Why You Should Be Worried About the EEOC

Did you know the EEOC employs a staff of full-time industrial psychologists? You probably don’t even care very much. But you should. Industrial psychologists are experts who determine whether your selection tools adversely impact protected groups like minorities, females, religious members, and so forth. You usually don’t hear from them unless a local EEOC investigator really gets onto your case. And you don’t even have to lose in court to get your organization’s name in lights or spend the big bucks on attorneys, depositions and settlements. Bad HR Practices Can Be Expensive Look at this list of a few recent EEOC settlements:

September 2001. General Motors settled a discrimination suit for $1.5 million.

October 2001. Eagle Global Logistics got hit with a $9 million consent decree.
March 2002. Rent-a-Center settled a sex-based suit for $47 million. McKesson settled a race-based suit for $1.2 million. Optical Cable settled a race and sex-based suit for $1 million.

You can read more cases by visiting the EEOC website. Do you think these problems were just bad luck on the part of these organizations? No. They were the result of bad HR hiring and placement practices. Ever since 1965, the U.S. government has struggled with how to balance the social needs of politics with the practical needs of business. In 1978, they published the “Uniform Guidelines on Employee Selection Procedures” — a list of practical hiring and placement suggestions about how to get the best people without running afoul of U.S. law. Make no mistake about it, the EEOC may be understaffed, and they may be under recognized, but when they get their teeth into a legitimate complaint there is no end to the money they will spend to make an example. What Can You Do? I recently attended an annual technical conference of Industrial Psychologists. While I was there, I listened to Dr. Hillary Weiner, an EEOC Industrial Psychologist, talk about what they look for when a company is being investigated. Here is the gist what she told the audience:

The EEOC first looks to see if there is any form of job analysis backing placement decisions.
They then check to see whether the test method is applicable to the job.
They examine every decision-making step. If there are multiple hurdles in the placement process, they look at the impact at each hurdle.
They look to see if the organization has attempted to use alternative methods to reduce adverse impact without sacrificing quality.
They examine the organization’s validation studies to see if they at least followed the minimum procedures.

If you haven’t thought about it before, you might want to think about these questions now:

Why were the HR departments of these large organizations caught “asleep at the switch?” The Uniform Guidelines have been around since 1978.
Is your organization making the same mistakes they did? I’m sure these companies either never heard of the Guidelines, or else they decided they were “professionals” who were immune from challenge.
Are you prepared to have your company name on the EEOC website? Contracting a professional to do a job analysis, develop a validated placement system and offer some legal advice is much cheaper than and EEOC or OFCCP challenge.
EEOC challenges are often triggered by silly tests that look nothing like the job, internal promotion decisions that are not based on job skills, performance reviews that are not job related, termination decisions that are unsupported by performance data, and interview questions that are not job-related (yes, the EEOC considers interviews to be “tests”).

You can read more about what the government wants you to do by downloading the DOL Guidelines. This is truly an area where what you don’t know can hurt you…big time!