Adverse Impact of Employment Tests on Minorities: Griggs v. Duke Power (1971) and Albemarle Paper v. Moody (1975)

1. Update: No gold pencils!!!

2. 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: 42 U.S. Code § 2000e–2 – (h) Unlawful employment practices: “…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….”

3. 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).

4. Griggs v. Duke Power (1971) Some Key Questions: • Can employment practices be in violation of Title VII if there is a lack of discriminatory intent (or motive)? • 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)?

5. ~ 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 dept.] Duke Power incrementally began adding requirements: 1955: Company required a HS diploma for jobs, except Labor 1965: Company stopped limiting Blacks to Labor Dept. jobs – but a HS diploma was required to transfer from the Labor to other depts. (*White employees hired before HS requirement performed satisfactorily and promoted to other jobs) Later in 1965: Required passing scores on 2 “aptitude tests” for jobs other than Labor (passing score approximated the national average for HS students; implemented the day Title VII became law!!!)

6. Griggs v. Duke Power (1971) Company’s 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

7. *** Consists of 50 questions with a 12-minute time limit

8. 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 consequencesof 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 Negroescannot be shown to be related to job performance, the practice is prohibited.”

9. Major Points of the Supreme Court Decision in Griggs • Employment discrimination may result from the effectsof one's actions • All tests/requirements must be job relatedand 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 Some referred this decision as the Grigg’s burden!

10. ~ Albemarle Paper v. Moody (1975) ~ Albemarle’s 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

11. ~ Albemarle’s 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 with many years of experience --- 105 employees; 4 Blacks) • Use of concurrent validation approach (test scores correlated with supervisor rankings (pair comparisons) • Instructions to supervisors regarding assessing 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 . . .” • There is no way of knowing precisely what criteria of job performance the supervisors were considering 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 significantly correlated within some lines of progression but not others --- Albemarle lost

12. ~ Connecticut v. Teal (1982) ~ ["Bottom line" defense] • 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. Background --- Black candidates who failed the exam sued, saying that the test was unrelated to the job and resulted in adverse impact (Multiple Hurdle approach used) % of Whites who passed the test: 79% % of Blacks who passed the test: 54% (or a passing rate for blacks that was 68% less than that of whites). Violation of the 4/5 rule • But, overall, 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!!!

13. Connecticut’s 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

14. ~ Supreme Court Decision in Teal ~ • Court decided in favor of the plaintiffs. It concluded that the law protects individualemployees 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 favorablytreatsother members of the employee's group

15. ~ Adverse Impact Process Before Wards Cove ~ Step 1: The challenger must identify a specificemployment practice that causedthe discrimination in question (disproportionately excludes protected group members) Step 2: The company must demonstrate that the challenged practice isjob relatedand consistent with business necessity Step 3: The challenger must prove that an equally valid, job-related practice exists with less (or no) adverse impact

16. Watson v. Ft. Worth Bank and Trust (1988) • Some Key Points: • Clara Watson was not promoted on several occasions based on subjective assessments made by her supervisors (all white) • Lower courts ruled that the use of subjective data must be the basis of a disparate treatment case –not adverse impact. Adverse impact is restricted to "objective" criteria as in Griggs • Supreme Court decision (8-0) Kennedy did not participate: • A) Subjective information needs to comply with the requirement set forth in Griggs regarding job-relatedness. Subjective employment practices can be challenged under disparate impact rules • 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"

17. B) A statisticaldifference may not be enough to establish a prima facie case C) Majority of the Court required the plaintiff to identify the SPECIFICemployment practice that CAUSEDthe statistical disparity between "protected" and "unprotected" groups D) Plurality lessened the burden of proof on the part of the company in demonstrating business necessity to that of production The Plurality Opinion in Watson (Justice O’Conner)

18. 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 (APA brief)

19. Selection Methods Amendable to Validation Studies (SIOP Principles) * Underlined factors were challenged by Watson

20. Wards Cove v. Antonio (1989) Basic facts/background: • Ward’s 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

21. Wards Cove v. Antonio Key Points: Evidence for adverse impactis useable to demonstrate a prima facie case (both lower courts rejected a pattern or practice claim) What comparisonis allowed to show disparate impact? Plaintiffs used the below disparities to form a prima facie case: % 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 (5-4): • Proper comparison was the % majority vs. % minority in skilled jobs ove • Relevant labor market (RLM): Racial composition of those in the noncannery (skilled) jobs (jobs at issue) with those in the "relevant" labor market who are qualified and have an interest in performing the job(s) in question

22. 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 ----- • In Hazelwood, 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

23. Wards Cove v. Antonio (cont.) • Plaintiff must identify specificemployment practice that causedthe 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 impacton employment opportunities." C) Company recordkeepingresponsibility "...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..."

24. D) Burdenof 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 employer’s justification for his use of the challenged practice ... there is no requirement that the challenged practice be ‘essential or indispensable‘ to the employer’s business for it to pass muster; this degree of scrutiny would be almost impossible for most employers to meet.” This was a big change in the burden for the defense – much easier to do!!!

25. ~ Adverse Impact Process AfterWards Cove ~ Step 1: The challenger must identify a particular employment practice that causedthe 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

26. CRA '91 Purpose: The purposes of this Act are (1) to provide appropriate remedies for intentional discrimination and unlawful harassment in the workplace; (2) to codifythe concepts of "business necessity" and "job related" enunciated by the Supreme Court in Griggs v. Duke Power Co., 401 U.S. 424 (1971), and in the other Supreme Court decisions priorto Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989); (3) to confirm statutory authority and provide statutory guidelines for the adjudication of disparateimpact suitsunder title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.); and (4) to respond to recent decisions of the Supreme Courtby expanding the scope of relevant civil rights statutes in order to provide adequate protection to victims of discrimination. Earlier purpose statement: S. 1745: "...to overrulethe proof burdens and meaning of business necessity in Wards Cove Packing Co. v. Atonio and to codifythe meaning of business necessity used in Griggs v. Duke Power Co...." Previous job-relatedness definitions: First Danforth-Kennedy proposal (Spring 1990): "substantialand demonstrablerelationship to effective job performance." S. 2104 (original bill in 1990): "essentialto effectivejob performance." Bill passed by Senate in 1990: "significantrelationship to successfulperformance of the job." S. 1208: "manifest relationship to requirements for effectivejob performance”

27. DEFINITIONS SEC. 2000e. [Section 701] (m) The term ``demonstrates'' means meets the burdens of productionand persuasion (proof) UNLAWFUL EMPLOYMENT PRACTICES SEC. 2000e-2. [Section 703] In 1990 CRA, the words “results in” were used Burden of Proof (k) (1) (A) An unlawful employment practice based on disparate impact is established under this title only if- (i) a complaining party demonstratesthat a respondent uses a particularemployment practice that causesa disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity; or (ii) the complaining party makes the demonstration described in subparagraph (C) with respect to an alternative employment practice and the respondent refuses to adopt such alternative employment practice. (B) (i) With respect to demonstrating that a particular employment practice causes a disparate impact as described in subparagraph (A)(i), the complaining party shall demonstrate that each particular challenged employment practice causes a disparate impact, except that if the complaining party can demonstrate to the court that the elements of a respondent's decision making process are not capable of separation for analysis, the decision making process may be analyzed as one employment practice.(ii) If the respondent demonstrates that a specific employment practice does not cause the disparate impact, the respondent shall not be required to demonstrate that such practice is required by business necessity.

28. Adverse Impact Scenario Under CRA-91 The term ``demonstrates'' means meets the burdens of production and persuasion. Step 1: The challenger must demonstratethat a particular employment practice caused the discrimination in question (disproportionately excludes protected group members) … if the complaining party can demonstrate to the court that the elements of a respondent's decision making process are not capable of separation for analysis, the decision making process may be analyzed as one employment practice. Step 2: The company must demonstrate that the challenged practice is job relatedfor the position in question 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

29. Uniform Guidelines --- Validity 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]. This view has been challenged by many in the psychological profession (e.g., Landy)

30. Most prefer a unitarian view of validity (any validity evidence, however it is collected, can support the job-relatedness of selection devices) Content Validity and Decision-Making (Rank Ordering) Use of content validity for rank ordering of candidates from Guardians v. Civil Service (1980) --- 1. Suitable job analysis 2. Reasonable competencein 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

31. 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 conditionsunder which each validity strategy is inappropriate, there is no reason to state a general preference for any one validity strategy.

32. 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. ...

33. Cutoff Scores • Lanning v. SEPTA (1999) [Southeaster Pennsylvania Transit Authority] • 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 • Also, Lanning distinguished between: • Job relatedness (validity evidence) • Business Necessity (that cutoff score measures minimum qualifications needed) • Rejected by SIOP Principles and other courts (e.g., Bew v. Chicago; Int. Brotherhood v. Mississippi Power (2006)

34. Isabel v. Memphis (2003) [Endorsed view of business necessity from Lanning that a cutoff score must measure minimum qualifications need for the job]* Adverse impact on black applicants using job knowledge test (promotion to Police Lieutenant) • Test content did NOT representtotal domain of KSAs for the job • No data (e.g., via a job analysis) that the test differentiated between qualified and unqualified candidates * No real reason to bring up the Lanning decision – defense would likely have lost due to failure to satisfy Step #4from Guardians (that test content be representative of job content)

35. 4/5 rule is a guideline, a rule of thumb Uniform Guidelines on Selection Procedures (1978) “A selection rate for any race, sex, or ethnic group which is less than four-fifths (4/5) (or eighty percent) of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies as evidence of adverse impact, while a greater than four-fifths rate will generally not be regarded by Federal enforcement agencies as evidence of adverse impact. 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.”

36. Males SR: 25% Females SR: 10% Difference in Selection ratios: 40% (much less that 80% -- violation of 4/5 rue

37. ~ Statistical Versus Practical Significance ~ What indicates a “meaningful” difference between 2 groups? Statistical significance tests generally assess the level of confidence a that a finding is not a chance event (e.g., Z test) Practical significance measures generally assess the magnitude or consequences of a finding (e.g., 4/5th rule) • 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.

38. 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.

39. Bew v. Chicago (2001) N = 5,191 (Probationary Police Officers Certification Test) Whites = 99.96 Blacks = 98.24 (No 4/5 Rule violation) But --- 32/33 who failed were Black Adverse Impact implied via test of independent proportions (Z-test) Isabel v Memphis (2003) 4/5 Rule violation with cutoff score of 70; dropped cutoff score to “66” Blacks = 74.6% Whites = 89.5% (No 4/5 rule violation) But, significant differences in mean scores (Blacks 69.17 vs. Whites 75.59)

40. Apsley v. Boeing (2012): Statistical significance does not necessarily equal practical significance Statistically significant difference in hiring rates (older workers negatively impacted) But, only 60 out of 9000 employees were affected (practically not a “big deal”/not meaningful) Jones v. City of Boston (2014): Drug Testing: White positive rate was 0.3% (30 people); for African Americans, it was 1.3% (55 people) – a 1% difference The issue is “the extent to which we can be confident that the differences in the outcome, whether large or small, were not random.” Although only 1% difference, the positive test rate for Blacks was several times that for Whites • Showing statistical significance is not easy for plaintiffs • Job relatedness and business necessity defense for company • Difficultto prove an effective alternative with less adverse impact when the impact is tiny Context Matters?

41. 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.

42. 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 nation’s 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 pairedwith a statistical significance test.