Target Resolves Employment Discrimination Litigation with Large Settlement

According to a recent news story from Bring Me The News, big box retailer Target has just agreed to pay $2.8 million to settle a complaint by the Equal Employment Opportunity Commission (EEOC). It was alleged the screening process for job applicants the retailer used was discriminatory.

The money collected as part of the settlement agreement will be given to the roughly 3,000 candidates who were allegedly rejected for higher-level positions with the retailer. The reason these applicants were rejected, according to EEOC, is because the test instruments utilized in the screening process were allegedly discriminatory against African Americans, Asians and women. EEOC said several of these tests were not even job-related. More specifically, it was not that there was one thing in these tests you point to and say was discriminatory, but when the results are reviewed in the context of the gender, ethnicity and national origin of the applicants, it was clear to EEOC that there was a discriminatory impact.

In addition to these issues, EEOC also alleged the screening tools used by the retailer violated provisions of the Americans with Disabilities Act (ADA). As our Orange County employment discrimination attorneys can explain, a pre-employment medical exam is illegal under the ADA unless the job falls within certain narrow exceptions. Those exceptions are a job such a bus driver or airline pilot, where an employee’s health is crucial to passenger safety. In regard to this case, EEOC said that the pre-employment mental health assessment conducted by psychologists was essentially a pre-employment medical exam, which is illegal under the ADA.

This particular complaint was filed against the retailer approximately eight years ago and involved the test used only for these higher level positions, where employees were paid a set salary as opposed to hourly wages, like the company’s lower tiered employees working at retail locations across the country. While the investigation was still pending, the company agreed to suspend the use of these diagnostic instruments central to the complaint.

One of the reasons a company will engage in a settlement such as this one is that it is not a requirement to accept reasonability or admit to any liability, and the company still maintains no laws were violated.   However, this litigation was very expensive, and, as the company stated, the tests were no longer being used, so there was not reason for them to continue fighting the allegations.

On the other hand, it could be argued the company was concerned it would be fined a significantly higher amount of money had the case proceeded to trial, and this was a way of preventing that. As with any other settlement agreement, it is a question of trying to decide whether it is better to keep fighting or to pay some amount of money to end the litigation and move on.

In addition to not using the testing instrument in the future and paying nearly $3 million, the company has agreed to maintain better records of employment practices and share its findings with EEOC each year, in hopes this will not happen in the future. EEOC said it is happy the company has agreed to conclude this matter.

Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 949.375.4734.

Additional Resources:

Target settles employment discrimination complaints for $2.8M, August 20, 2015, Bring Me The News, by Melanie Sommer

More Blog Entries:

EEOC Sues Restaurant for Discrimination Against Male Applicants, Feb. 5, 2015, Orange County Employment Lawyer Blog