Whirlpool Corp. will pay $850,000 to settle claims by the Labor Department that the company discriminated against 800 black job applicants. The company also will offer jobs to 48 rejected applicants.
Department investigators found, during a routine federal contract compliance evaluation, that the company's hiring practices disproportionately disqualified blacks applying for entry-level assembler positions or promotions at the company's Tulsa manufacturing facility.
The key was a multiple-choice screening test that eliminated from job consideration a higher percentage of black applicants than those from other groups. Whirlpool used the test from March 1, 1997, to Feb. 28, 1998.
Although an employer may use a test as a screening tool, if it eliminates a large number of applicants in a protected group in that process -- such as minorities -- the employer must conduct a study to ensure that the test is job-related.
The Test of Adult Basic Education given to the Whirlpool applicants contains multiple-choice questions that assess reading, math and English skills. The Labor Department found that not all the skills being tested for were vital for the entry-level jobs being filled.
Whirlpool, which offered last month to buy competitor Maytag Corp. for about $1.4 billion in stock and cash, and raised its offer yesterday to $1.7 billion, said that what led to the charges was inadvertent and unintentional.
"We've learned from this unique situation. We have since taken steps to carefully evaluate all hiring practices and recommendations to ensure fairness to all potential employees," David A. Binkley, the company's senior vice president of global human resources, said in a statement. Whirlpool admitted no wrongdoing in the settlement.
The Labor Department's Office of Federal Contract Compliance Programs enforces laws that prohibit employment discrimination by federal contractors. The group takes on 40 to 60 cases a year that it must close by either mediation or litigation. Whirlpool has contracts with the federal government.