Does your company use employment tests? If so, do you know whether the testing has an adverse impact on females or minorities? If so, have your tests been validated? If you do not know the answer to these questions, you may be in for a big surprise the next time you have a visit from the Office of Federal Contract Compliance Programs (OFCCP).
(If you’re not a federal contractor, keep reading. As will be discussed below, adverse impact – a.k.a. “disparate impact” – can be raised by the Equal Employment Opportunity Commission (EEOC) or any plaintiff’s attorney.)
Earlier this year, OFCCP Director Charles James announced that the agency intends to increase its number of “focused” compliance reviews and will look for potential systemic discrimination. One of the red flags will be job testing. James announced that OFCCP has hired a testing expert to bolster this effort and to keep employers from “blowing them out of the water” with their own experts.
The Uniform Guidelines on Employee Selection Procedures provide that any selection procedure that has an adverse impact on race, sex or ethnic group will be considered discriminatory unless (1) the procedure has been validated, or (2) alternate procedures are used that eliminate the adverse impact. The Uniform Guidelines contain details regarding how selection procedures may be validated. Simply put, the tests have to be valid predictors of job performance.
A Tale of Three Cities
A recent lawsuit involving the City of Memphis highlights the potential problems employers face when using employment tests. The City used a written test (among other criteria) in screening candidates for promotion to police sergeant. The passing score on the test was 70. The City determined that the test had a disparate impact on African-Americans, so the City lowered the passing score to 66. This meant that the pass rate for African-Americans was acceptable under the so-called “80-percent” rule. However, the average test score for African-Americans was lower than that for white candidates.
(“Huh?” The “80-percent” rule says that females or minorities should be selected for “positive” employment decisions – promotions and hires – at 80 percent of the rate that males or non-minorities are selected.)
Two African-Americans who were not selected for promotion sued the City, contending that the test was racially discriminatory. A federal court in Tennessee found in their favor, for three reasons: (1) changing the “cutoff” score was not enough when the average score for minorities was lower than the average score for whites; (2) the tests were not used on a simple “pass-fail” basis, but rather the actual scores were used in evaluating candidates; and (3) the test scores counted for 45 percent of all criteria used in the selection process.
The City had also failed to present evidence showing that the test was a valid predictor of performance.
It’s not just Elvis’s birthplace – the Windy City has taken a beating recently, too. In another testing case, a federal court in Illinois found in favor of African-American applicants for entry-level firefighter positions. The court found that the test had a racially adverse impact, failed to measure the skills essential for performance, and did not provide a valid basis for distinguishing “good” applicants from “bad.”
It’s also worth noting that the recent Supreme Court decision in Smith v. City of Jackson (Mississippi) has recognized a cause of action for disparate impact based on age. This was not a testing case, but employers would be well advised to make sure that any testing they conduct does not also result in age-based adverse impact.
If you have questions about your selection processes, or would like an adverse impact analysis performed on your selection processes, please contact a member of our Affirmative Action Practice Area or the Constangy attorney of your choice. If this bulletin was forwarded to you and you would like to be added to our distribution list, please e-mail Chasity Flanders at email@example.com.