Pepsi punished for using arrest records to screen out job applicants

The AP reports (see discussion following article):

Pepsi Beverages pays $3M in racial bias case

WASHINGTON—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 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.

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.

“I commend Pepsi’s willingness to reexamine its policy and modify it to ensure that unwarranted roadblocks to employment are removed,” EEOC Chairwoman Jacqueline Berrien said in a statement.

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.

About 73% of major employers report that they always check on applicants’ criminal records, while 19% do so for select job candidates, according to a 2010 survey by the Society for Human Resource Management.

But increased federal scrutiny of such policies has led some companies to reevaluate their hiring process. Pamela Devata, a Chicago employment lawyer who has represented companies trying to comply with EEOC’s requirements, said there has been an uptick over the past year in EEOC charges over the use of background checks.

“The EEOC has taken a very aggressive enforcement posture on the use of criminal background and criminal history,” Devata said.

Pepsi’s DeCecco said the company’s new policy would take a more “individualized approach” in considering the applicant’s criminal history against the particular job being sought.

Pepsi Beverages is PepsiCo’s beverage manufacturing, sales and distribution operating unit in the United States, Canada and Mexico.

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.

The commission held a special meeting on the topic of criminal background checks last summer, and Devata said employers have been expecting the EEOC to issue more specific guidance.

EEOC officials have said, for example, that an old drunken driving conviction may not be relevant to a clerical job, but a theft conviction may disqualify someone from working at a bank.

Julie Schmid, acting director of the EEOC’s Minneapolis office, said the EEOC recommends that employers consider the nature and gravity of offenses, the time that has passed since conviction or completion of a sentence, and the nature of the job sought.

“We hope that employers with unnecessarily broad criminal background check policies take note of this agreement and reassess their policies to ensure compliance” with antidiscrimination laws, Schmid said in a written statement.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Stuart L., who sent the article, wrote:

I imagine that very soon, any company without approved non-discrimination policies will be prevented from operating or shut-down by the equality fascists.

LA replies:

This settlement is similar to, though perhaps not as bad, as other anti-discrimination measures. It is similar to Griggs v. Duke, ultimately put in statutory form in the Civil Rights Act of 1991 (signed into law by Bush the elder), which prohibited employers from administering general aptitude tests to job applicants and required that any test be closely geared to the specific skills used in a particular job. This was very, very bad, because general aptitude tests screen out people who lack overall intelligence, and now companies were denied the ability to do that.

This current settlement follows the same logic as Griggs and the 1991 CRA: for an applicant’s arrest and convictions record to bar him from a job, it must have specific relevance to the job being sought. However, on first impression it strikes me as not quite as sweeping as the CRA, since it does allow the arrest record to be considered, whereas the 1991 CRA bars any general aptitude test.

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Jake F. writes:

James Taranto made a good point about the relationship of race, college degrees, and intelligence tests in this article in 2007:

What most professional jobs require is basic intellectual aptitude. And what has changed since the 1970s is that the court has developed a body of law that prevents employers from directly screening for such aptitude. The landmark case was Griggs v. Duke Power Co. (1971). A black coal miner claimed discrimination because his employer required a high-school diploma and an intelligence test as prerequisites for promotion to a more skilled position. The court ruled 8-0 in the miner’s favor. “Good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as ‘built-in headwinds’ for minority groups,” Chief Justice Warren Burger wrote.

This became known as the “disparate impact” test, and it applies only in employment law. Colleges and universities remain free to use aptitude tests, and elite institutions in particular lean heavily on exams such as the SAT in deciding whom to admit. For a prospective employee, obtaining a college degree is a very expensive way of showing that he has, in effect, passed an IQ test.

But why are employers able to get away with requiring a degree without running afoul of Griggs? Because colleges and universities—again, especially elite ones—go out of their way to discriminate in favor of minorities. By admitting blacks and Hispanics with much lower SAT scores than their white and Asian classmates, purportedly in order to promote “diversity,” these institutions launder the exam of its disparity.

Thus the higher-education industry and corporate employers have formed a symbiotic relationship in which the former profits by acting as the latter’s gatekeeper and shield against civil-rights lawsuits. Little wonder that in 2003, when the Supreme Court considered the constitutionality of discriminatory admissions policies at the University of Michigan, 65 Fortune 500 companies filed a friend-of-the-court brief urging that they be upheld.

Posted by Lawrence Auster at January 12, 2012 07:23 AM | Send