Pepsi Beverages Co. will pay $3.1 million to settle federal charges of race discrimination for using criminal background checks to screen out job applicants — even if they weren’t convicted of a crime. The settlement announced Wednesday with the Equal Employment Opportunity Commission is part of a national government crackdown on hiring policies that can hurt blacks and Hispanics.
EEOC officials said the company’s policy of not hiring workers with arrest records disproportionately excluded more than 300 black applicants. The policy barred applicants who had been arrested, but not convicted of a crime, and denied employment to others who were convicted of minor offenses. Using arrest and conviction records to deny employment can be illegal if it’s irrelevant for the job, according to the EEOC, which enforces the nation’s employment discrimination laws. The agency says such blanket policies can limit job opportunities for minorities with higher arrest and conviction rates than whites.
The company has since adopted a new criminal background policy and plans to make jobs available to victims of the old policy if they are still interested in jobs at Pepsi and are qualified for the openings. Under the settlement, the company will provide the EEOC with regular reports on its hiring practices and offer antidiscrimination training to its hiring personnel and managers.
About 73 percent of major employers report that they always check on applicants’ criminal records, while 19 percent do so for select job candidates, according to a 2010 survey by the Society for Human Resource Management.
But increased federal scrutiny of such policies has led some companies to reevaluate their hiring process. Pamela Devata, a Chicago employment lawyer who has represented companies trying to comply with EEOC’s requirements, said there has been an uptick over the past year in EEOC charges over the use of background checks.
