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Macy’s Settles Lawsuit Over Criminal Background Checks, NAACP Legal Defense Fund Says It’s a ‘Valuable Example’ For Other Employers to Follow

Macy’s Inc. and The Fortune Society Inc. have agreed to settle a lawsuit that accused the department store of using an unnecessarily punitive criminal history screening policy that inadvertently discriminated against minority candidates.

The suit, filed by Fortune Society in June 2019 in the Southern District of New York, alleged that Macy’s policy of performing sweeping background checks disproportionately disqualified Black and Latinx applicants and employees from job opportunities in violation of Title VII of the Civil Rights Act of 1964 and the New York City Human Rights Law.

Macy’s has agreed to pay $1.8 million to settle the suit as well as take additional steps to stay in compliance with the New York City Fair Chance Act, which seeks to ensure that individuals with criminal history records are evaluated fairly during the hiring process.

“Macy’s is a New York City icon providing good job opportunities and we welcome the steps it is taking to ensure compliance with the New York City Fair Chance Act to the benefit of all New Yorkers, including Fortune participants,” said JoAnne Page, Fortune’s president and CEO, in a statement Thursday announcing the settlement. (Fortune is a nonprofit organization with the mission of supporting individual’s successful reentry into society following incarceration, as well as promoting alternatives to incarceration.)

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Macy’s, which was among the first major fashion retail names to hire a chief diversity and inclusion officer in 2018, has since been vocal about its aggressive strategy to boost diversity and inclusion across its enterprise. That strategy, which was revamped even further last year, is composed of a “five-part approach” that includes a requirement for 50% representation of gender/gender identity, ethnicity, age, size and disabled persons in its advertising by 2020; 30% ethnic diversity at the senior director level and above by 2025; and a plan to achieve diverse supplier spend of at least 5% by 2021.

“We appreciate the work of the Fortune Society to ensure equitable access to jobs. Through the steps we have taken, we will be better able to deliver on our commitment to provide employment opportunities to all,” said Macy’s CDIO Shawn Outler in a statement. “Macy’s is a major employer in markets across the country and we believe that Macy’s is at its best when our workforce reflects the full diversity of the customer and communities we serve.”

Sherrilyn Ifill, president and director counsel at the NAACP Legal Defense and Educational Fund Inc., one of the organizations representing plaintiffs in the case, said the settlement creates a “valuable example for other employers to follow.”

“We are gratified that Macy’s will undertake efforts to hire an expert to review its criminal history screening policies and ensure that they provide economic opportunities for qualified applicants and employees,” Ifill added. “Criminal history screening policies must consider factors such as the nature of the conviction, its recency, and any evidence of mitigation and rehabilitation.”

The Fortune Society Inc. v. Macy’s Inc. was filed on June 26, 2019, and was brought on behalf of Fortune and its participants and plaintiff Michael Clark.

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