Dollar General Settles EEOC Lawsuit Over Disparate Impact Claims

Recently, discount retailer Dollar General agreed to pay $6 million to settle a lawsuit filed by the Equal Employment Opportunity Commission (EEOC). The lawsuit, filed in 2013 by the EEOC, claimed that Dollar General’s use of criminal history during the hiring process violated Title VII of the Civil Rights Act of 1964 because of its disparate impact on black job applicants.

According to the lawsuit, Dollar General used criminal history data in a way that had a disparate impact on minority applicants. Their hiring process, which used criminal history data as a criterion to employment, could not be justified by a business necessity.

According to the 2012 Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, the EEOC recommended that consideration of criminal history in hiring decisions must be limited to convictions for which exclusion would be job-related for the position in question and consistent with business necessity. When it comes to business necessity, employers must consider:

  • Nature and gravity of the offense
  • Time passed since the offense or completion of sentence
  • Nature of the job held or sought

Only after considering these “Green factors” should an employer make an employment determination.

Along with the $6 million settlement, Dollar General also agreed to hire a “criminal history consultant” to evaluate the use of criminal conviction history in hiring decisions and to make recommendations for the consideration of criminal history in hiring decisions.

Dollar General also will not discourage applicants with a criminal history from applying for employment, train managers to not discourage applicants with a criminal history and establish a reconsideration process for any applicants who fail the criminal background check.

Dollar General denied all allegations.

This case is a good reminder for any employers who consider criminal history when evaluating candidates. Employers cannot use blanket exclusions to eliminate applicants from the hiring pool. Any found criminal history must be carefully considered to understand how it may relate to the job that is in question. Otherwise you may risk disparate impact claims.

IntelliCorp is accredited with the Professional Background Screening Association (PBSA) and takes legal compliance very seriously. View our compliance page to get more information.

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