BALTIMORE – Pennsylvania-based convenience store chain Sheetz is looking to dismiss or transfer litigation from the Equal Employment Opportunity Commission, which charges that the criminal background check in the store’s hiring process has discriminated against job applicants of Black, American Indian/Alaska Native and/or multiracial origin.
The company said it has tried to reach “common ground” with the EEOC for eight years but faces suit anyway in Maryland federal court. The case is based on Title VII of the Civil Rights Act, which, when used to pin liability for disparate impact, makes pretty much everything illegal, one scholar has written.
A spokesperson for Sheetz, Nick Ruffner provided a statement on the suit.
“Diversity and inclusion are essential parts of who we are,” Sheetz spokesperson Nick Ruffner said.
“We take these allegations seriously. We have attempted to work with the EEOC for nearly eight years to find common ground and resolve this dispute.”
The EEOC’s allegations begin in August 2015, claiming unlawful employment practices through Sheetz’s “practice of using criminal justice history information as a basis for declining to hire job applicants for all positions in violation of [Title VII of the Civil Rights Act of 1964].”
“Defendants have implemented a practice requiring that job applicants seeking to be hired for all job titles must pass defendants’ review of information about their criminal justice history, including but not limited to convictions,” the suit said.
Questions about criminal history are included on job applications and background checks follow if an applicant is offered a job. The job offers can be rescinded if Sheetz decides the applicant’s history is too risky.
“Based on job applicants’ criminal justice history, including but not limited to convictions, defendants make a decision whether job applicants are deemed to have passed or failed the review,” the suit said. “Defendants refuse to hire all job applicants who they deem to have failed their criminal justice history screening.”
The EEOC said this practice discriminates against minority candidates. Should a candidate with a criminal history commit an act of violence at Sheetz, the victim would be able to claim negligent hiring in an injury lawsuit against the company.
Gail Heriot, a professor at the University of San Diego School of Law and author of a 2020 paper for New York University’s Journal of Law and Liberty titled “Title VII Disparate Impact Liability Makes Almost Everything Presumptively Illegal,” offered a critique of the EEOC’s interpretation of Title VII in that publication.
According to Heriot, the EEOC “interprets Title VII to require not just equal treatment, but near equal results.”
“Perhaps the most well-known recent example is the EEOC’s policy on job applicants with felony records, which essentially holds that employers are required to hire at least some of them,” she wrote.
“The rationale behind the policy is that despite the fact that the overwhelming majority of Americans of all races are not felons, since proportionally more African-Americans than Americans of other races have felony convictions, they are disproportionately affected when employers prefer to hire applicants with clean criminal records.
“Note the obvious: A well-considered policy easing the transition of prisoners back into the mainstream may indeed be a good idea. But Title VII is not such a policy. It doesn’t say a word about prohibiting discrimination on the basis of criminal record. Yet somehow the EEOC has come to interpret Title VII to cover conviction status.”
This makes employers who are not making their decisions based on race but rather the safety of customers and employees in violation of Title VII, she wrote.
Sheetz operates more than 600 convenience store locations in six states: Pennsylvania, West Virginia, Virginia, Maryland, Ohio and North Carolina.
The EEOC claimed the allegedly unlawful hiring practices in question date back to 2015, but it is unknown how many applicants it believes were affected.
The EEOC found Black job applicants failed the company’s criminal background check screening and were denied employment at a rate of 14.5%, multiracial job seekers did so 13.5% of the time and Native Americans at a rate of 13% – meanwhile, conversely, the EEOC said this trend occurred with less than 8% of white applicants who were refused employment.
The group began investigating Sheetz after two unsuccessful job applicants filed complaints alleging employment discrimination – it led the EEOC to inform Sheetz it may be violating federal civil rights laws in 2022, which spurred pre-litigation settlement talks that ultimately failed.
As a result, the instant suit was filed on April 24 in the U.S. District Court for the Northern District of Maryland.
UPDATE
On June 14, defendants Sheetz, Inc., Sheetz Distribution Services, LLC and CLI Transport, LP filed a partial motion to dismiss the case – arguing that all claims arising before May 13, 2017 must be dismissed, because they are barred by the 300-day charge-filing period in Section 706(e)(1) of Title VII of the Civil Rights Act.
“Section 706(e)(1) of Title VII provides in relevant part: “…[a] charge shall be filed by or on behalf of the person aggrieved within three hundred days after the alleged unlawful employment practice occurred…” Although Section 706(f)(1) gives the EEOC authority to sue on behalf of one or more persons aggrieved by an alleged unlawful discriminatory employment practice, nothing in Title VII permits the EEOC to recover for individuals whose claims arose more than 300 days before the filing of the administrative charge on which the EEOC’s lawsuit is based. Courts, including courts in this district, have held that Section 706(e)(1) precludes the EEOC from pursuing claims that arose outside the charge-filing period,” according to the dismissal motion.
The motion goes on to say that two of the charges present in the complaint, from Joseph Gorsuch and Rachael Whethers, would be two such examples filed outside the 300-day charge-filing period.
“In the complaint, the EEOC pursues a claim under Section 706 on behalf of ‘a class of aggrieved Black, American Indian/Alaska Native, and multiracial job applicants’ without identifying any aggrieved individual and alleges that defendants have engaged in unlawful refusals to hire ‘since at least Aug. 10, 2015.’ The Aug. 10, 2015 date is 300 days before the date the Gorsuch Charge – which claimed only gender discrimination – was signed by Gorsuch. The EEOC cannot pursue race discrimination claims dating back to Aug. 10, 2015 based on the Gorsuch Charge which alleged only gender discrimination, not race discrimination. The EEOC cannot rely on the Gorsuch Charge or its investigation of that charge to support race discrimination claims of aggrieved individuals in this case,” the dismissal motion stated.
“The only charge referenced in the complaint that alleged race discrimination is the Whethers Charge, filed on or about March 9, 2018. The EEOC can pursue claims that arose 300 days before that filing – i.e., claims arising on or after May 13, 2017. But the EEOC has no authority to seek relief for individuals whose claimed discriminatory failures to hire date earlier than May 13, 2017 or back to Aug. 10, 2015, almost two years before May 13, 2017. All claims involving alleged failure to hire before May 13, 2017 should be dismissed for failing to state a claim because they arose more than 300 days before the Whethers Charge. Further, no basis exists to argue that the continuing violation theory saves such claims. Section 706 of Title VII precludes recovery for discrete acts of discrimination that occur outside the applicable statutory charge-filing period. In Nat’l R.R. v. Morgan, the Supreme Court held that ‘discrete acts that fall within the statutory time period do not make timely acts that fall outside the statutory time period.’ The refusal to hire an applicant is undoubtedly a discrete act of discrimination.”
In a motion filed two days prior, the defendants also seek to have the case transferred to the U.S. District Court for the Western District of Pennsylvania.
“The District of Maryland is not the appropriate place to litigate this case, since defendants’ corporate headquarters, relevant decision-makers, and much of the evidence, such as relevant documents, are located in the Western District of Pennsylvania. Accordingly, defendants respectfully request that the Court grant their motion to transfer venue and transfer this matter to the U.S. District Court for the Western District of Pennsylvania,” per the transfer motion.
For separate counts of denial of hiring among Black, American Indian/Alaska Native and/or multiracial job applicants in violation of Title VII of the Civil Rights Act of 1964, which prohibits workplace discrimination on the basis of race, sex, religion and national origin, the plaintiff is seeking:
• Permanent injunctive relief preventing the defendants from engaging in race discrimination, including discriminatory denial of hire and use of particular employment practices for employment selection purposes that cause unlawful disparate impact against Black, American Indian/Alaska Native and/or multiracial job applicants;
• The defendants to create separate classes for each of the above-identified racial groups and provide appropriate back pay with pre-judgment interest, in amounts to be determined at trial and other affirmative relief necessary to eradicate the effects of their unlawful employment practices, including, but not limited to, instatement with retroactive seniority and benefits or front pay in lieu thereof and an additional amount to offset adverse tax consequences of payment of a lump sum monetary award in a single tax year that represents earnings that would have accrued over multiple tax years but for defendants’ unlawful employment practices;
• Such further relief as the Court deems necessary and proper in the public interest, and the costs of this action.
The plaintiff is represented by in-house counsel Debra Michele Lawrence, Ronald L. Phillips, Jenny Xia and Gregory A. Murray, in Baltimore, Md. and Pittsburgh.
The defendants are represented by Steven A. Kaplan, Robert W. Cameron and Katelyn W. McCombs of Littler Mendelson, in Washington, D.C. and Pittsburgh.
U.S. District Court for the District of Maryland Northern Division case 1:24-cv-01123
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com