Pennsylvania Litigation Blog

In a settlement likely to have long-lasting implications for employers nationwide, Pepsi Beverages Company has agreed to pay $3.13 million to resolve charges stemming from its policy against hiring applicants who had been arrested and/or convicted of certain minor offenses. The Equal Employment Opportunity Commission (“EEOC”) determined that Pepsi’s policy adversely affected over 300 black applicants, in violation of Title VII of the Civil Rights Act. Pepsi will also provide job offers and training to many of these applicants. The Pepsi investigation is part of a nationwide EEOC crackdown on hiring policies that can hurt black and Hispanic applicants. The “use of arrest and conviction records to deny employment can be illegal,” according to the EEOC, “when it is not relevant for the job,” because it can limit opportunities for minorities with higher arrest and conviction rates. The agency has indicated that it “hope[s] that employers with unnecessarily broad criminal background check policies take note of this agreement and reassess their policies to ensure compliance with Title VII.”

Pennsylvania employers are already prohibited from having blanket policies regarding criminal background checks. Under Pennsylvania law, Title 18 section 9125, an applicant’s convictions may be considered only to the extent to which they relate to the available position, and employers must notify applicants if their criminal background played a role in the decision not to hire them.

The Pennsylvania Human Relations Commission has opined that employers “must be able to show that inquiry into conviction is substantially related to an applicant’s suitability to perform major job duties” and that the criminal background check is, thus, required by “business necessity.” The EEOC’s statements surrounding the Pepsi settlement potentially takes this constraint nationwide.

Given these developments, employers should ensure that hiring practices conform to some “relevance” standard for criminal background disqualifications. The EEOC has stated, for example, that a recent theft conviction may be relevant to a bank teller position, while a years-old drunk driving conviction is likely not relevant to a clerical position. Employers should take steps to ensure that those in charge of hiring have access only to aspects of an applicant’s criminal background deemed relevant to a given position or that criminal background checks are not performed until late in the hiring process after a conditional offer is made. An individualized analysis should then be undertaken to ensure that the age and circumstances of the conviction, the available position, and any interim conduct suggesting rehabilitation of the applicant are
adequately taken into account.