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Pepsi Settles Racial Discrimination Claims

MINNEAPOLIS (CN) - A PepsiCo bottling unit will pay $3.13 million and provide jobs and training to resolve accusations of race discrimination, the U.S. Equal Employment Opportunity Commission said Wednesday.

The settlement by Pepsi Beverages, fka Pepsi Bottling Group, will be divided among black applicants who were denied jobs and the administration of the claims.

The EEOC said the criminal background-check policy the company used discriminated against African-Americans in violation of Title VII the Civil Rights Act, and that more than 300 black applicants were were disproportionately excluded from permanent employment by the policy.

"Under Pepsi's former policy, job applicants who had been arrested pending prosecution were not hired for a permanent job even if they had never been convicted of any offense," the EEOC said.

The policy also denied jobs to applicants who had been arrested or convicted of some minor offenses.

The use of arrest and conviction records to deny employment can be illegal when it is not relevant for the job, because it can limit employment opportunities of applicants based on their race or ethnicity.

The EEOC said Purchase, N.Y.-based Pepsi has adopted a new background-check policy and will offer jobs to applicants denied work under the policy who still want jobs and are qualified.

"We obtained significant financial relief for a large number of victims of discrimination, got them job opportunities that they were previously denied, and eradicated an unlawful barrier for future applicants," said EEOC Chicago District Director John Rowe. "We are pleased that Pepsi chose to work with us to reach this conciliation agreement and that through our joint efforts, we have been able to bring about real change at Pepsi without resorting to litigation."

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