Bullseye on Hiring Bias
After coming under fire for what critics said was racially biased hiring practices, Target Corp. recently agreed to pay out nearly $4 million and to re-examine how it utilizes criminal-background screening.
A judge signed off on the settlement April 5 in a class-action lawsuit led by individuals with criminal records who were denied employment by Target, an agreement that also addressed a complaint filed by the Equal Employment Opportunity Commission.
The plaintiffs, represented by the NAACP Legal Defense and Education Fund Inc. and Outten & Golden, contended that Target’s criminal-background policies are so broad that they unfairly affect African-American and Latino applicants, who are disproportionately represented in the criminal-justice system, which they said is a violation of Title VII of the Civil Rights Act of 1964. They argued that the company lacks clearly defined guidelines for handling applicants with criminal records, often resulting in those with any prior conviction at all being screened out, even if the offense is not relevant to the nature of the work.
As part of the settlement, Target will work with two industrial- and organization-psychology experts to ensure clear screening guidelines and protocol are in place that dictate that only those with recent convictions related to the job and who could pose a threat would be disqualified.
The company will also fast-track class-action plaintiffs to employment at Target. Cheryl-Lyn Bentley, an associate at Outten & Golden, says it’s unclear how many people will take advantage of that offer, since the overall number of class-action participants has yet to be determined—as the case reaches back to 2006.
“Some people may elect to take advantage of priority hiring and some may not be able to, if they don’t live within a commutable distance to a Target store or if they may now be retired or disabled,” Bentley says. As part of the settlement, Target will pay $3.7 million to a settlement fund, out of which up to $1,000 will be given to each plaintiff who is not interested in employment with Target.
Bentley called Target’s approach toward criminal-background screening “arbitrary.”
“There are no validated practices when it comes to screening individuals with criminal convictions,” she says, noting that such ambiguity opens up the door to discrimination. That applicants were often turned away for years-old convictions that she says would have no bearing on their job performance was a primary problem area.
“Our hope with this case was to show that these individuals are qualified and capable of working and contributing to society,” Bentley says. “That was one of the goals of the settlement and hopefully this will be a good model for other retailers and large companies to open up jobs to thousands of people who have convictions but who are still qualified and capable.”
In recent years, Target removed a question from its standard job application about criminal history and now addresses the issue in the final stages of the pre-employment process, an approach that will continue to be more narrowly defined as a result of the settlement.
Sweeping exclusions for applicants with criminal records are common, says Sarah Flotte, a partner with Michael Best. Such approaches are at odds with the EEOC’s recommendations regarding the need for individual assessments when it comes to candidates with a criminal history.
“That’s not necessarily because companies are trying to evade the EEOC’s guidance,” she says, “but rather, because the guidance is very confusing.”
In a 4-1 vote in 2012, the EEOC updated previous policy statements clarifying the legalities involving criminal-background checks for employment.
The guidance cautioned that use of criminal-history information could be deemed discriminatory in two primary ways: if it results in disparate treatment, or applicants of a certain protected class, such as race or national origin, being treated differently in employment decisions; or disparate impact for an entire class of selected people, which is the aspect tagged by the Target case. According to the EEOC, any employer with a policy that has a disparate impact must demonstrate that exclusions are “job-related and consistent with business necessity” in order to avoid liability.