including social media, in the context of employment screenings.
In opening remarks to kick off the big data workshop on Monday, FTC Chairwoman Edith Ramirez pledged that the commission would work diligently to “identify areas where big data practices might violate existing laws” and use its authority under statutes including the FCRA and Section 5 of the FTC Act to “rigorously” address the potentially detrimental impact of big data.
“Big data can have big consequences ... [that] can be either enormously beneficial to individuals and society or deeply detrimental,” she said. “It will almost certainly be a mixture of the two. But it is the responsibility of the FTC and others to help ensure that we maximize the power of big data for its capacity for good while identifying and minimizing the risks it presents.”
--Editing by Brian Baresch.