PTC/MW APRIL MEETING

by Sul-Kee Kim, David Morgan & Keli Wilson, DCI Consulting Group

DCI attended the Personnel Testing Council of Metropolitan Washington’s (PTC/MW) monthly Luncheon Meeting on April 15, 2009. Rich Tonowski, Ph.D., Chief Psychologist at EEOC, gave a presentation entitled Update on EEOC Enforcement: Perspectives from the Front Line. Tonowski provided an overview of the EEOC and its recent enforcement of anti-discrimination laws, and specifically, the role of the Research and Analytic Services (RAS) group where he works. Additionally, he discussed the EEOC's recent involvement in employee selection cases.

RAS is a branch of the Office of General Council at EEOC, and specializes in statistical analysis and employment selection issues. RAS is currently involved in cases that focus on ‘tap on the shoulder’ promotion systems, reduction-in-force, physical ability tests, pregnancy-related firings, and working conditions (e.g., disciplinary actions). RAS would take a particular interest in tests when:

• they have been in place for a long time and adverse impact is as bad as, or even worse than, it was when it was first implemented; and
• test developers/vendors have exhibited a “pattern of sloppy practice.”

When adverse impact does exist, RAS will look at applicant flow statistics closely and may demand a validation study and other validation evidence such as job analysis, test instrument, subtest description, cut point methodology, and evidence of a search for reasonable alternatives.

Tonowski also warned against overemphasis of the 80% rule (see Ricci v. Destefano). Specifically, he stated that a violation of the 80% rule may not signal systemic discrimination and compliance with the 80% rule may not automatically insulate a company. Additional concerns he voiced included:

• advocacy over sound practice when the practice is misunderstood or unnecessarily scrutinized;
• poor validation efforts; and
• preference toward administering tests without considering consultants’ advice.

Lastly, Tonowski discussed possible roles EEOC—particularly RAS—may play in the near future. Guidance via EEOC’s website and some external training may be available; however, employee selection is not an option on the training repertoire. Interestingly, Tonowski mentioned the idea of a grand professional conference, where the EEOC and other EEO professionals could discuss current issues and best practices in the field.

Note that the views expressed in this PTC presentation were those of Dr. Tonowski and did not necessarily reflect those of the EEOC.

SIOP’S 2009 ANNUAL CONFERENCE

by David Morgan & Eric Dunleavy, DCI Consulting Group

The 24th Annual Conference for the Society for Industrial and Organizational Psychology (SIOP) took place April 2-4, 2009 in New Orleans, LA. DCI staff were among those who attended and presented, in addition to other consultants, researchers, human resources (HR) professionals, managers, attorneys, and students from the I/O psychology community. Numerous sessions addressed important legal issues and challenges, particularly relevant to federal contractors and their obligations under current—and potentially forthcoming—equal employment opportunity (EEO) laws and regulations.

General themes of regulatory agency enforcement efforts were apparent across sessions, including, but not limited to:

• Agency focus on systemic discrimination;
• Increased pressure to justify selection procedures and identify available alternatives to tests with adverse impact, and;
• The likelihood of augmented enforcement in the areas of compensation and reductions-in-force.

This summary reviews presentations that were intended to shed light on these, and other, contemporary EEO issues.

Making the Case for Selection Procedures: Legal-Professional Challenges and Strategies

Keith Pyburn of Fisher & Phillips, LLC and John Weiner of PSI discussed the challenges organizations face when EEO law and science disagree, or conflict to some degree. More specifically, the presenters traced the historically divisive search for valid selection procedures with little or no adverse impact. Citing a recent statement from an article in The Labor Lawyer attempting to make the case for the Wonderlic (an instrument purported to measure general mental ability), “…even the NFL uses a personality test,” Pyburn showed one example of how legal professionals sometimes misunderstand even the basics of personnel assessment and selection. Similar naivety toward advancements in testing and selection is apparent among enforcement agencies as well. The discussion focused on the following topics:

• Situational specificity (e.g., local validation research) versus validity generalization (e.g., meta-analysis) in the EEO and scientific contexts;
• The role of cut scores (i.e., the point that differentiates a passing score from a failing score) in adverse impact litigation;
• How less adverse alternatives are playing a more important role in adverse impact litigation (even when tests are deemed related to the job).

Catching Up With the Supreme Court (and Congress Too)

Arthur Gutman of the Florida Institute of Technology, Eric Dunleavy of DCI Consulting and Donald Zink of Personnel Management Decisions reviewed several U.S. Supreme Court cases and other recent decisions, as well as proposed legislative and regulatory changes of particular interest to EEO professionals. The tutorial focused on the following areas:

• Implications of the Americans with Disabilities Act Amendments Act (ADAAA);
• Consequences of the Ledbetter Fair Pay Act;
• Potential implications of the Paycheck Fairness Act (which, if passed, would amend the Equal Pay Act and EEO enforcement for both EEOC and OFCCP);
• An update on adverse impact under the Age Discrimination in Employment Act (ADEA) Context (Meacham v. KAPL; Smith v. City of Jackson);
• A review of Ricci v. Destefano, which is scheduled for oral argument before the Supreme Court. The case centers around whether canceling a promotion process after the fact is a reasonable alternative to a potential Title VII adverse impact violation or a violation of the equal protection clause of the 14th amendment.

OFCCP: Then and Now

Robert Guion of Bowling Green State University, Harold Busch of DCI Consulting, Doug Reynolds of Development Dimensions International, Eric Dunleavy of DCI Consulting, Kevin Murphy of Penn State University and Mickey Silberman of Jackson Lewis, LLP discussed the genesis of the Office of Federal Contract Compliance Programs (OFCCP), factors influencing its evolution, past and present enforcement activities, and current audit processes for systemic discrimination. The symposium focused on the following:

• The history and creation of OFCCP and how employment testing played a role;
• How OFCCP enforcement moved to a systemic discrimination focus;
• Revised audit processes: cautions for test users and providers, and;
• A descriptive review of OFCCP enforcement activity past and present.

Audits of Human Resources Programs

Irene Sasaki of Dow Chemical Company, S. Morton McPhail of Valtera and Michael Tusa of McCranie, Sistrunk, Hardy, Maxwell & McDaniel reviewed the importance of human resource (HR) program audits, and best practices in auditing such areas as compensation, benefits, payroll, selection and testing, and reductions-in-force. The roundtable discussion focused on the following:

• Purposes, areas and risks of HR program audits;
• How performance evaluation systems play a role in employment decision making;
• Strategies for reviewing reduction-in-force systems;
• Taking steps to mitigate damage, and;
• Potential implications of the Ledbetter Fair Pay Act.

Best Practice Versus Legal Defensibility: How Much Validity Is Enough?

In a panel discussion facilitated by Hennie Kriek of SHL Americas, Wayne Cascio of the University of Colorado, Kevin Murphy of Penn State University, James Outtz of Outtz and Associates, George Thornton of Colorado State University and Paul Sackett of the University of Minnesota explored the reality of complying with legal demands in practice, and weighing the risk of legal challenge against the benefit and utility of assessment. Implications for role-players such as I/O psychologists, lawyers, consultants and line managers were discussed, including:

• How much job analysis is ‘enough’?;
• Strategies for transporting validity evidence;
• How public image and perceived risk play a role in validation research, and;
• What kinds of validity evidence are needed in certain situations?

As this summary shows, EEO and legal defensibility issues continue to be important topics to Industrial-Organizational Psychologists. This is particularly the case given recent paradigmatic shifts at EEOC and OFCCP, and the fact that the current administration in Washington D.C. views equal employment opportunity as a priority. These presentations reiterate the notion that I/O psychologists play important and strategic roles in organizations by developing selection procedures, evaluating the legal defensibility of those procedures, refining those procedures based on changing economic conditions, and staying aware of shifts in employment law and EEO doctrine.

OLMS RESCINDS "BECK" REGULATIONS

by Fred Satterwhite, Senior Consultant, DCI Consulting Group

The Office of Labor-Management Standards issued a final rule on March 30, 2009, to rescind the regulations at 29 CFR Part 470, which had implemented the now-revoked Executive Order 13201. The removed regulations had required government contractors and subcontractors with union workforces to post notices ("Beck" posters) informing their employees of certain rights under the National Labor Relations Act, including the right to elect not to join a union and the right of non-union members to pay only dues and fees used for union costs related to collective bargaining, contract administration, and grievance adjustment. The regulations had also required contractors to include provisions of EO 13201 in their contracts and purchase orders.

On February 4, 2009, President Obama issued Executive Order 13496, which expressly revoked EO 13201 and rendered moot the regulations at 29 CFR Part 470. EO 13496 requires the Secretary of Labor to publish a proposed rule describing new requirements for contractors and implementing enforcement procedures.

The proposed rule is due to be published by the first week of June, 2009, and is expected to include details for the new posting requirement and updated language for inclusion in contracts and purchase orders.

Contractors can remove Beck posters from their facilities, if they have not done so already. In the interim, OFCCP will no longer conduct on-site "Beck reviews", which had become a common practice in recent years during standard compliance reviews when OFCCP was informed that a contractor had union employees at the establishment. Once the Secretary of Labor publishes the proposed rule, contractors should begin planning ahead for required updates to contracts, purchase orders, and facility posters, with an effective date probably sometime near the end of 2009.

DCI CONSULTING GROUP PUBLISHES ARTICLE DESCRIBING ADVERSE IMPACT ANALYSES IN OFCCP ENFORCEMENT

David Cohen, President of DCI Consulting Group, and Eric Dunleavy, Ph.D., Senior Consultant at DCI, published an article in the March 2009 Quarterly of the Personnel Testing Council of Metropolitan Washington DC (PTC/MW). The article, entitled Calling all Federal Contractors and Subcontractors: Understanding Adverse Impact analyses in OFCCP Enforcement, summarized a PTC/MW luncheon presentation from 2008.

“It is important to understand the statistical analyses that the OFCCP use in their enforcement, particularly if federal contractors want to strategically mirror OFCCP analyses and be prepared for an OFCCP audit. For example, it is useful to know that OFCCP continues to focus on systemic discrimination in hiring, and uses statistical significance tests like the Z test and the Fisher Exact Test to demonstrate systemic disparity” said David Cohen. Additionally, “OFCCP doesn’t seem to be using the 80% rule often in present day enforcement, although practical significance can be as important an issue in adverse impact litigation as statistical significance” mentioned Dr. Dunleavy.

The article, which is available through PTC/MW, also describes two statistical techniques that are useful when adverse impact analyses should be conducted across different strata (e.g., location, time period, job, etc.). In some cases it may be more difficult to mirror the reality of personnel practices than initially realized. Data aggregation decisions could have substantial implications when interpreting the results of analyses. Simply ignoring strata may produce misleading results in a single analysis. This is a particularly important issue in instances where the OFCCP aggregates multiple locations, years, and/or jobs.

In some situations it may be reasonable to aggregate data when small sample sizes limit the power of a statistical test across similarly situated groups. In other situations where sample sizes are very large, statistical significance tests may be trivial given high statistical power, and should be combined with practical significance tests. Given these issues, it is important that adverse impact analyses appropriately balance mirroring reality and statistical significance concerns. Toward this end, the presentation demonstrated examples of Simpson’s paradox. In some cases no adverse impact exists when analyses are conducted separately by year, but when the years are aggregated results are statistically significant. In other cases, significant adverse impact may exist in different years, but may be masked when aggregated into a single analysis.

Statistical techniques can also help the analyst make aggregation decisions that ensure reality is mirrored. For example, the Breslow-Day statistic can be used to determine if adverse impact is similar in magnitude across job, year, location, etc. and whether data can be reasonably combined into one analysis. If the Breslow-Day statistic is statistically significant, aggregation may be inappropriate because there are differences in adverse impact across strata and a strata-by-strata approach may best mirror reality and ensure that all meaningful results are identified. If this statistic is not significant, the magnitude of impact is likely similar and aggregation is probably reasonable from a statistical perspective. If aggregation is a reasonable decision, the Mantel-Haenszel statistic can be used to determine the aggregate significance of the impact. This statistic computes an overall “weighted” disparity across a set of 2 by 2 tables, and produces an appropriate summary probability estimate and standard deviation to assess significance. EEO analysts would likely benefit from understanding the statistical analyses that are conducted to determine EEO compliance.