Target agreed to pay $2.8 million on Monday to settle a claim that the retailer disproportionately screened out applicants based on their race or gender. The complaint, filed by the Equal Employment Opportunity Commission (EEOC), targeted certain hiring assessments used over the past decade. The sum represents one of the highest amounts paid in recent years to settle a claim of hiring discrimination; most are for less than $1 million.
The EEOC said the tests were not sufficiently related to the actual jobs, which were for upper-level positions, and while on their face they were neutral, in practice they kept out particular groups, according to the agency’s statistical analysis. It also found that one of its assessments, by constituting a pre-employment medical exam, violated the Americans with Disabilities Act that bars such tests.
The settlement money will be shared among more than 3,000 people who were adversely affected by the hiring assessments. The company also agreed to take steps to ensure the validity of its hiring process, including better data keeping, and it is no longer using the tests.
A spokeswoman for the company noted that while the EEOC found the potential for adverse impact, it didn’t find any actual disparities in its hiring. “The EEOC has concluded that only a small fraction of the assessments administered during the relevant time period could have been problematic,” she said in an emailed statement. “We continue to firmly believe that no improper behavior occurred regarding these assessments.”
The settlement is part of a larger effort by EEOC to root out systemic bias in company policies. Screening and recruitment processes, background checks, and tests can all be tailored to exclude certain groups of people.
While the sum Target will pay is unusually large for a hiring discrimination case, there have been some other big-dollar settlements related to race and gender bias. In 2013, Merrill Lynch paid $160 million to settle a racial bias lawsuit and Bank of America paid $39 million to settle claims of discrimination against women in its investment advice division. That same year, Wet Seal agreed to pay $7.5 million in a class action settlement that alleged it denied equal pay and promotions to black store managers.
But discrimination is still widespread throughout the economy. Male job applicants with little experience are better rated than female ones with a proven track record and men are seen as better prospects for their long-term careers. Meanwhile, black job applicants are half as likely as equally qualified white ones to get a callback or job offer. Black workers have had an unemployment rate that’s at least 60 percent higher than white workers since at least 1972.