CHICAGO — A federal judge has approved a consent decree ending years of contentious litigation between the Equal Employment Opportunity Commission and Dollar General concerning the EEOC’s regulatory action accusing the retailer of discriminatory hiring practices.
According to the decree, which U.S. District Judge Andrea Wood signed Nov. 18, Dollar General will pay $6 million to end a dispute dating as far back as 2011, when the EEOC first raised allegations Dollar General discriminated against black employees and applicants. The decree stipulates the commission won’t pursue further legal action for discrimination dating back to 2004.
In 2011, the EEOC acted on complaints from two black former Dollar General employees who alleged discriminatory termination. The commission filed its first federal lawsuit against the Goodlettsville, Tenn.-based discount retail chain in 2013, saying hiring practices, and particularly use of criminal background checks to screen applicants, caused a disparate impact on African American job applicants.
While companies are allowed to conduct criminal background checks on applicants, the EEOC said Dollar General violated the 1964 Civil Rights Act with a policy that rejected a higher percentage of minorities and failed to show why that screening process was a job-related business necessity.
“Because of the racial disparities in the American criminal justice system, use of criminal background checks often has a disparate impact on African Americans,” said EEOC Chicago District Director Julianne Bowman in the release announcing the settlement. “This consent decree reminds employers that criminal background checks must have some demonstrable business necessity and connection to the job at issue.”
The EEOC said the $6 million from Dollar General will go into a settlement fund for African Americans denied employment with the company between 2004 and 2019. If the company wants to use background checks in the ensuing three years, it must retain a criminologist to provide a binding recommendation for a screening process that incorporates factors such as the time since an applicant’s conviction, the number, nature and gravity of offenses, and likelihood of recidivism.
“This case is important because Dollar General is not just providing relief for a past practice but for the future as well,” said Gregory Gochanour, regional attorney for the EEOC’s Chicago District, in a statement touting the decree. “…Unlike other background checks based on unproven myths and biases about people with criminal backgrounds, Dollar General’s new approach will be informed by experts with knowledge of actual risk.”
The company also agreed it won't discourage people with criminal histories from applying for jobs and will formally advise its current employees of that position. It also agreed to update its process for reconsidering employees who have a conditional offer rescinded based on criminal history review by clearly communicating the process for submitting information to bolster the applicant’s position.
Dollar General and the EEOC had spent years arguing over how transparent the EEOC needed to be, as the agency demanded extensive access to Dollar General’s records and books.
In a 2017 opinion, for instance, Magistrate Judge Sheila Finnegan ruled the EEOC had no obligation to show how the alleged discrimination applied on a position-by-position basis, because it claimed the corporate policy affected all applicants and employees across the board. The judge cautioned the broad-based legal strategy could pose problems if the company’s experts could prove certain positions weren’t subject to the disparate impact claims.
Dollar General was defended by McGuireWoods LLP, based in Dallas and Chicago, as well as by Epstein, Becker & Green, of Chicago.
EEOC’s trial attorneys were Jeanne Szromba, Richard Mrizek and Ethan Cohen, with Supervisory Trial Attorney Diane Smason.