Target Corp. has agreed to pay $2.8 million to thousands of rejected job candidates for upper-level positions because tests they were given disproportionately screened out applicants based on their race or gender.
The payout was announced by the Minneapolis Area Office of the U.S. Equal Employment Opportunity Commission and will be dispersed among more than 3,000 people, said Julie Schmid, acting director for the agency in Minneapolis.
“The tests were not sufficiently job-related,” Schmid said. “It’s not something in particular about the contents of the tests. The tests on their face were neutral. Our statistical analysis showed an adverse impact. They disproportionately screened out people in particular groups,” namely blacks, Asians and women.
Target spokeswoman Molly Snyder said the company has and continues “to firmly believe that no improper behavior occurred regarding these assessments. However, in light of the fact that none of the assessments cited by the EEOC are being used today and given the significant resources that would be required to litigate this case, Target agreed to a settlement with the EEOC.”
The tests, which were given to applicants for “high-level, non-hourly” positions, came under investigation by the EEOC in 2006, Schmid said.
In addition, the EEOC said it found that one of the assessments that the Minneapolis-based Target formerly used and that was performed by psychologists had violated the federal Americans with Disabilities Act. Schmid said this assessment was a pre-employment medical exam that was reserved for particular leadership openings. The ADA forbids such exams before a job is offered.
The pre-employment tests, or assessments, in question had been used “over the past decade,” and the EEOC concluded that “only a small fraction of the assessments … could have been problematic,” Target’s Snyder said.
“Target fully cooperated throughout the EEOC’s review by sharing substantial documentation and data and providing numerous interviews,” Snyder added.
The EEOC also determined that Target failed to maintain the records required to assess the impact of its hiring procedures.
Target stopped using the tests during the EEOC’s investigation. The company also agreed to better track its testing process and check for impact based on race, ethnicity and gender. Target agreed it will share those findings with the EEOC.
“We applaud Target for taking corrective action to ensure the validity of their hiring practices,” said EEOC Chair Jenny R. Yang. “This resolution demonstrates the benefits of working with EEOC and serves as a model for businesses committed to effective and lawful selection procedures.”
The amount of money received from the settlement per person will vary based on the consequences experienced by each individual, Schmid said.