Do You Test Job Applicants as Part of Your Hiring Process? If So, This $20 Million Settlement Should Get Your Attention.

Walmart will pay $20 million to settle an Equal Employment Opportunity Commission (EEOC) claim that it used a physical abilities test that resulted in sex discrimination against female applicants.

The job at issue in the case is called an order filler. Walmart’s order fillers work in the company’s distribution centers and take grocery items, such as cases of canned food, off shelves and stack them onto pallet jacks to be wrapped and loaded onto trucks for delivery to Walmart stores. Walmart claims that the job requires lifting up to 80 pounds.

Walmart started using a physical abilities test in 2010 for people applying for the job. The EEOC alleged that the test had a “disparate impact” on female applicants, putting them at a disadvantage and so denying them job opportunities because of their sex. Walmart claims that it had a third party create and validate the test, and denied that it unlawfully discriminated against women. The EEOC, however, alleged that Walmart overstated the physical demands of the job and that the test was not sufficiently related to the position or consistent with business necessity, which the test must have been to lawful.

Under the terms of the settlement, in addition to paying $20 million to a class of rejected female applicants, Walmart has agreed to stop using all physical ability tests as part of its hiring process for order fillers nationwide.

As this case shows, employee testing can be complicated and legally risky! Here’s a list of 10 tips to keep in mind to avoid trouble.

  • Always administer tests without regard to race, color, national origin, sex, religion, age (40 or older), disability, or any other category protected by state law where you intend to test.
  • Confirm that any employment test your company uses is properly validated for the positions and purposes for which it is used. The test must be job-related. While a test vendor’s assurances regarding the validity of a test may be helpful, employers are ultimately responsible for ensuring that tests are valid under the federal Uniform Guidelines on Employee Selection Procedures.
  • If a test—even a validated test–tends to screen out a protected group, determine whether there is another equally effective test that has a less adverse impact and, if so, use that test.
  • Make sure your managers aren’t conducting their own tests without HR’s involvement.
  • Under the ADA, it’s unlawful to require an applicant to take a test before you make a conditional offer of employment. Also, the ADA mandates that any test you require to be given to all applicants for the same job—not just applicants you believe may be limited by a physical or mental disability.
  • Also, under the ADA, understand that you may have a duty to accommodate an applicant/employee who has a disability by allowing the employee the opportunity to take a modified test that takes the disability into account while still getting the information the company legitimately needs.
  • One more ADA tip: remember to keep the results of any test that could be deemed to elicit medical information about an applicant/employee in a separate file from the personnel file, maintain the confidentiality of such medical files, and only allow disclosure of the medical information to those with a legitimate need to know.
  • Regularly review the actual requirements of a position (not just what the job description says) to determine whether a test that may have been job-related and valid in the past still is.
  • It’s seldom lawful for private employers to require an applicant or employee to take a polygraph (lie-detector) test under the Employee Polygraph Protection Act. There are a few limited exceptions to this prohibition, such as when an employer reasonably suspects an employee of theft, embezzlement, or causing other economic loss to the employer’s business, if certain other requirements are also met.

Be aware of state law distinctions regarding what is lawful to test for and how tests can be administered.