Macy’s Learns What’s in Store for Employers Who Engage in Discriminatory Employment Practices Using Background Report Information

Retail stores are no strangers to matters of civil rights. For decades, civil rights laws have helped keep retailers accountable for consumers’ civil rights complaints. Anti-discrimination protections extend not just to the shoppers, though. They reach essential workers keeping the doors open, too. How retailers hire cashiers, store clerks, backroom dock workers and more can be subject to those protections. Let’s revisit the discrimination complaint regarding Macy’s hiring practices as it draws to a close.

Inventory of Claims & (Proposed) Resolutions

Last year a class-action lawsuit was brought against Macy’s.  (To read our industry note about this, click here.)  The complaint alleged that the company improperly used background report information to discriminate against its applicants and employees. The complaint included alleged violations of Title VII of the Civil Rights Act of 1964 and the New York City Human Rights Law.

There has been a new development in the litigation.  Macy’s and the plaintiffs have reached a proposed settlement.  If approved, Macy’s must:

  • Change its applications. Its applications will not be able to mention the requirement for a background check for applicants in New York City.
  • Hire a consultant to review its background check procedures in New York City. The consultant will review them in light of New York laws and Title VII.  Macy’s will make changes to its background check procedures in New York City based on the consultant’s advice.  Macy’s must report changes made to those background check procedures to plaintiffs’ counsel.
  • Maintain any changes made to the background check procedures for a minimum of two years.
  • Pay a monetary settlement of $1.8 million.

Read the full proposed settlement here.

The proposed settlement has not been finalized.  It will take effect when approved by the court.

Keeping Stock of Regulations

This case is a reminder of how important legal compliance is when conducting background checks. It’s not just for big box stores. You should keep in mind background check laws at the federal, state, and local level.  Also keep anti-discrimination laws in mind when taking inventory of your background check programs.

It’s a lot of laws to remember.  What’s the best way to make sure your background screening program maintains compliance with all applicable laws? You should always consult with your legal counsel.

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