A Target store on Dec. 13, 2017, in Chicago
Photo: Scott Olson (Getty Images)

Target Corp. is dishing out a hefty $3.74 million to settle a lawsuit in which it is accused of using criminal-background checks to keep thousands of black and/or Hispanic people from getting jobs.

As part of the agreement, the retail giant has also agreed to review its policies for screening applicants, Reuters reports.

The preliminary settlement, which was filed Thursday in the U.S. District Court in New York City, still requires the approval of a judge.

Since 2001, Target has made use of background checks for its U.S. stores, thus importing into its hiring “the racial and ethnic disparities” that already exist in the U.S. criminal-justice system, the lawsuit claimed. The company is accused of passing by job applicants, even if their convictions were unrelated to the type of job they applied for.

From Reuters:

Eligible blacks and Hispanics who were since May 2006 wrongly denied hourly and entry-level jobs such as cashiers, cart attendants, food service workers and stockers will receive $1.2 million or “priority hiring.”

Another $600,000 will fund nonprofits that help people with criminal histories reenter the workforce, while most of the remaining payout will cover legal and other fees, the settlement said. Target did not admit wrongdoing.

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Of course, despite the money and the promise to review practices, Target did not admit to any wrongdoing.

A spokesperson for Target, Jenna Reck, said that the company no longer asks for criminal histories in job applications, but said that convictions are still considered “important” and noted that the retailer still gathers criminal-background information late in the hiring process.

“We have a number of measures in place to ensure we’re fair and equitable in our hiring” while “maintaining a safe and secure working and shopping environment for team members and guests,” she said.

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The plaintiffs in the case were represented by the NAACP Legal Defense and Educational Fund and the law firm Outten & Golden.

“Criminal background information can be a legitimate tool for screening job applicants,” LDF President Sherrilyn Ifill said in a statement, but Target’s background checks were “harmful to many qualified applicants who deserved a fair shot at a good job.”