BALTIMORE – Pennsylvania-based convenience store chain Sheetz has been granted a venue transfer of 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 The job offers can be rescinded if Sheetz decides the applicant’s history is too risky.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 District of Maryland.
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.
In another motion filed two days prior to the dismissal motion, 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.
UPDATE
In an Oct. 4 memorandum opinion, U.S. District Court for the District of Maryland Judge Julie Rebecca Rubin authorized the transfer of the case to the U.S. District Court for the Western District of Pennsylvania, finding the defendants showed such a transfer was appropriate based upon a preponderance of the evidence.
Rubin examined four factors in order to make her ruling: 1) EEOC’s choice of venue; (2) witness convenience and access; (3) convenience of the parties; and (4) the interests of justice.
“Here, while the connection between Maryland and EEOC’s cause of action is not ‘sufficiently strong’, it cannot be said that Maryland has no connection to the facts of the case. EEOC alleges that defendants have engaged in unlawful employment practices through the use of ‘criminal justice history information as the basis for declining to hire job applicants’ and that such practices occurred at defendants’ Maryland facilities and all other facilities and business operations company-wide. Sheetz has over 24,000 employees and 700 store locations across six states – Pennsylvania, Ohio, Maryland, Virginia, West Virginia and North Carolina. Although certain events giving rise to the action occurred at defendants’ headquarters in Pennsylvania, there are also ‘over 1,000 names of people who were categorized as having failed defendants’ criminal history screening and who are identified in the data as Black, American Indian/Alaska Native, or multiracial’ and their last known residence addresses are across 30 states, including Maryland and the District of Columbia,” Rubin said.
“The Court, however, also considers that of the six states that are home to Sheetz stores, Maryland has the fewest (34 stores), and no Sheetz employees responsible for administering and revising the policies involving criminal history reviews are located in Maryland. In addition, the two EEOC charges referenced in the complaint that prompted the EEOC investigation relate to denial of jobs to applicants located in Pennsylvania, not Maryland. Accordingly, the Court concludes that Maryland has little connection to EEOC’s claims. In view of the foregoing, the court concludes that EEOC’s decision to file suit in Maryland weighs only slightly against transfer.”
Rubin next turned to witness convenience and access – and pointed out that “no specific witnesses are known to live in Maryland apart from potential unidentified aggrieved individuals who worked at defendants’ Maryland facilities.”
“EEOC generally refers to potential aggrieved applicants across multiples states and anticipated expert witnesses located across the country. Therefore, it seems that the anticipated expert witnesses and potential aggrieved individuals will have to travel, either way. And, as noted above, ‘the convenience of expert witnesses…is given little weight in the transfer analysis because expert witnesses ‘typically are well-compensated for their time and, accordingly, will travel to testify where needed.’ The Court also agrees with defendants that, in light of the fact that defendants maintain the fewest facilities in Maryland, ‘most of the purportedly aggrieved parties likely will live outside the District of Maryland and many will be in Pennsylvania, where most of defendants’ facilities are located.’ Accordingly, the Court concludes that the second factor tips in favor of transfer,” Rubin stated.
Rubin then examined the factor of convenience of the parties.
“Here, it is plainly more convenient for defendants to have this case proceed in Pennsylvania where their headquarters are located. Defendants’ corporate offices, department of human resources, employee relations, operations and the employees involved in the criminal history review are located in Blair County, Pennsylvania. The individuals identified in the complaint that prompted the EEOC investigation applied for positions in Pennsylvania, and EEOC’s Pittsburgh Area Office conducted the underlying charge investigation. While not entitled to significant weight, the Court also considers that ‘many of the documents and materials related to hiring and criminal history reviews are kept at’ defendants’ facilities in Pennsylvania,” Rubin said.
“EEOC’s contention that travel to Pennsylvania ‘is likely to be much more time consuming and therefore expensive’ for experts and aggrieved applicants across various states is unavailing. And much of EEOC’s argument ‘actually centers more on the convenience of its attorneys, which is not a proper consideration under Section 1404(a). Even considering the convenience of EEOC’s attorneys, however, the Court notes that one counsel of record works out of EEOC’s Pittsburgh office. Further, Debra Lawrence, Lead Attorney, is the Regional Attorney for the Philadelphia and Pittsburgh EEOC offices. In sum, the Court is not persuaded that EEOC’s attorneys will be unduly inconvenienced by having to litigate the case in Pennsylvania. Accordingly, for these reasons, the Court concludes that the third factor weighs in favor of transfer.”
Finally, Rubin turned to the factor of “the interests of justice.”
“Defendants rely on the docket congestion to support transfer. In the instant case, the Court is not persuaded that docket congestion favors transfer here. The median time from filing to trial is 41.3 months in the Western District of Pennsylvania and 40.8 months in the District of Maryland. The median time from filing to disposition is 8.5 months in the District of Maryland and 6.2 months in the Western District of Pennsylvania. In addition, in the District of Maryland, there are 491 pending cases per judge and in the Western District of Pennsylvania, there are 407 pending cases per judge,” Rubin stated.
“Accordingly, the Court concludes that docket congestion is not significantly different between the two courts, and, therefore, this factor remains neutral. Defendants have met their burden to persuade the court by a preponderance of the evidence that transfer is appropriate. The Court concludes that transfer would ‘better and more conveniently serve the interests of the parties and witnesses and better promote the interests of justice.’ The motion to transfer will be granted. Therefore, the Court will not address the motion to dismiss. For the reasons set forth herein, by separate order, defendants’ motion to transfer will be granted.”
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 case 1:24-cv-01123
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com