Walmart Pays $20 Million to Settle National Hiring Discrimination Case

September 15, 2020


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. 

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