Pepsi's $3M, Racially-Biased Background Check
Do you refuse to hire job applicants with an arrest or criminal record? No matter how small or irrelevant the infraction is to the job?
If you do, be careful. The Equal Employment Opportunity has announced that it reached a $3.1 million settlement with PepsiCo over such a policy. Investigators concluded that the practice disproportionately affected African-Americans and other minorities.
The Pepsi settlement is also not the first time the agency has targeted such criminal background check policies.
In fact, some predict that these types of enforcement actions will only increase with time. Commission officials have signaled a growing awareness of issues facing persons with criminal records. This is especially true for racial minorities, as they have higher arrest and conviction rates than whites.
For these reasons, it may be time to review how you use criminal background checks.
We understand that they're useful in protecting your business and preventing negligent hiring suits. And no one blames you for being reluctant to hire an ex-convict. But a wholesale refusal to hire persons with arrest records can get you in trouble.
In addition to working with an attorney to change your policy, consider using the Department of Labor's Federal Bonding Program. The program will give you six months of free "dishonesty" insurance if you hire an at-risk, hard-to-place jobseeker.
It might be just the incentive you need to take a chance on someone who has all the right skills.
If you're still not convinced, think about the size of the Pepsi settlement. You probably won't pay as much, but it'll probably be enough to break the bank.
Related Resources:
- Pepsi Beverages pays $3M in racial bias case (Associated Press)
- Performing an Employee Background Check (FindLaw)
- Pre-Employment Background Check Laws (FindLaw)