Positive Trending for Claims Challenging the Legality of Pre-Employment Assessments

A variety of factors are trending in favor of eliminating the use of pre-employment assessments that violate the Americans with Disabilities Act (ADA) and the Rehabilitation Act of 1973, including:

• Implementation of the EEOC Strategic Enforcement Plan for 2013-2016

• The first national priority of the EEOC in the strategic enforcement plan is “eliminating systemic barriers in recruitment and hiring.”
• “[P]eople with disabilities continue to confront discriminatory policies and practices at the recruitment and hiring stages. These include … the use of screening tools (e.g., pre-employment tests …) “

• EEOC Systemic Investigation of Pre-Employment Testing and the ADA

• Stemming from more than six years of litigation by the EEOC against Kroger and Kronos 
• September 14, 2012 Third Circuit Court of Appeals decision in EEOC v. Kronos Incorporated
• It is “a proper inquiry for the EEOC to seek information about how these tests work, including information about the types of characteristics they screen out….“ Third Circuit Court of Appeals (September 14, 2012)
• Transfer of two charges from Atlanta EEOC to the EEOC office leading the systemic investigation

EEOC Focus on Disability Discrimination Litigation

• ADA claims covered the biggest percentage of the EEOC’s yearly litigation filing activity for FY 2013 
• The pie chart below provides a snapshot of the cases filed by the EEOC in the last week of the fiscal year and shows that almost half of the cases filed were based on disability discrimination.

• CVS/Rhode Island ACLU Settlement

• CVS eliminates use of pre-offer assessment as a consequence of claim by ACLU that questions from the assessment could have a discriminatory impact on people with mental impairments or disorders. 
• Please see Challenges to Pre-Employment Assessments

• Karraker Court Decision

• Rejected “form” defenses (e.g., test not reviewed by medical professional) and dismantled distinction between a test that evaluates personality and one that diagnoses mental disorders
• Please see Courts Find Tests To Be Illegal

• Adoption of the Five-Factor Model in DSM-5 by the American Psychiatric Association

• Based on two decades of research demonstrating that the five-factor model - used as the basis for many of the pre-employment personality tests - can be used as a structural model for describing and understanding personality disorders, including those within the Diagnostic and Statistical Manual of Mental Disorders (DSM)
• Please see ADA, FFM and DSM

• Significant Risk of Punitive Damages

• In addition to claims for actual or compensatory damages, which may be nominal on a per person basis, applicants may also seek punitive damages for the reckless behavior of the employers that used illegal pre-employment assessments.
• In State of Arizona v. ASARCO LLC, No. 11-17484 (9th Cir. Oct. 24, 2013), the 9th Circuit Court of Appeals held that a punitive damages award of $125,000 in an employment discrimination case finding no actual damages and $1 in nominal damages was constitutional and "did not raise judicial eyebrows."
• Please see Punitive Damages

• OFCCP issuance of non-discrimination and and affirmative action regulations for individuals with disabilities (IWDs)

• Regulations require federal contractors to achieve a 7%  workforce utilization goal of IWDs. 
• The contractors are required to achieve the 7% in each and every job group of the contractors.

Why Success Is Important

The long-term fiscal stability of the United States of America depends, in part, on ensuring that Americans with disabilities have meaningful opportunities to contribute to our collective well-being and on eliminating outdated policies that keep people in cycles of poverty and dependency.

More than two decades after the passage of the ADA, the unemployment rate for Americans with disabilities stubbornly remains nearly double that of people without disabilities, while their rate of labor force participation has continued to be abysmally low. Figures from the Bureau of Labor Statistics show that labor force participation for workers with disabilities was 20.3 percent, while the total for workers without disabilities was 69.1 percent—more than three times higher. As of April 2012, the unemployment rate for people with disabilities was 12.5 percent, versus 7.6 percent for those without disabilities.

There are many benefits of employment—work enhances skills such as communication, socialization, academics, physical health, and community skills; it factors into how one is perceived by society; it promotes economic well-being; it leads to greater opportunity for upward mobility; and it contributes to greater self-esteem. Yet only 15 percent of those with a mental disability are in the labor market. Please see So Many Job Openings, So Little Hiring.

Employment Assessments Are Designed to Reveal an Impairment

Employers and assessment providers have tried to distinguish their assessments by arguing that their assessments were designed to measure “normal” personalities and/or “stable” personality traits. That argument fails because the FFM measures both sides of the same coin. As noted in the ADA, FFM and DSM post, the five-factor model of personality is widely accepted as representing the higher-order structure of both normal and abnormal personality traits.

By its design, a test that measures so-called “normal” personalities and seeks to identify individuals with “stable personality traits” screens out (or reveals) persons who may not possess “normal” personalities and/or “stable” personality traits – persons like military veterans suffering from post-traumatic stress disorder, college students diagnosed with bipolar disorder and mothers with post-partum depression – persons whom the ADA was enacted (and amended) to protect.



The issue is whether the test is “designed to reveal” an impairment of physical or mental health. For example, one may devise a process to separate white beads from a container of red, white and blue beads. While the intent is to find the white beads, the process is designed to reveal red and blue beads by distinguishing them from white beads.

Similarly, an employment assessment is designed to reveal a person with a mental impairment (a red or blue bead) by distinguishing that person from a “normal” person (a white bead).

In the words of the Karraker court (please see the Courts Find Tests to be Illegal post), an employment assessment utilizing an FFM-based model is “designed, at least in part, to reveal mental illness and has the effect of hurting the employment prospects of one with a mental disability” and, as such, “is best categorized as a medical examination.”

Some assessment companies make it very clear that their tests are designed to identify and exclude persons with mental illnesses. Clearfit advertises itself as a “hiring tool for finding job applicants and predicting who will succeed.” According to the company’s website, “each applicant is scored against a Success Profile: a combination of personality and motivation traits that predict success in a particular role.”

And what happens if personality is not taken into account? According to Clearfit, one of the consequences is “27.2 days/yr. lost productivity for depressed workers.” Thus making it clear that the personality assessment should be used to eliminate from employment consideration those persons suffering from a mental illness, like mothers with post-partum depression.

A screenshot from the Clearfit webpage is set out below:



Courts Find Tests to be Illegal

In Karraker v. Rent-A-Center, a group of current and former employees filed a class action alleging that the employer’s policy requiring employees seeking management positions to take the Minnesota Multiphasic Personality Inventory (MMPI) violated the ADA. The plaintiffs alleged that the MMPI could identify conditions such as depression, paranoia, schizoid tendencies and mania.



The court found that even if the employer did not use the test to remove applicants with mental disorders from consideration, the use of the test likely had that effect. The court recognized that a bad score on a test did not necessarily mean that a person had a mental disorder, but a person who does have a mental disorder is likely to score badly on the test and lose the opportunity to get the position. 

The court held that because the MMPI was “designed, at least in part, to reveal mental illness and has the effect of hurting the employment prospects of one with a mental disability … the MMPI is best categorized as a medical examination.”

While employers and testing companies try to draw a distinction between the MMPI and the FFM, it is a distinction without a difference. Studies have shown that correlations between the MMPI and FFM demonstrated meaningful relations between the two sets of constructs. Both instruments showed substantial stability over six months, and both were significant and substantial predictors of symptom counts for most personality disorders. 

On August 22, 2012, in Kroll v. White Lake Ambulance Authority, the Sixth Circuit Court of Appeals held that psychological counseling is a medical examination under the ADA. In an extremely detailed review of the available guidance and case law,the court determined that, under the criteria set forth by the U.S. Equal Employment Opportunity Commission (EEOC) for analyzing a test or procedure (see “EEOC Enforcement Guidance” in the ADA, FFM and DSM post), a psychological test designed to reveal mental illness or to diagnose mental health issues is a “medical examination” under the ADA because, in the court’s words, the “uncovering of mental-health defects at an employer’s direction is the precise harm that [the ADA] is designed to prevent.”

Punitive Damages

An employer utilizing an FFM-based pre-employment assessment is at risk for punitive damages where, as held by the Supreme Court in 1999, the “employer has engaged in intentional discrimination and has done so with malice or reckless indifference to the federally protected rights of an aggrieved individual.”

 As noted in the What Are the Issues post, the assessments are intentionally designed to reveal and accept “normal” personalities and reveal and reject persons with mental disabilities.  

Reckless indifference may be show by a variety of methods, including an employer’s failure to comply with the EEOC guidance, including:

• Administering tests without regard to disability;
• Ensuring that tests are properly validated;
• Ensuring that tests are job-related;
• Ensuring that tests are appropriate for the employer's purpose; and
• Ensuring that tests and selection procedures are not adopted casually by managers who know little about these processes.

Reckless indifference may also be shown by an employer’s failure to meet industry standards. In a statement made in 2007, the general counsel of the employer-funded Equal Employment Advisory Council set out the following industry standards:

• Tests must be based on "objective" criteria
• A "carefully selected" test that is "properly validated" can provide a great deal of relevant information when "[u]sed in conjunction with other sources of information"
• Ensuring each employment test has been properly validated.
• Avoiding overreliance on representations made by test manufacturers regarding test validity and suitability for a particular job.
• Conducting periodic audits of employment selection testing procedures to monitor for possible disparate impact, outdated validity studies and other potential problems

The Karraker decision provided clear guidance to employers that utilize personality tests. At a minimum, employers should independently determine whether the tests were medical examinations under Title I of the ADA and they should independently validate that the tests do not discriminate against disabled applicants.

As noted in the What Are the Issues post, there is no evidence that employers or assessment test providers have done any studies to determine the impact of assessments on persons with mental illness

The failure of employers to follow Supreme Court precedent that (i) requires validation of an employment test, (ii) prohibits arbitrary cut-off points, and (iii) requires differential studies of the impact of the test on protected classes (persons with mental illness) – reckless.