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7th Circuit

My soul sometimes leaves my body--true or false?

This was one of a barrage of odd questions brothers Steven, Michael and Christopher Karraker answered when applying for promotions at a Rent-A-Center Inc. (RAC) in Chicago. Why a manager at a furniture-rental chain would need to verify the whereabouts of their souls was beyond them. The test they were taking was the Minnesota Multiphasic Personality Inventory (MMPI), a tool used by psychologists to diagnose mental illness. In order to gauge a person's sanity, it asks such questions as, "I see things or animals or people around me that others do not see." RAC bundled the MMPI with eight other tests and used the results to determine whether an employee would make a good manager.

Trouble began soon after the test scores came back. The Karrakers exceeded the maximum number of aberrations allowed on the MMPI. As a result, RAC wouldn't grant them their promotions. The brothers knew they weren't insane, but they weren't so sure about RAC. They decided to take the Plano, Texas-company to court.

Filing suit under the Americans With Disabilities Act (ADA), they argued that the MMPI is a medical examination, which employers may not use to make employment or promotion decisions.

"The test has been used to diagnose the most severe psychological abnormalities," says plaintiffs' attorney Mary Lee Leahy of Springfield, Ill. "The scales deal with such things as mania, paranoia and hypochondria. If you are going to use a medical test, under the ADA, you have to have offered the person a position contingent upon passing the medical test."

On June 14, the 7th Circuit U.S. Court of Appeals agreed with the Karrakers. In its opinion, the court wrote, "Because it is designed, at least in part, to reveal mental illness and has the effect of hurting the employment prospects of one with a mental disability, we think the MMPI is best categorized as a medical examination."

This case calls into question whether employers can use personality or psychological tests to screen or evaluate employees under the ADA.

"Employers have to consider whether the test is really one that can be used to identify whether people have certain medical or psychiatric conditions," says Frank Alvarez, an attorney at Jackson Lewis in White Plaines, N.Y. "And if it can be used that way, then employers have to take a very close look at those tests and evaluate whether there are other safeguards that they can implement to explain to judges, plaintiffs' lawyers and the EEOC that they are not being used in that manner."

Call The Doctor

The ADA clearly specifies that companies cannot use medical examinations to evaluate potential employees. However, what constitutes a medical examination isn't clear.

In the RAC case, the court relied on the EEOC's guidelines, which include "whether the test is designed to reveal an impairment of physical or mental health" and "whether the test measures an employee's performance of a task or measures his/her physiological responses to performing the task."

"There are all sorts of tests that you can do that aren't medical examinations," says Steve Schwartzman, a partner at Hodes, Ulman, Pessin & Katz in Towson, Md. who specializes in labor and employment law. "But these types of personality profiles are considered at least by this court to be medical examinations mainly because they could provide evidence, which would lead someone to identify that the applicant has a mental disorder or an impairment."

Furthermore, while the ADA explicitly prohibits pre-employment medical testing, the court found that testing before offering a promotion also violates the ADA.

"Prior to a conditional offer of employment being extended, employers cannot make any inquiries that would disclose whether some individuals have medical conditions including psychiatric conditions," Alvarez says. "[Issuing a medical test] is one of those dangerous, high-risk practices that you would want to be very careful about doing pre-offer."

RAC also made the mistake of using a medical test that didn't have a direct application to the managerial positions as required under the ADA. Although RAC argued that the test was used to determine certain personality traits suitable for the job, the court didn't consider the company's intentions.

"It's sort of like using an automatic assault weapon for target practice," Alvarez says. "It is overbroad. You very well might be using that type of weapon for target practice, but the rest of the world is going to be saying, 'Do you really need that?'"

With so much liability, why would an employer administer a personality test at all? Many employers consider such tests a valuable predictor of future job performance, Alvarez says. Yet he also stresses that, as with any pre-employment selection criteria, placing too much emphasis on one tool is risky.

"There is no substitute for good interviewing, good reference checking and training in terms of educating the applicant about what the job truly is going to involve," he says.

Litmus Test

Determining whether a certain test violates the ADA is key to avoiding lawsuits. However, because the ADA's definition of what constitutes a medical examination is vague, companies need to spend time researching each test they want to use.

"I would feel more comfortable [administering a test] if I knew that this particular test has been challenged and upheld as reasonable and valid in some other court proceeding," Schwartzman says.

While RAC lacked a reasonable explanation for administering the MMPI, a company can protect itself by providing a reasonable rationale for using a test. Even if the test is medical, it can hold up in court as long as it is administered post-offer, and the company successfully explains that it is reasonably related to the job.

"Whether the plaintiff can show a bias or discrimination, there is always that fairness consideration that plays before a jury," Schwartzman says. "The jury will think, 'OK, the person applied for a job, they took this test, and they flunked it. What does this test show? Was an employer justified in relying on this test? Was this test a reasonable basis to make that employment decision?'"

Alvarez suggests that in-house counsel be directly involved with a company's decision to use a certain test to screen employees. He says that GCs should look at employment tests with a skeptical eye.

"GCs need to examine all the inquiries that are being made and perhaps challenge the testing company promoting the test as to why those questions need to be asked and what is the purpose behind them," he says. "GCs should ask how these tests were developed. Were they developed with the assistance of medical and psychiatric professionals? Is the test used by the medical community for reasons other than identifying personality traits, and is it given by mental health professionals in hospitals and other clinical settings?"

Some job applicants may find employment tests invasive, even if the exam is nonmedical. This raises a privacy issue, one that could be grounds for a lawsuit. In order to protect a company from such liability, Alvarez suggests getting the applicant's informed consent.

"Make certain that you have informed consent from applicants about the nature of the inquiries that will be made," he says. "Also, you almost have to assume that someone is going to be upset with the disclosures, and you want to be in the position of saying that there was actually consent to those disclosures."

Technology Editor

Keith Ecker

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