Whether there are laws in place or not, at times it is much smarter to pick the candidate with lesser credentials that has higher upside potential. In sports the intelligent teams don't draft the guys that have the best statistics right now. They draft the people that they can train to be the best. Its the same with schools. If someone went to a nice school and had better credentials than someone that went to a bad school with bad teachers, the latter student is the one that the schools very well should take because with the proper training they will be superior in the long run, even if they aren't currently.
Being forbidden from discriminating based on people's race, gender, sexual orientation, etc does not restrict you from rejecting candidates with poor credentials.
This issue is that you can get in trouble when having poor credentials is correlated with some protected class. For example, consider all the flack banks have gotten for being less willing to lend to blacks. Many people—including, crucially, judges and government officials—tend to infer the presence of discrimination without considering creditworthiness. Are banks less likely to lend to blacks once you control for credit score? The question rarely even gets asked, and asking it can (bizarrely) get you accused of racism. (The same people who fret most about supposedly racist lending also decry higher poverty rates among blacks, apparently without seeing the connection.)
The same sort of pattern applies to virtually every other field where certain favored groups are "underrepresented" (the subtle implication being that they should be proportionally represented, although this assumption is almost never examined or justified). If you're allocating slots for some selective competition, and rejecting people for "poor credentials" eliminates all protect groups in your applicant pool, how sympathetic do you think the diversity committee will be to your selection criteria?
