$150K lesson: Track stats for pre-employment tests

Many employers use some form of testing to help pick the best applicants to hire. But if the results aren’t watched closely enough, those tests can inadvertently lead to discrimination suits.
In one recent case, the fire department of Portsmouth, Virginia, was sued by a group of unsuccessful job applicants. They claimed the employer’s selection procedure unfairly weeded out African-American candidates.
The focus of the dispute was a written examination. About 86% of Caucasian applicants passed the test, while African-Americans passed at a rate of just 42%.
Also, the applicants claimed the test wasn’t necessary or job-related.
Who won? Unable to get the case thrown out by a judge, the fire department ended up settling for $145,000.
The bottom line: Companies can get in trouble when pre-employment tests adversely impact a protected class, even when there’s no intentional bias. That’s why employers should be aware of how different groups perform during the selection process.
Note: Even if a particular test has an adverse impact, companies can still use it if it’s job-related, consistent with business necessity and there is no non-discriminatory alternative available.