Walmart Pays $20 Million to Settle National Hiring Discrimination Case

September 15, 2020

Overview

On September 9, 2020, Walmart, Inc. settled claims asserted by the EEOC by agreeing to pay $20 million into a settlement fund and to end its use of a physical abilities test to screen job applicants. According to the EEOC, the physical abilities test violated Title VII because it disproportionately excluded female applicants from jobs as grocery order fillers at Walmart’s grocery distribution centers nationwide.

The physical abilities test required applicants to be able to lift up to 80 pounds, which resulted in up to 12,000 female applicants being rejected for positions as grocery order fillers, even though they were otherwise qualified for the position.

Employers are permitted to use pre-employment screening tests.  However, use of such tests violates employment discrimination laws if the test has disparate impact on female, minority, or disabled applicants, and the test is not both job-related and consistent with business necessity. Use of tests to screen applicants can also give rise to class action lawsuits.

Many employers and companies that screen applicants as a service to employers need to keep track of whether a pre-employment screening test disproportionately excludes members of a legally protected class. The EEOC’s Uniform Guidelines on Employee Selection Procedures (UGESP), issued in 1978, remain in effect and are an important consideration whenever an employer (or employer’s agent) relies on pre-employment test to screen job applicants.  The EEOC’s UGESP specify three methods by which employers can “validate” pre-employment screening tests and thereby avoid liability.  In addition, determining whether a particular pre-employment test disproportionately excludes members of a protected class requires, among other things, inviting all applicants who possess the minimum qualifications to self-identify (in writing) as to their race, national origin, gender, and disability.

This recent settlement between Walmart and the EEOC serves as a reminder that well-intentioned use of pre-employment screening tests can result in liability under federal employment discrimination laws in the event the test disproportionately harms applicants who are members of a protected class.  If you have questions or need assistance reviewing your organization’s applicant screening procedures, please contact a member of our Labor & Employment law practice group. 

Disclaimer / Attorney Advertisement

This blog is made available by Marshall & Melhorn, LLC and Marshall & Melhorn, PLLC (“Marshall Melhorn” or “the Firm”) for informational purposes only.  It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice.  Any opinions expressed in this blog do not necessarily reflect the views of Marshall Melhorn, its members, or its clients.  Accordingly, do not act upon this information without seeking counsel from a licensed attorney.  This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship.  Communicating with the Firm through or regarding this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter.  Therefore, any communication or material you transmit to the Firm through or regarding this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary.  The information on this blog is not guaranteed to be complete, accurate, and/or up-to-date.  Marshall Melhorn makes no representations or warranties of any kind, express or implied, as to the operation or content of the site.  Marshall Melhorn expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement.  Legal advice is not being conveyed and Marshall Melhorn or any of its members, employees, agents or affiliates shall not be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites.  Some states do not allow disclaimers regarding warranties or limitation of damages, so these disclaimers may not apply to you.  In some states, the contents of this blog may be considered ATTORNEY ADVERTISING MATERIAL.  If applicable, please note that prior results do not guarantee a similar outcome.