1. Legal Issues Related to Pre-Employment Personality Testing Presented by Scott Murray, Staff Attorney North Carolina School Boards Association October 6, 2015

2. The information in this presentation is for educational purposes only and does not constitute legal advice. No attorney-client relationship is created or intended through this presentation or through receipt or review of these materials. For advice on specific matters, please consult with your board attorney or other legal counsel. © This presentation is copyrighted by the North Carolina School Boards Association. Unauthorized copying or distribution is prohibited.

3. Definition  A questionnaire or other standardized instrument designed to measure an applicant’s character, skills, cognitive abilities, interests, and/or attitudes.  Administered to a prospective employee prior to the employer’s hiring decision.  Used as a factor in the hiring decision.

4. Background  Various studies and news articles have estimated that approximately 20% of employers use some type of pre- hire assessment (such as a personality test) as a tool in the hiring process and the number is growing.  More prevalent in private industry, but the idea is spreading to the public sector as well.  According to the WSJ, businesses spent over $500 million last year on commercially available employment-related personality tests.  Time Magazine reports a $2 billion industry.

5. Background  There are thousands of assessments out there – obviously some are better than others.  Tests vary depending on the job or industry.  Research on the efficacy of such tests is inconclusive. Some studies have found a very small correlation between personality and job success.  Difficult area to study for a number of reasons.

6. Relevant Laws 1. U.S. Constitution 2. Title VII of the Civil Rights Act 3. Age Discrimination in Employment Act (ADEA) 4. Title I of the Americans with Disabilities Act (ADA)

7. First Amendment  Freedom of speech, press, and assembly  Courts have interpreted the 1st Amendment to protect against pre- employment inquiries about an individual’s political or religious beliefs and associations.

8. Baird v. State Bar of Arizona (US Supreme Court, 1971)  Baird’s bar application was denied for her refusal to answer a question about any Communist affiliations.  Court held that the State cannot exclude a person from a profession or punish him or her solely because he or she is a member of a political organization or holds certain beliefs.

9. Fourteenth Amendment  Prohibits the State from depriving an individual of life, liberty, or property without due process of law.  Courts have interpreted the 14 th Amendment to create a “right to privacy” that must be weighed against a legitimate governmental interest.

10. Right to Privacy  Privacy interest in avoiding disclosure of one’s personal matters.  Privacy interest in one’s independence in making certain types of decisions (e.g., contraception, marriage, child rearing/education).

11. Right to Privacy  Protects personal, private information in which an individual has a reasonable expectation of confidentiality.  Can be overcome if employer can show that governmental interest in disclosure outweighs the individual's privacy interest.

12. Walls v. City of Petersburg (4 th Cir. 1990)  Police department employee refused to answer questions about homosexuality, marital history, financial information, and criminal records of family members.

13. Walls v. City of Petersburg (4 th Cir. 1990)  Court found that she did have a privacy interest in her personal finances but the department’s interest in guarding against corruption was stronger.  Court also considered danger of unauthorized disclosure of results but found that keeping results in a locked file cabinet was sufficient.

14. McKenna v. Fargo (D.N.J. 1978)  Fire department applicants challenged psychological tests (MMPI, Rorshach, etc.) used to screen candidates.  Court was skeptical and recognized the privacy interests but found that the State’s interest in identifying emotionally unstable applicants for a high-risk job justified the intrusion.

15. Title VII of the Civil Rights Act of 1964  Title VII prohibits discrimination on the basis of “race, color, religion, sex, or national origin.”  Enforced by Equal Employment Opportunity Commission (EEOC)  See EEOC fact sheet at http://www.eeoc.gov/policy/docs/factemployment_pro cedures.html http://www.eeoc.gov/policy/docs/factemployment_pro cedures.html

16. Title VII of the Civil Rights Act of 1964  Title VII permits personality tests so long as they are not “designed, intended, or used to discriminate” on the basis of race, etc.  Employer is not permitted to adjust scores, use different score cutoffs, or otherwise alter results of employment tests based on race, etc.

17. Type 1: Disparate Treatment  Intentional discrimination or “disparate treatment” of candidates is intentionally treating individuals differently based on their race, etc.  Must less common form of discrimination (e.g., gender-biased test or only testing males but not females)

18. Type 2: Disparate Impact  Effective discrimination or “disparate impact” on candidates is using a neutral test or procedure that has the unintended effect of disproportionately excluding a particular group or class based on race, etc.  E.g., using a physical test that disproportionately screens out women

19. Type 2: Disparate Impact  This is the more common type of discrimination under which most tests/procedures are legally challenged.  Typically based on statistical analysis and evidence of results.

20. Type 2: Disparate Impact  Even if a disparate impact is shown, the employer can overcome a challenge by showing that the test is: 1. Job-related; 2. Consistent with a business necessity; and 3. There is no less discriminatory alternative available.

21. Griggs v. Duke Power (US Supreme Court 1971)  Black employees sued power company under Title VII over a requirement that a high school diploma and a satisfactory intelligence test score were necessary for certain jobs.

22. Griggs v. Duke Power (US Supreme Court 1971)  Court based decision on the following factors:  Neither requirement shown to be significantly related to job performance – i.e., no business necessity.  Blacks were disqualified at a substantially higher rate than whites (also historical preference for whites).

23. Albemarle Paper Co. v. Moody (US Supreme Court 1975)  “Discriminatory tests are impermissible unless shown, by professionally acceptable methods, to be ‘predictive of or significantly correlated with important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated.”

24. EEOC Uniform Guidelines  In 1978, the EEOC (and other depts) created and adopted the Uniform Guidelines on Employee Selection Procedures (UGESP) to provide guidance on how to determine if tests and procedures are lawful under Title VII.  Available at http://www.uniformguidelines.comhttp://www.uniformguidelines.com

25. EEOC Uniform Guidelines  The UGESP set forth detailed criteria to validate a specific employment test or procedures – i.e., to show the test is job- related and consistent with a business necessity.

26. Age Discrimination in Employment Act of 1967 (ADEA)  The ADEA prohibits employment discrimination on the basis of age (40 and over).  Requires a similar initial legal analysis as Title VII, except that employers may defend a disparate impact claim by showing that the test is based on a reasonable factor other than age.

27. Smith v. Jackson (US Supreme Court 2005)  “[T]he scope of disparate-impact liability under ADEA is narrower than under Title VII.”  “[C]ertain employment criteria that are routinely used may be reasonable despite their adverse impact on older workers as a group.”

28. Title I of the Americans with Disabilities Act of 1990 (ADA)  The ADA prohibits employment discrimination on the basis of a qualified disability.  Among other disabilities, the ADA covers “any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities.”

29. ADA Rules  An employer may make pre-employment inquiries into the ability of an applicant to perform “job-related functions for the position in question... consistent with business necessity.”  An employer “shall not conduct a medical examination or make [pre-employment] inquiries of a job applicant as to whether such applicant is an individual with a disability or as to the nature or severity of such a disability.”

30. ADA Rules  In other words, an employer may administer a pre-employment personality test, unless the test asks “disability-related questions” or the test is considered a “medical exam.”  These terms are defined and interpreted in EEOC guidance documents:  http://www.eeoc.gov/policy/docs/preemp.html http://www.eeoc.gov/policy/docs/preemp.html  http://www.eeoc.gov/policy/docs/guidance- inquries.html http://www.eeoc.gov/policy/docs/guidance- inquries.html

31. Karraker v. Rent-a-Center (7 th Cir. 2005)  Court found that the MMPI test was considered a “medical examination” because, although the test was not interpreted by a psychologist, it was designed, at least in part, to reveal mental illness and had the effect of hurting the employment prospects of one with a mental disability.

32. ADA Rules  Under the ADA it is also unlawful to: 1. Use tests (at any stage) that have a disparate impact on individuals with disabilities, unless the test is job-related and consistent with business necessity.

33. ADA Rules  Under the ADA it is also unlawful to: 2. Fail to use tests in the most effective manner to ensure the results accurately reflect the skills/aptitude that the test is supposed to measure, as opposed to reflecting an impairment or disability.

34. ADA Rules  Under the ADA it is also unlawful to: 3. Fail to make reasonable accommodations to known physical or mental limitations of an otherwise qualified individual with a disability, unless such accommodation would impose an undue hardship.

35. EEOC Investigation  The EEOC is currently in the process of consolidating several complaints into a large-scale investigation into whether certain personality tests discriminate against individuals with disabilities – with a specific focus on depression and bi-polar disorder.

36. Practical Tips  Involve your superintendent, board, and board attorney in these matters.  Ensure any pre-employment tests are not adopted casually with little review.  Ask the test provider if the test has ever been legally challenged.

37. Practical Tips  Ensure any pre-employment tests do not contain questions probing into the applicant’s religious beliefs or political affiliations.  Avoid questions about other private matters unless you can show a strong governmental interest.

38. Practical Tips  Require the test provider to demonstrate or document the test’s validity for the particular job applied for.  Get clarity on exactly what traits the test seeks to measure and proof that it does in fact measure for those traits.

39. Practical Tips  Conduct your own internal, independent, attorney-client privileged review of a test to determine if the test has or has the potential to have a disparate impact or other adverse/discriminatory effect on a protected class of individuals.

40. Practical Tips  If a test has the possibility of adversely impacting applicants over the age of 40, you need to be able to show a justifiable, non-age related reason for using such a test.  Ensure the test is designed to be a pre- employment screening tool and not a psychological or medical test, or counseling tool.

41. Practical Tips  Review other litigation and EEOC guidance/decisions to find examples of tests or questions that have been challenged and/or removed.

42. Practical Tips  Personality test results should not be a determinative factor in the employment decision. Use such tests only in combination with more traditional, neutral criteria (e.g., resumes, applications, interviews, references) as part of a holistic applicant review process.

43. Questions?  Please feel free to contact me with any questions at:  smurray@ncsba.orgsmurray@ncsba.org  919-747-6708