The EEOC announced today that Pepsi Beverages has agreed to a settlement of $3.1 million to resolve a claim by black prospective employees.  Between 2006 and 2010, Pepsi excluded from any consideration for employment any applicant who had been arrested or convicted of a crime, including minor offenses (not sure how minor).

The EEOC found reasonable cause to believe that Pepsi’s policy had a disproportionate effect on black applicants, and was poised to file a lawsuit against Pepsi.  According to the EEOC, the use of criminal background checks “can be legal”, but now apparently, it can also be illegal.

For the uninitiated, the US laws on discrimination not only prevent what might be called direct discrimination – toward a particular individual or group of individuals, but also they also prevent what is known as “disparate treatment”.  Disparate treatment happens when a protected class does not equal treatment with other protected class.  Disparate treatment can even happen when an otherwise innocuous policy – such as using criminal background checks – has a disproportionate and discriminatory effect.

Now, many of you reading this would say that it is ridiculous to say that you can’t exclude prospective employees because they have a criminal history.  After all, being a criminal isn’t a “protected class”.  I’m right there with you, but the EEOC doesn’t seem to see it that way.  From its perspective, a person’s criminal history might not be relevant to whether they can be a good employee.  I’m not exactly sure how that would work.  A person who commits a crime is willing to cross a line that I believe an employer ought to have the right to say they don’t want crossed.  It doesn’t matter to me if the person is applying for a job as a janitor and their crime was being drunk in public.  Sure the two are different, but that crosses a line I don’t want crossed.

If the EEOC can sue for this, it is tantamount to making being an ex-con a protected class.  Of course, since I am not king of the world, I don’t get to overrule this decision and my opinion doesn’t matter.

So, what does this mean for you, employers?  I guess it means that you have to give more thoughtful consideration to hiring criminals, or perhaps you have to be more careful to have a thoughtful excuse why a particular criminal shouldn’t be hired and mark it on their application.