Target pays $3.7M to settle lawsuit over background checks

MINNEAPOLIS — Target Corp. has agreed to pay $3.7 million to settle a lawsuit over concerns that the way it uses criminal background checks as part of the hiring process has disproportionately hurt black and Latino applicants.

“Target’s background check policy was out of step with best practices and harmful to many qualified applicants who deserved a fair shot at a good job,” said Sherrilyn Ifill, president of the NAACP Legal Defense and Educational Fund, which worked on the case. “Criminal background information can be a legitimate tool for screening job applicants, but only when appropriately linked to relevant questions such as how long ago the offense occurred and whether it was a nonviolent or misdemeanor offense.”

As part of the settlement of the class-action complaint, independent consultants will recommend changes to Target’s current screening guidelines. For example, they will come up with a list of convictions that are not considered job-related and should not disqualify a person from a particular position. They will also review the company’s appeals process that offers candidates a chance to show evidence of rehabilitation.

"We’re glad to resolve this and move forward,” the Minneapolisbased retailer said in a statement. “At Target, we have a number of measures in place to ensure we’re fair and equitable in our hiring practices . ... And in hiring, like the rest of our business, we hold diversity and inclusion as core values and strive to give everyone access to the same opportunities.”

Maurice Emsellem, program director with advocacy group National Employment Law Project, said this is one of the largest settlements of its kind and will likely provide a model for other employers as they look to adopt better hiring practices and policies.

In 2016, the U.S. Census Bureau agreed to pay $15 million to settle a similar class-action suit that involved an estimated 450,000 black and Latino applicants who may have been passed over for jobs because of backgroundcheck practices.

“Employers are now way more tuned into the laws and policies that encourage them to create more fair practices to hire people with records,” Emsellem said. “But there’s still plenty of big employers and small employers who have a long way to go to clean up their policies.”

As part of the settlement, which was filed Thursday in U.S. District Court in New York, black and Latino applicants who were denied employment from a Target store because of a criminal-background check since May 2006 will be eligible for priority hiring or interviewing for current open positions. Alternately, they can seek a financial award of up to $1,000.

Target is also giving $600,000 to five organizations that work to help individuals with criminal backgrounds find employment: AccessAbility’s Career & Educational Pathways program and RS Eden in Minnesota, Center for Employment Opportunities and the Fortune Society in New York, and A New Way of Life Reentry Project in California.

In 2016, Target was among the companies that signed on to a White House pledge that encouraged employers to eliminate unnecessary barriers facing applicants with criminal records.

Like many major employers, Target started using criminal background checks as part of its hiring process more than a decade ago. The retailer, which employs about 345,000 workers and is among the nation’s largest employers, used to ask job applicants about their criminal history on the initial application form.