by Steven Collis

In its first class action lawsuit challenging an employer’s use of criminal records, the Equal Employment Opportunity Commission (EEOC) ended up dropping its case against PeopleMark and getting socked with $750,000 in sanctions. Recently, the EEOC suffered another stinging loss when a federal court dismissed its discrimination case against Kaplan Higher Education Corporation (which was discussed in a previous blog post, “EEOC’s use of ‘race raters’ against Kaplan University gets failing grade”) based on an unsound analysis by the commission’s expert witness. With the same expert providing statistical evidence in another case, could the agency strike out in a third background check class action lawsuit?

Over the past few years, the EEOC has aggressively challenged the use of credit reports and criminal history checks in hiring decisions, alleging that use of the information results in a discriminatory impact on candidates in protected groups. In 2012, the commission successfully negotiated a $3.13 million prelawsuit settlement of a race discrimination charge against Pepsi in which the soda giant’s criminal background check policy was called into question for allegedly discriminating against African Americans. However, the agency has been less successful pursuing similar cases in court, mainly because of its struggle to proffer reliable evidence of discriminatory impact. Despite the EEOC’s mixed results, the recent settlements and case filings indicate that the use of credit and criminal history checks in the hiring process is a hot topic. read more…

By Jennifer Melton

On January 11, 2012, Pepsi Beverages Company agreed to pay more than $3 million to resolve race discrimination claims filed in 2006 by more than 300 African American job applicants. The claims alleged that the company’s criminal background check policy (1) disproportionately excluded African Americans from employment with Pepsi and (2) violated federal and state legal limits established by Title VII of the Civil Rights Act of 1964. The settlement sends a clear message to other employers: Be more proactive and conduct frequent and comprehensive reviews of criminal background check policies to minimize the likelihood of similar sanctions and fines by the Equal Employment Opportunity Commission (EEOC).

Legal Ramifications

Following an EEOC investigation, the commission ruled that Pepsi’s long- standing policy (which denied employment to job applicants who had been arrested) resulted in race discrimination. Statistics show that minorities tend to have higher arrest and conviction rates than whites. The investigation revealed that in this case, none of the applicants had been convicted of a crime and therefore should have been considered suitable for employment (provided they met the job requirements and qualifications). read more…

By Kara E. Shea

Employers are understandably hesitant to hire an applicant with a criminal history. There are good reasons to exercise caution ― employers face considerable exposure for workplace violence committed by employees.

The U.S. Department of Labor‘s Occupational Safety and Health Administration regularly cites employers that have failed to enact adequate safeguards against workplace violence. Employers also may be sued in private lawsuits based on negligent hiring or retention of employees who commit workplace violence.

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