Federal Contractor's Costly Settlement Underscores Hazards Of Pre-Employment Tests
A Michigan-based food service distributor, Gordon Food Service, Inc., recently came under fire from the U.S. Department of Labor (“DOL”), based on allegations that a pre-employment strength and agility test used at four of Gordon’s warehouse facilities improperly discriminated against female applicants. Following the conclusion of the DOL’s investigation, Gordon agreed to pay nearly $2 million to settle the matter.
This costly lesson for Gordon serves as a warning to employers to tread carefully in formulating and carrying out pre-employment tests, to ensure that they do not impermissibly discriminate against applicants based on a protected classification.
Background And DOL’s Investigation
Gordon is a party to approximately $4.5 million in federal contracts with various government agencies. As such, Gordon is subject to the oversight of the DOL’s Office of Federal Contract Compliance Programs (“OFCCP”), which enforces laws prohibiting federal contractors and subcontractors from discriminating in employment on the basis of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran.
In the course of a routine review of Gordon’s records, DOL investigators noticed a significant disparity in hiring statistics for female and male applicants for laborer positions in four of Gordon’s warehouses, located in Brighton, Michigan; Grand Rapids, Michigan; Kenosha, Wisconsin; and Shepherdsville, Kentucky. For instance, between January 2010 and September 2012, Gordon hired only 6 women for laborer positions at those facilities, out of an overall pool of 926 female applicants. By contrast, during that same time period, Gordon hired approximately 300 men who had applied for the same positions.
Looking more closely into the issue, DOL investigators found that, as part of the hiring process, Gordon required applicants to take a strength and agility test, purportedly to determine an individual’s risk for injury. The DOL determined that very few female applicants had passed the strength portion of the test, which used isokinetic testing technology.
Because of the test’s disparate impact upon female applicants, Gordon was required to demonstrate that the test was job-related and consistent with business necessity. The DOL concluded that Gordon could not make such a showing. In particular, the test was not administered or interpreted by an appropriate health care professional, Gordon had not thoroughly analyzed the validity of the test, and the criteria used to determine whether an applicant met the required strength standard were formulated for workers in the coal mining industry, rather than warehouse workers.
Thus, the DOL concluded, by maintaining the strength and agility test at the four facilities, Gordon unlawfully discriminated against female applicants.
Details Of Settlement
Without admitting wrongdoing, Gordon agreed to settle the DOL’s allegations by (1) paying a total of $1.85 million to affected female applicants; (2) hiring 37 women from the original pool of 926 applicants to warehouse positions; and (3) discontinuing the strength and agility test that was the subject of the investigation.
In a press release discussing the settlement agreement, the OFCCP’s Director, Patricia A. Shiu, stated that as a result of Gordon’s use of the strength and agility test, “women were denied good-paying jobs” and that, in the DOL’s view, pre-employment tests like the one used by Gordon often “exclude workers from jobs that they can in fact perform.”
Recommendations For Employers
While this investigation and settlement arose specifically from Gordon’s status as a federal contractor, virtually all employers are bound by the types of anti-discrimination prohibitions that brought Gordon under scrutiny. Thus, employers risk similarly expensive consequences if they rely on pre-hiring tests that impermissibly discriminate on the basis of protected categories.
Accordingly, we recommend that employers:
- Thoroughly evaluate, with the assistance of experienced employment counsel, any pre-employment tests administered to applicants, to ensure that such tests are legitimately job-related and do not have an impermissible discriminatory effect;
- Regularly update their employee handbooks, policy statements, application forms and other employment documents as necessary in light of continuing developments in the anti-discrimination laws; and
- Ensure that all managers, supervisors and HR personnel are thoroughly familiar with their legal responsibilities in this area.
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Please feel free to contact us if you have any questions about the Gordon settlement or any related issues.