Retailers can't use credit checks to turn down sales associate job applicants, panel says

By Jonathan Bilyk | Sep 28, 2016

Simply because a sales associate or cashier may handle credit applications doesn’t mean a retail employer should be allowed to deny jobs to applicants with poor credit history, a state appeals panel has ruled.

Simply because a sales associate or cashier may handle credit applications doesn’t mean a retail employer should be allowed to deny jobs to applicants with poor credit history, a state appeals panel has ruled.

On Sept. 27, a three-justice panel of the Illinois First District Appellate Court ruled against Neiman Marcus, finding the department store chain had violated the rights of plaintiff Catherine Ohle, who had been denied a job at the chain’s Oak Brook store after a background screening revealed elements in Ohle’s credit history Neiman Marcus found questionable.

The justices said such practices violated the state’s law prohibiting the use of credit checks to screen job applicants.

The decision reversed the decision of Cook County Circuit Judge Kathleen Kennedy, who had ruled in favor of Neiman Marcus, finding the Illinois law actually exempted retailers hiring sales associates who may handle in-store customer credit card applications. Since initiating those credit applications required sales associates to be able to see customers’ “confidential information,” the judge sided with Neiman Marcus’ contention that this essentially gave those sales associates “access” to that information, and, thus, made the credit history of applicants for those sales associates positions fair game for employment screening.

Ken Wolter /

The justices, however, said this reasoning represented too broad a widening of the definition of “access” within the state law.

“To construe ‘access’ to personal or confidential information so broadly as to include merely accepting credit card applications by an entry level employee applying for this type of position nullifies the legislative intent evident in this Act,” the justices wrote.

Justice Daniel J. Pierce delivered the opinion of the court. Justices Michael B. Hyman and John B. Simon concurred.

The case arose in 2012 after the retailer declined to hire Ohle for the position of “Dress Collections Sales Associate” at its Oak Brook store. Neiman Marcus specifically cited the results of its check of Ohle’s credit history in denying Ohle’s employment application.

Ohle then filed a putative class action lawsuit, claiming the retailer’s use of credit checks violated the Illinois Employee Credit Privacy Act, which “prohibits an employer from inquiring into a potential employee’s credit history and prohibits an employer from refusing to hire the applicant or discriminating against the applicant because of his or her credit history.”

While Neiman Marcus soon after ended its use of credit checks for sales associate positions, the company responded to the lawsuit by arguing the state law provided for the use of credit checks for positions for which a “satisfactory credit history” is an “established bona fide occupational requirement.”

While the retailer attempted to argue its sales associate positions, by virtue of job duties which included handling money and, in particular, credit applications, fell into that category, the justices disagreed, saying the law was meant to apply to the managers and other higher level store personnel who actually handle the credit card applications once they move beyond the sales counter.

They said in the process of initiating and handling customers’ credit card applications and the “confidential information” they contain, the sales associates essentially act as a “conduit,” undertaking “a task no more sensitive in nature than entering credit card numbers into a credit card machine or taking down driver’s license information to accept a personal check in order to complete a sales transaction.”

“If the Act applied where employees are simply handed credit card applications and then place the application in a drawer for processing at a later time by a different department, then retail clerks in most stores, including retail stores like defendant’s, would be exempt and employers would be allowed to deny employment to citizens who face ‘financial hardships that are often unpreventable’ due to the ‘harshest economic situation we’ve seen in decades’ and who are not able to obtain employment despite ‘bad credit,’” the justices wrote.

The justices remanded the case to the Cook County Circuit Court for new proceedings.

Ohle was represented in the action by attorneys with the firm of Stephan Zouras LLP, of Chicago.

Neiman Marcus was defended by the firm of Jackson Lewis P.C., of Chicago.

Want to get notified whenever we write about any of these organizations ?

Sign-up Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Jackson Lewis PC Neiman Marcus Group LLC Stephan Zouras LLP

More News

The Record Network