Get the right results from employment tests, while avoiding charges of discrimination

By Richard D. Alaniz

As the economy slowly improves and employers look to add more workers, hiring productive workers is as important as ever, and no one wants to waste time and money hiring people who aren't the right fit.

Interviews aren't always perfect indicators of who will be the best person for a particular position. Someone may interview extremely well, but still not be effective or productive in the workplace. Those doing the interviewing may be too subjective, focusing on candidates who may not be the right fit for a particular job while failing to see the good qualities another applicant may have.

To bring more objective standards to the hiring and promotion process, many organizations are using or considering employment tests. When done right, these types of tests can help employers accurately gauge the abilities and productivity of job applicants. They can also give an impartial glimpse of how a person can actually do a job, rather than just how they perform in an interview.

However, when employment tests are not designed, administered, or used correctly, they can leave employers vulnerable to claims of discrimination and reverse discrimination. Would-be employees who don't get a job may claim violations of the Americans With Disabilities Act, Title VII of the Civil Rights, the Age Discrimination in Employment Act, and other legislation designed to guarantee workplace equality.

The U.S. Equal Employment Opportunity Commission has been keeping a close watch on employer's use of employment tests. Several years ago, Dial Corp. was ordered to pay $3.3 million after it was accused of rejecting women job applicants who failed a strength test. Before the test, 46 percent of all new hires at a particular site were women, but that number dropped to 15 percent after the test was implemented. Dial argued that the number of injuries had dropped since it started using the test, thus justifying its results. But, the EEOC argued that the test required much more physical strength than the job itself, and that injuries had most likely dropped because of better training and job rotations. Ultimately, the court agreed with the EEOC and found against Dial.

"This case is an example of the EEOC's current focus on systemic cases," Regional Attorney John C. Hendrickson said at the time in a statement. "Pre-employment tests that screen out women or minorities will be closely examined by this agency."

And almost exactly two years ago, the U.S. Supreme Court decided an even more high-profile employment test case. In Ricci v. DeStefano, the Supreme Court ruled that the City of New Haven, CT, committed reverse discrimination when it administered an employment test for promotions for firefighters. Looking to increase the diversity of the upper ranks of the fire department, the city hired an outside consultant to design a written exam that would be fair to everyone who took it.

However, the firefighters who earned the top scores were almost all white. Worried about a discrimination lawsuit from black firefighters, the city tossed out the test results. So some of the non-minority firefighters who scored well on the test sued, saying they were the victims of reverse discrimination under Title VII and the Equal Protection Clause of the Fourteenth Amendment. The Supreme Court agreed, stating that "no individual should face workplace discrimination based on race."

Since the ruling, those who use employment tests are faced with the unenviable challenge of not discriminating against everyone – the tests must be managed so that every applicant, minorities and non-minorities alike, is treated equally.

Fortunately, when employers understand what is involved and plan carefully, they can still take advantage of employment testing to find the best applicants while minimizing the risks that one particular group can later claim that they were discriminated against.

The EEOC Weighs In

There are different types of employment and promotion tests that employers can use, including those that test physical and intellectual abilities; personality tests; those that mimic the type of work that the applicant will be expected to do; and tests that gauge an applicant's ability to communicate with customers and colleagues.

Even before the Ricci case, the EEOC recognized the challenges that employers face when trying to strike a balance with employment tests, stating that "the use of tests and other selection procedures can be a very effective means of determining which applicants or employees are most qualified for a particular job." However, use of these tools can violate the federal anti-discrimination laws if an employer intentionally uses them to discriminate based on race, color, sex, national origin, religion, disability, or age (40 or older). Use of tests and other selection procedures can also violate the federal anti-discrimination laws if they disproportionately exclude people in a particular group by race, sex, or another covered basis, unless the employer can justify the test or procedure under the law.

To help provide some clarity, the EEOC has issued a fact sheet regarding employment test and selection procedures.

What Employers Should Do Now

Employers that utilize employment tests should be familiar with the EEOC's guidance, but it is important to realize that these guidelines are fairly vague. Employers that have not reviewed their testing policies should do so as soon as possible and be prepared to invest some time in the process.

Employers need to look carefully at how tests are actually being handled in their work environments. Employers can design the best policies in the world that are in complete conformance with the EEOC guidelines, but if one manager in a satellite office is not following the right procedures, the company may still be vulnerable to a discrimination lawsuit or a regulatory investigation. 

Have Experts Review Current Testing Procedures

There are many factors to consider when examining the legality of employment screening tests. Along with federal legislation and court rulings, employers need to consider state and local anti-discrimination laws. Employers that want to minimize the risks of lawsuits should commit to carefully reviewing the tests they give, what positions they are used for, and how they are administered.

Regulations and results from employment tests can be very complicated, so it is critical to include knowledgeable people in the review, including HR, in-house attorneys and outside law firms. These experts should understand that when it comes to employment testing, there is no one-size-fits-all approach – tests need to be carefully tailored for the job description. Don't administer a single test for a variety of different positions. Off-the-shelf tests are in all likelihood not validated for at least some of the jobs at issue. And, if you have sites in different states, it may be necessary to customize the tests to factor in state and local laws. 

Educate Hiring Managers and HR

As the EEOC pointed out in its fact sheet, the people who administer the tests need to understand the goals of the tests and how they are designed to work. Managers and HR should receive ongoing education about the rationales for the tests and the importance of administering them correctly.

Employers should also encourage hiring managers to report any issues they see or disconnects between the goals of the test and the ultimate outcomes. Employers should also be sure that the tests are relevant for the job in question – being able to justify the use of the test is critical when combating potential discrimination claims. Validation of the test as a selection device helps confirm that it tests for the skills and abilities of the jobs in question. If a particular test screens out a group that is protected under federal law, the employer needs to determine if there is another alternative that is equally effective. If one exists, the employer needs to use that one instead.

Managers should feel comfortable reporting concerns, and the employer should designate a single point of contact to respond to any issues. This point of contact should most logically be someone in HR or the compliance department. With one person in charge, it's easier to spot potentially discriminatory trends that might otherwise be overlooked.

Carefully Review Outcomes from Tests

Blatant discrimination is hard to hide, but it's not always easy to see when a group or class may have a disadvantage with a particular test. Whenever possible, employers should use quantitative information, instead of subjective answers. The data should be compiled and regularly reviewed by someone who has the expertise to crunch the numbers and see if hiring patterns have been impacted because of test results.

Don't Rely on a Testing Company to Do the Work

It's not enough to work with an expensive vendor that can create an elaborate testing system. The EEOC expects employers to take responsibility for the testing procedures that they use. As the Ricci case showed, outside consultants don't always design tests that eliminate potential discrimination claims.

Document Everything

With all hiring decisions, employers should always put everything in writing. Test results should be tracked, and hiring managers need to justify why they hired certain employees while rejecting others.

Review Tests Frequently

Employers that use employment tests need to understand that they are fluid and should be reviewed regularly. This will help ensure that the tests continue to be relevant for specific job positions.

Considering the potential liabilities and uncertainties, especially with the EEOC focusing on employment tests, some employers may be wondering if it is worthwhile to use employment testing. There are many advantages that well-designed, validated, thoughtful, and relevant tests bring to the hiring process. For those who understand the potential risks, employment tests can help by identifying the best people for the job, reducing costs and training time, and minimizing job turnover while keeping companies safe from discrimination lawsuits.

About the author:

Richard D. Alaniz is senior partner at Alaniz and Schraeder, a national labor and employment firm based in Houston. He has been at the forefront of labor and employment law for over thirty years, including stints with the U.S. Department of Labor and the National Labor Relations Board. Alaniz is a prolific writer on labor and employment law and conducts frequent seminars to client companies and trade associations across the country. Questions about this article can be addressed to Alaniz at (281) 833-2200 or ralaniz@alaniz-schraeder.com

 

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