Target Corp. Has New Targets to Hit after Huge EEOC Settlement

Authored by Whitney P. Cooney, Karen E. Milner

Aug 28, 2015

In a settlement announced on Aug. 24, 2015, Target Corp. has agreed to pay $2.8 million, among other remedial actions, to resolve a charge filed by the Equal Employment Opportunity Commission (EEOC) for alleged discrimination in the hiring process. The 2006 complaint alleged that pre-employment tests given to applicants for high-level, non-hourly positions were discriminatory. The EEOC’s investigation revealed thousands were adversely affected.

Specifically, the EEOC found reasonable cause to believe certain assessments formerly used by Target disproportionately screened out applicants for exempt-level positions based on race and gender. According to the EEOC, the tests violated Title VII of the Civil Rights Act of 1964 in that they were not sufficiently job-related or consistent with business necessity. In addition, one of the three assessments violated the Americans with Disabilities Act (ADA). The EEOC determined this particular assessment performed by psychologists constituted a pre-employment “medical examination,” prohibited by the ADA, which prohibits pre-offer medical examinations. Lastly, the EEOC found that Target failed to maintain records sufficient to assess the impact of its hiring procedures.

As part of the settlement Target also agreed that it will:

  • not use these assessments as part of its exempt-level selection procedures;
  • collect data sufficient to assess adverse impact based on race, ethnicity, and gender;
  • conduct a validity study for all exempt assessments currently in use and any new assessments;
  • monitor the assessments in use for exempt professional positions for adverse impact based on race, ethnicity, and gender;
  • provide the EEOC with an annual detailed summary of the studies and the adverse impact analysis conducted; and
  • retain an outside consultant to provide a minimum of two hours of training annually to all personnel responsible for the development and implementation of exempt assessments on the topics of record keeping, the ADA and pre-employment medical exams, and disparate impact in employment selection procedures.

The take away: Employers should ensure all pre-employment assessments are job-related and based on business necessity and have no disparate impact on protected groups. Employers also should take care not to subject applicants to medical examinations prior to an offer of employment. As was the case with Target, it’s important to remember that “medical examinations,” within the meaning of the ADA, encompass not just fitness for duty testing generally associated with positions requiring manual labor, but may also include certain types of psychological testing of the variety commonly used when hiring for professional and executive level positions.

For assistance with a compliance review on your hiring processes and assessments, or any other employment-related issue, please contact Karen E. Milner or Whitney P. Cooney.

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