Schenker Inc to Pay $750,000 To Conciliate EEOC Class Investigation

CHICAGO – Schenker Inc., a global leader in the field of contract logistics services, has agreed to pay $750,000 to conciliate several charges of discrimination filed with the U.S. Equal Employment Opportunity Commission (EEOC) pursuant to Title VII of the Civil Rights Act of 1964, the agency announced today.

The multi-year investigation began in May 2011 when a group of warehouse employees in Joliet, Ill., alleged that they had been subjected to ongoing race and national origin harassment in the workplace, which persisted despite their complaints to management. A subset of the group also made allegations of sexual harassment. Following the initial complaints, the EEOC investigated allegations that the company’s national hiring practices hindered the employment prospects of black and Hispanic applicants. The agency issued a finding that the evidence showed reasonable cause to believe the company had violated the Civil Rights Act.

While the company has denied the allegations, in an effort to resolve the charges and reaffirm its commitment to equal employment opportunity, Schenker Inc. agreed to pay $750,000 to individuals identified by EEOC as having been subjected to the unlawful discrimination. The monetary relief will be awarded as damages to individual Charging Parties and class members who worked at the Joliet warehouse, along with others identified by EEOC as having been denied employment opportunities.

The company has also partnered with EEOC to implement a variety of measures aimed at preventing discrimination in their workplace and educating their workforce. Notably, the company updated its criminal background check policy to comply with EEOC guidance, ensuring that background checks on prospective employees are not conducted until an offer of employment has been made. Moreover, criminal records will be reviewed on a case by case basis, with consideration given to the nature and gravity of the offense, the time elapsed, and the specifications of the position.

“Harassment, retaliation, and the use of overly broad criminal background policies are all priorities under the EEOC’s Strategic Enforcement Plan,” said Julianne Bowman, director of EEOC’s Chicago District Office. “This resolution addresses those priorities, improving Schenker’s hiring procedures and the working lives of current Schenker employees as a result.”

Schenker Inc. also agreed to update its policies on harassment and discrimination, implement an external outlet for individuals who wish to make complaints of discrimination, and conduct annual training for all its employees nationwide, including specialized training for those working in a HR or hiring capacity. Furthermore, the company agreed to provide periodic reports of any new complaints of discrimination and applicant flow data to the EEOC for the next three years to ensure efficacy of these new procedures.

EEOC Files Suit Against Two Employers for Use of Criminal Background Checks

BMW Fired and Denied Hire to Class of Employees Who Worked Successfully for Years; Dollar General Disproportionately Excluded African Americans From Hire

WASHINGTON – A BMW manufacturing facility in South Carolina, and the largest small-box discount retailer in the United States violated Title VII of the Civil Rights Act by implementing and utilizing a criminal background policy that resulted in employees being fired and others being screened out for employment, the U.S. Equal Employment Opportunity Commission alleged in two lawsuits filed today.

The EEOC’s Charlotte district office filed suit in U.S. District Court of South Carolina, Spartanburg Division against BMW Manufacturing Co., LLC, and a separate suit was filed in Chicago against Dolgencorp, doing business as Dollar General.

In the suit against BMW, the EEOC alleges that BMW disproportionately screened out African Americans from jobs, and that the policy is not job related and consistent with business necessity. The claimants were employees of UTi Integrated Logistics, Inc. (“UTi”), which provided logistic services to BMW at the South Carolina facility. The logistics services included warehouse and distribution assistance, transportation services and manufacturing support.

Since 1994, BMW has had a criminal conviction policy that denies facility access to BMW employees and employees of contractors with certain criminal convictions. However, when UTi assigned the claimants to work at the BMW facility, UTi screened the employees according to UTi’s criminal conviction policy. UTi’s criminal background check limited review to convictions within the prior seven years. BMW’s policy has no time limit with regard to convictions. The policy is a blanket exclusion without any individualized assessment of the nature and gravity of the crimes, the ages of the convictions, or the nature of the claimants’ respective positions.

In 2008, UTi ended its contract with BMW. During a transitional period, UTi employees were informed of the need to re-apply with the new contractor to retain their positions in the BMW warehouse.  As part of the application process, BMW directed the new contractor to perform new criminal background checks on every current UTi employee applying for transition of employment. The new contractor subsequently discovered that several UTi employees had criminal convictions in violation of BMW’s criminal conviction policy. As a result, those employees were told that they no longer met the criteria for working at the BMW facility and were subsequently terminated and denied rehire as employees of the new contractor, despite the fact that many of the employees had worked at the BMW facility for years.

In Illinois, the Chicago office of the EEOC filed a nationwide lawsuit based on discrimination charges filed by two rejected black applicants.  That lawsuit charges that Dollar General conditions all of its job offers on criminal background checks, which results in a disparate impact against blacks.  Dollar General operates 10,000 stores in 40 states, plus 11 distribution centers. Ninety percent of all Dollar General employees are store clerks who are both stockers and cashiers at the stores.

According to the EEOC, one of the applicants who had filed a charge with EEOC was given a conditional employment offer, although she had disclosed a six-year-old conviction for possession of a controlled substance.  Her application also showed that she had previously worked for another discount retailer as a cashier-stocker for four years.  Nevertheless, her job offer was allegedly revoked because Dollar General’s practice was to use her type of conviction as a disqualification factor for 10 years.

The other applicant who filed an EEOC charge was fired by Dollar General although, according to the EEOC, the conviction records check report about her was wrong – she did not have the felony conviction attributed to her.  The EEOC said that although she advised the Dollar General store manager of the mistake in the report, the company did not reverse its decision and her firing stood.

“Title VII of the Civil Rights Act of 1964 prohibits discrimination against job applicants and employees on account of their race,” said EEOC Chair Jacqueline A. Berrien.  “Since issuing its first written policy guidance in the 1980s regarding the use of arrest and conviction records in employment decisions, the EEOC has advised employers that under certain circumstances, their use of that information to deny employment opportunities could be at odds with Title VII.”

“The Commission is committed to using public education and informal resolution to address discriminatory hiring practices,” said David Lopez, EEOC General Counsel.  “When these methods are unsuccessful, the Commission will, if necessary, seek redress from the federal courts and ensure equal opportunity for all.  This is the latest in a series of systemic cases the Commission has filed to challenge unlawful hiring practices.”

Both lawsuits were brought under Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race and national origin as well as retaliation.  The EEOC will assert claims of disparate impact, in both cases, against African Americans. The EEOC filed suit in each instance after attempting to resolve the matter through settlement.  In all, the Commission will seek back pay, as well as injunctive relief to prevent future discrimination of employees and applicants.

Eliminating barriers in recruitment and hiring, especially class-based recruitment and hiring practices that discriminate against racial, ethnic and religious groups, older workers, women, and people with disabilities, is one of six national priorities identified by the Commission’s Strategic Enforcement Plan (SEP).

On April 25, 2012, the EEOC issued updated enforcement guidance on employer use of arrest and conviction records. The EEOC is a member of the federal interagency Reentry Council, a Cabinet-level interagency group convened to examine all aspects of reentry of individuals with criminal records.  Among other issues, the Reentry Council is working to reduce barriers to employment, so that people with past criminal involvement – after they have been held accountable and paid their dues – can compete for appropriate work opportunities in order to support themselves and their families, pay their taxes, and contribute to the economy.

Pepsi to Pay $3.13 Million and Made Major Policy Changes to Resolve EEOC Finding of Nationwide Hiring Discrimination Against African Americans

Company’s Former Use of Criminal Background Checks Discriminated Based On Race, Agency Found
MINNEAPOLIS – Pepsi Beverages (Pepsi), formerly known as Pepsi Bottling Group, has agreed to pay $3.13 million and provide job offers and training to resolve a charge of race discrimination filed in the Minneapolis Area Office of the U.S. Equal Employment Opportunity Commission (EEOC).  The monetary settlement will primarily be divided among black applicants for positions at Pepsi, with a portion of the sum being allocated for the administration of the claims process. Based on the investigation, the EEOC found reasonable cause to believe that the criminal background check policy formerly used by Pepsi discriminated against African Americans in violation of Title VII of the Civil Rights Act of 1964.

The EEOC’s investigation revealed that more than 300 African Americans were adversely affected when Pepsi applied a criminal background check policy that disproportionately excluded black applicants from permanent employment.  Under Pepsi’s former policy, job applicants who had been arrested pending prosecution were not hired for a permanent job even if they had never been convicted of any offense.

Pepsi’s former policy also denied employment to applicants from employment who had been arrested or convicted of certain minor offenses. The use of arrest and conviction records to deny employment can be illegal under Title VII of the Civil Rights Act of 1964, when it is not relevant for the job, because it can limit the employment opportunities of applicants or workers based on their race or ethnicity.

“The EEOC has long standing guidance and policy statements on the use of arrest and conviction records in employment,” said EEOC Chair Jacqueline A. Berrien.  “I commend Pepsi’s willingness to re-examine its policy and modify it to ensure that unwarranted roadblocks to employment are removed.”

During the course of the EEOC’s investigation, Pepsi adopted a new criminal background check policy.  In addition to the monetary relief, Pepsi will offer employment opportunities to victims of the former criminal background check policy who still want jobs at Pepsi and are qualified for the jobs for which they apply.  The company will supply the EEOC with regular reports on its hiring practices under its new criminal background check policy.  Pepsi will conduct Title VII training for its hiring personnel and all of its managers.

“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.  Such exclusions can create an adverse impact based on race in violation of Title VII,” said Julie Schmid, Acting Director of the EEOC’s Minneapolis Area Office. “We hope that employers with unnecessarily broad criminal background check policies take note of this agreement and reassess their policies to ensure compliance with Title VII.”

“We obtained significant financial relief for a large number of victims of discrimination, got them job opportunities that they were previously denied, and eradicated an unlawful barrier for future applicants,” said EEOC Chicago District Director John Rowe. “We are pleased that Pepsi chose to work with us to reach this conciliation agreement and that through our joint efforts, we have been able to bring about real change at Pepsi without resorting to litigation.”

The EEOC enforces federal laws against employment discrimination.  The EEOC issued its first written policy guidance regarding the use of arrest and conviction records in employment in the 1980s.  The Commission also considered this issue in 2008 and held a meeting on the use of arrest and conviction records in employment last summer.  The EEOC is a member of the federal interagency Reentry Council, a Cabinet-level interagency group convened to examine all aspects of reentry of individuals with criminal records.