Dollar General Agrees to Pay $6 Million in EEOC Settlement

For large and small employers across a broad spectrum of industries, pre-employment background checks are an integral part of the hiring process. A legal or procedural requirement for many positions, background checks ideally allow employers to make decisions to hire individuals who are not only talented but also do not present a high level of risk. The Equal Employment Opportunity Commission (EEOC) has made it clear for several decades now, that employers do not have carte blanche to deny applicants based on an adverse background check result. If those denial decisions disproportionately impact a minority group, the hiring policy may be ruled discriminatory.

These standards are at the heart of many recent lawsuits filed by the EEOC against employers such as Dollar General, which in 2019 reached a $6 million settlement. The EEOC alleged that the company routinely denied minority applicants with adverse background checks at a higher rate than white applicants with similar records. Dollar General admitted no wrongdoing in its settlement.

As part of the settlement agreement, Dollar General will re-extend employment offers to previously-denied applicants. The EEOC stipulated that the company must work with a criminologist in the future to make empirically-based risk assessments if it wishes to reinstate the use of background checks. 

Dollar General is far from the only major company to land in hot water over allegedly inappropriate use of background checks in recent years. Amazon, Macy's, and Target have all faced class-action lawsuits over discriminatory practices that excluded otherwise qualified applicants. While some litigation remains in the court systems, companies such as Target have chosen to make procedural changes to lessen the risk of discrimination claims, including adopting EEOC guidance for background checks.

Employers in every industry who wish to use criminal histories, such as the county-level reports available through backgroundchecks.com, should take note of EEOC guidelines. This guidance has inspired many of the "ban the box" laws implemented nationwide. Though your area may not have such rules in place, following EEOC guidance can help you to avoid the appearance of discriminatory actions during hiring. 

EEOC principles for employee background checks include:

  •  Considering the nature of the crime(s)
  • Assessing the amount of time that has elapsed since a conviction
  • Evaluating the relationship, if any, that these facts have with a particular job role

As businesses seek talented individuals to hire and competition increases for open positions, maintaining a reliable and compliant way to vet applicants is vital. backgroundchecks.com supplies powerful tools, such as the multi-jurisdictional US OneSEARCH, that enable and support a fair, robust vetting process. 

Employers must pair care and planning with their use of these checks. As the Dollar General settlement demonstrates, the alternative is facing real and expensive consequences for failing to create fair and equal opportunities for all. 

Michael Klazema

About Michael Klazema The author

Michael Klazema is Chief Marketing Technologist at EY-VODW.com and has over two decades of experience in digital consulting, online product management, and technology innovation. He is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments.

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