Pre-employment tests are commonly used by employers to prescreen applicants and/or determine if applicants are suitable for hire. Employers should be careful what they ask on these tests for two reasons: (1) the ADA and (2) potential disparate impact discrimination claims.

The EEOC recently settled its challenge to Target’s pre-employment testing for $2.8 million. The EEOC alleged that several questions (the content of the questions was not made public) on Target’s pre-employment tests had a disparate impact on candidates on the basis of race or sex. Disparate impact claims arise when a neutral screening method or criteria affects a particular protected class more than others. A disparate impact claim by its definition exists without any evidence of intent. Notably, the EEOC also sued Ford Motor Company over its cognitive reasoning testing in 2008, settling for $1.6 million.

The EEOC challenged Target’s testing for a second reason, alleging that a separate assessment administered by psychologists constituted a psychological exam.  The EEOC alleged that it was an impermissible pre-employment medical examination under the ADA.  Under the ADA, a medical exam may not be used to screen out qualified applicants with disabilities and may only be administered after an offer of employment has been made.  The Target assessment was administered pre-offer as a screening tool.

Any pre-employment test must be related to the job and the skills necessary for doing the job  and consistent with business necessity.  The EEOC has published a fact sheet setting forth its view on pre-employment testing, which is <a href=”” target=”_blank”>available here</a>.  The EEOC is most skeptical of two types of tests: (1) tests that measure skills like personality or communication and (2) tests that measure general intelligence in areas such as math, reading, or writing.

In response, as more employers are beginning to use data analytics to identify and hire employees who are the best “fit”, they should carefully review their pre-employment testing and screening devices for any likely adverse impact on a particular group and any possible argument that certain questions constitute psychological assessments.