Pepsi to Pay Over $3 Million to Settle Discrimination Suit

Pepsi’s largest bottling plant will pay $3.13 million to over 300 people after it was determined that criminal background checks formerly used by the company discriminated against African Americans. The complaint was filed in Minnesota by the U.S. Equal Employment Opportunity Commission (EEOC) According to the EEOC, the background check “disproportionately excluded black applicants from permanent employment.” In addition to the monetary settlement, Pepsi will also offer job opportunities to all applicants that were previously denied jobs but still wanted them.

When employers contemplate instituting a background check policy, the EEOC recommends that they take into consideration the nature and gravity of the offense.

The EEOC filed the complaint and conducted the investigation because they believed that the policy violated Title VII of the Civil Rights Act of 1964. The policy led to the denial of job opportunities to anyone who had been arrested or convicted of certain minor offenses, as well as those who had been arrested but not yet convicted of a crime. Under the Civil Rights Act, this is considered discrimination if it excludes some races because of criminal background checks not related to the job. Pepsi recently changed its criminal background check policy.

Julie Schmid, the Director of the office of the Minneapolis EEOC that filed the complaint, said “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 completion of the sentence, and the nature of the job sought in order to be sure that the exclusion is important for the particular position.” She stressed that these criminal background checks should not be unnecessarily broad.

Federal law protects applicants from being discriminated against for race, gender, age, religion or national origin.