year has passed since the $55 million settlement in the FedEx racial discrimination
case that rocked the recruiting world.
The class-action lawsuit reminded recruiters that objective
testing and neutral selection policies do not remove the risk of a discrimination
charge if there is evidence of disparate impact—which occurs when a neutral policy
or practice produces discriminatory results—on a protected group.
FedEx agreed to abandon the basic skills test that generated
discriminatory patterns, but many employers still use similar tests and remain exposed
to claims of disparate impact from minority group and female applicants, applicants
age 40 or older and applicants with disabilities.
Employers should use the utmost caution when selecting
a basic skills test.
"It had better be right," says Chris Arbery, a partner
specializing in employment law at Hunton & Williams in Atlanta. "Knowing the risks
that are out there, employers should take test selection very seriously."
The Equal Employment Opportunity Commission has increased
its scrutiny of neutral practices that generate discriminatory results. In these
disparate impact cases, the intent of the employer is irrelevant if a protected
group can prove that a test or job requirement that is not justified leads to a
disproportionate number of rejected applicants.
The employer must be able to demonstrate that the test
or requirement is job-related and consistent with business necessity and that there
is no effective alternative that would have a lesser impact on the protected group.
The EEOC’s Uniform Guidelines for Employment Selection
Procedures establish the parameters for a screening process that avoids disparate
impact, but employers and their recruiters must also understand workplace changes
that may trigger disparate impact and the broad approach that many courts take regarding
discrimination claims.
"Employers and recruiters must know the legal context
and the general prohibitions," Arbery says. "Understanding the legal context helps
the employer avoid taking shortcuts and making assumptions."
Outdated tests and job requirements and blanket diploma
requirements open the door to legal challenges by unsuccessful candidates.
Changes in required skills
The key is to tailor the test to the job, but with ongoing automation and offshoring,
the actual work performed in any job may change and those changes may not be reflected
in the requirements posted for job candidates.
"New technology creates significant changes in job requirements,"
Arbery notes. "As technology evolves, some skills may be required for a job that
was not required before, and some skills that were required may no longer be necessary."
To obtain the specific information needed to update
the requirements for each job, human resources staffers can meet with the employees
who do the job and the supervisor for the position.
"A better approach is to also obtain professional assistance
from firms that specialize in testing and selection methods," Arbery advises. "They
stay up to date on legal requirements. This approach may be more costly in the short
run, but it is less expensive in the long run."
"The real goal is to use the right test to get results,"
says Gregory Mersol, a partner in the employment and labor practice at Baker Hostetler
in Cleveland. "The test must relate to the job. And although some employers have
argued that reading skills are required for menial jobs because workers must understand
safety precautions, unsuccessful candidates may argue that symbols and pictures
are a valid alternative to written instructions."
Mersol also reminds employers to use reputable testing
vendors.
"There are many good firms out there," he says. "Find
out how much support they will provide if a test is challenged. Defending a test
is expensive and the testing company should provide assistance from competent personnel."
A different problem arises when the selection process
for one job inadvertently eliminates candidates for another job without any grounding
in business necessity.
"Look down the road, particularly when you have one
pool that feeds into another," Mersol says. "You may be testing in a way that has
consequences in the future."
For example, if the pool for supervisors comes from
the pool for laborers, and laborers face a 100-pound lifting requirement, the employer
may be eliminating women from the supervisors’ pool even though the lifting requirement
does not apply to the supervisor’s job.
"Also, in service jobs, employees may need certain technical
skills for one group of jobs, but the supervisors may not need those same skills,"
Mersol notes. Programming skills requirements may be necessary for an entry-level
position, but may not be necessary at the supervisory level. The impact of the requirements
for one job may filter through to other jobs where the business necessity defense
would not hold.
Mersol advises employers to review their tests at least
every three years, and more often if there is new automation, a change in the product
mix, a change in the customer base or a corporate restructuring, which may mean
some job duties have been added or taken away. A requirement for a job may include
typing so many words a minute, but the job or the technology might change so that
fast typing is no longer a key skill.
If a test or requirement is a business necessity but
results in disparate impact, the employer must demonstrate that there is no viable
alternative for screening applicants.
"To explore alternatives, bring into the discussion
a slice of the existing employees, their direct supervisors and HR and diversity
personnel," Mersol says. In many cases, employers can identify a different way to
test for the required skills.
Diversity personnel may also be able to identify potential
problems for unique groups, Mersol says. In addition, employers should ensure that
tests are administered under consistent controlled conditions and the administrative
procedures are correct.
"We’re going to see continued pressure on employers
to lighten job requirements and testing," Mersol says. Many employers evaluate their
job requirements and testing procedures when they conduct their annual review of
their affirmative action plan, but this may not be sufficient if positions change
or adverse impact is discovered between reviews.
Diploma trap
Employers should also review their educational degree requirements.
"The high school diploma requirement is the granddaddy
of all testing and selection issues," Mersol notes.
The requirement is difficult to justify for any menial
job. He notes that many cases arise from testing and degree requirements in areas
where minorities may attend substandard schools.
Arbery suggests that employers periodically revisit
high school diploma requirements. Many jobs do not require a high school diploma,
but some employers prefer candidates with diplomas and use a blanket requirement.
The presumption is that a graduate has general language and math skills, but those
skills may not be necessary for the job. Any blanket requirement for a high school
diploma is open to a challenge.
The annual reports employers must provide for the EEOC
and, if they are federal contractors, the Office of Federal Contract Compliance
Programs must include a snapshot of the workforce.
"Employers are doing a better job than they did 10 years
ago, in part because it is so easy now to capture the data," Arbery notes. "But
no employer is immune to a legal challenge once this workforce information becomes
available."
The downside of reporting is that other people have
access to the information, including lawyers who are looking for adverse impact.
"Make sure that the report is accurate and be aware
that others have access to it," Arbery advises.
According to Arbery, professional test validation is
essential. Employers must also consider alternative tests or methods and monitor
statistics on testing results to ensure that any disparate impact claim would not
be successful. He advises employers to stay abreast of developments in testing and
to tap expert consultants and counsel.
According to the EEOC’s guidelines, evidence of disparate
impact appears when members of a protected group are selected at a rate of less
than four-fifths of another group. Some employers still rely on the four-fifths
rule to measure their own potential liability. However, Mersol advises employers
to take a closer look at the rule.
"The OFCCP loves it, but it is analytically bankrupt
and the courts will scrutinize its applicability," Mersol warns. "The reality is
that better tools are available."
Courts are rejecting the rule as an appropriate measure
of disparate impact particularly because it may not be a good measure for smaller
groups. Courts want a more focused analysis, often based on multiple regression
analysis.
One reason for heightened employer attention to objective
testing is arising from cases where candidates are challenging the absence of a
uniform method in selection and promotion. In the massive gender discrimination
case now under way against Wal-Mart, the plaintiffs are challenging the absence
of a uniform selection method across Wal-Mart’s 3,400 stores nationwide. In 2007,
the 9th Circuit Court of Appeals in California allowed the case to move forward
as a class action.
Particularly in sectors affected by ongoing labor shortages,
eliminating unnecessary tests and skills and diploma requirements not only reduces
legal exposure but also enlarges the potential pool of candidates.
"At the end of the day, most employers want a selection
method that really works, not just one that avoids liability," Arbery notes. "The
key is to have both."
Workforce Management Online, June 2008 -- Register Now!
= Member Only
