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Friday, January 20, 2012

Pepsi to Pay Applicants $3.13 Million for Background Checks

By Tommy Eden, Attorney

Pepsi’s background checking policy denied employment to applicants who had been arrested or convicted of certain minor offenses. An investigation conducted by the EEOC revealed that more than 300 African Americans in the Minneapolis area were adversely affected when Pepsi applied a criminal background check policy that disproportionately excluded black applicants from permanent employment.

Pepsi’s policy excluded from consideration job applicants who had been arrested pending prosecution, even when they had never been convicted of any offense.

The EEOC found reasonable cause to believe that the criminal background check policy used by Pepsi discriminated against African Americans in violation of Title VII of the Civil Rights Act of 1964.

Pepsi has voluntarily agreed with the EEOC to pay $3.13 million and provide job offers and training to resolve a charge of race discrimination. 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.

As part of the EEOC settlement, Pepsi: 1) adopted a new criminal background check policy; 2) agreed to offer employment opportunities to victims of the former criminal background check policy who still want jobs at Pepsi and are qualified for the jobs for which they apply; 3) will supply the EEOC with regular reports on its hiring practices under its new criminal background check policy; and 4) will conduct Title VII training for its hiring personnel and all of its managers.

Common Sense Counsel: The EEOC has published policy guidance regarding the use of arrest and conviction records in employment. The EEOC is a member of the federal interagency Reentry Council, a Cabinet-level interagency group convened to examine all aspects of reentry of individuals with criminal records, so this is a real hot button issue.

When employers contemplate instituting a background check policy, they should consider the following: 1) the nature and gravity of the offense; 2) the time that has passed since the conviction and/or completion of the sentence; and 3) the nature of the job sought in order to be sure that the exclusion is important for the particular position and not an unwarranted roadblock to employment. Employers with unnecessarily broad criminal background check policies should take note of this EEOC enforcement and reassess their policies to ensure compliance with Title VII. A well drafted job description is critical to showing that a background check is relevant and not an unwarranted roadblock.

Tommy Eden is a Lee County native, an attorney with the local office of Capell & Howard, P.C. and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at or 334-501-1540. Live EEOC links can be found at