In a recent settlement with the EEOC, PepsiCo Inc.’s biggest bottling unit, Pepsi Beverages (“Pepsi”) has agreed to pay $3.13 million and offer jobs and training to resolve allegations that it engaged in nationwide hiring discrimination against African Americans. This investigation and settlement comes as a result of the EEOC’s crackdown on corporate policies that discriminate against African Americans and Hispanics.
The government’s investigation found that Pepsi’s policy on conducting criminal background checks discriminated against over 300 African Americans in violation of the Civil Rights Act. Pepsi’s policy adversely affected African American applicants when it used a criminal background check which disproportionately excluded African Americans form being hired. The former policy did not hire any job applicants who had been arrested pending prosecution even if they had never been convicted of any offense.
The same policy also excluded from employment any applicants who had been arrested or convicted of certain minor offenses. Title VII of the Civil Rights Act of 1974 makes it illegal to use arrest and conviction records to discriminate in hiring when it is not relevant to the job.
While being investigated by the EEOC, Pepsi changed its criminal background check policy to avoid discrimination. Dave DeCecco, Pepsi’s spokesperson, has stated that Pepsi’s new policy aims to take a more “individualized approach” and will consider the applicant’s history with respect to the job being applied for.
Along with monetary compensation, Pepsi will also give job opportunities to persons who were denied employment under the former criminal background check policy and still want a job and are qualified. Pepsi will also have to provide the EEOC with reports on its hiring practices under its new policy as well as have its hiring personnel and managers undergo Title VII training.
Julie Schmid, Acting Director of the EEOC’s Minneapolis Area Office stated that 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 contemplation 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 on race in violation of Title VII.”
It is a shame that a company as large and well-known as Pepsi was engaging in such a discriminatory practice. Although the EEOC did not find any intentional discrimination on Pepsi’s behalf, Pepsi’s policy was still discriminatory and adversely impacted over 300 African Americans. It was basically trying and convicting applicants who in fact had never been convicted of any offense and excluding them from consideration for employment.
Even if you think your corporate employment policies are not discriminatory, you need to evaluate them and make sure they don’t have a discriminatory impact on any minorities. Make sure you have a well thought out, reasonable criminal background check policy related to the job for which you are hiring. For example, it may be reasonable not to hire an individual with a recent history of violent crimes for the position of a door-to-door salesman. However, it may not be reasonable to deny employment to a qualified individual for the position of receptionist because she was arrested for disorderly conduct 15 years ago and never convicted.
Our attorneys have helped many companies evaluate their hiring polices to ensure that they are not discriminatory. Our attorneys have also conducted hundreds of seminars and training sessions for managers and supervisors on how to avoid and deal with discrimination at the workplace. Call our Discrimination Agreement Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you avoid any potential litigation.
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