Central Transport LLC and Pennsylvania resident Rodney Phath agreed to dismiss a criminal history discrimination lawsuit Thursday, according to a stipulation filed in the US District Court for the Eastern District of Pennsylvania. Phath sued the trucking company in 2024 under Pennsylvania’s Criminal History Record Information Act, alleging he was immediately rejected for a truck driving position after disclosing his criminal record.
TL;DR: A trucking company and a Pennsylvania job applicant settled a 2024 lawsuit alleging the employer unlawfully denied employment based on criminal history, closing the case with prejudice in federal court on June 12.
The parties moved to dismiss the case with prejudice, meaning neither side can refile the claims. Settlement terms were not disclosed in the filing.
Pennsylvania Law Restricts Criminal History Use in Hiring
Pennsylvania’s Criminal History Record Information Act places specific limits on how employers can use an applicant’s criminal background when evaluating job candidates. The statute prohibits employers from denying employment solely because of a criminal record without considering factors such as the nature of the offense, time elapsed since conviction, and the relationship between the conviction and the job duties.
Phath’s complaint alleged Central Transport rejected his application for a truck driving position immediately after he disclosed his criminal history, without conducting an individualized assessment as required under state law. The lawsuit was filed in 2024 in federal court.
The case adds to mounting legal pressure on employers to review and revise automated rejection workflows that may conflict with state fair-chance hiring laws. Several states including California, New York, and Illinois have enacted similar protections that require individualized consideration of criminal records rather than blanket disqualification policies.
Criminal History Screening Creates Legal Risk for Automated Systems
Many applicant tracking systems include criminal background check integrations that automatically flag or reject candidates based on disclosure or background report results. Employers own legal liability for AI hiring tools regardless of whether the decision logic originates from internal policy or vendor-supplied algorithms, according to recent employment law analysis.
The settlement follows a pattern of employers revising screening policies after facing litigation. Federal equal employment opportunity guidance issued by the EEOC in 2012 warned that blanket criminal history exclusions can create disparate impact discrimination claims under Title VII, particularly when policies disproportionately screen out protected classes.
Automated knockout questions that disqualify applicants based solely on a yes/no criminal history disclosure may violate state laws requiring case-by-case evaluation. Configuring ATS knockout questions requires careful review of which criteria trigger automatic rejection versus manual review flags.
What This Means for In-House Recruiters
This settlement underscores the need to audit how applicant tracking systems handle criminal history information during screening stages. Recruiters should verify that their ATS workflows flag criminal history disclosures for manual review rather than triggering automatic rejection, especially in states with fair-chance hiring laws.
Many recruiting teams inherit knockout question logic from prior administrators without reviewing whether those settings comply with current state law. Pennsylvania joins at least 37 states and over 150 cities with “ban the box” or similar criminal history protection statutes. Recruitment automation governance checklists should include regular review of screening criteria that may create legal exposure.
Employers using third-party background screening vendors should document how their ATS handles the time gap between application and background check results. Immediate rejection based on self-disclosed criminal history—before conducting an individualized assessment—creates the clearest liability exposure under statutes like Pennsylvania’s Criminal History Record Information Act.
