Pepsi Beverages Co. 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 announced Wednesday with the Equal Employment Opportunity Commission is part of a national government crackdown on hiring policies that can hurt blacks and Hispanics.
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.
Pepsi Beverage spokesman Dave DeCecco said the company’s criminal background check policy has always been neutral and that the EEOC did not find any intentional discrimination. He said after the issue was first raised in 2006, the company worked with the EEOC to revise its background check process “to create a workplace that is as diverse and inclusive as possible.”
“We are committed to promoting diversity and inclusion and we have been widely recognized for our efforts for decades,” DeCecco said.
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.