Security Newswire

Pepsi's Settles $3M Background Check Lawsuit

Pepsi Beverages will pay $3.1 million to settle federal charges of race discrimination for using criminal background checks to screen out job applicants — even if they weren't convicted of a crime.

The settlement was announced by the Equal Employment Opportunity Commission.

EEOC officials said the company's policy of not hiring workers with arrest records disproportionately excluded more than 300 black applicants. The policy barred applicants who had been arrested, but not convicted of a crime, and denied employment to others who were convicted of minor offenses.

Using arrest and conviction records to deny employment can be illegal if it's irrelevant for the job, according to the EEOC, which enforces the nation's employment discrimination laws. The agency says such blanket policies can limit job opportunities for minorities with higher arrest and conviction rates than whites.

The company has since adopted a new criminal background policy and plans to make jobs available to victims of the old policy if they are still interested in jobs at Pepsi and are qualified for the openings.

Under the settlement, the company will provide the EEOC with regular reports on its hiring practices and offer antidiscrimination training to its hiring personnel and managers.