The Supreme Court Case That Unintentionally Allowed Employer

An argument by economist Richard Vedder adds some enlightening context to last week's news that top employers screen candidates based solely on academic pedigree. Vedder laments the use of diplomas as a costly and inefficient way of screening job applicants, but he understands from whence such practices arose. The prologue for such behavior, it turns out, can be traced to a 1971 court decision following the civil rights movement.

From Inside Higher Ed (the article itself is actually about the over-investment in college):

For the past several decades, moreover, the ability of employers to find other means of certifying competence and skills has been severely circumscribed by judicial decisions and laws. In Griggs v. Duke Power (1971), the U.S. Supreme Court essentially outlawed employer testing of prospective workers where the test imparted a "disparate impact" on members of minority groups. Cautious employers have sharply reduced such testing, and are now forced to rely on other measures of competence, namely the possession of a college diploma.

The historic case is a good example of the law of unintended consequences, of wanting one result and getting the opposite. The defendant in Griggs, a company called Duke Power, in trying to be non-discriminatory was found to be discriminatory; the court, in trying to stem bias of one sort, cleared the way for bias of another sort. You can read Vedder's telling of the case here, but I'll do my best to do give a short recap, for those interested but unlikely to read the entire detailed summary.  

In 1964, as part of the Civil Rights Act, employers were prohibited from discriminating against candidates based on race, color, religion, sex and national origin. That bit of legislation was called Title VII. Time was back then that companies routinely used employment tests to screen candidates. While the tests were useful in building strong workforces, they were also useful in discriminating against minorities. Proponents for these tests and proponents against these tests argued and Congress eventually struck judgment down the middle. To Title VII was added a section saying that employment tests were legal as long as they were not "designed, intended or used" to discriminate against minorities. One opponent of the bill thought this made it too easy for companies to be presumed guilty until proven innocent.

Duke Power was a company that, pre-Title VII, discriminated against black people. As a rule: if no high school diploma (or equivalence), then no non-labor job. Post-Title VII, Duke instituted new diploma requirements that tried to favor the quality of work over the color of skin. A new policy was also created allowing diploma-less candidates to reach higher positions should they receive certain scores on two tests. To further help these non-credentialed candidates, Duke instituted a program that would pay two-thirds the cost of obtaining those credentials.

The plaintiffs for the case argued in district court that the new policies and requirements were still biased against blacks and perpetuated Title VII violations. Tests must measure a person's ability to do a specific job, not the person in a general or abstract way, they argued. But the action was dismissed by the district court. Then, on appeal, the decision was reversed in part, when the court distinguished between workers before and after the testing requirement. Eventually, the Supreme Court reversed in a groundbreaking unanimous decision. They wrote that Congress had required:  

The removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other permissible classification….The act proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation. The touchstone is business necessity. If an employment practice which operates to exclude Negroes cannot be shown to be related to job performance, the practice is prohibited.

The Griggs decision made it such that companies need not intend to discriminate to be guilty of discrimination. Lopsided test results are themselves proof of discrimination (evidenced by the unevenness of the results), and the burden of proving the test to be job-related goes to the company.

Faced with the threat of constant litigation, why would companies risk using these types of tests? Certain companies in more specialized industries often use narrow job-specific or subject-specific tests, and many companies use harmless personality tests like Meyers-Briggs. But no tests of general intelligence. Given the ban on such tests, despite their usefulness in measuring aptitude, it made sense for employers to look for other ways to screen applicants. The college degree, which often signals a certain level of aptitude and competence, became a de facto intelligence test, as Vedder says. It became the new requirement, the new high school diploma. And yet this practice is not exactly prohibited.  

So now, minorities and poor folk, who are less likely to attend four-year colleges, are being locked in the same disadvantaged position as black people without diplomas were back then. That so many employers require college diplomas, tacitly or otherwise, means the court decision accomplished very little in blunting biased company hiring practices. In fact, it's probably true that it's only helped make discrimination more rampant. The more the college degree became a standard employee screening device, the more college degree holders there were vying for jobs of comparable skill level, jobs which weren't increasing at a equivalent rate. It was really only a matter of time before the bar raised up again, and again, giving employers more factors todiscriminate against.

What do you think? Should employment tests assessing a candidate's general intelligence be allowed?

[Inside Higher Ed]

Related: Hiring at Top Firms a Rigged Game