Pepsi Beverages Settles Discrimination Complaint

WASHINGTON (AP) — 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.

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.

He said the 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.

About 73 percent of major employers report that they always check on applicants’ criminal records, while 19 percent 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.

The commission held a special meeting on the topic 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.)

  • Crime does pay apparently !

    Are you effen kidding me???? Ya, let’s worry about the rights of convicted criminals. I cannot believe that the “law” demands that a company put their employees in potentially harmful environments just to be “diverse”. And with recidivism being what it is, it would not make me feel comfortable for me or a relative to work alongside someone like that. What a joke.

    • Crime does pay apparently !

      Oh ya, I forgot. Whose fault is it that they had criminal backgrounds anyways? That right, not them. LMFAO.

      • Daniel

        The article said “some were arrested and never chraged” that is not the same as having a crimminal background.

  • Cheeses Riced


  • D. Schultz

    I’m sure those 300 are smiling all the way to the bank …good for them!

  • See BS

    Lawyers are chasing all our jobs away to China with lawsuit abuse.

    Good luck trying to get Asian Billionaires to start business or manufacturing in the State of Minnesota.

    This is what is attacking middle class jobs more than anything.

  • whatevs

    So someone convicted of theft can’t work in a bank? Makes sense. But if they end up working next to me in that clerical job, who protects me from getting my stuff stolen? The locks on our desks are so flimsy you can pull the desk drawer open even if it’s locked.

    • newcraft

      A line has to be drawn somewhere. People have to earn a living. There’s only “so much” weeding out people can do and its appropriate that you wouldn’t place people in positions of responsibility that conflict with their past – but you can’t turn them away if they have the skills you require. And the truth is, you’re just as likely to have your stuff stolen by people who’ve never been in jail. You’re perpetuating a stereotype and showing some naivete if you think they’re the only group of people to worry about.

  • stung4ever

    I can somewhat understand not using arrest records to deny employment. An arrest is not evidence of guilt. Of course, a large amount of arrests, even without convictions, is suggestive of a pattern.

    But it being illegal to use conviction records? That’s just stupid. Even if it isn’t completely relevant to the job, companies should still know what kind of people they’re hiring, and criminal records are a VERY good indicator of someone you don’t want to hire.

    • newcraft

      I agree with your points, however, the blanket approach you’re alluding to has been creeping in with employers using credit scores as indicators of potential behavior, it’s not such a stretch away from this. How many people in this economy have an unblemished credit record? And how is your credit report supposed to reflect on what kind of employee you’ll be? In most cases, it’s irrelevant to how they’ll perform on the job. But because there are a small number of extreme people who had a bad score and then proved unreliable, it’s come to be a new weeding tool for everyone.

      I don’t think they said it’s illegal to use conviction records. What they’re trying to get employers to do is to personalize the process, so the guy who had outstanding parking tickets isn’t put in the same bucket with the guy who embezzled from his previous employer. Just as the guy with bankruptcy and judgements on his credit history shouldn’t be lumped together with the guy who just had a late car payment in a bad year.

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