Knack Testing Illegal Under ADA?

Wasabi Waiter looks a lot like hundreds of other simple online games. Players acting as sushi servers track the moods of their customers, deliver them dishes that correspond to those emotions, and clear plates while tending to incoming patrons. Unlike most games, though, Wasabi Waiter purportedly analyzes every millisecond of player behavior, measuring conscientiousness, emotion recognition, and other attributes that academic studies show correlate with job performance. The game, designed by startup Knack.it, then scores each player’s likelihood of becoming an outstanding employee.

Knack's assessments are based on games developed by the company that may be "played" on computers and mobile devices. Interesting, but how do persons with disabilities play these games? How would a blind person play these game? How would a persons with limb paralysis play these games? How would a person with diminished mental capacity play these games? How well would a person who may not be computer literate, an older person for example, play these games? What advantage, if any, does a gaming environment provide for one class of persons (young male online gamer ) versus another (mature female non-gamer)?

Screening Out Applicants

Tests that screen out or tend to screen out an individual with a disability or a class of individuals with disabilities are illegal under the Americans with Disabilities Act (ADA) unless the tests are job-related and consistent with business necessity.

Knack testing relies on gamification. Applicants "play" Wasabi Waiter, Balloon Brigade, and other video games to generate the data used by Knack to identify promising applicants. As noted above, however, the reliance on video games screens out persons with disabilities, whether physical disabilities like blindness and limb paralysis or mental disabilities like diminished mental capacity.

Phrased differently, how would physicist Stephen Hawking, clearly an innovator and high performer, fare in taking Knack's Balloon Brigade? Hawking has a motor neurone disease related to amyotrophic lateral sclerosis, a condition that has progressed over the years. He is almost entirely paralysed and communicates through a speech generating device.

From a practical standpoint, legal claims that an individual with a disability has been screened out do not require a statistical showing of disparate impact, or other comparative evidence showing that a group of disabled persons are adversely affected. The plain language of the law – “screen out or tend to screen out” and “an individual with a disability or a class of individuals with disabilities” – confirm that a claim may be supported by evidence that the challenged practice screens out an individual on the basis of their disability.  “In the ADA context, a plaintiff may satisfy the second prong of his prima facie case [impact upon persons with protected characteristic] by demonstrating an adverse impact on himself rather than on an entire group.” Gonzalez v. City of New Braunfels.

Illegal Medical Examination

The ADA prohibits employers, whether directly or via third parties like Knack, from administering pre-employment medical examinations. Guidance by the Equal Employment Opportunity Commission defines medical examination under the ADA by reference to seven factors, any one of which may be sufficient to determine that a test is a medical examination.

Physiological Responses

One of those factors is whether the test measures an applicant's physiological responses to performing a task. EEOC guidance on this issue states:

[I]f an employer measures an applicant's physiological or biological responses to performance, the test would be medical.

According to Knack, its test:

leverages cutting-edge behavioral and cognitive neuroscience, data science, and computer science to build games which produce thousands of data points describing how a player perceives, responds, plans, reacts, thinks, problem-solves, adapts, learns, persists, and performs in a multitude of situations.

Types of physiological responses include a reaction or response - a bodily process occurring due to the effect of some antecedent stimulus or agent. As noted in the prior paragraph, Knack tests create data points that track how an applicant perceives, responds, reacts, adapts, learns and persists. The Knack test, therefore, is an illegal medical examination under the ADA.

Five Factor Model of Personality

Justin Fox, executive editor of the Harvard Business Review Group, took two of the Knack assessments and received information in the following report:

As can be seen by the report, among the factors measured by Knack are conscientiousness, openness and stability. These are elements found in the Five Factor Model of Personality, a model that is currently being challenged in at least seven charges filed with the EEOC. Please see ADA, FFM and DSM.

The ADA prohibits pre-employment medical exams but allows employers to “make pre-employment inquiries into the ability of an applicant to perform job-related functions.” The Knack gaming measurements do not seek job-related information and are not consistent with business necessity. The measurements, designed to reveal information about individuals’ openness, conscientiousness, stability (also referred to as neuroticism), and other factors do not seek information about the ability of an applicant to perform the day-to-day functions of a job.

Knowledge of Disability Not Required

Neither the medical examination claim nor the "screen out" claim under the ADA require that an employer have knowledge that an applicant has a disability, a consistent holding from a number of jurisdictions, including the 7th, 9th, 10th, and 11th Federal Circuit Courts of Appeal.

ADA guidance states, in relevant part:

A covered entity shall not require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature and severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.

According to guidance issued by the EEOC, "This statutory language makes clear that the ADA’s restrictions on inquiries and examinations apply to all employees, not just those with disabilities.”

Punitive Damages for Illegal Medical Examinations under the ADA

In a recent decision, a Pennsylvania federal court held that an acquiring company conducted over 300 unlawful pre-offer medical exams in violation of the ADA.  Cambria Care Center (“CCC”) had purchased the former Cambria County owned nursing home and engaged Grane Healthcare (a separate, but related entity to CCC) to interview and hire employees for the new facility, which was set to open later in the year.

All 300 of the former county nursing home employees were invited to apply for new employment.More than 300 employees from the acquired company applied for positions with  Grane [the acquiring company]. Grane ultimately hired roughly 225 of the applicants. Every applicant was required to undergo a medical examination. Several unsuccessful applicants for employment filed charges of discrimination with the Equal Employment Opportunity Commission (EEOC), alleging that Grane had violated the Americans with Disabilities Act of 1990 (ADA) by conducting pre-offer medical examinations of prospective employees and declining to hire some of them because of actual or perceived disabilities.

The record demonstrates that the employees seeking employment with Grane were subjected to a formalized process consisting of unlawful pre-offer medical examinations and illicit solicitations of detailed medical information. The individuals who were subjected to these illegal examinations and inquiries, including those who were ultimately rejected, were deprived of the prophylactic protection from discrimination that § 12112(d) was designed to create.

Section 12112(d) Claims

The provisions of the ADA pertaining to medical examinations and inquiries are codified at 42 U.S.C. § 12112(d). This statutory framework is designed to shield information about an applicant’s medical condition from his or her prospective employer until after an offer of employment is made. Before an offer of employment is extended, an employer may not ask a job applicant to undergo a medical examination or inquire as to whether he or she “is an individual with a disability.”

Unlike § 12112(a), which aims to protect a discrete class of “disabled” persons from discrimination, § 12112(d) contains no language limiting the category of applicants and employees entitled to statutory protection. Consequently, an individual who is subjected to an unlawful medical examination or inquiry can successfully assert a claim under § 12112(d) without establishing the existence of a statutory “disability.” In this vein, an applicant who is rejected by an employer based on information gleaned from an illegal pre-offer medical examination or inquiry may seek redress under § 12112(d)(2)(A) even if that information does not reveal a “disabling” medical condition. A § 12112(d) violation occurs as soon as “an employer conducts an improper medical examination or asks an improper disability-related question, regardless of the results or response.”

Current Charges with the EEOC

None of the seven charges currently being investigated by the EEOC require the employer to have knowledge that the applicant has a disability.  The claim that an employer used an unlawful pre-offer medical exam does not turn on the employer’s knowledge of the applicant's disability -- and in fact does not require that the applicant have a disability.

For those employers utilizing Five Factor Model-based personality tests as an element of their screening and hiring process, the § 12112(d) violation occurs each time the applicant completes the test and the results are submitted to the employer or assessment company.

The ADA’s prohibition against pre-offer medical examinations and inquiries is prophylactic in nature. Congress was concerned that medical information gleaned from such examinations and inquiries could be used to exclude disabled applicants from further consideration for employment. In order to discriminate against an applicant “on the basis of disability,” an employer must know that the applicant is disabled. By denying employers access to medical information until after offers of employment are made, § 12112(d) aims to ensure that such information does not infect the employee-selection process. In this way, § 12112(d) deters covert discrimination against disabled applicants by forcing employers to make hiring decisions before procuring the information upon which discriminatory decisions could be based.

Reducing Employer Risk Exposure

The timing or sequencing of the testing has a significant impact. Employers could reduce risk exposure by administering the test after having provided the applicant with a conditional offer of employment. The employer would still face the risks associated with tests that discriminate against persons with disabilities, but would not face the potential for claims from all applicants who took the test.

Employers sequence the testing first not because they want to include those who are the best fit for the company culture, but because they need a quick, low-cost method of excluding a significant number of applicants. As one employer (Xco) stated in its position statement,

“The [assessment] enables [Xco]  to assess a large volume of applicants cost-effectively and provides consistency in that assessment. Without the [assessment] reviewing and assessing all individual applications would be extremely costly, both in terms of the labor resources needed to conduct such screening and the costs associated with training managers in making the predictive assessments yielded by the [assessment]. It also would result in greater variability in the reliability of the assessments made by individual managers.

Available Alternatives

Xco, and other employers act as if there are only two alternatives – use assessments (quick, low-cost) and don’t use assessments (time-consuming, costly). There are a variety of alternatives, including tests that do not constitute pre-offer medical exams and do not screen out persons with mental illness. Both Starbucks and CVS are prospering without using illegal pre-offer medical examinations and they do not appear to have put themselves at a competitive disadvantage. 

For example, contrast the stock price performance of CVS (no assessment) and Walgreens (assessment) since CVS stopped using assessments following its settlement with the ACLU in Rhode Island. Please see "The CVS Example" in When the First Domino Falls: Consequences to Employers of Embracing Workforce Assessment Solutions

Systemic Risk 

Due to the lack of variability in the online assessments, any discriminatory element that makes its way into the test algorithm – like the screening out of persons with mental disabilities due to the use of the Five Factor Model - is propagated across the entire universe of job applicants.

Congress sought “to provide clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities.” 42 U.S.C. § 12101(b)(2). Covered employers cannot erode those standards by procuring detailed medical information about applicants for employment and contending, at the end of the day, that such information has never been used to the detriment of those applicants. If it were otherwise, disabled individuals would be vulnerable to several forms of discrimination that the ADA was designed to prevent. Since most employment decisions involve elements of discretion, it is relatively easy for an employer to “concoct a plausible reason for not hiring” a particular individual. A decision declaring the admitted § 12112(d) violations to be “harmless” would seriously undermine the ADA’s policy of prophylactic deterrence.

Compensatory Damages 

Before 1991, plaintiffs proceeding under Title VII could only seek “equitable” remedies. Backpay was the primary form of monetary relief available to aggrieved individuals. Section 102 of the Civil Rights Act of 1991 added compensatory and punitive damages to the remedies otherwise available under Title VII and the ADA. The relevant statutory language, permits a “complaining party” to “recover compensatory and punitive damages” from a covered entity responsible for violating § 102 of the ADA. The provisions governing medical examinations and inquiries are included within § 102.

The compensatory damages available to individuals aggrieved by violations of Title I include remuneration for “future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses.” The total amount of compensatory and punitive damages available to “each complaining party” is capped at anywhere from $50,000 to $300,000, depending on the number of individuals employed by the covered entity.

Punitive Damages

The Civil Rights Act of 1991 permits any party to “demand a trial by jury” “[i]f a complaining party seeks compensatory or punitive damages” under Title I. The disjunctive wording of this language suggests that a plaintiff can seek an award of punitive damages without seeking an award of compensatory damages. Several Courts of Appeals have concluded that punitive damages may be assessed under the relevant statutory provisions even if no compensatory damages are awarded.

Employers will likely argue that most applicants should receive little, if any, in the way of compensatory damages like backpay. The argument is based on the limited number of positions available as compared with the large number of applicants; only a small percentage of the applicants could have been hired to fill the positions. The expansive scope of compensatory damages – including nonpecuniary losses – plus the availability of punitive damages is designed to provide relief to applicants whose rights have been violated.

As noted below, precluding awards of punitive damages in cases involving no easily quantifiable physical and monetary harm would quell the deterrence that Congress intended to provide when it enacted § 12112(d). The statutory caps on damages ensure against limitless awards in cases of insubstantial harm.

The damages cap for each of the seven companies subject to the EEOC charges is $300,000 per applicant.

A plaintiff seeking punitive damages under Title I must demonstrate that the offending employer “engaged in a discriminatory practice or discriminatory practices with malice or with reckless indifference to [his or her] federally protected rights.” In Kolstad v. American Dental Association, the Supreme Court construed this language to mean that a covered employer must “discriminate in the face of a perceived risk that its actions will violate federal law” in order to be liable for punitive damages.

Reckless Indifference

Examples of reckless indifference by the seven companies subject to the EEOC charges may include:

• Using an assessment is based on the Five Factor Model of personality, which serves as a basis for categorizing and diagnosing personality disorders in the Diagnostic and Statistical Manual of Mental Disorders.
• Failing to perform any adverse impact or validation studies on persons with disabilities. As Kronos stated in one of its filings in the EEOC litigation, “No adverse impact or validation studies have been performed by Kronos … with respect to potential adverse impact on individuals with disabilities.”
• Continuing to use the assessment for years after having been put on notice that the assessment may be an illegal pre-offer test. Contrast Kroger with CVS.
• Asking questions are neither “directly relevant” to the job nor “plainly job-related.” The questions, designed to reveal information about individuals’ “openness,” “conscientiousness,” “extraversion,” “agreeableness,” and “neuroticism,” based on the Five Factor Model, do not seek information about the ability of an applicant to perform the day-to-day functions of a job.
•  Ignoring the almost 40-year old mandate of the Supreme Court in Albemarle Paper Company v. Moody, 422 US 405 (1975) that a test should be validated on people as similar as possible to those to whom it will be administered (i.e., persons with disabilities). The Court further stated that differential studies should be conducted on minority groups – like persons with mental illnesses - wherever feasible. 
• Relying solely on the statements of the assessment company, without any independent review or verification by the employer. The EEOC fact sheet sets out selection and administration guidelines, including  that an employer: (i) ensure that tests and selection procedures are not adopted casually by managers who know little about these processes; (ii) ensure that the tests are valid, independent of the test vendor’s documentation; and, (iii) determine whether there is an equally effective alternative selection procedure that has less adverse impact and adopt that alternative procedure if a selection procedure screens out a protected group.

Punitive Damages Do Not Require Showing of Tangible Harm

The statutory language does not condition an award of punitive damages on a showing of tangible harm. It is worth noting that the term discriminatory practice” is defined more broadly in relation to Title I than it is in relation to Title VII. Although the term includes only “discrimination” in the Title VII context, it is broad enough to encompass “violations” of the ADA that might not constitute “discrimination.”

The breadth of this language, which specifically defines a term appearing in the portion of the statute governing awards of punitive damages, suggests that Congress intended to provide for assessments of punitive damages against employers responsible for intentionally violating Title I’s prophylactic provisions. Precluding awards of punitive damages in cases involving no “easily quantifiable physical and monetary harm would quell the deterrence that Congress intended” to provide when it enacted § 12112(d). The statutory caps on damages “ensure against limitless awards in cases of insubstantial harm.”

Accordingly, the EEOC can seek punitive damages on behalf of the applicants who were unlawfully subjected to pre-offer medical examinations and inquiries even if those applicants are not otherwise entitled to compensatory damages.

Since the examinations in this case were illegally conducted at the pre-offer stage, the EEOC can seek backpay and compensatory damages on behalf of any applicant rejected based on unlawfully procured medical information, regardless of whether his or her injuries are attributable to “discrimination based on a disability.” Moreover, recovery may be sought for less tangible injuries caused by the examinations and inquiries, irrespective of whether those injuries manifested themselves in the form of personnel decisions (suggesting that an “emotional” injury could constitute “actual damage”).

Positive Trending for Claims Challenging the Legality of Pre-Employment Assessments

A variety of factors are trending in favor of eliminating the use of pre-employment assessments that violate the Americans with Disabilities Act (ADA) and the Rehabilitation Act of 1973, including:

• Implementation of the EEOC Strategic Enforcement Plan for 2013-2016

• The first national priority of the EEOC in the strategic enforcement plan is “eliminating systemic barriers in recruitment and hiring.”
• “[P]eople with disabilities continue to confront discriminatory policies and practices at the recruitment and hiring stages. These include … the use of screening tools (e.g., pre-employment tests …) “

• EEOC Systemic Investigation of Pre-Employment Testing and the ADA

• Stemming from more than six years of litigation by the EEOC against Kroger and Kronos 
• September 14, 2012 Third Circuit Court of Appeals decision in EEOC v. Kronos Incorporated
• It is “a proper inquiry for the EEOC to seek information about how these tests work, including information about the types of characteristics they screen out….“ Third Circuit Court of Appeals (September 14, 2012)
• Transfer of two charges from Atlanta EEOC to the EEOC office leading the systemic investigation

EEOC Focus on Disability Discrimination Litigation

• ADA claims covered the biggest percentage of the EEOC’s yearly litigation filing activity for FY 2013 
• The pie chart below provides a snapshot of the cases filed by the EEOC in the last week of the fiscal year and shows that almost half of the cases filed were based on disability discrimination.

• CVS/Rhode Island ACLU Settlement

• CVS eliminates use of pre-offer assessment as a consequence of claim by ACLU that questions from the assessment could have a discriminatory impact on people with mental impairments or disorders. 
• Please see Challenges to Pre-Employment Assessments

• Karraker Court Decision

• Rejected “form” defenses (e.g., test not reviewed by medical professional) and dismantled distinction between a test that evaluates personality and one that diagnoses mental disorders
• Please see Courts Find Tests To Be Illegal

• Adoption of the Five-Factor Model in DSM-5 by the American Psychiatric Association

• Based on two decades of research demonstrating that the five-factor model - used as the basis for many of the pre-employment personality tests - can be used as a structural model for describing and understanding personality disorders, including those within the Diagnostic and Statistical Manual of Mental Disorders (DSM)
• Please see ADA, FFM and DSM

• Significant Risk of Punitive Damages

• In addition to claims for actual or compensatory damages, which may be nominal on a per person basis, applicants may also seek punitive damages for the reckless behavior of the employers that used illegal pre-employment assessments.
• In State of Arizona v. ASARCO LLC, No. 11-17484 (9th Cir. Oct. 24, 2013), the 9th Circuit Court of Appeals held that a punitive damages award of $125,000 in an employment discrimination case finding no actual damages and $1 in nominal damages was constitutional and "did not raise judicial eyebrows."
• Please see Punitive Damages

• OFCCP issuance of non-discrimination and and affirmative action regulations for individuals with disabilities (IWDs)

• Regulations require federal contractors to achieve a 7%  workforce utilization goal of IWDs. 
• The contractors are required to achieve the 7% in each and every job group of the contractors.

Why Success Is Important

The long-term fiscal stability of the United States of America depends, in part, on ensuring that Americans with disabilities have meaningful opportunities to contribute to our collective well-being and on eliminating outdated policies that keep people in cycles of poverty and dependency.

More than two decades after the passage of the ADA, the unemployment rate for Americans with disabilities stubbornly remains nearly double that of people without disabilities, while their rate of labor force participation has continued to be abysmally low. Figures from the Bureau of Labor Statistics show that labor force participation for workers with disabilities was 20.3 percent, while the total for workers without disabilities was 69.1 percent—more than three times higher. As of April 2012, the unemployment rate for people with disabilities was 12.5 percent, versus 7.6 percent for those without disabilities.

There are many benefits of employment—work enhances skills such as communication, socialization, academics, physical health, and community skills; it factors into how one is perceived by society; it promotes economic well-being; it leads to greater opportunity for upward mobility; and it contributes to greater self-esteem. Yet only 15 percent of those with a mental disability are in the labor market. Please see So Many Job Openings, So Little Hiring.

Risks to Kroger Shareholders

There is material risk to Kroger shareholders and other stakeholders that the company's use of the Kronos assessments over the past 7+ years has created millions of potential plaintiffs, including every person who has applied for a position at one of the many Kroger companies.

Kroger is being investigated by the Equal Employment Opportunity Commission (EEOC) as a consequence of multiple charges filed with the EEOC alleging non-compliance with labor and employment laws, including the Americans with Disabilities Act (ADA). The investigation has been ongoing for more than five years and has generated a number of district court and appellate court decisions as Kroger and the employment assessment company it uses, Kronos, have sought to avoid disclosing information about the assessment and its impact on persons protected by the ADA.

These actions by Kroger and Kronos have generally been unsuccessful; the appellate court decisions have sided with the EEOC and have ordered Kronos to disclose massive amounts of information, including:

1. Any and all documents and data constituting or related to validation studies or validation evidence pertaining to Kronos assessment tests purchased by Kroger, including but not limited to such studies or evidence as they relate to the use of the tests as personnel selection or screening instruments, even if created or performed for other customer(s).
2. The user’s manual and instructions for the use of assessment tests used by Kroger.
3. Any and all documents (if any) related to Kroger, including but not limited to correspondence, notes, and data files, relating to Kroger; its use of the assessment test; results, ratings, or scores of individual test takers; and any validation efforts made thereto.
4. Any and all documents discussing, analyzing or measuring potential adverse impact on persons with disabilities.
5. Any and all documents related to any and all job analysis performed by any person or entity related to any or all position(s) at Kroger.

 See Kroger and Kronos: Chaos and Disorder.

Claims and Damages

Claims against Kroger include:

• Claims that the Kronos assessment is an illegal pre-employment medical examination whose use is prohibited by the ADA.
• Claims that responses to the Kronos assessment, as a medical examination, are confidential medical information, subject to strict safeguards that Kroger has been recklessly ignoring.
• Claims that the Kronos assessment illegally screens out persons with mental disabilities in violation of the ADA.
• Claims that Kroger failed to ensure that the Kronos assessment results accurately reflect the skills, aptitude and other factors that the assessment purports to measure, rather than reflecting an applicant’s impairment.

As a medical examination, it is unlawful for the Kronos assessment to be administered by Kroger to any job applicant prior to a conditional offer of employment being made to that applicant.  Each time the Kronos assessment is so administered to any such applicant, Kroger is violating Title I of the ADA and subjecting itself to claims for back pay, front pay, compensatory damages and injunctive relief. Each person that has been subject to the illegal medical examination of Kroger under Article 1 of the ADA is entitled to seek compensatory and punitive damages of $600,000, in addition to back pay, front pay and recovery of attorneys’ fees.

An employer utilizing the Kronos assessment, like Kroger, is at risk for punitive damages where, as held by the court in Kolstad v. American Dental Association, the “employer has engaged in intentional discrimination and has done so with malice or reckless indifference to the federally protected rights of an aggrieved individual.”

Kroger’s unlawful use of the Unicru assessment subjects the company to material and publicly-disclosable liability and it shareholders to a potentially significant diminution in the value of their shares.

Ignoring EEOC Guidance

Reckless indifference may be show by a variety of methods, including an employer’s failure to comply with the EEOC guidance for testing and selection, pursuant to which employers are encouraged to:

1. Administer tests without regard to race, color, national origin, sex, religion, age, or disability;
2. Ensure that tests are properly validated;
3. Ensure that tests are job-related;
4. Ensure that tests are appropriate for the employer's purpose;
5. If selection procedures screen out a protected group, determine whether there is an equally effective alternative selection procedure that has less adverse impact and adopt that alternative procedure;
6. Keep abreast of changes in job requirements and update the test specifications or selection procedures accordingly; and
7.  Ensure that tests and selection procedures are not adopted casually by managers who know little about these processes.

In a court filing submitted several years ago in connection with its ongoing EEOC litigation, Kronos stated that “[n]o adverse impact or validation studies have been performed by Kronos, or to Kronos’ knowledge, by or for Kroger with respect to potential adverse impact on individuals with disabilities.” This filing was served on both the EEOC and Kroger.

Consequently, Kroger cannot confirm that the Kronos assessments have been administered without regard to disability, nor can it confirm that the Kronos assessments have been properly validated. Even more recklessly, Kroger has known that the Kronos assessments have not been validated with respect to potential adverse impact on individuals with disabilities and yet has continued to use the unvalidated assessment for years.

Disregarding Industry Standards

Reckless indifference may also be shown by an employer’s failure to meet industry standards. The general counsel of the Equal Employment Advisory Council, an employer association comprised of more than 300 major corporations and staffed by experienced lawyers and HR professionals with in-depth knowledge in handling EEO and affirmative action compliance issues, set out the following industry standards in a statement made to the EEOC in 2007:

• Tests are to be based on "objective" criteria
• Tests are attractive screening methods "when administered properly"
• A "carefully selected" test that is "properly validated" can provide a great deal of relevant information when "[u]sed in conjunction with other sources of information"
• A few "basic principles that EEAC member companies strive to apply:“
• Ensure each employment test has been properly validated.
• Ensure that the validity study is current and properly documented.
• Avoid overreliance on representations made by test manufacturers regarding test validity and suitability for a particular job.
• Conduct periodic audits of employment selection testing procedures to monitor for
• possible disparate impact
• significant changes in jobs
• outdated validity studies
• other potential problems

As set out in the many documents filed in the ongoing litigation among the EEOC, Kroger and Kronos, few, if any, of these basic industry principles have been followed by Kroger. For example:

1. Kroger was unable to provide the EEOC with any validation studies, whether current or not or properly documented or not; 
2. There was no information provided that demonstrated periodic audits by Kroger of the Kronos assessment to monitor for possible disparate impact or outdated validity studies; and
3. Kroger utilizes the Kronos assessment, on its own, as the basis for rejecting applicants – the assessment was not “used in conjunction with other sources of information.” 
4. Kroger seemingly relied solely on the representations of Kronos regarding test validity and suitability.

Kroger’s knowing failure to meet many the basic principles set out by the industry and turning a blind eye towards the known discriminatory impact of the Kronos assessment is demonstrably reckless.

He Said, She Said

A key element in both the EEOC and EEAC guidance is the responsibility of the employer (Kroger) to independently review the assessment and avoid reliance on the representations of the assessment provider.  Did Kroger conduct such an independent review? It would appear not.

In a letter to the EEOC dated February 9, 2009, sent by Kroger’s counsel it states, “Unicru, the company that developed the assessment [and subsequently acquired by Kronos], has informed … [Kroger] that the assessment has been fully and appropriately validated, and that there is no disparate impact.” That statement admits a reliance on Kronos's representations and indicates no independent validation effort on the part of Kroger.

The quoted sentence from the February 9, 2009 letter of Kroger's counsel is puzzling, given the Kronos statement mentioned previously that it is “impossible” to measure disparate impact on people who have disabilities. Which is it? How can Kronos assure Kroger that there is no disparate impact, as Kroger’s counsel stated to the EEOC, if, according to Kronos, it is impossible to measure disparate impact?

Ignoring Supreme Court Precedent

In a petition to revoke an EEOC subpoena filed on October 16, 2008, Kronos claims that there is “no known method … to ascertain adverse impact against the entire generic category of disabilities.” As noted above, such a claim is a red herring. Given the wealth of scholarship and data concerning the interrelationship between the FFM model and diagnosing mental illness (please see ADA, FFM and DSM), it seems more likely that Kronos was unwilling to spend the money to determine the impact of the Unicru assessment on persons with disabilities.  Either that, or Kronos knows what the results would demonstrate – that the assessment is a medical examination and its administration by employers, including Kroger, results in disparate treatment of, and has a disparate impact on, persons with mental illness.

As evidenced by the scholarship on the use of the FFM to diagnose mental illness previously discussed, there are no barriers to testing the use of the FFM in the Kronos assessment to determine its impact on persons with mental illness. As noted by the authors of “Veiled Barriers: Pre-EmploymentTesting and Disability” published by the Journal of Rehabilitation Administration in 2006:

[S]tudies of sub-groups, such as individuals with mental illnesses or cognitive impairments could be conducted to determine the potential, and perhaps likelihood for, pre-employment test results unfairly penalizing these individuals in the employee selection and hiring stages …

In Albemarle Paper Company v. Moody, the Supreme Court addressed a case in which an employer implemented a test (Wonderlic) on the theory that a certain verbal intelligence was called for by the increasing sophistication of the plant's operations. The company made no attempt to validate the test for job-relatedness, and simply adopted the national "norm" score as a cut-off point for new job applicants. The Supreme Court cited the Standards of the American Psychological Association and pointed out that a test should be validated on people as similar as possible to those to whom it will be administered. The Court further stated that differential studies should be conducted on minority groups wherever feasible.

Substitute (i) Kroger for Albemarle Paper Company and (ii) Kronos assessment for the Wonderlic test in the Albemarle Paper Company decision and one sees few, if any, differences. Like Albemarle Paper Company, Kroger made no attempt to validate the test for job-relatedness and arbitrarily adopted cut-off points. Like Albemarle Paper Company, neither Kroger nor Kronos conducted validation studies on persons with mental illness.

Kroger’s failure to follow Supreme Court precedent that (i) requires validation of an employment test (Unicru assessment), (ii) prohibits arbitrary cut-off points, and (iii) requires differential studies of the impact of the test on protected classes (persons with mental illness)? Reckless.

What Gets Lost? Risks of Translating Psychological Models and Legal Requirements to Computer Code

The genesis for this posting is the article "Technologies of Compliance: Risk and Regulation in a Digital Age" authored by Kenneth A. Bamberger and found at 88 Texas L. Rev. 669 (2010). This posting takes portions of the article, modified to address the issue of job applicant assessments, and intersperses information on elements of workforce analytics to provide examples of the risks and challenges raised in the Bamberger article.

Workforce analytic systems are powerful tools, but they pose real perils. They force computer programmers to attempt to interpret psychological models, legal requirements and managerial logic; they mask the uncertainty of the very hazards with which lawmakers and regulators are concerned; they skew decisionmaking through an “automation bias” as a substitute for sound judgment; and their lack of transparency thwarts oversight and accountability.

Lost In Translation

The hiring assessment functionality of workforce analytics contains three divergent logic systems, legal, psychological and managerial. The legal logic system derives, in part, from the Americans with Disabilities Act (ADA) and its accompanying regulations and related caselaw. The psychological logic system derives primarily from the five-factor model of personality, or Big Five, as it has evolved over the past 20-25 years. The managerial logic derives from the implementation of the human resource function of the employer. Technology in the form of workforce analytics then attempts to tie these three logic systems together in order to create an automated assessment program that attempts to determine applicant "suitability" or "fit."

Information technology is not value-neutral, but embodies bias inherent in both its social and organizational context and its form. It is not infinitely plastic, but, through its systematization, trends towards inflexibility. It is not merely a transparent tool of intentional organizational control, but in turn shapes organizational definitions, perceptions, and decision structures. In addition to controlling the primary risks it seeks to address, then, it can raise—and then mask—different sorts of risk in its implementation.

For example, many workforce analytic companies utilize the Big Five model in creating their personality assessments. As its name implies, the Big Five looks at five traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism, with each trait conceptualized on an axis from low to high (e.g., low neuroticism, high neuroticism). The Big Five, operating under various names, existed for a number of decades prior to its "rebirth" in the early 1990s, where it was embraced by organizational psychologists.

Since the late 1990s workforce analytics companies like Unicru (now owned by Kronos) have adopted the Big Five for use in their job applicant assessment program. The workforce analytic companies have created "model" psychological profiles and tested applicants against those profiles. In general, applicants receive either green, yellow or red scores on the basis of a 50/25/25 cutoff. Applicants scoring red are generally not interviewed, let alone hired.

The use of technology systems to hardwire workforce analytics raises a number of fundamental issues regarding the translation of legal mandates, psychological models and business practices into computer code and the resulting distortions. These translation distortions arise from the organizational and social context in which translation occurs; choices “embody biases that exist independently, and usually prior to the creation of the system.” And they arise as well from the nature of the technology itself “and the attempt to make human constructs amenable to computers.”

These distortions are compounded when psychological models, legal standards and managerial processes are turned over to programmers for translation into predictive algorithms and computer code. These programmers may know nothing of the psychological models, legal standards and management processes. Some are employees of separate IT divisions within firms; many are employees of third-party systems vendors. Wherever they work, their translation efforts are colored by their own disciplinary assumptions, the technical constraints of requirements engineering, and limits arising from the cost and capacity of computing.

Managerial processes may be poor vehicles for capturing nuance in legal policy and psychological models, especially in a context like employment discrimination where regulators have eschewed rules for standards and where the interpretation of those standards by regulators and psychological professionals may change over time. For example, the ADA prohibits pre-employment medical examinations and psychological tests used by workforce analytic companies may be considered medical examinations (please see ADA, FFM and DSM). Employers and workforce analytic companies have interpreted the medical examination requirement as prohibiting the use of tests that are designed to diagnose mental illnesses. 

This interpretation creates two significant risks for employers and workforce analytic companies. First, the legal standard does not speak to "tests designed to diagnose mental illnesses;" rather, it is "whether the test is designed to reveal an impairment of physical or mental health such as those listed in the Diagnostic and Statistical Manual of Mental Disorders." "Designed to reveal" is semantically and substantively different from "designed to diagnose" and, as set out in Employment Tests are Designed to Reveal an Impairment, Big Five-based tests are designed to reveal impairments by their screening out process. As depicted in the graphic, tests designed to diagnose are a subset of the overall category of tests designed to reveal an impairment. Using the "designed to diagnose" category as the proxy for medical examinations puts employers and workforce analytic companies at significant risk of violating the ADA medical examination prohibition and the confidential medical information safeguards under the ADA. It may also result in other claims against the workforce analytic companies by job applicants, employers and insurers. The mistaken use of the "designed to diagnose" category as a proxy for medical examinations could be considered a design defect in the product liability arena or as negligent in a tort claim..

The second significant risk for employers and workforce analytic companies arises from their failure to account for the evolution of the Big Five model from non-clinical model to clinical model.  In her seminal review of the personality disorder literature published in 2007, Dr. Lee Anna Clark stated that “the five-factor model of personality is widely accepted as representing the higher-order structure of both normal and abnormal personality traits.” A clear sign of this evolution comes with the publication of the most current volume of the Diagnostic and Statistical Manual for Mental Disorders (DSM-5), published in May 2013, where the model used to diagnose many personality disorders is based on the Big Five. 

Consequently, even if the standard for defining a medical examination was focused solely on the use of a test that diagnosed a mental illness, the five-factor model has now evolved into a diagnostic tool used by the psychiatric community to define mental impairments, including personality disorders, of the kind set out in the DSM-5. The failure of employers and workforce analytic companies to account for the evolutionary development of the five-factor model puts them at significant risk due to their belief that the five-factor model is not a diagnostic tool - a belief that time and scientific advances have now overturned. 

Automation Bias

While computer code and predictive-analytic methods might be accessible to programmers, they remain opaque to users —for whom, often, only the outcomes remain visible. In the case of job applicants, even this information (assessment outcome) is not visible to them - results are not disclosed by employers or workforce analytic companies. Programmers “code[] layer after layer of policies and other types of rules” that managers and directors cannot hope to understand or unwind.

Human judgment is subject to an automation bias, which fosters a tendency to “disregard or not search for contradictory information insight of a computer-generated solution that is accepted as correct.” Such bias has been found to be most pronounced when computer technology fails to flag a problem.

In a recent study from the medical context, researchers compared the diagnostic accuracy of two groups of experienced mammogram readers (radiologists, radiographers, and breast clinicians)—one aided by a Computer Aided Detection (CAD) program and the other lacking access to the technology. The study revealed that the first group was almost twice as likely to miss signs of cancer if the CAD did not flag the concerning presentation than the second group that did not rely on the program.

Automation bias may be found in the algorithms created and used by workforce analytic companies to provide "insights" to their employer customers. For example, Kenexa, an IBM company, has determined that distance from work, commute time and frequency of household moves all have a correlation with attrition in call-center and fast-food jobs. Applicants who live more than five miles from work, have a lengthy commute or have moved more frequently are scored down by the algorithms, making them less desirable candidates.

Painting with the broad brush of distance from work, commute time and moving frequency may result in well-qualified applicants being excluded. The Kenexa insights are generalized correlations; they say nothing about any particular applicant.

What are the risks of employers slavishly adhering to the results of the algorithm? Part of the answer comes from identifying groups of people who have longer commutes and move more frequently than others, lower-income persons who, according to the U.S. Census, are disproportionately African-American and Hispanic.

Through the application of these “insights,” many low-income persons are electronically redlined, meaning employers will pass over qualified applicants because they live (or don’t live) in certain areas, or because they have moved. The reasons for moving do not matter — whether it is to find a better school for their children, to escape domestic violence, the elimination of mass transit in their community, or as a consequence of job loss due to a company shutdown (please see From What Distance is Discrimination Acceptable?)

An employer who does not look past the simple results of the assessment algorithms not only harms itself by failing to consider well-qualified employees, the employer puts itself at risk for employment discrimination claims by classes of persons (e.g., African-American, Hispanic) protected by federal and state employment laws.

Institutionalized (Mis)Understanding

Institutionalization of workforce management practices might permit evolutionary improvements in existing measurements, but it masks areas where risk types are ignored or analysis is insufficient and where more revolutionary, paradigm-shifting advances might be warranted.

These understandings (or misunderstandings) can be institutionalized across the field of workforce analytics. As workforce analytic practices are disseminated through the industry by professional groups, workforce analytic practitioners, management scholars, and third-party technology vendors and consultants, they standardize an approach that other firms adopt, seeking legitimacy.

Workforce analytic systems, designed in part to mitigate risks, have now become sources of risk themselves. They create the perception of stability through probabilistic reasoning and the experience of accuracy, reliability, and comprehensiveness through automation and presentation. But in so doing, technology systems draw organizational attention away from uncertainty and partiality. They can embed, and then justify, self-interested assumptions and hypotheses.

Moreover, they shroud opacity—and the challenges for oversight that opacity presents—in the guise of legitimacy, providing the allure of shortcuts and safe harbors for actors both challenged by resource constraints and desperate for acceptable means to demonstrate compliance with legal mandates and market expectations.

The technical language of workforce analytic systems obscures the accountability of the decisions they channel. Programming and mathematical idiom can shield layers of embedded assumptions from high-level firm decisionmakers charged with meaningful oversight and can mask important concerns with a veneer of transparency. This problem is compounded in the case of regulators outside the firm, who frequently lack the resources or vantage to peer inside buried decision processes and must instead rely on the resulting conclusions about risks and safeguards offered them by the parties they regulate.

Risks of a Technological Monoculture

Technology-based workforce analytic systems proliferate, in part, because policy makers have rejected rule-based mandates in favor of regulatory principles that rely on the exercise of context-specific judgment by regulated entities for their implementation . Yet workforce analytic technology can turn each of these regulatory choices on its head. The need to translate psychological, legal and managerial logic into a fourth distinct logic of computer code and quantitative analytics creates the possibility that legal choices will be skewed by the biases inherent in that process.

Such biases introduce several risks: that choices will be shaped both by assumptions divorced from sound management and incentives unrelated to public ends (e.g., hiring discrimination leading to larger income support payments - SSDI, SSI); that the rule-bound nature of code will substitute one-time technological “fixes” for ongoing human oversight and assessment (e.g., failure to recognize the evolution of the Big Five becoming a diagnostic tool); and that the standardization of risk-assessment approaches will eliminate variety—and therefore robustness in workforce analytic efforts, developing systemic risks of which individual actors may not be aware.

Systemic risks have developed because there is a technological "monoculture" in the workforce analytic industry. The problems are analogous to those of the biological domain. A deeply entrenched standard prevents the introduction of technological ideas that deviate too far for accepted norms. This means that the industry may languish with inefficient or non-optimal solutions to problems, even though efficient, optimal, and technically feasible solutions exist. The technical feasibility of these superior solutions is not important; they are excluded because they are incompatible with the status quo technology.

In a diverse population, any particular weakness or vulnerability is likely confined to only a small segment of the whole population, making population-wide catastrophes extremely unlikely. In a homogeneous population, any vulnerability is manifested by everyone, creating a risk of total extinction. In the case of workforce analytics, one successful challenge the Big Five-based model either being an illegal medical examination or screening out persons with disabilities introduces systemic risk to all customers of that workforce analytics company - one loss will lead to multiple challenges, along the lines of the asbestos litigation (please see The Next Asbestos? The Next FLSA?).Systemic risk is not limited to the ecosystem of the workforce analytic company being challenged, but extends to all companies that market or utilize Big Five-based assessments.

The potential costs are enormous. If the assessment is an illegal medical examination, then each applicant has a claim based on the use of an illegal medical examination. Some employers use the assessments to screen millions of applicants each year; each applicant is a potential plaintiff. Further, if the test is a medical examination, then each applicant has a claim for the misuse of confidential medical information (if the test is a medical examination, the applicant responses are confidential medical information). Not only does that lead to claims based on privacy violations, but all systems, solutions and databases that incorporate the information obtained from the assessments will need to be "sanitized." In a very real sense, the data may be the virus and the costs of "cleansing" those systems may well dwarf the very significant damages payable to applicants (please see When the First Domino Falls: Consequences to Employers of Embracing Workforce Assessment Solutions).

Kroger and Kronos: Chaos and Disorder

In classic Greek mythology, Kronos (also known as Cronus) was the leader of the first generation of Titans. Cronus was usually depicted with a sickle or scythe and the Greeks considered Cronus a cruel and tempestuous force of chaos and disorder.

Kronos, the company, is a U.S.-based workforce management software and services company. According to the company, tens of thousands of organizations in more than 100 countries - including more than half of the Fortune 1000 - use Kronos to control labor costs, minimize compliance risk, and improve workforce productivity.

In August 2006, Kronos acquired Unicru, Inc., a company specializing in software used to assess and hire hourly workers. At the time of the acquisition by Kronos, Unicru had as customers more than 140 leading companies and brands, including SuperValu, Kroger, Toys "R" Us, Best Buy, CVS, Borders, Lowe's, Caribou Coffee, and Marquis Healthcare.

The Unicru assessment consists of a number of statements, to which an applicant must answer “strongly disagree,” “disagree,” “agree,” or “strongly agree.” It includes statements such as the following: “You have confidence in yourself”; You are always cheerful”; “You try to sense what others are thinking and feeling”; “You always say whatever is on your mind”; and “It is easy for you to feel what others are feeling.”

Kroger, Kronos and the Unicru assessment are being investigated by the Equal Employment Opportunity Commission (EEOC) for compliance with labor and employment laws, including the Americans with Disabilities Act (ADA). The investigation has been ongoing for more than five years and has generated a number of district court and appellate court decisions as Kronos has sought to avoid disclosing information about the Unicru assessment and its impact on persons protected by the ADA.

Cloning Employees and Institutionalizing Biased Hiring Practices

According to Kronos, the Unicru assessment is an artificial intelligence test that uses neural networks to “learn” the characteristics of a customer’s “best” employees.  As stated by Kronos’ Chief Scientist and the developer of the Unicru assessment, Dr. David Scarborough, in chillingly Orwellian terms, "[o]ur system allows you to clone your best, most reliable people."

First used for engineering and industrial applications during the mid-1980s, neural networks evolved from early artificial intelligence research. Modeled on the function of the human brain, a neural network attempts to imitate human reasoning. Large amounts of data are fed into the network, which looks for relationships and reaches conclusions.

"There are a couple of dangers," states Jai Shekhawat, CEO of Chicago-based Fieldglass Inc., which develops software for managing workers. "Is something a correlation--a predictor--or merely a coincidence? At best, [these methods] are complementary to human judgment, not a substitute for it."

Notwithstanding such dangers, Kronos customers like Kroger are substituting this “coincidence” for human judgment. Based on the prospective employee's answers on the application, the Unicru assessment categorizes the applicant as red, green or yellow. In most cases, red is usually an automatic discard, or, as Dr. Scarborough stated “[m]anagers are strongly discouraged from hiring first quartile (“red”) applicants …”

There is no evidence that the Unicru assessment determines whether an employer’s hiring practices are biased or discriminatory. For example, if the Unicru assessment had been utilized fifty years ago, many companies’ “best” employees would have the personality traits of white males – persons of color, women and those with disabilities need not have applied.

The Unicru assessment embeds and industrializes existing stigma, bias and discrimination in the hiring process. As stated by Cynthia Dwork and Deirdre K. Mulligan in a recent Stanford Law Review article:

While automated decisionmaking systems “may reduce the impact of biased individuals, they may also normalize the far more massive impacts of system-level biases and blind spots.” Rooting out biases and blind spots in big data depends on our ability to constrain, understand, and test the systems that use such data to shape information, experiences, and opportunities.

As a “blind” tool that “learns” from the employer, the Unicru assessment replicates the existing bias of the employer and applies it on a massive scale. All applicants have their test responses fed through a discriminatory filter that is the Unicru assessment (a filter that is biased both on its own and in conjunction with its “learned” behavior). Hiring decisions are being made by Kroger and other Kronos customers based on this deeply flawed process.

Illegal Medical Examination

The ADA prohibits the use of pre-employment medical examinations. At the pre-offer stage, an employer, like Kroger, is only entitled to ask about an applicant's ability to perform the essential functions of the job. The ADA's prohibition against pre-employment examinations seeks to ensure that the applicant's disability is not considered prior to the assessment of the applicant's qualifications.

EEOC guidance provides a seven-factor test for analyzing whether a test or procedure qualifies as a “medical examination,” including:

• whether the test is designed to reveal an impairment of physical or mental health such as those listed in the Diagnostic and Statistical Manual of Mental Disorders (“DSM”); and
• whether the test is interpreted by a health care professional.

According to the guidance, the presence of any one of the seven factors is enough to support a finding that the test is a medical examination and the Unicru assessment meets the two factors listed above. 

Since the Unicru assessment is based on the five-factor model (FFM) of personality it meets the first factor listed above. As set out in previous posts -  ADA, FFM and DSM and Employment Assessments are Designed to Reveal an Impairment - assessments based on the FFM are designed to reveal an impairment of mental health, such as those listed in the DSM.

As to the second factor, whether the test is interpreted by a health care professional, the individuals who developed the Unicru assessment are psychologists, most of whom are members of the APA. In developing the Assessments, the psychologists establish the rules by which the assessments are to be interpreted (i.e., how the responses to the questions are to be scored, including whether the applicant receives a green, yellow or red rating).

According to the APA Model Act for State Licensure of Psychologists, “[t]he practice of psychology includes … (a) psychological testing and the evaluation or assessment of personal characteristics, such as intelligence; personality; cognitive, physical, and/or emotional abilities; … [and] (f) provision of direct services to … groups for the purpose of enhancing … organizational effectiveness, using psychological principles, methods, and/or procedures … for making decisions about the individual, such as selection …”

EEOC guidance states that psychologists are among the “variety of health professionals [that] may provide documentation regarding psychiatric disabilities” for ADA purposes. Accordingly, the psychologists who developed the Unicru assessment are "health care providers" for purposes of the ADA.

(Not) Walking the Talk

Kroger's Policy on Business Ethics states:

We are committed to a policy of equal opportunity for all associates without regard to race, color, religion, gender, national origin, age, disability or sexual orientation.

Kroger has six core values: Honesty; Integrity, Respect; Diversity; Safety; and, Inclusion. In a June 13, 2011 press release announcing the appointment of Kroger's chief diversity officer, Kroger's CEO is quoted as saying:

“Diversity is a core value at Kroger. We take our commitment to diversity seriously, both because it is right and because it makes us better at our business. When our decision-making is inclusive and reflects the diversity of our customers, we make better decisions.”

For job applicants with mental illness, there is no respect, no inclusion, no diversity, no honesty and no integrity. In the more than twenty years since passage of the ADA, there has been little positive movement in de-stigmatizing mental illness in the workplace (please see Mental Illness and Issues of Employment). People with mental illnesses identify employment discrimination as one of their most frequent stigma experiences. In its use of the Unicru assessment, Kroger, wittingly or not, continues the disturbing pattern of employment discrimination against citizens of the United States with mental illness.

Failing Customers and Shareowners

Kroger's Policy on Business Ethics also states:

As a retailer providing millions of Americans with their daily food and as a publicly owned company, The Kroger Co. has a special obligation to comply with the law and deal ethically with customers, suppliers, associates, and shareowners. 

Psychiatric medications are among the most widely prescribed and biggest-selling class of drugs in the U.S. In 2011, Americans spent $18.2 billion on antipsychotics to treat depression, bipolar disorder and schizophrenia, $11.0 billion on antidepressants and $7.9 billion on treatment for ADHD, according to IMS Health, which tracks prescription-drug sales. These three categories of prescription drug sales accounted for approximately 11.6% of all prescription drug sales in the U.S. for 2011

Kroger is the fifth-largest pharmacy operator in the United States, operating retail pharmacies in over 1,948 stores. During fiscal 2011, Kroger pharmacists filled over 146 million prescriptions at a retail value of approximately $7.3 billion. Assuming 11.6% of Kroger prescription drug sales were for antipsychotics, antidepressants and ADHD medications, prescription drugs for persons with mental illness accounted for approximately $847 million of Kroger prescription drug sales in 2011, some two-thirds of the amount of Kroger’s operating profit for that year.

Persons who have their prescriptions filled at Kroger, their family members and other loved ones also shop at Kroger for other products and services. Those persons, their family members and other loved ones provide a material percentage of Kroger’s overall revenue each year. How does Kroger repay this customer loyalty? By utilizing an unlawful pre-employment assessment to eliminate from consideration for employment persons with mental illness.

Why should persons with mental illness, their family members and other loved ones continue to shop at Kroger? Good question. 

Kroger's continuing use of the Unicru assessments calls into question Kroger's "special obligation to comply with the law and deal ethically" with its shareowners, As previously noted, Kroger and Kronos have been engaged in litigation with the EEOC for more than five years over legality of the Unicru assessment. To be precise, the five years of litigation have primarily addressed the unwillingness of Kroger and Kronos to provide information requested by the EEOC in order to conduct its investigation into the Unicru assessment. Two appellate courts, the latest in September 2012, have ruled decisively in favor of the EEOC and its right to investigate a broad set of nationwide and historical data from Kroger and Kronos.

At anytime over the past five years, Kroger could have ceased using the Unicru assessment, if only as a risk mitigation strategy for its shareowners. As noted in the Challenges to Pre-Employment Assessments posting, in July 2011, CVS and the Rhode Island Civil Liberties Union (ACLU) entered into a voluntary settlement addressing the ACLU’s complaint challenging CVS’s use of a pre-hire questionnaire that the ACLU claimed could have a discriminatory impact on people with certain mental impairments or disorders. Pursuant to the settlement agreement, CVS agreed to permanently remove the questions at issue from its online application.

Each day Kroger continues to use the Unicru assessment, there are thousands more potential plaintiffs with claims against Kroger. By now, the aggregate number of potential plaintiffs numbers in the millions - with each job applicant over the past 5+ years having a number of claims against Kroger.

Under the ADA, Kroger may use a third party like Kronos to undertake the assessment of Kroger job applicants. The use of a third party, however, does not insulate Kroger from any claims arising from the assessment usage. Under the ADA, Kroger is responsible (and liable) for any failures on the part of Kronos and the Unicru assessment to comply with the provisions of the ADA.

Any comfort Kroger or its shareowners take in the indemnification provided by Kronos should be tempered by the recognition that such indemnification may prove illusory. Kronos and its insurers may not have the capital necessary to indemnify Kroger and its shareowners for all claims arising from Kroger's continuing use of the Unicru assessment. Please see Damages and Indemnification Challenges for Employers.