Blog

 
     

backgroundchecks.com Legislation and Compliance Update: Pepsi Settles EEOC Class Charge for $3.1 Million

By Michael Klazema on 1/13/2012

The Equal Employment Opportunity Commission announced settlement of a charge it brought against Pepsi Beverages on behalf of black applicants whom Pepsi had declined to hire due to arrests that had not resulted in convictions or to minor convictions that were not relevant to the position. Pepsi will pay over $3.1m and offer jobs to anyone in the class who is still interested in working for Pepsi.

The EEOC appears to have successfully pressed two theories:

  1. According to the EEOC, “Pepsi’s former policy also denied employment to applicants from employment who had been arrested or convicted of certain minor offenses. The use of arrest and conviction records to deny employment can be illegal under Title VII of the Civil Rights Act of 1964, when it is not relevant for the job, because it can limit the employment opportunities of applicants or workers based on their race or ethnicity.

This is consistent with the EEOC’s long-held position that, to hold a conviction record against an applicant, and employer must show that excluding the applicant based on the conviction is job-related and consistent with business necessity.

In explaining this position, the EEOC cited its long-standing guidance: “When employers contemplate instituting a background check policy, the EEOC recommends that they take into consideration the nature and gravity of the offense, the time that has passed since the conviction and/or completion of the sentence, and the nature of the job sought in order to be sure that the exclusion is important for the particular position.  Such exclusions can create an adverse impact based on race in violation of Title VII.”

2.    According to the EEOC, “Under Pepsi’s former policy, job applicants who had been arrested pending prosecution were not hired for a permanent job even if they had never been convicted of any offense.

This is consistent with the EEOC’s long-held position that, to hold a non-conviction against an applicant, an employer must do something beyond finding the criminal history record to determine that the applicant actually committed the offense. Once the employer concludes that the applicant actually committed the offense, then the employer must ensure that excluding the applicant is both job-related and consistent with business necessity, just as it would for a conviction record.

The EEOC’s press release on the subject is available at http://www.eeoc.gov/eeoc/newsroom/release/1-11-12a.cfm.

Pamela Davata, an attorney who represents the National Association of Professional Background Screeners (NAPBS), commented on the action in an Associated Press article available at http://tinyurl.com/7bjamxv.

For more information on how this may affect your screening program and how backgroundchecks.com can help, please contact your client relationship representative.


Tag Cloud
Categories
Recent Posts

Latest News

  • June 20 Repeat background checks are becoming more common, with companies in India leading the charge. What does this trend look like, and how can employers embrace it now to stay ahead of the curve?
  • June 19

    Every federal job involves a background check of some kind. These background checks and how they are evaluated vary based on job, department, and security clearance level.


  • June 18

  • June 14 Ban the box laws aim to improve opportunities for employment. Could they have the opposite effect instead?
  • June 13 Jacobs Petroleum Products is a regional petroleum company that operates throughout Pennsylvania, West Virginia, Ohio, and Maryland. Apart from their employees carrying much responsibility and have frequent contact with customers, the company’s hiring also tends to be segmented since individual store managers are responsible for hiring talent for their own stores. In this employment landscape, Jacobs Petroleum Products needed a reliable and effective way to screen its new hires for criminal infractions and other red flags.
  • June 12

    The University of Wisconsin System may tweak its hiring and reference check processes. The potential changes come after one of UW’s assistant deans was accused of sexual harassment.


  • June 07 Stories of abuse by coaches in youth sports leagues continue to crop up around the country, but rules and guidelines remain patchy and enforcement is often lacking. The struggle to implement an effective system continues nationwide.
  • June 07 Financial background checks, usually referred to as credit history checks, can be an effective way to find out if a candidate is fit to handle accounts, financial data, and other assets at your business.
  • June 06 The Society for Human Resource Management and the Charles Koch Institute recently commissioned a survey to find out how willing employers were to hire people with criminal records. The study indicates that managers, HR professionals, and employees themselves are becoming more comfortable with the idea of hiring and working with ex-offenders.
  • June 04 Are fingerprint background checks the gold standard for employee screening, or are they overhyped? We look at some of the myths and misconceptions surrounding these checks.