Dive Brief:

• Target and The NAACP Legal Defense and Education Fund have reached a settlement resolving a class-action lawsuit over what the NAACP had claimed was an "overly broad and outdated criminal background check policy discriminated against African-American and Latino applicants," the fund said on Thursday.

• In addition to agreeing to pay over $3.7 million, Target is setting up a process for class members in the suit to either obtain jobs or receive a cash award. The settlement was also filed in a complaint with the Southern District of New York and is subject to court approval, according to a press release from the NAACP Legal Defense and Education Fund and the law firm of Outten & Golden LLP.

• Target spokesperson Danielle Schumann told Retail Dive in an email, "As part of the settlement, we’ll contribute to several organizations that help individuals with criminal backgrounds become successfully employed, continuing years of work by Target to help remove barriers that individuals with criminal records face when seeking employment."

Dive Insight:

The NAACP group alleged that Target's previous criminal background check policy automatically disqualified a disproportionate number of otherwise qualified African-American and Latino applicants, centering on the experience of two prospective employees who had received conditional employment offers from Target after interviews. Those were later revoked after the company's screening process found two decade-old misdemeanor convictions in one case and a decade-old drug-related felony in the other.

"Criminal background information can be a legitimate tool for screening job applicants, but only when appropriately linked to relevant questions such as how long ago the offense occurred and whether it was a non-violent or misdemeanor offense," NAACP Legal Defense and Education Fund President and Director-Counsel​ Sherrilyn Ifill said in a statement. "Overly broad background screenings unfairly limit opportunities for Black and Latino applicants due to widespread discrimination at every stage in the criminal justice system. We commend Target for agreeing to this settlement, which will help create economic opportunities for deserving Americans."

Target on Thursday acknowledged that many disqualifications may have been unintentional and emphasized that they took place 10 years ago and that its hiring practices have since been revised, "removing the criminal history question from our employment application nationwide."

According to Schumann, the company now gathers criminal background information in the final stages of the hiring process. "This ensures individuals are considered for employment based on their qualifications, interview and availability," she said. 

But the company also said that it's committed to safety and security and that it still believes it's important to consider a job applicant's criminal conviction history. Those who have one are given an opportunity to explain it and provide information about the circumstances, mitigating factors, good conduct and rehabilitation, Schumann added.