Bob Brady, BLR Founder and CEO, in a recent post offers the best summary (even if I disagree with his conclusion) that I’ve read concerning the recent Supreme Court ruling on pre-employment testing, Ricci v. DeStefano. The Supreme Court decided Ricci v. DeStefano only a few weeks ago, and it has sparked debate about its impact on employment testing.
Bob wrote,
Several years ago, the HR department of the city of New Haven, Connecticut, was presented with a very difficult choice: It could accept the results of a recent promotion exam and risk the ire of the majority of city residents, or ignore them and risk a lawsuit by the firefighters who would be denied promotions…..In the end, prodded by public opinion and politics, the city decided to throw out the results of the test.
The city actually did things right in designing a test for promotion. It hired a well-known, highly qualified firm to develop a pre-employment test, paying them $100,000. Both the test developer and the city followed a rigorous protocol designed to ensure that the test was good and that it was not compromised.
The test was administered and, when the results came back, no African Americans—and only one Hispanic—made it into the top of the list, though they were heavily represented in the rank and file. It wasn’t that a good number didn’t pass the test, demonstrating considerable competence. However, under the rules, only the highest-scoring individuals made it into the hiring pool.
This put city administrators in a very precarious position: Use the test scores and face a very unhappy minority community and probably a lawsuit on the basis of "adverse impact," or ignore the scores and face a lawsuit because of "reverse discrimination."
The City of New Haven chose to avoid the adverse impact lawsuit but was then slapped with a lawsuit anyway. In what is now being called the “Ricci” case, the top scorers were predominantly white. Despite the employer attempting to the right thing, including retaining an outside consultant, the City of New Haven decided not to certify the results of the examination because it feared a disparate impact discrimination lawsuit from the minority test takers.
The Supreme Court however decided that this was illegal reverse discrimination because the City could not demonstrate a “strong basis in evidence that, had it not taken the action, it would have been liable” for disparate impact discrimination against the minority candidates. While the test did discriminate, the basis was job related and therefore it disqualified candidates based on qualifications, not race, ethnicity, or gender. The city was held liable for disparate treatment discrimination against the “white” non-minority firefighters for deciding not to certify the test results. In other words, employers who rank test scorers must be able to demonstrate that a higher score correlates with better job performance.
Ironically, the ruling confirmed that a test can discriminate against minorities if the employer can prove job-relatedness. In a post on the Nixon Peabody site, attorney Philip Berkowitz wrote, “If a test is shown to have a disparate impact, an employer can defend using the test results by producing evidence there is a business justification for the selection method.”
This ruling essentially shoots down how many human resources and hiring managers evaluate an assessment. While concerns about cost, convenience, and adverse impact are essential factors, the ultimate question in choosing and using a pre-employment test should be based on its ability to predict job-related abilities, then evaluate the impact it has on minorities. The Ricci case seems to uphold the rights of a business to disqualify a minority candidate if they are not qualified. (Vice versa, Title VII protects minorities from being arbitrarily disqualified when they are qualified.)
A New York federal district court found that the employment testing conducted by the Fire Department of New York (“FDNY”) had a disparate impact on minority candidates. A class of would-be minority firefighters prevailed in showing the tests to become a firefighter resulted in an unlawful disparate impact on black and Hispanic applicants. The court held that the test, was “poorly constructed” and “arbitrarily rank[ed]” the firefighter candidates.
In defending the claim of adverse impact discrimination, the City of New York was unable to prove a “business justification” for the test. The court found the FDNY pre-employment tests did not actually test the abilities purported to be tested. The job analysis and test construction were deficient, and the record showed the FDNY did not use independent experts to write the tests, but instead relied on panels of firefighters to write the questions. The content of the tests was not directly related to the job requirements. The test was not representative of the content or the procedures required of the job. Finally, the court found the cutoff scores selected for the tests and method of rank-ordering test takers were inappropriately selected. The court carefully reviewed each step of the testing process, finding the FDNY failed to observe sound practices in its pre-employment testing.
While the Internet is now filled with blogs and commentary about the value and risks of pre-employment testing, nothing has really changed. Pre-employment testing continues to be a valid and reliable tool when hiring and promoting candidates. Assuming a test has been properly constructed and validated, the risk associated with using it is not related to the test itself but how and when it is used. These recent court rulings just confirmed a few things for managers to consider when choosing pre-employment tests or any assessment used in the hiring or promotion of employees:
1. People can sue for anything. Being sued doesn’t mean your actions aren’t defensible. While intentional discrimination against minorities should be prosecuted to the fullest extent, this Ricci ruling seems to support businesses who are intent on hiring the most qualified candidate for the job, regardless of race, ethnicity, religion, or gender.
2. Selecting a test on price or convenience alone will not be a reliable defense if an employee ever contests the results. And as the Fire Department of New York discovered, “home-grown” tests expose the organization to a huge liability.
3. No testing isn’t a viable solution either. A selection process subject to the biases and various skill levels of interviewers raises just as many red flags if not more than pre-employment tests.
4. Arbitrarily setting cut-offs has always been wrong and the courts just confirmed it. Cut-offs or knock-out scores must be based on performance, not gut instinct or superficial criteria or personal bias.
5. The best approach for employers implementing a workforce reduction is to identify job-related criteria that are neutral and properly reflect legitimate business considerations.
