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Construction Insurance Bulletin


By May 1, 2010No Comments

Many organizations use tests to help them evaluate prospective employees or candidates for promotions. The tests help employers measure a person’s aptitude for a job or how well the person will fit within the organization. Some small businesses have job candidates take personality tests. A chain of video rental stores requires prospective employees to take a long multiple-choice exam similar in format to the Scholastic Aptitude Test.

Employers like to use these tests because they theoretically provide objective measures of a candidate, shielding the employer from accusations of illegal discrimination or favoritism and giving them a handy way to compare multiple candidates for the same job. However, the use of employee tests carries risks, though a 2009 U.S. Supreme Court decision lowered those risks for employers.

Title VII of the federal Civil Rights Act of 1964 requires employers to meet standards that, in this case, conflicted with one another. It prohibits employers from intentionally discriminating in employment decisions on the basis of race, color, religion, sex, or national origin. It refers to such discrimination as “disparate treatment.”� It also forbids some employment practices that, while appearing to be neutral, have a disproportionate effect on members of minority groups (what the law calls “disparate impact”).

The city of New Haven, Connecticut ran into this conflict when it administered tests to measure the readiness of city firefighters for promotions to officer status. Though the city took great pains to design and administer a fair test, almost twice as many whites passed as did blacks, and Hispanics fared even worse. Fearing a lawsuit based on the disparate impact of the test, the city decided to throw out all the results. This decision led a (mostly white) group of firefighters who had passed the test but not received promotions to sue the city, claiming that the city discriminated against them because of their race. The trial court and a federal appellate court sided with the city, but the U.S. Supreme Court ruled in favor of the firefighters.

The court acknowledged that an employer could be liable for the disparate impact of a promotional exam. However, this would be the case only if the exam was not related to the job and necessary for the business, or if the employer had the option of using a different, non-discriminatory exam and chose not to use it. The court further said that the city was wrong to throw out the test results merely because it did not like them. To justify throwing out the results, the city had to show that the test’s construction and content discriminated against minorities. Noting the efforts the city made to ensure a fair test, the court concluded that the exam was not disparate treatment. The decision set a standard for discrimination claims: Title VII allows corrective action for racial discrimination only when strong evidence exists that the employer would have been liable for disparate impact even if it had not taken the particular action.

The federal Equal Employment Opportunity Commission advises employers who use tests to do the following:

  • Administer tests without regard to race, color, national origin, religion, sex, disability, or age.
  • Ensure that the tests are validated properly for the particular positions and purposes to which they apply.
  • Identify and use alternative selection procedures when a test screens out a protected employee group.
  • Update tests so that they reflect changing job requirements.
  • Ensure that hiring managers understand a test’s effectiveness and limitations for predicting future job performance.

Used properly, tests can be a useful tool for evaluating job candidates, but employers must recognize the pitfalls into which tests can lead them.