Right on Cue—The EEOC Sues a Contractor Firm: Navigating Compliance in the Contractor World

In last month’s blog, we outlined the EEOC’s subject matter priorities for Fiscal Years 2024-2028, specifically discussing two areas within Recruitment and Hiring.

Eliminating Barriers in Recruitment and Hiring

The EEOC is focusing on recruitment and hiring practices and policies that discriminate on any unlawful basis under the statutes it enforces, including sex, race, national origin, color, religion, age, and disability. Key areas of concern include:

1. The use of technology, including artificial intelligence and machine learning, to target job advertisements, recruit applicants, or make or assist in hiring decisions, where such systems intentionally exclude or adversely impact protected groups.
2. The use of screening tools or requirements that disproportionately impact workers on a protected basis, including those facilitated by artificial intelligence or other automated systems, pre-employment tests, and background checks.

These priorities are being actively pursued, as demonstrated by the EEOC’s recent action. On April 18th, the EEOC issued a press release stating:

“Sheetz, a large convenience store chain, violated federal law by denying employment to a class of job applicants because of their race, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed today.”

The EEOC filed suit against Sheetz, Inc.; Sheetz Distribution Services, LLC; and CLI Transport, LP, accusing them of maintaining a longstanding practice of screening all job applicants for records of criminal conviction and then denying them employment based on those records. This practice disproportionately screened out Black, Native American/Alaska Native, and multiracial applicants, violating provisions of Title VII that prohibit disparate impact discrimination.

Notably, the lawsuit does not allege that Sheetz was motivated by race when making hiring decisions. The issue at hand is not disparate treatment—where different groups are treated differently—but disparate impact, where a neutral practice disproportionately affects a protected group.

What This Means for Contractors

For contractors and service networks, these issues are equally pertinent. The EEOC’s focus extends to any company or entity that employs individuals, including independent contractors and those in service networks. Therefore, it is crucial to ensure that all recruitment and screening practices are job-related, consistent with business necessity, and do not disproportionately impact any protected group.

Automated systems, including AI-driven recruitment tools, must be carefully assessed to avoid unintentional discrimination. Even practices that are uniform across all applicants can be problematic if they result in a disparate impact on a protected group.

To mitigate these risks, consider the following:

• Review your criteria: Ensure that exclusionary criteria are directly related to job requirements and business needs.
• Evaluate your tools: Regularly audit automated systems and algorithms to check for biases or discriminatory effects.
• Explore alternatives: Consider whether less discriminatory alternatives exist that still meet your business needs.

In conclusion, the Sheetz case serves as a reminder of the importance of compliance with EEOC guidelines. Whether dealing with employees or contractors, it is vital to ensure that recruitment and hiring practices are fair, equitable, and compliant with all applicable laws. This vigilance not only helps avoid legal pitfalls but also promotes a diverse and inclusive work environment.