Earlier this month, the Equal Employment Opportunity Commission announced separate settlements with CVS Caremark Corporation and Best Buy based on the companies’ use of personality assessments during the application process. The EEOC contended that these tests had a disparate impact against applicants based on race and national origin. As part of the settlements, both corporations agreed to cease using personality tests for this purpose.

The EEOC did not allege intentional discrimination in either situation. Rather, the agency claimed that applicants were excluded from employment on a statistical basis because the tests used result in different scores based on the race and national origin of the applicants. These settlements demonstrate risks involved with using examination tools in hiring that have not been statistically validated for this purpose. Many of the most commonly used personality tests explicitly warn users that they have not been validated for hiring purposes and should not be part of the hiring process.

Even if the employer uses a statistically validated personality test, if it results in a disparate impact against women or minorities, the employer would need to demonstrate a business necessity behind use of the test that could not be accomplished through other means that would not result in this disparity. When it comes to the link between personality attributes and work performance, proving this necessity could be difficult. For these reasons, most employers decide not to use personality assessments as part of the hiring process. While they may have value in terms of identifying needs for employee training and development, using personality assessments as hiring criteria subjects the employer to risk of disparate impact employment discrimination claims.

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