This week’s cautionary tale comes courtesy of Target Corp.
On Monday, the Minneapolis-based discount chain agreed to pay $2.8 million to resolve charges of discrimination stemming from employment assessments used by Target, which “disproportionately screened out applicants for exempt-level professional positions based on race and sex,” according to the Equal Employment Opportunity Commission. The payout will be distributed among more than 3,000 individuals.
In its investigation of the retail giant, the EEOC determined that the assessment tests Target administered to thousands of candidates—who were ultimately rejected—for upper-level positions were not job-related, and violated Title VII of the Civils Right Act of 1964.
In addition to finding that the assessments unduly eliminated individuals in particular groups from consideration—namely African-Americans, Asians and women, according to the EEOC—the Washington-based agency determined that one of the assessments Target had been using violated the American with Disabilities Act. In this case, applicants were subjected to medical examinations prior to an offer of employment, which, as the EEOC notes, is prohibited by the ADA. Finally, the EEOC found that Target committed recordkeeping violations by failing to maintain records adequately enough to evaluate the impact of its hiring processes.
While maintaining that it didn’t act improperly regarding the assessments, Target did stop using the tests in question during the EEOC’s investigation, and has “agreed to better track its testing process and check for impact based on race, ethnicity and gender,” according to Target spokeswoman Molly Snyder.
In the same statement, Snyder noted that Target had relied on these tests “over the past decade,” and said the EEOC concluded that “only a small fraction of the assessments … could have been problematic.”
The settlement underscores the “quite risky” nature of the pre-employment assessments commonly used by many employers, says Tashwanda Pinchback Dixon, an Atlanta-based attorney at Balch & Bingham, and a member of the firm’s labor and employment and litigation practice groups.
“It’s important that employers take a very close look at these tests and make sure there is a clear link to business necessity,” says Dixon, whose experience includes focusing on Title VII sex and race discrimination claims.
Ensuring such a connection “is even more critical with tests that seek medical information, because of the ADA and the Genetic Information Nondiscrimination Act,” adds Dixon.
In most instances, she says, “a case can be made for business necessity when the position requires manual labor, such as manual lifting requirements.”
In Target’s case, however, “the link to business necessity is not as obvious.”
In light of this week’s settlement, Dixon says that employers should expect their pre-employment assessments to come under scrutiny by candidates and—if brought to its attention—the EEOC.
As such, “employers should also evaluate and monitor whether their assessments have an adverse impact on any protected class,” she says, “including race, gender and individuals with disabilities.”Twitter It!