Well, it’s happened and it’s a big one. Pepsi Beverages Company has agreed to a $3.1 million settlement with the Equal Opportunity Commission (EEOC).
This comes following federal charges that Pepsi committed racial discrimination in its hiring practices. At issue was the use of criminal background checks to screen job applicants, but more specifically, the elimination of approximately 300 African American applicants based on arrest records (but not necessarily convictions). After the findings surfaced back in 2006, Pepsi was cooperative, and to avoid a lawsuit worked with the EEOC to reach the agreement.
The EEOC says using arrest and conviction records to deny employment can be illegal if it’s irrelevant for the job. Along with the financial settlement, the 300 or so applicants that were denied employment will receive suitable job offers and share in the majority of the $3.1 million. In addition, Pepsi will provide the EEOC with regular reports on its hiring practices and conduct anti-discrimination to hiring personnel. Pepsi has also modified their hiring practices and process to check applicant backgrounds.
Based on what’s happened at Pepsi, it’s probably a very good idea for businesses to revisit or examine their hiring and background check policies to be in compliance with the EEOC and avoid against problems in the future.
Click here to read the EEOC press release on the Pepsi settlement.
Click here to read an article on the Pepsi story.
Click here to go directly to the EEOC website.