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Dollar General Sued Over Use of Criminal Checks in Hiring

Dollar General Corp. (DG), the discount retailer, was sued by the U.S. Equal Employment Opportunity Commission for conditioning job offers for store clerks on criminal background checks.

The illegal practice has had a negative impact on black applicants since the company started doing it in 2004, according to a complaint filed by the commission today in federal court in Chicago.

“People who have been convicted of crimes and have paid their ‘debt to society,’ eventually ought to have a fair shot in the job market -- especially if the conviction was years earlier and had nothing to do with the job they seek,” John Rowe, director of the EEOC’s Chicago-area office, said in a statement announcing the lawsuit.

The check is conducted after an applicant is given a job offer, with the pass/fail result being relayed to the store manager by e-mail, according to the EEOC’s complaint.

Dan MacDonald, a spokesman for the Goodlettsville, Tennessee-based company, said by phone that he couldn’t immediately comment on the commission’s allegations.

Criminal History

Working with an outside company, Dollar General allegedly developed criteria for determining when an applicant’s criminal history warrants rejection, taking into account the nature of the crime and date of the conviction.

From January 2004 to April 2007, Dollar General made about 344,300 conditional job offers, 75 percent of which were conveyed to non-blacks, the EEOC alleged, citing data it says it received from the retailer.

About 7 percent of the conditional offers made to non-blacks were rescinded for failing background checks, while about 10 percent of the offers made to blacks were withdrawn.

“The gross disparity in the rates at which black and non-black conditional employees were discharged on account of defendant’s criminal background check policy is statistically significant,” according to the EEOC complaint.

The commission seeks a court order barring the practice and requiring the company to provide equal employment opportunities to black job seekers. The EEOC also asked for a monetary judgment to compensate rejected applicants.

Dollar General rose 2.8 percent to $51.74 at 2:16 p.m. in New York Stock Exchange (NYX) trading today.

The case is Equal Employment Opportunity Commission v. Dolgencorp LLC, 13-cv-04307, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at

aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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