Plaintiffs Clint Millien and Felipe Kelly sued Madison Square Garden for its hiring practices relating to applicants’ failure to disclose previous criminal activity when applying for food preparation positions. The plaintiffs claim that Madison Square Garden imposed too strict of requirements for criminal disclosures that had a disparate impact on minority applicants. The parties agreed to settle the case for $1.3 million.  

The plaintiffs’ claims are based on two main theories of liability. First, they contend that Madison Square Garden’s practice of revoking conditional employment offers based on a failure to disclose previous criminal history had a discriminatory impact on African-American and Latino applicants. Second, they claim that Madison Square Garden routinely failed to provide applicants with copies of their background screening reports before denying them employment, as required under the Fair Credit Reporting Act and the New York Correction Law. Madison Square Garden denies any wrongdoing. 

The proposed settlement awards $200 to all individuals denied employment at Madison Square Garden based on the content of their background screening reports within the last four years. The settlement further provides $1,700 to applicants who submit a valid claim demonstrating that they would have been eligible for employment had they fully and accurately disclosed their criminal history on their original job application. In total, Madison Square Garden agreed to pay $519,800 in relief to putative class members and $750,000 in attorneys’ fees. 

The settlement also provides injunctive relief to the class and requires that Madison Square Garden make substantial changes to its hiring policies. Among other changes, Madison Square Garden will now only require applicants to disclose criminal convictions that occurred within the past five years. It will no longer revoke conditional employment offers based on a failure to disclose open warrants, nor require applicants to disclose marijuana convictions (unless convicted of intent to sell). Madison Square Garden also committed to providing applicants with copies of their screening reports before denying any job applications. Finally, Madison Square Garden agreed to shorten its previous lifetime ban on individuals reapplying for positions after being disqualified for their failure to accurately disclose their criminal history. 

The parties filed their motion for preliminary approval on June 24 and are awaiting the Court’s approval of the proposed settlement. 

This settlement highlights important issues companies must consider when designing and implementing their policies for screening potential job applicants.

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