Employer Pays $2.7 Million to Settle Criminal History Case

A global leader in supply chain management and logistics recently entered into a $2.7 million settlement to resolve allegations that its use of criminal history was discriminatory.

The Complaint

As alleged in the complaint, the employer used a criminal history screening policy that denied job opportunities to individuals with non-job-related convictions resulted in a blanket ban on employment for individuals with a criminal history. Accordingly, the complaint alleged the employer’s policy led to an unjustified and unlawful disparate impact.

According to the complaint, the named plaintiff disclosed his criminal history during an interview and was allegedly told the history would not be an issue since the position was temporary. He was subsequently hired and performed the role as a temporary worker (placed via a staffing agency) for a period of eight months without incident. He then applied for a permanent position with the employer when his background check revealed an 18-year-old felony conviction from 1998 and a 3-year-old probation violation for failing to report from 2013.

Following the background check, he was denied employment and was also fired from the temporary position. The complaint alleges he was not afforded an opportunity to provide additional information regarding evidence of rehabilitation; nor did the employer conduct an individualized assessment. A second named plaintiff was also denied employment following a background check which revealed misdemeanor convictions from 2011 and 2013.

As further alleged in the complaint, the employer maintained a wide range of felony offenses as “exclusionary offenses,” which led to blanket disqualification of job applicants without any individualized review or consideration. Misdemeanor convictions within the last five years were treated in a similar fashion. The complaint also alleges the employer automatically rejected applicants who fail to completely disclose their entire criminal history without an inquiry into the incomplete or falsified disclosure.

The Settlement

These allegations resulted in the $2.7 million settlement. It is important to note that the employer did not admit or concede liability. As part of the settlement agreement, the employer will engage a consultant to review the employer’s criminal history background check processes and recommend improvements. The cost of this engagement is separate from the $2.7 million and may cost up to $50,000.