After Title VII was passed, concerns remained that tests were being used in industry that functioned to limit the opportunities for minorities to gain employment

1
Adverse Impact Background

• After Title VII was passed, concerns remained
  that tests were being used in industry that
  functioned to limit the opportunities for
  minorities to gain employment
• Such concerns were fostered by the exemption in
  the language contained within Title VII regarding
  the use of psychological tests

nor shall it be an unlawful employment practice
for an employer to give and to act upon the
results of any professionally developed ability
test provided that such test, its administration
or action upon the results is not designed,
intended or used to discriminate because of race,
color, religion, sex or national origin.
2
EEOC Statement (1966) regarding professionally
developed tests The Commission accordingly
interprets professionally developed ability
tests to mean a test which fairly measures the
knowledge or skills required by the particular
job or class of jobs which the applicant seeks,
The fact that a test was prepared by an
individual or organization claiming expertise in
test preparation does not, without more, justify
its use within the meaning of Title VII. (35
Fed. Reg. 12333).
3
Griggs v. Duke Power (1971)
Key Questions

• Can employment practices be in violation of
  Title VII if there is a lack of discriminatory
  intent?

• Can evidence that a practice disproportionately
  excludes members of a protected group be used to
  form a prima facie case?

• What standard/evidence must exist to defend the
  use of devices used for personnel decisions
  (e.g., selection, promotion)?

4
Griggs Background

• Duke Power organized into 5 departments
• Labor (Blacks limited to these jobs highest pay
  here was less than the lowest
• wage in the other departments)
• 2) Coal Handling
• 3) Operations
• 4) Maintenance
• 5) Laboratory Test
• Promotions made on the basis of seniority within
  each department

Duke Power incrementally began adding
requirements 1955 company required a HS
diploma for jobs within each department, except
Labor 1965 Company a HS diploma was required to
transfer from the Labor Dept. (White employees
hired before HS requirement performed
satisfactorily not debated) Later in 1965
Required passing scores on 2 aptitude tests
(passing score approximated the national average
. for HS students)
5
Griggs v. Duke Power (1971)
Companys Promotion Requirements (Facially
neutral) 1) Pass the Wonderlic Personnel Test
and Bennett Mechanical Aptitude Test 2) Possess
a high school diploma

• Challengers provided evidence that the
  requirements disproportionately excluded
  protected group members (i.e., Blacks)
• Tests eliminated roughly 94 of blacks as
  compared to 43 of whites.
• 12 of Blacks possessed a high school diploma
  in NC versus 34 of Whites

6
Griggs v. Duke Power (cont.)

• Company defense Argued that the use of
  "professionally developed tests" was allowed
  under Title VII (technically correct)
• Company also said that they did not intend to
  discriminate against protected group members by
  mandating their requirements (tests and diploma)

From the SC decision Congress directed the
thrust of the Act to the consequences of
employment practices, not simply the motivation.
More than that, Congress has placed on the
employer the burden of showing that any given
requirement must have a manifest relationship to
the employment in question. The Act
proscribes not only overt discrimination but also
practices that are fair in form, but
discriminatory in operation. The touchstone is
business necessity. If an employment practice
which operates to exclude Negroes cannot be shown
to be related to job performance, the practice is
prohibited.
7
Major Points of the Supreme Court Decision in
Griggs

• Employment discrimination may result from the
  effects of one's actions

• All tests/requirements must be job related and
  consistent with business
• necessity

• Proof of an intention to discriminate is not
  required for discrimination to
• exist

• All tests must meet standard professional
  guidelines for psychometric worth

8
Albemarle Paper v. Moody (1975)
Albemarles Testing Requirements
Pass the Beta Exam (a test of nonverbal
intelligence) and the Wonderlic Test
Why use the Wonderlic?
... selected based on the theory that a certain
verbal intelligence was called for by the
increasing sophistication of the plant's
operations.
No attempt to ascertain the job-relatedness of
the Wonderlic No rationale for the use of the
its cutoff score (national norm) for passing
9
Albemarles Validation Study

• A few months before the trial, Albemarle hired a
  consultant to validate its tests
• 10 job groupings, 9 lines of progression (sample
  consisted of those near the top of the
  progression lines --- 105 employees 4 Blacks)
• Use of concurrent validation approach (test
  scores correlated with supervisor rankings (pair
  comparisons)
• Instructions to supervisors regarding asessing
  the performance of their subordinates
  "determine which ones they felt irrespective of
  the job that they were actually doing, but in
  their respective jobs, did a better job than the
  person they were rating against . . .

Findings --- A patchwork of correlations Beta
Exam Significant correlations in 3 out of the 8
lines of progression Wonderlic Significant
correlations for one form (not the other)
obtained in 4 job groups No significant
correlations obtained in 2 groups tests
significant within some lines of progression but
not others
10
Albemarle --- Summary of Key Points
gtgtgt Test scores were correlated (rather
haphazardly) with job performance measures across
several job categories, but no evidence existed
showing that the jobs were comparable
The study in this case involved no analysis of
the attributes of, or the particular skills
needed in, the studied job groups. There is
accordingly no basis for concluding that "no
significant differences" exist among the lines of
progression, or among distinct job groupings
within the studied lines of progression. Indeed,
the study's checkered results appear to compel
the opposite conclusion.
gtgtgt Subjective supervisor evaluations of
employees were based on unclear performance
criteria (e.g., supervisors were asked to assess
which workers, regardless of job category, were
better than the individual to which they were
being compared)
There is no way of knowing precisely what
criteria of job performance the supervisors were
considering, ...
11
Albemarle --- Summary of Key Points (cont.)
gtgtgt The sample used in the validation study was
heavily comprised of those who were white, in
upper-level positions, and who had greater years
of experience, than the typical job applicant for
whom the tests were being administered
Albemarle's validation study dealt only with
job-experienced, white workers but the tests
themselves are given to new job applicants, who
are younger, largely inexperienced, and in many
instances nonwhite. The APA Standards state that
it is "essential" that "the validity of a test
should be determined on subjects who are at the
age or in the same educational or vocational
situation as the persons for whom the test is
recommended in practice."
12
Adverse Impact Process Before Wards Cove
Step 1 The challenger must identify a specific
employment practice that caused the
discrimination in question (disproportionately
excludes protected group members)
Step 2 The company must demonstrate that the
challenged practice is job related and consistent
with business necessity
Step 3 The challenger must prove that an equally
valid, job-related practice exists with less (or
no) adverse impact
13
Connecticut v. Teal (1982) "bottom line"
defense
Background?

• State required the passing of a written test
  for promotion
• Those who passed the test were placed on a list
  indicating that they were
• eligible for future promotion consideration
• Once on the list, other factors were evaluated
  in making promotion
• decisions such as supervisor recommendations,
  work performance, and
• job tenure.

Black candidates who failed the exam sued, saying
that the test was unrelated to the job and
resulted in adverse impact of Blacks who
passed the test was 54 compared to 79 for
whites (or a passing rate for blacks that was 68
less than that of whites). Clear violation of
the 4/5 rule. But, 22.9 of Blacks were promoted
vs. 13.5 of Whites
Promotion decisions were made about a year
after the suit was filed and about 30 days
before the trial.
14
Connecticuts position Connecticut said they
were in compliance with the Uniform Guidelines.
That is, 1607.4(C) of the Uniform Guidelines
states 1 If the total selection process for
a job has an adverse impact, the individual
components of the selection process should be
evaluated for adverse impact. 2 If the total
selection process does not have an adverse
impact, the Federal enforcement agencies will
not expect a user to evaluate the individual
components for adverse impact, or to validate
such individual components, and will not take
enforcement action based upon adverse impact in
any component of that process
15
Supreme Court Decision in Teal

• Court decided in favor of the plaintiffs. It
  concluded that the law protects individual
  employees and that discrimination can exist even
  though the group as a whole fared well

• "Title VII does not permit the victim of a
  facially discriminatory policy to be told that he
  has been wronged because other persons in his or
  her race or sex were hired. Every individual
  employee is protected against both discriminatory
  treatment 457 U.S. 440, 456   and "practices
  that are fair in form, but discriminatory in
  operation. ... In sum, petitioners'
  nondiscriminatory "bottom line" is no answer,
  under the terms of Title VII, to respondents'
  prima facie claim of employment discrimination.
• It is clear that Congress never intended to
  give an employer license to discriminate against
  some employees on the basis of race or sex merely
  because he favorably treats other members of the
  employees group

16
Watson v. Ft. Worth Bank and Trust
Background of case?
17

• Watson v. Ft. Worth Bank and Trust
• Key Points
• Plaintiffs do NOT need to show intentional
  discrimination with regard to subjective
  information used for employment decisions. That
  is, subjective information needs to comply with
  the requirement set forth in Griggs regarding
  job-relatedness.
• When an employer's "...undisciplined system of
  subjective decision-making has precisely the
  same effects as a system perverted by intentional
  discrimination, it is difficult to see why Title
  VII" should not apply"
• Therefore, subjective employment practices can
  be challenged under disparate impact rule
• B) A statistical difference may not be enough to
  establish a prima facie case
• C) Majority of the Court required the plaintiff
  to identify the SPECIFIC employment practice that
  CAUSED the statistical disparity between
  "protected" and "unprotected" group
• D) Plurality lessened the burden of proof on the
  part of the company in demonstrating business
  necessity to that of production

18
The Plurality Opinion in Watson (Justice OConner)
19
Watson v. Ft. Worth Bank and Trust (cont.)
"Our cases make it clear that employers are not
required, even when defending standardized or
objective tests, to introduce formal 'validation
studies' showing that particular criteria predict
actual on-the-job performance" "...formal
validation techniques endorsed by the EEOC in its
Uniform Guidelines may sometimes not be effective
in measuring the job-relatedness of subjective
selection procedures" "...It is self-evident
that many jobs, for example those involving
managerial responsibilities, require personal
qualities that have never been considered
amenable to standardized testing...courts are
generally less competent than employers to
restructure business practices, and unless
mandated to do so by Congress, they should not
attempt it"
Not true objective and subjective data require
the same psychometric rigor
20
Selection Methods Amendable to Validation Studies
(SIOP Principles)
Underlined factors were challenged by Watson
21
Wards Cove v. Antonio (1989)
Basic facts/background?

• Wards Cove
• Salmon cannery company
• Operates only in summer
• Location of salmon runs vary as does the number
  of employees in each
• site
• Two general types of jobs
• 1) Cannery (mostly minority, hired via a union,
  live near job sites)
• 2) Noncannery (skilled position, mostly White,
  higher paid)
• Separate facilities for each job category

22
Wards Cove v. Antonio Key Points Evidence for
adverse impact is useable to demonstrate a prima
facie case (both lower courts rejected a
disparate treatment claim) What
comparison is allowed to show disparate impact?
Plaintiffs used cross-job disparities to form a
prima facie case (similar to Teamsters)
minorities in
unskilled skilled vs.
nonminorities in skilled jobs
Discrepancies due to differences in hiring
procedures (e.g., nepotism, word of mouth
recruiting, walk-ins, vague hiring criteria)

• Supreme Court Decision in Wards Cove
• Proper statistical comparison is
• Racial composition of those in the noncannery
  jobs with those in the "relevant" labor market
  who are qualified and have an interest in
  performing the job(s) in question (e.g.,
  Teamsters-Hazelwood)
• Here, majority vs. minority in skilled jobs

23
Adverse Impact or Disparate Treatment???

• Why not consider Wards Cove as a disparate
  treatment case (i.e., pattern or practice)
• In Wards Cove, Justice White cited Hazelwood as
  the prime example of adverse impact ----- WRONG!
• In Wards Cove, the Court did not even mention
  Griggs or any other adverse impact case!

Note Recruitment is NOT considered to be a
selection procedure (e.g., Uniform Guidelines).
Recruitment, specifically passive recruitment
practices, were the reason for the disparities in
Wards Cove
24

• Plaintiff must identify specific employment
  practice that caused the statistical disparity
  (consistent with plurality in Watson v. Ft. Worth
  Bank, 1989)
• "Here, respondents have alleged that several
  "objective" employment practices (e.g., nepotism,
  separate hiring channels, rehire preferences), as
  well as the use of 'subjective decision making'
  to select non-cannery workers had a disparate
  impact on non-whites...Respondents will... have
  to demonstrate that the disparity they complain
  of is the result of one or more of the employment
  practices that they are attacking here,
  specifically showing that each challenged
  practice has a significant disparate impact on
  employment opportunities."

25
Wards Cove v. Antonio (cont.) C) Company
recordkeeping responsibility "...employers...are
required to maintain...records or other
information which will disclose the impact which
its tests and other procedures have upon
employment opportunities or persons by
identifiable race, sex, or other ethnic
groups...This includes records concerning 'the
individual components of the selection process'
where a statistical disparity in the selection
rates of whites and nonwhites...Plaintiffs as a
general matter will have the benefit of these
tools to meet their burden of showing a causal
link between challenged employment practices and
racial imbalances in the workforce..."
26
D) Burden of Proof Regarding earlier court
opinions on this issue "...they should have
been understood to mean an employer's production
-- but not persuasion burden." Faced with a
prima facie case the employer may now
"articulate" rather than "prove" that it had a
legitimate business reason for its
practice. The touchstone of this inquiry is a
reasoned review of the employers justification
for his use of the challenged practice ... there
is no requirement that the challenged practice be
essential or indispensable to the employers
business for it to pass muster this degree of
scrutiny would be almost impossible for most
employers to meet.
27
Adverse Impact Process After Wards Cove
Step 1 The challenger must identify a specific
employment practice that caused the
discrimination in question (disproportionately
excludes protected group members)
Step 2 The company must demonstrate that the
challenged practice is job related and consistent
with business necessity Wards Cove The company
must PRODUCE evidence (articulate -- not prove)
that it had a legitimate reason for their
employment practice
Step 3 The challenger must prove that an equally
valid, job-related practice exists with less (or
no) adverse impact
28
Uniform Guidelines
Sec. 1607.5(A). Acceptable types of validity
studies. For the purposes of satisfying these
guidelines, users may rely upon criterion-related
validity studies, content validity studies or
construct validity studies, in accordance with
the standards set forth in the technical
standards of these guidelines, section 14 below.
New strategies for showing the validity of
selection procedures will be evaluated as they
become accepted by the psychological profession.
(TIP article on Guidelines review)
Sec. 1607.C(1) A selection procedure based on
inferences about mental processes cannot be
supported solely or primarily on the basis of
content validity. Thus, a content strategy is not
appropriate for demonstrating the validity of
selection procedures which purport to measure
traits or constructs such as intelligence,
aptitude, personality, common sense, judgment,
leadership and spatial ability emphasis by
authors.
29
Most prefer a unitarian view of validity (any
validity evidence, however it is collected, can
support the job-relatedness of selection devices)
Use of content validity for rank ordering of
candidates from Guardians v. Civil Service (1980)
--- 1. Suitable job analysis 2. Reasonable
competence in test construction 3. Test content
related to job content 4. Test content
representative of job content 5. Scoring systems
selecting applicants who are better job performers
30
Gillespie v. Wisconsin (1985) On the rejection
of preferences for criterion-related validity
Q56 Why don't the Uniform Guidelines state a
preference for criterion-related validity over
content or construct validity? A Generally
accepted principles of the psychological
profession support the use of criterion-related,
content or construct validity strategies as
appropriate. American Psychological Association
Standards, E, pp. 25-26. This use was recognized
by the Supreme Court in Washington v. Davis, 426
U.S. 229, 247, fn. 13. Because the Guidelines
describe the conditions under which each validity
strategy is inappropriate, there is no reason to
state a general preference for any one validity
strategy.
31
Gillespie v. Wisconsin (1985 cont.)
Q62 Under what circumstances may a selection
procedure be used for ranking? A Use of a
selection procedure on a ranking basis may be
supported by content validity if there is
evidence from job analysis or other empirical
data that what is measured by the selection
procedure is associated with differences in
levels of job performance. ?Any conclusion that
a content validated procedure is appropriate for
ranking must rest on an inference that higher
scores on the procedure are related to better job
performance. The more closely and completely the
selection procedure approximates the important
work behaviors, the easier it is to make such an
inference. Evidence that better performance on
the procedure is related to greater productivity
or to performance of behaviors of greater
difficulty may also support such an inference.?
32
Cutoff Scores

• Lanning v. SEPTA (1999)
• Key issue was the use of an aerobic test for
  selecting transit authority police officers (run
  1.5 miles with full gear under 12 minutes)
• Led to adverse impact for females

• SEPTA did a job analysis demonstrating the
  importance of aerobic capacity to safety of
  officers and the public
• SEPTA provided statistics showing a relationship
  between aerobic capacity and number of successful
  criminal arrest and commendations for field work

33
4/5 rule is a guideline, a rule of thumb
Uniform Guidelines on Selection Procedures (1978)
Smaller differences in selection rate may
nevertheless constitute adverse impact, where
they are significant in both statistical and
practical terms or where a user's actions have
discouraged applicants disproportionately on
grounds of race, sex, or ethnic group. Greater
differences in selection rate may not constitute
adverse impact where the differences are based on
small numbers and are not statistically
significant, or where special recruiting or other
programs cause the pool of minority or female
candidates to be atypical of the normal pool of
applicants from that group.

• Courts have used other criteria (e.g., Bew v.
  Chicago, Isabel v. Memphis)
• Differences in mean test scores
• Effect size (e.g., D statistic)
• Differences in proportions of those selected
  (e.g., Z test)

34
Statistical Versus Practical Significance
A disparity in selection rates exist between two
groups. Is this difference an indication of
adverse impact?
Statistical significance tests generally assess
the level of confidence a that a finding is not a
chance event (e.g., Z test of independent
proportions or Fishers exact test) Practical
significance measures generally assess the
magnitude or consequences of a finding (e.g.,
using 4/5th rule, odds ratio, Cohens h statistic)

• In Stagi v. Amtrack (2010) the 3rd Circuit noted
  that increased numbers make it more likely to
  exclude chance as a cause of adverse impact. The
  court ruled that
• Statistically significant results alone support
  causation
• The 4/5th rule was not persuasive
• There is no additional requirement of practical
  significance given the inference of causation
• This combination of ideas almost implies that
  statistical significance is practical
  significance because a disparity is probably not
  due to chance.

35
Most recent OFCCP settlements have emphasized
disparities using statistical significance tests
as standalone evidence.
From Dunleavy. E. M., Gutman, A. (2011). An
Update on the Statistical Versus Practical
Significance Debate A Review of Stagi v. Amtrak
(2010). The Industrial-Organizational
Psychologist, 48(4), 121-130.
36
Why not a 2-stage process in determining adverse
impact? Step 1 A statistical significance test
would as the 1st hurdle supporting that a
disparity is probably not due to chance. Step
2 Evidence that a non-chance disparity is
substantial enough in size to support a
reasonable inference of discrimination
This two-hurdle process has NOT been observed in
recent case law concerning impact measurement.
37
Advice From a Technical Advisory Committee
(Created to help provide the assessment and
equal employment opportunity (EEO) communities
with technical best practice guidance on how to
conduct adverse impact analyses and included 70
of the nations experts in adverse impact
analyses. Available at http//cceq.org/

• Multiple methods of adverse impact detection
  should be used. However, care should be taken to
  minimize redundancy and combine only methods that
  each add unique information.
• Practical significance should be considered,
  and a variety of effect sizes may be useful
  measures. Practical significance measures should
  be paired with a statistical significance test.

38
Use of Multiple Selection Components

• Need to specify
• How each test is scored
• How each score is combined
• If applicants are eliminated by any single
  score functioning as a minimum
• qualification

Avoid doing what was done in the Watson case!