The EmpLAWyerologist

Does Pre-Employment Testing Increase an Employer’s Exposure to Potential Lawsuits?

With our recent focus on pre-employment screening, we turn now to the use of pre-employment testing.  Many employers choose to rely on certain pre-employment testing to help them determine whether a candidate is qualified for the job in question, or otherwise a fit for the job or the company. Such tests may focus on certain job skills, cognitive abilities, physical abilities or personality traits. Is it legal? If so, when and how can employers administer pre-employment tests and use the results in its hiring process? If not, why and/or when are they not legal or what types of tests specifically would be prohibited?  Does employment testing increase an employer’s exposure to potential lawsuits?

Legal challenges to an employer’s hiring decisions generally occur when candidates feel that the hiring process is inequitable or unfair. Pre-employment tests, conducted under the right circumstances, can help provide an enhanced perception of objectivity. Having said that, such testing will still be subject to the same legal standards as all employee selection techniques.  So where does that leave an employer? Can an employer use objective assessment tools in the hiring process and still minimize its exposure to a lawsuit?  The short answer is “Yes”.  In a moment, we will begin to answer “how”. First, however, let’s answer another question: Why should/would the use of tests expose employers to potential lawsuits if the practice is legal? The EEOC, in its Fact Sheet entitled, Employment Tests and Selection Procedures discusses the above-mentioned EEO laws as well as disparate treatment and disparate impact (click here for review of those concepts in my previous post on EEOC and background checks)  regarding pre-employment testing. Helpful hint to employers: Often when the EEOC issues a fact sheet or Enforcement Guidance on an employment practice there is an implicit acknowledgement that the practice in and of itself is legal, if done consistently with the applicable laws. Click here if you would like to read the Fact Sheet.  (Note: This week’s post will focus primarily on pre-employment testing under Title VII of the Civil Rights Act. ADA requirements will be covered in an upcoming post.)

Here are examples of issues involved in disparate treatment cases:

1. Was the test in question used to treat people of a different race, color, religion, sex or national origin differently? For example, a cognitive test given only to candidates over 50 can be a strong indicator that the employer is using the test to weed out workers over a certain age, in violation of the ADEA
2. Is there any evidence of bias (e.g. statements)? Using the cognitive test example, an employer’s statement that “older people tend to make more mistakes” would further indicate an intent to screen out candidates over a certain age.
3. What if any reason did the employer provide for the different treatment? Can the employer offer a non-discriminatory reason for the test/procedure in question?
4. Is there evidence that the employer’s stated reason for the different treatment is untrue and that race, color, religion sex or national origin is the true reason?

What issues are involved in pre-employment testing cases where disparate impact may be occurring?

1. Is the employer imposing a neutral test that disproportionately screens out one or more groups protected under applicable EEO laws (e.g. African Americans?)  One usually needs statistical analysis to show disparate impact on one or more such protected class.
2. If the procedure or test in question does have a disparate impact on one or more groups protected under applicable EEO laws can the employer show that such test or procedure is job-related and consistent with business necessity? If the test, criterion or procedure is related to successfully performing the essential job functions then it unlikely be vulnerable from an EEO standpoint.
3. If the employer can show the criterion, procedure and/or test to be job-related and/or consistent with business necessity, can the person challenging it/them show that a less discriminatory alternative is available? Unless the employee can show that  another, equally effective test that would not disproportionately exclude the group(s) in question is available then the challenged test/procedure/practice will pass muster.

The following two cases provide good illustrations of how the EEOC tends to look at pre-employment testing practices:

EEOC v. Ford Motor Co and United Automobile Workers of America: This nationwide class-action lawsuit on behalf of African-Americans rejected for an apprenticeship program involved interpretation of Title VII and its application to cognitive tests.  The test in question measured verbal, numerical and spatial reasoning, purportedly to evaluate mechanical aptitude. Although the test was independently validated, it nonetheless consistently excluded a disproportionate number of African-American applicants. The evidence showed that less discriminatory methods were available that could have met Ford’s needs, but Ford did not change its procedures. Ultimately, the EEOC succeeded in obtaining an$8.5 million settlement, which also included Ford agreeing to replace the test in question with a procedure designed by a jointly selected industrial psychologist to predict job success while reducing the adverse impact on African-American applicants.

In EEOC v. Dial Corp, the Eighth Circuit Court of Appeals (covering Arkansas, Iowa, Minnesota, Missouri, Nebraska and the Dakotas) upheld a trial court finding that a strength test that disproportionately rejected women for entry-level jobs violated Title VII.  Prior to use of the strength test, women comprised 46% of all new hires, whereas after use of the test, women comprised only 15% of all new hires. Dial’s stated justification of injury prevention failed, because the EEOC showed through expert testimony that the test was far more difficult than the actual job, and the injury reduction cited by Dial in fact occurred two years before the test was even implemented.

Join me back here next week for a look at some US Supreme Court cases on pre-employment testing and Employer Best Practices!

Are you in the staffing industry? Do you use staffing agencies to meet your staffing requirements? If so, click here to read my latest post about how the ADA  applies to “temps” on The Staffing Stream , a blog published by Staffing Industry Analysts.

Disclaimer: Contents of this post are for informational purposes only, are not legal advice and do not create an attorney-client relationship. Always consult with competent local employment counsel on any issues discussed here.

Click here to learn more about Janette Levey Frisch, author of The Emplawyerologist.

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