Legal Opinion

Ryan L. Thomas, J.D., Ph.D. Attorney at Law 209 S. Inglewood, Orem, Utah 84058 (801) 226-6009

January 7, 1993

re: Legal Opinion on use of the Kolbe A™ index - in Employment Testing and Classification

The Kolbe Index

The Kolbe A index is a forced-choice instrument which requires subjects to choose one of four responses reflecting how they would be most and least likely to respond to 36 single-sentence problem-solving or behavioral scenarios. It is part of the Kolbe RightFit™ System, based on the theory of conation, which premises human behavior on the interaction between the cognitive (knowledge), the affective (feeling or belief), and the conative (instinct or will). The Kolbe A index raw scores are translated into a set of four scales which reflect the subject's conative instincts.

Kolbe Corp research has shown that successful employees in similar jobs tend to have Kolbe A index results which fall within a well defined range. These ranges, the studies suggest, tend to be consistent with the conative expectations of the job as identified by supervisors and cohorts. The use of the Kolbe A index in selection and classification of employees is premised on the theory that by determining the relative consonance between a job applicant's conative instincts and the conative requirements of a specific job, employers can accurately predict employee success.

Legal Requirements of Employee Testing

The federal legislative enactments which impact the employment selection process date from the Civil Rights Act of 1866 which, in Section 1981, provides a right of action when anyone acting "under color of state law" deprives another of a civil right. Title VII of the Civil Rights Act of 1964 proscribes anyone whose business impacts interstate commerce from discriminating on the basis of "race, creed, color or national origin." Gender-based discrimination is also proscribed. The 1964 Civil Rights act was followed by the 1967 Age Discrimination in Employment Act which prohibited discrimination on the basis of age for those over age 40. Protection for the disabled was provided by the Vocational Rehabilitation Act in 1973. That protection was extended by the Americans with Disabilities Act of 1990 which protects all "qualified persons with a disability," defined as any applicant or employee with a disability who, with or without accommodation, can perform the essential functions of the job.

The most important case impacting employee testing is Griggs v. Duke Power, 401 US 424 (1971), in which the United States Supreme Court held that the employer, Duke Power, had established unlawful racially discriminatory criteria for employment and advancement including testing and educational requirements. The legal principles emerging from that case and its legal progeny are:

1. Any testing or other system of selection or classification, even if facially neutral, which has a "disparate impact" on a protected group including religion, national origin, age, gender and handicap will be the basis for an action for employment discrimination unless the employer can demonstrate that there is a substantial "business necessity" for the practice. See James v. Stockham Valves and Fittings Co., 559 F.2d 310 (5th Cir. 1977), cert. den. 434 U.S. 1034 (1978) (evidence of disparate impact of employment test on Blacks combined with gross disparities between numbers of Whites and Blacks in positions requiring high scores sufficient to establish adverse impact). However, the impact must be shown in the specific job setting. See Adams v. Texas & Pacific Motor Transport Co.. 408 F. Supp. 156 (E.D. La. 1975), (employer's use of the same test found inappropriate in Griggs was not held to be facially invalid without a showing of disparate impact among employer's job applicants). Disparate impact has been defined in the EEOC Guidelines to constitute, "A selection rate for any race, sex, or ethnic group which is less than four-fifths(4/5)(or eighty percent) of the rate for the group with the highest rate." 41 C.F.R. section 60-3.4(d). However, this "four-fifths rule" has been criticized by some courts. See Clady v.County of Los Angeles, 770 F.2d 1421 (9th Cir. 1985).
2. In order to satisfy the "business necessity" requirement, a test or requirement must be proven to be "Job related." See Brunet v. City of Columbus, 642 F. Supp. 1214 (S.D. Ohio 1986) (employer established job-relatedness of mechanical reasoning test) and United States v. LLJLAC. 793 F.2d 636 (5th Cir. 1986) (lower court erred in not considering the job-relatedness of a biased test).
3. Tests used for employment selection and classification can not be validated as "job related" in the abstract, but the inferences which are drawn from the test results used by an employer in employment decisions may only be validated within a specific employment context. See Albemarle Paper Co. v. Moody 422 U.S. 405 (1975) (citing EEOC Guidelines, "Discriminatory tests are impermissible unless shown, by professionally acceptable methods, to be 'predictive of or significantly correlated with important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated.' 29 CFR section 1607.4(c).")
4. A facially discriminatory pattern can be established by showing a statistically significant difference between the hiring patterns of an employer and an appropriate reference group (usually adult population in the geographical area). See International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977). However, courts have sometimes allowed general population statistics to be used to prove disparate impact. See Dothard v. Rawlinson, 433 U.S. 321 (1977) (national statistics on height and weight used to show disparate impact on females of Alabama requirements for prison guards).
5. Once a facially discriminatory pattern is established, the employer has the burden to establish the "business necessity" or "job relatedness" of the test or other selection procedure. Additionally, the employer must show that the employment practice which selects or classifies, even if it measures a "Job-related business necessity," does so in a way which is less discriminatory than other available alternatives and does not inappropriately use scores of those near the top of a line of progression to exclude applicants without considering the effect of work experience and on-the-job training. See Albemarle Paper Co. v. Moody, supra, (use of tests proscribed where they had not been validated for all jobs for which they were used and where scores of experienced workers were used to establish cut scores without considering on-the-job development). In summary, valid employment testing must meet the following minimum legal requirements:
1. Only job-specific inferences from tests, not tests in the abstract, can be validated.
2. A "disparate impact" occurs when a minority group is selected less than 80% as frequently as the most frequent group selected.
3. Criterion-based tests are generally preferred to other forms of employment testing, although content and construct testing may be validated.
4. Employers must keep records of testing and must prove no disparate impact or "job-relatedness," "business necessity" and lack of viable alternatives to a biased selection practice.
5. When distinguishable, specific employment or testing practices, rather than the entire selection or classification process, are subject to judicial review.
6. Neither testing, nor any other process of selecting or classifying may be differentially normed for race or other protected category.

Conclusion

Consistent with the requirement for job-specific validation, the Kolbe A index is a nonsubjective criterion-based test which has been validated in a number of job settings. The studies done by Kolbe Corp and independent researchers show the Kolbe A index to be free from bias when appropriately applied. Consistent with the Civil Rights Act of 1991, there are not separate norms for any groups. Test-retest studies have shown that the Kolbe A index results are relatively constant over time, and do not appear to be impacted by on-the job training.

It is my legal opinion based on the studies provided to me by Kolbe Corp and my review of the relevant law, that the Kolbe A index, could be used as an element of a system of employee selection and classification which may, assuming all other elements to be minority neutral, comply with federal law.

Ryan L. Thomas J.D., Ph.D.
Attorney at Law