June 30, 2016

Testing Settlements are Alive and Well: Investigate and Validate

Two recent OFCCP settlements emphasize the importance of monitoring adverse impact throughout all steps of the hiring process: Gordon Food Service (GFS) and The Aqualon Company.

GFS, a food distribution company, implemented a hiring process that included a strength test that resulted in adverse impact against women seeking entry-level laborer positions. Lacking validation evidence in accordance with the Uniform Guidelines on Employee Selection Procedures (UGESP), GFS settled with OFCCP. As part of the conciliation agreement, GFS will hire 37 women, pay $1.85 million to impacted applicants, and stop using the strength test until it can be properly validated. For more details on this settlement, see our previous blog.

The next settlement focuses on The Aqualon Company, a subsidiary of Ashland Inc. OFCCP alleged discrimination against 660 African Americans who applied for entry-level positions and noted that “Aqualon used a discriminatory test” that “was not job-related” and “did not meet the requirements of UGESP.” As part of the conciliation agreement, Aqualon will pay $175,000 in back pay and interest to the impacted applicants and will hire four of the African American applicants. The organization will also stop using the test and will revise its hiring procedures. See OFCCP’s press release here.

These settlements serve as a reminder that OFCCP will focus on testing cases. As such, it is critical that contractors monitor their selection systems for adverse impact and research the underlying causes of statistical disparities. According to the UGESP, if a statistical disparity is identified for the overall selection process, contractors should evaluate each individual step or point in the hiring process where decisions are made. An individual step that shows statistically significant disparities must have sufficient validation evidence to support the continued use of that step.

By Cliff Haimann, Consultant; Emilee Tison, Senior Consultant; and Kayo Sady, Senior Consultant at DCI Consulting Group. 

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