The EEOC Settles Six-Year-Old Lawsuit Attacking Background Check Policy
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The EEOC Settles Six-Year-Old Lawsuit Attacking Background Check Policy

Dollar General and the Equal Employment Opportunity Commission (“EEOC”) recently settled a six-year-old Title VII lawsuit.  The EEOC brought its race discrimination claim on behalf of a Charging Party and a class of Black job applicants, alleging that Dollar General’s use of criminal justice history information in the hiring process had a disparate impact on Black applicants.

In its Complaint, the EEOC claimed that Dollar General (named in the lawsuit as DolGenCorp, LLC) improperly refused to hire job applicants who failed background checks.  According to the EEOC, Dollar General would require applicants who received a conditional offer of employment to undergo a background check, and if they failed, their offer of employment was withdrawn without further inquiry.

In deciding whether an applicant passed or failed a background check, Dollar General would allegedly use a “matrix” identifying specific crimes and the required period of time elapsed since the conviction for each crime.  For example, a possession of drug paraphernalia conviction must be at least ten years old to pass the background check; an illegal dumping conviction must be at least three years old; and an improper supervision of a child conviction must be at least three years old.

The EEOC had previously criticized background check policies such as the one alleged in the lawsuit in a 2012 Enforcement Guidance. The Guidance instructed that employers should exclude applicants from employment based on criminal history only if the exclusion is “job related for the position in question and consistent with business necessity,” which usually requires an “individualized assessment” of each applicant.

To facilitate the settlement, the court entered a Consent Decree jointly prepared by Dollar General and the EEOC, which provides, among other things, that Dollar General is prohibited from considering criminal history in making hiring decisions unless it hires a criminal history consultant to evaluate the use of criminal history in hiring decisions by Dollar General and make recommendations.  The Consent Decree further provides that the consultant will consider the following information in making its recommendation:

  • the amount of time passed since the conviction or release from incarceration;
  • the types of behaviors typified by the crimes committed;
  • the number of past offenses;
  • the nature and gravity of the past offenses;
  • the age of the applicant at the time of conviction and at the time of application;
  • the nature of and risks associated with Dollar General’s workplace;
  • the potential for recidivism;
  • Dollar General’s sale of certain merchandise such as beer, wine, and tobacco;
  • Dollar General’s job positions and duties, operational structure, and business objectives such as loss prevention;
  • the nature of the job held or sought, including the nature of the job’s duties, the job’s essential functions, and the circumstances under which the job is performed;
  • depositions taken in the case; and
  • relevant publications on the use of criminal history for hiring decisions.

Dollar General’s other obligations in the Consent Decree include recordkeeping, providing data collection reports to the EEOC, training employees who have material responsibility for the criminal history review process, updating the employee handbook, and payment of $6 million to the class members.  The case was filed in the U.S. District Court for the Northern District of Illinois, case number 1:13-cv-04307.

Dollar General’s settlement with the EEOC is a reminder to employers to periodically review and update their background check policies to ensure they comply with federal, state, and local laws.

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