$6 Million Settlement Reached in Criminal Check Discrimination Case

The Equal Employment Opportunity Commission (EEOC) and Dollar General recently reached a $6 million dollar settlement in the long-standing litigation over Dollar General’s criminal background check practices.

Case Background

In June 2013, the EEOC sued Dollar General alleging its criminal history hiring practices led to a disparate impact against black candidates. The lawsuit specifically cited an individual who allegedly had her conditional offer revoked after she disclosed a six-year old conviction for possession of a controlled substance despite demonstrating work history in the retail space. The EEOC alleged Dollar General’s hiring matrix prohibited individuals with that type of criminal history from employment if the conviction occurred within the last ten years without conducting any type of individualized assessment.
 
Dollar General fired back disagreeing with the EEOC’s allegations. Instead, the organization claimed its criminal background check policies were job-related and justified by business necessity. The parties have traded numerous motions and battles in the courtroom over the past six plus years at what is sure to be a significant cost to Dollar General.


 

Settlement Details

In addition to the $6 million settlement, Dollar General agreed to retain a “criminal history consultant” who will evaluate the organization’s use of criminal history information in hiring decisions. The consultant will consider the evidence and depositions from the litigation along with various factors frequently touted by the EEOC such the as nature and gravity of past offenses. From there, the consultant will provide recommendations which Dollar General must implement within 180 calendar days. Dollar General must pay this consultant in addition to the settlement fees agreed upon.
 
Dollar General further agreed to:

• Not engage in unlawful intentional discrimination toward conditional hires on the basis of race.
• Refrain from retaliating against any individual who opposed the organization’s use of criminal history or its related policies.
• Not discourage individuals with criminal histories from applying for employment.
• Temporarily modify its use of criminal history in hiring decisions to conduct internal individualized review for misdemeanor crimes (identified in the consent decree) until it establishes the required changes recommended by the consultant.
• Update its reconsideration process for individuals who had a conditional offer rescinded due to criminal history which includes communication to those individuals informing them that they can ask for the employment decision to be reconsidered.
• Maintain appropriate records related to its hiring decisions and criminal history.
• Provide annual reporting to the EEOC regarding those records.
• Provide training to necessary employees about the consultant’s recommendations, issue notices to store managers regarding hiring individuals with criminal histories and update its employee handbook.
• Issue notice to conditional hires at the time they authorize a criminal background check that individuals with a criminal history will not be automatically excluded.

It’s important to note Dollar General did not admit liability or fault as part of this settlement.

Employer Considerations

The EEOC continues its pursuit of investigations and litigation regarding how employers use criminal background checks as part of the employment decision. Employers are encouraged to engage with qualified legal counsel to review their hiring practices. This review process should include items such as adjudication matrices and terms (i.e., moving away from labels like “fail”, “ineligible” or “do not hire”), how training is provided to staff and the employer’s record-keeping process.