BMW Rehires Employees, Pays Out $1.6M in Racial Discriminaton Lawsuit

BMW has rehired 70 African American employees at its South Carolina warehouse and will payout $1.6 million as part of a lawsuit. The automaker let numerous employees go after a new criminal background check policy was put into place under a new contractor. Those employees were working not directly for BMW, but for a contractor at the BMW facility. The original contractor policy was not to hire anyone with any criminal history within the past seven years; however, a new contractor took over staffing and had a zero tolerance policy for any criminal convictions as it relates to their hiring process.

The U.S. Equal Employment Opportunity Commission sued BMW for the actions of its contractor back in 2013, alleging a desperate impact on certain black candidates. The EEOC felt that the criminal conviction background check policy stood at odds with the Title VII of the Civil Rights Act of 1964. BMW fired 88 employees, 70 of whom were African American. Some of those employees had been working in the warehouse for over a decade.

Speaking to USA Today, BMW officials deny any allegation of racism in their organization pointing to their “large and highly divisive workforce.” The suit was settled for $1.6 million, but originally sought back pay and “other relief” for 69 African American applicants to the BMW facility. As part of the settlement, BMW will payout the aforementioned $1.6 million and though a staffing organization offer employment to at least 70 and as many as 146 African-American applicants who were found by the EEOC. The settlement also does affirm BMW has the legal right to have criminal background checks as part of their hiring process.

Lynette Barnes, regional attorney for the EEOC said in a statement that she is satisfied with the settlement. Barnes said in a statement, “We are pleased with BMW’s agreement to resolve this disputed matter by providing both monetary relief and employment opportunities to the logistic workers who lost their jobs at the facility. We commend BMW for re-evaluating its criminal conviction records guidelines that resulted in the discharge of these workers.”

This ruling by the EEOC seems to run parallel to the recent ruling by the National Labor Relations Board who declared that companies are to be held responsible for labor violations by their contractors. Under the NLRB ruling, BMW would be considered a “joint-employer” of those employees who were disqualified from employment due to a change in criminal background check policy. We reported on this ruling as it could relate to retail automotive if the NLRB shows the same interest in the franchise relationship that they have in the company-contractor relationship.

Time will tell if the NLRB ruling will one day directly impact dealership staff, however its clear that BMW just paid a price for actions taken by one of its contractors. Could this be the start of a new trend? Will this suit as well as NLRB ruling lead to more scrutiny when it comes to automotive contractors?