Pre-employment Selection
in an Era of Enhanced Risk
March 21, 2017 MPPAW Meeting
Topics
1. EEOC’s “Systemic Enforcement” Initiative
2. Title VII and Disparate Impact
• Recordkeeping requirements
• Best practices for adverse impact tracking and analysis
• Common challenges to validity
3. ADA and Medical Inquiries/Exams
• Psychological and personality tests
Assessment in an Era of Mounting Risk
■ EEOC and plaintiffs’ attorneys are focused on
“systemic” issues.
■ Heightened scrutiny of:
˗ Pre-employment and promotional assessments
˗ Pre-offer “medical” examinations
˗ Background checks
▪ Arrest or conviction history
▪ Credit checks
˗ Education and other minimum qualifications
Substantial EEOC Awards/Settlements
■ EEOC v. Ford (2005)
˗ Written test for apprenticeship program had
disparate impact against African Americans.
▪ $8.55 million court-approved settlement.
▪ 280 African American test-takers placed on
apprenticeship list.
▪ Development of new selection methods, with
EEOC involvement and reporting/oversight.
Substantial EEOC Awards/Settlements
■ EEOC v. Dial (2006)
˗ Pre-employment strength test had disparate
impact against women.
▪ Court found test was more difficult than job.
▪ Dial’s validation studies did not show that the
test achieved its stated goal of reducing
injuries.
▪ $3.3 million damages award upheld by court.
Substantial EEOC Awards/Settlements
■ EEOC v. Pepsi Beverages (2012)
˗ Criminal background check policy had disparate
impact against African Americans.
▪ $3.13 million conciliated settlement.
▪ Pepsi discontinued policy and offered jobs to
applicants who had been excluded.
▪ Oversight by and regular reporting to EEOC,
Title VII training for recruiters and managers.
Title VII and Adverse Impact
■ Title VII forbids use of selection tool that is
discriminatory in effect, unless employer can show
that it is “related to job performance and is
consistent with business necessity.”
■ If employer can meet this burden, EEOC or private
plaintiff can still prevail by showing there was an
alternative selection method with substantially similar
validity and less adverse impact.
Title VII and Adverse Impact
■ The EEOC’s Uniform Guidelines on Employuee
Selection Procedures (1978) require employers to
maintain and have available for inspection
information that will disclose the impact selection
processes have on employment opportunities by
race, sex, or ethnic group.
■ Where employer fails to maintain these records, the
EEOC can draw an “adverse inference” that the tool
had actionable disparate impact.
Title VII and Adverse Impact
■ Note: as part of its systemic enforcement efforts, the
EEOC has advanced adverse impact claims on behalf
of intersectional subgroups (e.g., Asian women,
African American women, etc.).
Title VII and Adverse Impact
■ The EEOC’s Four-Fifths Rule
˗ Is passing rate of protected group less than 80
percent of passing rate of non-protected group?
■ Z-Test of Statistical Significance
˗ Is difference in passing rates of protected and
non-protected groups statistically significant at
two to three, or more, standard deviations?
Title VII and Adverse Impact
Accepted Measures of Practical Significance:
■ Measures of effect size
˗ “Cohen’s d,” “Cohen’s h,” etc. As a rule of thumb, effects
under these tests that are less than 0.2 (i.e., smaller than
“small”) are not practically significant.
˗ “Phi coefficient.” The Phi coefficient squared can be used
to measure the percentage of variance that is explained by
the subgroup variable. As a rule of thumb, 1% is the
minimum threshold to establish an inference that variance
is explained by the subgroup variable.
Best Practices:
Responding to Adverse Impact Analyses
■ Involve inside or outside legal counsel to ensure
analyses are privileged.
■ Analyze adverse impact of assessments, even if there
are no “bottom line” hiring disparities.
■ Address different passing schemes in your analysis.
■ Analyze multiple measures of potential adverse
impact (at least four-fifths rule and Zd).
■ Analyze measures of practical significance.
■ Analyze intersectional (“women plus”) subgroups, if
indicated by group-level results.
Best Practices:
Responding to Adverse Impact Analyses
■ Response to adverse impact findings:
˗ How confident are we in validity evidence,
including job analysis?
˗ How recent is validity evidence?
˗ Assuming strong validity, what is brand impact of
continuing to use an assessment that has adverse
impact?
˗ Check in with business regarding changing
ROI/need for assessment.
Best Practices:
Responding to Adverse Impact Analyses
■ The search for equally or more valid alternatives
with less adverse impact:
˗ Work with vendors (and counsel) to conduct
root-cause analysis of impact of :
▪ Cut scores/pass rates
▪ Components and their weighting
Validity: Common Challenges
■ There are certain errors of omission that the EEOC
(and courts) are more likely to view as serious:
˗ Failing to conduct local job analysis to establish
requirements of job(s).
˗ Using vendor’s established job analysis
questionnaire without examining whether it
captures important information for job(s) being
studied.
˗ Ignoring actual job duties, work behaviors, or
work outcomes and focusing instead on broad
competencies.
Validity: Common Challenges
˗
˗
Combining jobs into job families and basing
decisions on combined results without
establishing similarity.
Failing to establish that performance criteria
are needed at hire.
Validity: Common Challenges
˗
˗
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Failing to conduct any sort of validation study.
Failing to establish the relevancy of criteria.
▪ Including relying on coefficients of
correlation that are not sufficiently strong.
Failing to provide rationale for weights of
component scales, or for selection cut-score/pass
rate.
Validity: Common Challenges
■ Arguing for transportability of validity without
sufficient proof of job similarity.
■ Conducting no bias or fairness analyses (when
feasible).
■ Failing to consider if there are alternative measures
with substantially equal or greater validity and less
adverse impact, or rejecting equally (or more) valid
alternatives with less adverse impact.
The ADA and Medical Inquiries/Exams
The ADA requires a conditional job offer before a
medical exam can be required of an applicant.
■ ADA Title I provides that an employer may not
require medical examinations or ask questions about
job applicant’s disability until after the employer
makes a conditional job offer.
The ADA and Medical Inquiries/Exams
What is a medical exam?
■ ADA and implementing regulations do not define
“medical examination.”
■ EEOC Enforcement Guidance defines “medical
examination” generally as “a procedure or test that
seeks information about an individual’s physical
or mental impairments or health.”
The ADA and Medical Inquiries/Exams
■ Is test administered or interpreted by health care
professional or someone trained by health care
professional?
■ Is test designed to reveal impairment such as those
listed in DSM or physical or mental health?
■ Is employer trying to determine applicant’s
physical or mental health or impairments?
The ADA and Medical Inquiries/Exams
■ Is test invasive?
■ Does test measure applicant’s performance of task, or
his/her physiological responses to performing task?
■ Is test normally given in medical setting (for
example, health care professional’s office)?
■ Is medical equipment used?
The ADA and Medical Inquiries/Exams
■ Courts tend to focus on two considerations:
˗ Is test administered or interpreted by health
care professional?
˗ Is test designed to reveal impairment or
applicant’s mental health, or does it measure
personality traits such as honesty, preferences,
and habits?
The ADA and Medical Inquiries/Exams
Karraker v. Rent-A-Center, 411 F.3d 831 (7th Cir.
2005)
■ Test that included items from Minnesota Multiphasic
Personality Inventory (“MMPI”) found to be medical
exam.
˗ Question of whether test was a medical
examination “largely turn[ed] on whether [it] is
designed to reveal a mental impairment.”
˗ Because the MMPI was originally designed to
“reveal mental illness,” it was “best categorized
as a medical examination.”
The ADA and Medical Inquiries/Exams
Barnes v. Cochran, 944 F. Supp. 897 (S.D. Fla. 1996)
■ The court held that a pre-employment psychological
evaluation was a medical examination because:
˗ a licensed (forensic) psychologist performed the
evaluation.
˗ the evaluation included a clinical evaluation of answers to
questions intended to identify specific psychological
disabilities.
˗ and the forensic psychologist reviewed the applicant’s
medical records.
The ADA: No Harm… But Still Foul?
■ Claimant need not be disabled to recover damages for
unauthorized inquiries/collection of medical
information.
■ Claimant must be able to show that unlawful
examination caused “some sort of tangible injury.”
■ But, the EEOC takes position that the mere
“inconvenience” of unauthorized pre-offer medical
inquiry/exam is itself an injury entitling applicant to
relief.
The ADA: Personality Assessments
■ EEOC is also scrutinizing personality tests on disability
discrimination (and race) discrimination grounds:
˗ EEOC v. Kronos, Inc.
▪ Hearing and speech impaired applicant not hired
by Kroger filed charge with EEOC alleging that
Kroger’s personality test discriminated against her
on basis of her disabilities.
▪ Kroger had summarized the results of Kronos
(Unicru) personality test as demonstrating that the
applicant “is less likely to…listen carefully,
understand and remember.”
The ADA: Personality Assessments
 In an expansion of the EEOC’s investigation, court approved a
subpoena to Kronos for nationwide validation
data/documentation about:
– any Kronos assessment used by Kroger;
– for any retail position;
– including any analysis of the assessments’ impact on
disabled applicants.
– … even if the data/documentation was created for
another employer.
The ADA: Personality Assessments
 Court rejected broad “fishing expedition” targetting
data/documents relating to adverse impact based on race.
– But if the data/documents produced happened to reveal a
racially-related impact, then the EEOC “need not ignore
this new evidence.”
The ADA: Personality Assessments
■ State agencies are also attacking personality tests on
grounds that they might indirectly reveal information
about disability:
˗
Rhode Island’s Fair Employment Practices Act
makes it unlawful for any employer to “[e]licit or
attempt to elicit any information directly or
indirectly pertaining to [an applicant’s]…
disability,” or to “[u]se any form of application
for employment … containing questions or entries
directly or indirectly pertaining to … disability[.]”
The ADA: Personality Assessments
■ In case involving CVS, the Rhode Island Human Rights
Commision took issue with the following test items:
˗ “You get angry more often than nervous,” because it
could be associated with borderline personality disorder;
˗ “People do a lot of things that make you angry,” because
it could be associated with borderline or antisocial
personality disorders;
˗ “It bothers you a long time when someone is unfair to
you,” which could be associated with “ruminativeness,” a
symptom of various forms of depression; and
˗ “There’s no use having close friends; they always let you
down,” which could be associated with schizophrenia.
Title VII: Personality Assessments
■ The EEOC is investigating personality tests on race
discrimination grounds as well.
˗ One reason employers use personality tests is that
they mitigate potential adverse impact caused by
other types of tests.
˗ Even though personality tests tend to benefit some
racial groups, they can disadvantage others.
■ But, EEOC experts also argue that employers should
use personality tests (in particular, tests of integrity)
as “less discriminatory alternative” to criminal
background or credit checks.
Best Practices: Personality Assessments
■ Strategies for effective use:
˗ Ensure items/constructs are clearly linked to work (face
validity).
˗ Refer to them as “work style” or “your work approach.”
˗ Avoid using items that could be viewed as
inappropriate/intrusive.
˗ Reinforce job relevance through the instructions and set
up of the exercise.
˗ Include alongside other more-engaging, highly-relevant
content.
˗ Gather candidate feedback.
˗ Gather recruiter/hiring manager feedback.
Final Thoughts
 A robust, local job analysis is your best friend.
 There is no such thing as a “pre-validated”
assessment.
 Cut scores should not just be whatever the business
wants.
 In the long run, end-arounds don’t benefit anyone.
 Face validity really does make a difference.
DISCLAIMER: This presentation is intended for educational
purposes only and is not intended to constitute legal advice.
Mark J. Girouard
Nilan Johnson Lewis PA
120 South Sixth Street, Suite 400
Minneapolis, MN 55402
612.305.7500
[email protected]