Blog

 
     

Pepsi Settles EEOC Class Charge for $3.1 Million

By Michael Klazema on 1/12/2012

The Equal Employment Opportunity Commission announced the 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, an 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 offenseOnce 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 client services.

In addition, to help our clients better understand criminal background checks and the EEOC, backgroundchecks.com’s general counsel, Chris Lemens, hosts a webinar on this subject every other month. For information or to sign up for the webinar, go to: http://www.backgroundbiz.com/campaigns/2012-CCEEO-Webinar-Invitation.html.


Tag Cloud
Categories
Recent Posts

Latest News

  • April 19

    In a post-Penn State scandal world, universities are more aware than ever of the need to protect students by vetting faculty. The extent of this vetting and its implementation are hot topics causing controversy on campuses nationwide.


  • April 18 Amazon’s criminal background checks look back seven years and consider any convictions from that time. All finalists must complete criminal background searches, reference checks, and drug tests.
  • April 17

    From entry-level positions to roles involving “Top Secret” security clearances, military roles can involve a variety of different background investigations. We look at what different types of military background checks entail.


  • April 17 A new CNBC series is looking at true HR stories and their lessons. The most recent installment looked at the consequences of not running background checks.
  • April 12 Complicated by patchwork legislation and continuing federal prohibition, marijuana legalization poses several challenges for employers and would-be employees alike. Despite its legal status in a growing number of states, marijuana continues to negatively impact job-seekers.
  • April 12 Familiarizing yourself with the legality of background checks is essential. Continue reading about laws and regulations.
  • April 11

    Understanding the background check obligations in your industry and state.

  • April 10 A former employee of a senior assisted living community is facing charges for stealing from a resident. The alleged theft occurred after the employee gained access to the patient’s credit cards and checking account.
  • April 06 Background checks aren’t pass or fail. Employers consider various factors before making any hiring decision based on background check data.
  • April 06  Level 1 and Level 2 are terms used in Florida law to describe background check requirements for employers. We look at what a Level 2 background check entails.