Pepsi’s $3.13 million settlement with the EEOC over an overly broad background check policy should cause all employers who use such checks to re-evaluate their policies. While background checks can provide invaluable information to employers in the hiring process, if used improperly, they may be deemed tools of discrimination.

As we discuss in our Talking Points Legal Tip video, businesses need to be aware that the Equal Employment Opportunity Commission continues to focus on employment screening policies, including criminal background checks, credit checks and social media checks, in an effort to eradicate discrimination in the workplace. In the Pepsi case, the EEOC determined that Pepsi’s broad policy excluded more than 300 black applicants because it excluded individuals convicted of minor offenses.

The concern is that the use of criminal background checks could have a disproportionate impact on minorities and contribute to discrimination. Any employer’s blanket prohibition against hiring someone with a criminal conviction will bring extra scrutiny. Instead, employers should evaluate prospective employees on a case by case basis, weighing the nature and gravity of the criminal offense and the amount of time since the conviction against the job’s specific duties and responsibilities....