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Seventh Circuit Finds That the Use of a Psychological Test Violates the ADA

August 17, 2005

The U.S. Court of Appeals for the Seventh Circuit recently held that an employer violated the Americans with Disabilities Act (ADA) when it administered a psychological test to employees applying for internal promotions. See Karraker v.Rent-A-Center, Inc., No. 04-2881 (June 14, 2005). The test consisted of 502 questions from the Minnesota Multiphasic Personality Inventory (MMPI).

In Karraker, three brothers who sought internal promotions with Rent-A-Center (RAC) participated in a series of management profile tests, which included the MMPI.  None of the brothers received a high enough score to qualify for a promotion. They subsequently filed suit against RAC on behalf of employees of more than 100 RAC stores in Illinois for using medical examinations that were allegedly designed to screen out individuals with psychiatric disabilities. RAC said it used the MMPI merely “to measure personality traits” and “state of mood.” However, RAC employees argued that the MMPI is actually designed to measure where test-takers fall on a scale measuring depression, hypochondriasis, hysteria, paranoia and mania. RAC employees were asked, for example, whether the following statements were true or false: “I have a habit of counting things that are not important such as bulbs on electric signs, and so forth;” and “[a]t times I have fits of laughing and crying that I cannot control.” Depending upon how an RAC employee answered such questions, his or her MMPI score could result in the denial of a promotion.

The issue in Karraker was whether the MMPI is a “medical examination” under the ADA. The ADA limits the ability of employers to use medical examinations as a condition of employment. The court, citing the Equal Employment Opportunity Commission’s guidance on medical examinations, stated that “[p]sychological tests that are designed to identify a mental disorder or impairment qualify as medical examinations, but psychological tests that measure personality traits such as honesty, preferences, and habits do not.” The court held that because the MMPI was designed, at least in part, to identify psychological disorders and could have an adverse effect on the employment of a person with a psychological disability, that it is best categorized as a medical examination. The court did distinguish an MMPI-type psychological test from a personality test designed, for example, to determine whether an applicant has a propensity to lie, which would not be considered a medical examination under the ADA.

The Karraker decision has thrust employment tests into the ADA spotlight. In light of this key ADA decision, employers should take the following steps with regard to personality and psychological tests:

  1. Determine whether your company is using psychological or personality tests in the hiring process and, if so, whether the tests are of the type that identify and measure psychiatric disorders.
  2. Talk to outside search firms, recruiters and temporary staffing agencies to determine whether your sources for candidates are being subjected to such tests.
  3. Take a step back and examine your testing procedures. Evaluate whether such employment tests are appropriate for your company’s candidates and whether they effectively predict future job performance.
  4. If you decide to continue utilizing personality or psychological tests, be sure to discuss them with your employment counsel to determine whether they are ADA-compliant in light of the Karraker decision.

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