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Monday, March 24, 2008

The importance of following established criteria

In Dunlap v. Tennessee Valley Auth., decided last week by the 6th Circuit, illustrates the dangers employers face when deviating from established criteria in the hiring process.

David Dunlap, a 52-year-old African American, was one of 21 applicants for 10 positions with the TVA. Before it began interviewing, the selection committee decided that the interview would account for 70% of an applicant's final score and technical expertise would account for the other 30%. While the committed would score each candidates after his or her interview, the committee would also review the the scores from all of the prior interviewees and re-score them. This "score-balancing" caused the final scores to vary widely from the initial scores. For example, Dunlap's attendance record of only a few days off for family illness was scored a 3.7, while two white applicants with the same answer scored a 4.2 and 4.5. Dunlap's perfect safety record received a 4, while another white applicant with two prior accidents scored a 6.

After the interviews, the 21 applicants were ranked in order of most to least qualified. Dunlap ranked 14th. Of the 10 hirees, only one was black. Dunlap alleges that the combined weight of his more than 20 years of technical and supervisory experience made him a more qualified applicant than some of the other applicants who were hired, some of whom had only minimal supervisory experience and poorer safety records. Dunlap scored the same on the technical part of the application as five of the selected white candidates, but he scored much lower on the interview. He alleged that the interview process was biased to select less qualified candidates and hide racial preferences. The Court agreed.

The Court found that the TVA's hiring matrix was a pretext for racial discrimination:

First, the selection committee determined that the interview would account for seventy percent of an applicant’s final score, and technical expertise would account for thirty percent, therefore transferring the bulk of the final score from an objective measurement (merit and experience) towards a subjective measurement (communication skills). The TVA’s "Principles and Practices" on filling vacant positions, however, mandate that "merit and efficiency form the basis for selection of job candidates," stating that "education, training, experience, ability and previous work performance serve as a basis for appraisal of merit and efficiency."

Thus, because the hiring matrix for these positions differed from the employer's established policies, the Court found the use of the matrix was pretextual. The Court also found that the interviewers' manipulation of the scores to ensure that certain people would rank in the top 10 was also evidence of pretext.

TVA's failure to follow its own established policies and practices is what ultimately doomed it in this case. If it had hired the same 9 white candidates instead of Dunlap, but instead relied solely on objective technical criteria as its "Principles and Practices" required, and had not balanced scores after each interview, it would have been close to impossible for Dunlap to have proved discrimination. The objective criteria were supposed to hire the 10 best candidates, not the nine best white candidates and one token African American.

The use of objective criteria, whether in hiring, or for selecting employees to be included in a RIF, is a great way to insulate your organization from a claim of discrimination. Those criteria, however, must be safe from scrutiny. When a subjective component is introduced, such as interviewing or "score leveling", it looks more and more like something other than objective qualifications are the deciding factor. Courts and juries like to think that companies hire and retain the best, most qualified people. If a plaintiff can show that numbers that were supposed to be objective are anything but, those same judges and juries will look for an explanation as to why. Often times, the answer they will find is discrimination.