Federal contractors, be warned: If you have not properly reviewed (and validated!) any testing used as part of your hiring process, the Office of Federal Contract Compliance Programs may take issue . . . and seek to collect big dollars.

In May, the OFCCP announced that it reached a $1.85 million settlement with Gordon Food Services after determining that GFS used a discriminatory “strength test” that adversely affected female applicants for laborer jobs. GFS agreed to stop using the test and to hire 37 women to work in its warehouse. Interestingly, the Agency learned of the alleged discriminatory test not because of a complaint by one of the women who failed the test, but through a routine review of the company’s Functional Affirmative Action Program.

In reviewing the data submitted by the company, the Agency noted that GFS hired only six women from a pool of more than 900 female applicants for its laborer positions, during the same time period in which it hired almost 300 men. The company’s pre-hire test was used to determine applicants’ ability to handle the physical demands of the warehouse position. The OFCCP determined that the test was not performed by, nor were the results interpreted by, a healthcare provider. Additionally, the Agency found that the criteria were based on standards used in the coal mining industry; therefore, it was not specific to GFS’s laborer position. Ultimately, the OFCCP believed “the test was more stringent than the actual job requirements.”

In what may have been the last straw for the OFCCP, a male employee who was part of the baseline testing failed the test — even though he had worked successfully in the laborer position for two years.

In discussing the settlement, OFCCP Director Patricia A. Shiu said, “Too often we find ‘tests’ like the one used in this case that exclude workers from jobs that they can in fact perform. In this case, women were denied good-paying jobs. We are making sure that these women are compensated and that some are able to get the work they sought when positions become available.”

More recently, the OFCCP has announced another settlement involving the issue of pre-hire testing — this time with adverse impact based on race. The Agency reached a $175,000 settlement with Aqualon Company, a subsidiary of Ashland, Inc., a leading specialty chemical company. Aqualon will have to hire four African-American candidates. The OFCCP concluded that Aqualon’s pre-employment test did not meet the requirements of the Uniform Guidelines on Employee Selection Procedures and was not job-related.

Although neither GFS nor Aqualon admitted liability in their settlements with the OFCCP, both paid a heavy price for use of testing that tended to screen out individuals within certain protected categories. It is imperative that hiring tests be job-related, recently reviewed, and validated for the specific jobs for which the tests are being used. Before using pre-hire tests, employers are encouraged to determine whether there are other ways, with less discriminatory impact, to determine whether applicants are able to perform the job(s).

Finally, federal contractors are reminded that even the use of third-party administrators does not insulate them from liability. It is the employer who is required to follow the UGESP, and to ensure the test is properly validated and does not result in adverse impact against any particular race, gender, or other protected group. Only by following the necessary steps in testing will a federal contractor receiving a passing grade.