Target on Monday agreed to settle a U.S. Equal Employment Opportunity Commission charge that it used hiring tests that disproportionately screened out candidates for professional jobs based on race and gender. The EEOC said the settlement of $2.8 million will be shared by thousands who were adversely affected when Target used the assessments in its hiring process. The agency said the tests were not sufficiently job-related, so Target violated Title VII of the 1964 Civil Rights Act.

The EEOC found that one of the assessments Target used in its hiring practice also violated the Americans with Disabilities Act because the test was performed by psychologists on behalf of Target as a “pre-employment medical exam. Employers are prohibited by the Americans with Disabilities Act from subjecting applicants to medical examinations prior to an offer of employment,” the agency said.

The company refused to acknowledge any wrongdoing in administering the tests; however, it agreed to discontinue the use of the tests that violated the law and monitor the assessments it uses for professional positions for adverse impact based on race, ethnicity and gender. In addition, the retailer will provide the EEOC with a detailed summary of the studies and the adverse impact analyses it conducted.

“We applaud Target for taking corrective action to ensure the validity of their hiring practices,” said EEOC chair Jenny R. Yang.  “This resolution demonstrates the benefits of working with the EEOC and serves as a model for businesses committed to effective and lawful selection procedures.”

Julianne Bowman, director of EEOC’s Chicago district office, said, “We are pleased that Target chose to work with us to reach this conciliation agreement and that through our joint efforts, we have been able to bring about real change at Target without resorting to protracted litigation.”

“At Target, diversity is an integral part of how we do business and we have always been firmly committed to being an equal opportunity employer,” the retailer said. “Like many large employers, Target uses assessments as a part of its hiring process. These assessments are just one element of a comprehensive hiring process where our primary goal is ensuring that we are setting up team members and Target for success.

“The settlement is a result of the EEOC’s review of some of the pre-employment assessments that Target was using over the past decade,” Target said. “None of the assessments that were included in the EEOC’s adverse impact determination are being used today. The EEOC has concluded that only a small fraction of the assessments administered during the relevant time period could have been problematic. We continue to firmly believe that no improper behavior occurred regarding these assessments.”

A Target spokeswoman noted that of the tens of millions of people who applied to the company over the past decade, the settlement covers “a group that numbers in the four-figure range.”

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