Keep Your Statistics, Please.

Target has had a rough time with pre-employment tests. The previously lost a case of using a clinical psychology instrument in hiring security guards. Now they have settled again with the EEOC for using tests with adverse impact. I’m very curious as to which tests they were using, but I haven’t been able to find out online and since they settle the case they don’t have to disclose the information.

For those of you who are using pre-employment tests (and shame on those of you who are not!), there are a few very important takeaways from the case:

  • Do your adverse impact analyses when you implement AND periodically as you are using the tests. Why? According the EEOC, “The tests [Target was using] were not sufficiently job-related. It’s not something in particular about the contents of the tests. The tests on their face were neutral. Our statistical analysis showed an adverse impact. They disproportionately screened out people in particular groups, name blacks, Asians and women.” Just because your tests do not look like they should have adverse impact doesn’t mean that they don’t.
  • Really, how good is your validity evidence? The key quote from above is “not sufficiently job-related,” which really means the job-relatedness of the tests was not strong enough to support the adverse impact they had. Having a valid test is your defense against an adverse impact claim. Oh, and it’s also the way to show others in your organization their value.
  • Track your data. I was gobsmacked that Target, “failed to maintain the records required to assess the impact of its hiring procedures.” After all, this is the company that knows when women are pregnant before their families do. If you’re the cynical type, you are probably thinking, “Well, they knew it would be bad, so they didn’t keep track of it.” If you get a visit from the EEOC (or your state equal opportunity agency), they won’t look kindly on you not having this kind of information. And it makes you look guilty. Part of the responsibility of having a pre-employment testing program is tracking its adverse impact and validity. If you are thinking of outsourcing it, find out how your contractor plans on following the data.

In the end, Target figured it was worth $2.8 million to make this go away, especially since they claim they are not using the tests anymore. They can probably find that money between the cushions they sell. What’s left unanswered is whether they will continue to use different tests to select managers and others.

For the rest of us, Target gives us a cautionary tale. Big class action lawsuits about tests are riding in to the sunset because the standards for validation and implementation are codified into US law. The standards are clear and they are ignored at your peril.

For more information on using validated pre-employment tests, contact Warren Bobrow.

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