Pepsi Beverages to Pay $3.13 Million in Race Discrimination Case

PepsiCo Inc (PEP).’s biggest bottling unit agreed to pay $3.13 million and offer jobs and training to resolve charges the company discriminated against blacks, the U.S. Equal Employment Opportunity Commission said.

The settlement by Pepsi Beverages Co. will be divided among black applicants denied jobs at the unit, previously known as Pepsi Bottling Group, and will cover costs to make the payments.

The U.S. investigation found that Pepsi’s criminal background-check policy discriminated against blacks in violation of the Civil Rights Act, according to the statement. More than 300 blacks were were affected by the policy, the agency said.

The company, an operating unit of Purchase, New York-based PepsiCo (PEP), didn’t immediately respond to a request for comment on the settlement.

The EEOC found that Pepsi Beverage’s background checks denied employment to applicants who had been arrested or convicted of certain minor offenses, or were awaiting prosecution without prior convictions.

“The EEOC has long standing guidance and policy statements on the use of arrest and conviction records in employment,” EEOC Chair Jacqueline Berrien said in an e-mail statement.

During the investigation, Pepsi adopted a new criminal background-check policy, the agency said. Pepsi Beverages will offer job opportunities to applicants denied work under the policy who still want jobs and are qualified, the agency said.

To contact the reporter on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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