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Big Pepsi settlement shows background check peril

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in Employment Background Check,Hiring,Human Resources

Pepsi Beverages will pay $3.1 million to resolve EEOC charges that it discriminated against minorities when it refused to hire applicants with arrest records.

The EEOC alleged that Pepsi’s practice of using previous arrests to rule out applicants—even those never convicted of a crime—constituted disparate impact discrimination against minorities. The EEOC claims the practice affected 300 black applicants. Pepsi has agreed to change its policies.

The EEOC has long held that criminal background checks should be limited to only those positions where such information is “job-related and of business necessity.” In those cases, the EEOC believes only convictions should count against the applicant, not arrests.

A 2010 survey by the Society for Human Resource Management found that 73% of major employers always check applicants’ criminal records. Only 19% do so because of security or safety concerns related to a specific job.

{ 1 comment… read it below or add one }

Nick Fishman March 27, 2012 at 8:57 am

I beg to differ the point that this ruling does anything to dissuade employers from conducing criminal background checks. What this case proves is that employers shouldn’t make bright-line hiring decisions, especially when it comes to alleged behavior that didn’t result in a conviction. Had they found actual convictions that were job-related, they surely would have been within their rights to not hire these individuals.


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