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Use Care When Conducting Pre-Employment Tests

June 21, 2006
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Pre-employment testing can help executives gain insight into a candidate’s fit with the overall corporate culture. Furthermore, tests can help shed light on whether the candidate has the necessary personality traits and skills for the job at hand.

Tests can help to reduce the guesswork inherent in hiring, thereby allowing workforce managers to be more confident in the employee selection process. Some workforce experts argue that the surge in pre-employment testing currently unfolding is embedded, at least partly, in a desire to make better employee selection decisions.

An American Management Association study found that 44 percent of the group’s members responding to the study use tests to select employees. Forty percent ofFortune 100 companies include some form of psychological testing in their employment selection processes, according to the Society for Human Resource Management.

There is a downside to using pre-employment tests. There are laws and guidelines in administering these exams that, unless followed to the letter, can create a legal nightmare for corporations.

One of the most important points for employers to remember, particularly in the case of pencil-and-paper "personality" tests, is that these tools can only be used for determining traits that are associated with a particular job, according to Kimberly Talley, attorney at Baker & Hostleter in Los Angeles.

A personality test revealing anything about an employee’s mental impairment or a psychological condition, even if it is an inadvertent effort, violates the Americans With Disabilities Act. That’s because, barring certain exceptions, the law forbids employers from requiring applicants to undergo medical examinations and queries as a condition of employment.

So if a test has medical or psychological evaluation components and employment is contingent on a certain outcome, a company could be treading on thin ice—as was demonstrated in the 2005 case Karracker v. Rent-A-Center Inc.

Rent-A-Center, which leases furniture and appliances, had made it mandatory for employees to take an APT Management Trainee-Executive Profile before being promoted. The exam was designed to gauge personality traits, language skills and math proficiency. But a portion of the test included questions from the Minnesota Multiphasic Personality Inventory, and its results could be used to determine traits like depression, hysteria, paranoia and mania.

What’s more, applicants were required to receive certain testing scores as a condition for securing employment. It was no surprise that the court ruled against Rent-A-Center.

Companies can evade this situation by taking into consideration the dynamics that courts look at to determine whether a personality test has a medical component. Some of these factors include whether a test is administered by a health care professional, interpreted by a health care professional or designed to reveal an impairment of physical or mental health. Avoiding these factors could help companies to stay out of trouble.

Under certain special circumstances, however, employers can administer tests that gauge the health of an applicant—as long as it is relevant to the tasks that they will be required to perform on the job, notes Carol Miaskoff, assistant legal council at the Equal Employment Opportunity Commission in Washington, D.C.

    The important point for companies to remember in this situation is that there is a sequence of steps that must be followed. The medical tests can be administered only after all other application components have been cleared and a job offer has been extended. The reason for this stipulation is because it lets an applicant discern whether he was rejected on the basis of a disability or because of insufficient skills or experience.

    Failing to go by the book landed American Airlines in trouble last year (Leonel v. American Airlines Inc.). The company had not completed the background checks on some of its applicants before asking them to take medical and blood tests. As it turns out, some of these individuals were HIV-positive but had not revealed it to American Airlines prior to the medical exam.

    After receiving results from the blood samples, American rescinded the offers that had been made, citing that the applicants had not been forthright about their condition. Three candidates sued the company.

    One of the salient points that came out of the case is that it did not matter whether the candidates had been forthright about their health condition (they were relatively early in the application process). The fact that American Airlines failed to follow the specified protocol required under the law was the lesson for employers.

    Administering the medical tests before the background check was complete would have made it difficult for the applicants to determine whether they had been denied employment because of issues with their background checks or with their physical exam, the court concluded.

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