Jonathan Stempel, Reuters, April 5, 2018

Target Corp has agreed to review its policies for screening job applicants and pay $3.74 million to settle a lawsuit claiming its use of criminal background checks kept thousands of blacks and Hispanics from obtaining employment.

The preliminary settlement filed on Thursday with the U.S. District Court in Manhattan requires a judge’s approval.

It resolves claims that Target, which has performed background checks for employment in U.S. stores since 2001, “imported the racial and ethnic disparities” in U.S. criminal justice system into its hiring, in part by disqualifying job applicants for convictions unrelated to the work they sought.

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Thursday’s settlement calls for experts to review Target’s guidelines for using criminal histories in hiring, and help the retailer implement appropriate changes.

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Another $600,000 will fund nonprofits that help people with criminal histories reenter the workforce, while most of the remaining payout will cover legal and other fees, the settlement said. Target did not admit wrongdoing.

Jenna Reck, a Target spokeswoman, said the retailer no longer asks for criminal histories in job applications, but still considers convictions “important” and gathers criminal background information late in the hiring process.

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The plaintiffs included Carnella Times and Erving Smith, who are black and claimed they were denied stocker jobs after background checks uncovered past convictions, and The Fortune Society, which helps former prisoners reenter society.

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The plaintiffs were represented by the NAACP Legal Defense and Educational Fund (“LDF”), and the law firm Outten & Golden.

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