UPDATE: July 2, 2019: Macy's Chief Diversity Officer, Shawn Outler, said in an emailed statement that the company's policy is not to comment on pending litigation.  

"We are committed to ensuring the safety and security of our colleagues and customers, securing proprietary business information, and safeguarding confidential customer, colleague and company data. All Macy’s, Inc. senior executives, Credit and Customer Service (MCCS), asset protection and fine jewelry colleagues, as well as certain support roles, are required to complete third-party background screening. For all other job functions, we are consistent in our approach to the consideration of criminal history in adherence with EEOC guidelines, as well as applicable local and state laws, and consider, among other things, the requirements of the job, the amount of time that has elapsed, and the nature of any offenses," the statement said. 

Dive Brief:

• A new class action alleged that Macy's rejects job applicants, revokes job offers and terminates the employment of people with criminal histories — even when the convictions are old, minor and/or unrelated to the job — in violation of Title VII of the Civil Rights Act of 1964, the Fair Credit Reporting Act (FCRA) and New York law (The Fortune Society, Inc., et al. v. Macy's, Inc., No. 19-cv-05961 (S.D.N.Y. June 26, 2019)).
• The lawsuit was brought by The Fortune Society (Fortune), a nonprofit that provides reentry assistance to individuals impacted by the criminal justice system. Fortune alleged that Macy's policies and practices reinforce the racial discrimination present in the criminal justice system and result in unjustified racial disparities in employment opportunities.
• Fortune also claimed that Macy's illegally asks applicants to authorize background checks before a job offer is made and takes adverse action against applicants and employees on the basis of consumer reports without first providing them with a copy of the report, a notice of rights or a timely notification of Macy's intent to take adverse action.

Dive Insight:

Employers that ignore applicants with criminal records may be violating Title VII and U.S. Equal Employment Opportunity Commission standards, according to experts at a recent Society for Human Resource Management Employment Law & Legislative Conference.

Additionally, ban-the-box laws, which make it illegal for certain employers to ask on job applications about criminal history, are being enacted in a number of jurisdictions. Even employers that aren't currently subject to such laws may wish to voluntarily consider banning the box. At one employer, Dave's Killer Bread, people with felony convictions were found to have slightly better performance than their counterparts in terms of attendance, policy and behavior problems, along with comparable turnover numbers.

Earlier this year, the Department of Labor announced that it was awarding more than $2 million to states for Fidelity Bonding Demonstration Grants. The grants are designed to increase employment outcomes for people with criminal records, educate employers and the public on the availability and benefits of fidelity bonds and provide outreach to employers to encourage them to hire formerly incarcerated candidates. 

The Macy's allegations also include claims that the retailer's policies violate the FCRA. In order to stay out of trouble, experts recommend that employers consistently use a four-step FCRA-compliant process every time a background check is requested, whether it's a criminal background check or a credit report.