Pepsi Settles Dispute over Criminal Background Checks for $3.13 Million

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Pepsi will revise an overly broad criminal background check policy, provide training and pay $3.13 million to settle an Equal Employment Opportunity Commission (EEOC) claim that the policy violated Title VII, according to Julie Schmid, acting director of the EEOC’s Minneapolis area office.
Schmid noted that 92 million Americans have a criminal history, referring to testimony by Amy Solomon, senior advisor to the assistant attorney general in the U.S. Department of Justice, in a July 26, 2011, EEOC hearing.
“The majority of arrests in a given year are for relatively minor nonviolent crimes. For example, among the almost 14 million arrests recorded in 2009, only 4 percent were considered serious violent crimes, such as murder, rape, robbery and aggravated assault,” Solomon testified. “And what is often forgotten is that many people who have been arrested for a crime have not been convicted, and this is true for those not only charged with minor crimes, but also for those charged with more serious crimes.”
Minor offenses might include simple assault or forgery, Schmid remarked. Such minor crimes and arrests were irrelevant for Pepsi’s warehouse loader positions, the positions at issue in this case.
For convictions to be relevant as a bar to hire, an employer must consider the nature and gravity of the offense, the time that has passed since the conviction and the nature of the job sought, she noted.
The EEOC investigation found that more than 300 black applicants were excluded by Pepsi’s overly broad policy, which denied employment to those arrested or convicted of minor offenses.
During the EEOC’s investigation, Pepsi adopted a new criminal background check policy. In addition to the monetary relief for black applicants who were not hired, Pepsi will offer employment to victims of the former policy who are qualified to work.
Pepsi also will supply the EEOC with regular reports on its hiring practices under its new policy and conduct Title VII training for hiring personnel and all of its managers.
“We hope that employers with unnecessarily broad criminal background check policies take note of this agreement and reassess their policies to ensure compliance with Title VII,” Schmid said.
“We are pleased that Pepsi chose to work with us to reach this conciliation agreement and that, through our joint efforts, we have been able to bring about real change at Pepsi without resorting to litigation, remarked EEOC Chicago District Director John Rowe. The Minneapolis area office is part of the EEOC’s Chicago district.
Allen Smith, J.D., is manager, workplace law content, for SHRM. Click here to read the original article.