Are criminal background checks race-biased?
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Pepsi Beverages reached a settlement agreement with the Equal Employment Opportunity Commission (EEOC), in which it will pay $3.13 million and modify its training and hiring processes based on allegations of racial discrimination. An investigation by the EEOC found evidence that Pepsi’s use of criminal background checks during the hiring process had an adverse and disproportionate impact on black job applicants.
Under Pepsi's policy, job applicants who had been arrested pending prosecution were denied job offers, even if they had not been convicted. In addition, Pepsi's policy denied employment to job applicants arrested or convicted of particular minor offenses. The EEOC found that Pepsi's policy disproportionately impacted more than three hundred individuals.