Employee Screening

Employee Screening

Employers naturally want to gather information about prospective employees. This can be done in several ways, such as through interviews and references. Other ways of gathering information about employment are also useful, but may raise legal concerns.

With care, a variety of useful tools can be helpful, if used in a nondiscriminatory way. This white paper outlines the requirements of the major federal laws, addressing what an employer may and may not do to seek information, both during hiring and later in employment. It then explores how issues of liability may arise from mistakes made in an employee hiring process.

Psychological assessments can also be useful for an organization, especially ones like mission agencies that may work overseas or in situations that create a great deal of stress. They can help employers identify potential work problems that could be serious. (Psychological assessments can also be useful during employment, if significant concerns have arisen.) However, there are important legal limitations that may define what can be done, how it should be done, and possible pitfalls to avoid.

Many employers today have turned to artificial intelligence–driven or algorithmic screening tools. This includes software that automatically "scores" resumes, analyzes video interviews, or predicts job fit. These tools also carry some legal risks. Other tools, such as criminal background checks, have their own risks, and must be approached carefully.

For secular companies considering these tools, the laws should be applied in a straightforward way. For ministries, religious protections come into play. The ministerial exception is a First Amendment doctrine recognized by the U.S. Supreme Court.¹ Religious groups are free to choose "who will preach their beliefs, teach their faith, and carry out their mission."² The ministerial exception may limit the ability of "ministerial" employees to succeed in certain employment discrimination claims. Ministries also have protection to choose employees who share their religious beliefs under Title VII. But these doctrines require some factual analysis. The safest practice is to structure screening to comply with the current laws, while realizing that the ministerial exception may still shield the employment decision. For other approaches, be cautious and seek counsel.

I. Federal and State Laws Addressing Employee Screening

First, it's important to understand the legal standards. Several federal laws regulate how employee screening may be conducted. The Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, and Title VII of the Civil Rights Act of 1964, all control how an employer can screen potential employees. For each of these laws, there may often be state equivalents, or similar laws in other national jurisdictions.

A. Americans with Disabilities Act

The Americans with Disabilities Act (ADA) is a federal law that prohibits discrimination in employment against people with disabilities. Under this law, not only is it not legal to refuse to hire someone because of a disability, there are also restrictions on how employers can screen potential employees.

Under the ADA, an employer's ability to make disability–related inquiries or require medical examinations is analyzed in three stages: pre–offer, post–offer, and employment. At the first stage (prior to an offer of employment), the ADA prohibits all disability–related inquiries and medical examinations, even if they are related to the job. At the second stage (after an applicant is given a conditional job offer, but before s/he starts work), an employer may make disability–related inquiries and conduct medical examinations, regardless of whether they are related to the job, as long as it does so for all entering employees in the same job category. At the third stage (after employment begins), an employer may make disability–related inquiries and require medical examinations only if they are job–related and consistent with business necessity.³

Each stage is explored in more detail below.

1. Pre–Offer Stage

The organization may not conduct certain assessments, or inquire about disabilities in the pre–offer stage, because a potential employer may not conduct a "medical examination" in the pre–offer stage.⁴ A medical examination under the ADA is broader than simply having a medical doctor conduct a physical. It also includes psychological tests that are designed to identify a mental disorder or impairment, such as the MMPI or other similar tests.⁵ So if an organization is giving a candidate the MMPI–2, or another psychological test designed to identify pathology prior to giving the candidate an offer to join, it is likely violating the ADA and risking legal liability.

However, vocational or personality testing doesn't usually qualify as a medical examination under the ADA. For example, psychological tests that measure personality traits such as honesty, preferences, and habits are typically not considered medical examinations under the ADA.⁶ This means tests such as the Strengths Finder, the DISC, or Myers–Briggs are likely acceptable, if used in a job–related and nondiscriminatory way. In addition, for ministries, especially when the position is ministerial, but likely also under Title VII, a spiritual fitness assessment, which is not a medical test, may be a useful tool. The information presented in these tests isn't generally considered confidential or damaging. And it can be very helpful in placing people well, or in strengthening the interview process.

There could still be some drawbacks to using personality tests. First, a test could identify a talented individual who doesn't fit the personality profile the employer is looking for (and when a particular personality type isn't actually needed). Next, it is common for people to answer in ways they think the employer is looking for, rather than reflecting their true selves. This can skew results. Some of these tests are intended for personal development or training, and using them as hiring filters can be unfair. Certain questions, even on these more general tests, could create legal problems. As an example, "Do you experience frequent mood changes?" could be aimed at identifying mental health conditions. Even innocuous testing should be considered carefully and used wisely.

Disability–related questions in general are not permitted,⁷ whether the questioning is done in an interview or during psychological screening. A disability under the ADA is fairly broad and includes a physical or mental impairment that substantially limits one or more major life activities.⁸ Organizations need to stay away from questions about whether the candidate is an individual with a disability and the nature or severity of a disability; including questions that might easily lead to a response with this information. For example, asking a candidate whether he or she has a history of depression or has ever taken anti–depressants would be prohibited in most cases.

The key here in evaluating an assessment is that it cannot be considered a "medical examination" and cannot ask disability–related questions, nor can these questions be raised in an interview.

Unlike most of the ADA, the protections at the pre–offer stage are not limited to disabled employees.⁹ This means both disabled and non–disabled employees would be able to bring a claim for violation of these rules.

This shouldn't affect the employer's ability to evaluate a candidate, as there is still a wide latitude of questions that don't violate the ADA. Normal questions asked during the hiring process are fair game: such as whether an applicant can perform job–related functions;¹⁰ or questions about how, with or without reasonable accommodation, the applicant will be able to perform job–related functions.¹¹ The employer can also evaluate the applicant's non–medical qualifications and skills, such as background checks, reference checks, and education.

Interviews, questionnaires, and narratives can be very useful. The employer can ask questions about how this person performs under stress, what she does when she is in danger, how he reacts when he is anxious, or what she does when she is frustrated or angry. The employer can ask questions about how the person reads other people or gets along with other people. In addition, in–depth reference checks can be extremely useful, especially with a waiver of liability from the prospective employee that allows former employers to talk freely.

2. Post–Offer Stage

What if an employer still believes that a psychological assessment would be useful? The ADA doesn't prohibit psychological screening entirely; but it requires that an employer give an offer of employment to the prospective employee before conducting the screening. Any screening has to be done post–offer. The purpose behind the two–stage system is to encourage employers not to illegally consider disability in the employment decision, and to assist applicants who are screened out because of disabilities to identify the discriminatory basis as the real reason for the failure to hire. The law takes this procedural order seriously. In fact, the Equal Employment Opportunity Commission (EEOC) has advised "An employer may not . . . require a medical examination, even if the employer intends to shield itself from … the results of the examination until the post–offer stage."¹²

In order to be ADA–compliant, screening involving a medical examination component must be set up as a two–stage system. In the first stage, all non–medical qualifications must be evaluated. After all the information that could reasonably be obtained about the applicant is reviewed, the employer makes a job offer. This offer may be contingent on the results of a later examination.¹³ While conditional offers before medical examination are permissible; the offer must be real. "A job offer is real if the employer has evaluated all relevant non–medical information which it reasonably could have obtained and analyzed prior to giving the offer."¹⁴ Some courts have gone so far as to hold that if the offer is contingent on anything but the medical examination, it is not a real offer.¹⁵ At this second stage, the applicant may be given a medical examination, which includes most psychological screenings done by a licensed mental health professional.

Organizations that get the offer/assessment order wrong can end up in trouble.¹⁶ This is the case even if the decision–maker does not take the offending test results into consideration in the employment decision.¹⁷ At least one court has held that even successful applicants could later come back and sue on this issue.¹⁸

For employers who choose to conduct psychological assessments after giving a conditional offer, the ADA imposes a few additional rules. For a given class of positions, the same testing must be given to all entering employees.¹⁹ This means an organization cannot pick and choose among candidates; for example, which candidates should submit to psychological screening and which should not. If the organization wants to perform psychological examinations that qualify as medical exams under the ADA, it must give the test to all candidates in the given class. For example, perhaps an organization will test only for managers, or only for people who hold a ministerial role. The point is consistency across the board. Second, the information must be treated as a confidential medical record and shared only as permitted by rules.²⁰ Finally, the results of the exam cannot be used inconsistently with ADA.²¹

If an organization wants to use psychological testing, here are some suggestions. First, it should work with a professional to validate the tests—the ones chosen should be a valid predictor of job performance. It's also wise to work with legal counsel to evaluate risks. It should evaluate classes of people that will be tested. And it's important to make sure that the test results are just a single piece of broader decision–making.

Technically, once an employer is permitted to give a medical examination under the ADA, the ADA "imposes no restrictions on the scope of entrance examinations; it only guarantees the confidentiality of the information gathered … and restricts the use to which an employer may put the information."²² In other words, the ADA does not restrict what kind of examination may be performed at this point, and it can include a psychological assessment. But it does restrict how the results of such an examination may be used by the employer. "If an employer withdraws the offer based on medical information (i.e., screens him/her out because of a disability), it must show that the reason for doing so was job–related and consistent with business necessity."²³ If the psychological examination reveals a reason why the candidate should not be hired, the organization must explain why that reason disqualifies the candidate from doing the job.

Giving these assessments puts the organization at some risk, because it gives the appearance that the organization is in fact screening for disabilities. The organization should have clearly stated in its job descriptions why certain qualities are job–related and consistent with business necessity.

Once a disability has been identified, whether through a post–offer examination or by some other means, the legal standard becomes whether someone could do the job with or without an accommodation. That means that the employer doesn't just revoke the job offer. The employer is required to engage in an "interactive process," which is a good–faith dialogue with the candidate (or employee) to explore whether the person can do the job with or without accommodations, and whether a reasonable accommodation would allow the person to perform the essential functions of the position.

3. Assessments During Employment

Sometimes an organization would like to conduct additional psychological testing to ensure that a current employee is still fit for the job, particularly if the employee is having problems. There may be an objective need to determine whether an employee is still able to perform the essential functions of his or her job.²⁴ This kind of screening may also be permissible under the ADA if it is job–related and consistent with business necessity. It's going to be important for the employer to have adequately defined what is required in terms of healthy interpersonal relationships, how problems are worked out or conflict resolved, or what standards need to be maintained. This will in turn help to define whether and how the person is falling short.

Before doing additional testing, the organization should consider if it actually needs or wants psychological information. For instance, if the person is engaging in toxic behaviors or is not functioning well, it may be simpler to address the situation as a performance issue. Are the problems related to spiritual or emotional maturity, or are they garden–variety bad behavior? Consider whether it is really helpful to have psychological information that may raise the possibility of a disability. If problem behavior relates to a disability, the employer is back to the interactive discussion about accommodations.

If the employer wants to do testing, here is when it is permitted. "Generally, a disability–related inquiry or medical examination of an employee may be job–related and consistent with business necessity when an employer has a reasonable belief, based on objective evidence that: (1) an employee's ability to perform essential job functions will be impaired by a medical condition; or (2) an employee will pose a direct threat to someone due to a medical condition."²⁵ "An individual does not pose a 'direct threat' simply by virtue of having a history of psychiatric disability or being treated for a psychiatric disability."²⁶ There must be more evidence than that.

Second, in limited situations, "periodic medical examinations of employees in positions affecting public safety that are narrowly tailored to address specific job–related concerns are permissible."²⁷ To meet this exception, the employer must show that the monitoring addresses job–related concerns. EEOC guidance suggests that employees who work in positions affecting public safety, such as police officers, firefighters, or airline pilots are the main focus of this exception.²⁸ It's not usually going to apply to employers outside of that public safety space.

For organizations, such as missions, that have personnel overseas, part of the analysis may be whether medical services exist in that location to support the persons' needs, and whether the team can provide the level of support that may be needed for the person in that location. The employer must review the job carefully, including what is required of the person to function in the job, and also available resources and local conditions.

4. Safeguarding the Information

Any time an employer does a psychological screening that qualifies as a medical examination, the ADA requires the employer to keep confidential information concerning the medical condition or history of its applicants or employees, including information about psychiatric disability.²⁹ Results from psychological testing should only be shared with select individuals. For example, it is permissible for individuals making the hiring decision to receive this information. Supervisors and managers may be informed of the results, but only to the extent necessary to explain necessary restrictions on the work or duties of the employee and necessary accommodations. First aid and safety personnel may be informed, when appropriate, if the disability might require emergency treatment. Information may be shared with government officials investigating compliance with the ADA upon request. Information covered under the ADA must be kept in separate medical files, apart from the usual personnel files. It definitely should not be shared widely with coworkers.

5. A Word About Mental Health and Neurodivergent Traits

A broad range of mental health conditions and neurodivergent traits (anxiety disorders, depression, PTSD, ADHD, autism spectrum) may be disabilities under the ADA. Screening processes and workplace practices should take this into account. Employers should ensure that screening tools of all types do not disproportionately screen out individuals with these traits, unless the criteria are job–related and consistent with business necessity. If an employer becomes aware of a mental health condition that impacts the employee's ability to do the job, the employer must engage in the interactive process to determine whether a reasonable accommodation can be provided. Examples might be adjustments in communication methods, modified schedules, or changes to the work environment to reduce stressors.

B. Genetic Information Nondiscrimination Act

Employers should also be aware of another federal law, the Genetic Information Nondiscrimination Act (GINA). Generally, GINA prohibits employers from gathering "genetic information" from applicants or employees, or discriminating based on genetic information. This includes asking the employee directly or searching other sources, such as the Internet, for this information.³⁰ Under the law, genetic information includes information about an individual's genetic tests and the genetic tests of his or her family members, as well as family medical history. Basically, "GINA is intended to prohibit employers from making a 'predictive assessment concerning an individual's propensity to get an inheritable genetic disease or disorder based on the occurrence of an inheritable disease or disorder in a family member.'"³¹

Even when an employer can give a medical examination or fitness–for–duty test, it is flatly illegal to require an applicant or employee to answer questions about family medical history during these tests.³² If the candidate is asked about genetic information in an ADA–compliant post–offer psychological screening test, it still violates GINA. For example, it would be impermissible under GINA for an employer to ask a candidate whether any of her family members suffered from bipolar disorder in order to determine whether the candidate has a chance of developing such a disorder, and then determine she is not a good fit based on the response. Usually, in order for a GINA violation to turn into a legal claim, an employee or applicant has to be able to show that the employer's knowledge of his genetic information was used in an employment decision. Technically, however, simply requesting the information is not permitted under GINA.

There are some limited exceptions to liability under GINA, but they are very narrow. Coming across the information inadvertently is one exception (but seeking it out would not be). GINA is rarely the source of litigation, and since its enactment in 2008, little caselaw guidance has developed around its parameters. While GINA is less likely to be of a concern than the ADA, its strict liability risk still means it should not be ignored.

C. Title VII of the Civil Rights Act and Ban–the–Box Laws

Title VII of the Civil Rights Act of 1964—the federal antidiscrimination statute that prohibits discrimination on the basis of race, color, national origin, religion and sex—also affects employee screening procedures. Making any decision based on a protected class can result in liability.

Protected class definitions have changed rapidly in the last few years. The Supreme Court has held that Title VII's prohibition on sex discrimination extends to discrimination based on sexual orientation and gender identity.³³

For religious organizations with traditional faith beliefs, this development is particularly significant. Title VII contains a religious organization exception that allows religious employers to make employment decisions based on their religious beliefs. The ministerial exception, as noted, provides further protection for decisions involving employees in ministerial roles. However, the scope of both these protections continues to be litigated. Relying on them without legal guidance is risky. Ministries will want to work with legal counsel to understand whether and how these exemptions apply in their specific situation, workforce, and jurisdiction.

Generally speaking, hiring departments need to review their screening questions and criteria for how they may affect protected groups under both state and federal law, keeping in mind that state law may apply to more categories and more employers.

Criminal background checks can potentially create discrimination claims. The EEOC has argued that having a policy that automatically excludes people with a criminal record disproportionally affects certain classes of people, and is discriminatory.

For example, a company in South Carolina was ordered to pay $1.6 million to alleged victims of race discrimination to settle a lawsuit filed by the EEOC on this theory.³⁴ The company excluded workers from employment if they had convictions for certain categories of crime, regardless of how long ago they had been convicted or whether the crime was a felony or misdemeanor. According to the EEOC, 80% of the workers disqualified under this policy were black. The reason this was deemed discriminatory was because of the disparate impact the policy had on racial minorities.

If an employer automatically screens out a candidate who has been convicted of any crime, regardless of the offense or how long ago the conviction occurred, there may be an argument that this policy is having an adverse effect on certain racial groups and is discriminatory under Title VII. In addition, many states and other jurisdiction have "Ban–the–Box" laws that regulate how employees can be asked about the criminal history or when and how criminal background checks can be done. While the federal Ban–the–Box law, the "Fair–Chance to Compete for Jobs Act," only applies to federal contractors and agencies, state Ban-the-Box laws usually apply to all employers.

The laws also range significantly as to when in the process employers can ask about criminal backgrounds. For example, in Illinois, employers with 15 or more employees are prohibited from inquiring into a candidate's criminal record until the applicant has been selected for an interview, or until after a conditional offer is made.³⁵ Even where a state has not adopted this law, a local jurisdiction's law may apply. For instance, Pennsylvania does not have a state–wide law, but the City of Philadelphia has a law that limits how employers can use criminal records in the pre–employment screening process.³⁶ The National Employment Law Project has compiled a helpful resource that lists all the laws that have been enacted in various jurisdictions.³⁷

Employers need a solid rationale for excluding people who have committed certain crimes. It may be something like a blanket exclusion for child safety crimes for anyone who will have access to children in the workplace. Or it may involve a choice to exclude people who have convictions for fraud and embezzlement from handling money.

D. EEOC Guidance on Artificial Intelligence and Algorithmic Screening Tools

Many employers now use software–based tools to assist with screening. These range from applicant tracking systems that automatically filter resumes to video–interview platforms that use facial expression or voice analysis to generate candidate scores. While these tools can be efficient, they carry substantial legal risk.

The EEOC takes the position that the use of algorithmic screening tools does not insulate an employer from liability under Title VII or the ADA. In May 2023, the EEOC issued technical assistance titled "Artificial Intelligence and Algorithmic Fairness," stressing that an employer is responsible for the discriminatory impact of any tool it uses—even one developed by a third–party. However, as of early 2026, this guidance was no longer available.

The idea is that if an AI–driven screening tool disproportionately excludes candidates in a protected class, the employer faces potential disparate impact liability under Title VII, regardless of whether the employer intended to discriminate. Since this is a developing area, employers must at least consider the issues.

The risk may be highest with reference to disabilities. A tool that screens out candidates with certain speech patterns or facial expressions may inadvertently screen out individuals with disabilities (such as those affecting speech or motor control) in violation of the ADA. Employers can ask vendors directly whether their tools have been tested for adverse impact on people with disabilities and to request that accommodation procedures be built into any automated system.

Several states have enacted or are considering specific legislation. Illinois was the first, passing the Artificial Intelligence Video Interview Act in 2019, which requires employers to notify candidates when AI is used to analyze video interviews and to obtain their consent. New York City enacted Local Law 144 in 2021, requiring bias audits of automated employment decision tools within a year of using the tool. The company must also post the audit results. Employers considering using these tools should check whether state or local law imposes additional requirements.

Practically, employers should treat algorithmic screening tools with the same rigor applied to any other screening instrument: validate that they predict actual job performance, test for adverse impact before deployment, document the business justification, and ensure accommodation procedures are available.

E. Other Important Laws

Several other laws and regulations that should be noted, on both the state and federal level.

1. Fair-Credit-Reporting Act

The Fair-Credit-Reporting Act (FCRA) places limitations on the pre–employment screening process. The FCRA applies whenever an organization uses a third–party provider to perform background checks, credit checks, or similar screening checks. To comply with the FCRA, the employer must: (1) make a clear written disclosure to the applicant in a standalone document that a consumer report may be obtained; (2) get written authorization from the applicant; and (3) before taking any adverse action based on the report, provide the candidate with a copy of the report and a written summary of rights under the FCRA. Using a reputable third–party provider is likely to assist greatly in complying with any of the FCRA's mandates.

The pre–adverse action notice is something employers sometimes overlook. The candidate must be given a reasonable period (five business days are recommended) to review the report and dispute any inaccurate information before the employer finalizes an adverse decision (such as not hiring them). The candidate should also receive a copy of "A Summary of Your Rights Under the Fair-Credit-Reporting Act" from the Consumer Financial Protection Bureau. It's also helpful to share contact information of the credit reporting agency and the organization. A dispute of the findings creates additional deadlines.

Once this window has closed, the employer can send a formal adverse action notice identifying the consumer reporting agency, advising about the decision, confirming that it was made in whole or in part based on a consumer report/background check, and informing the candidate of the right to dispute the report's accuracy and get a free copy of the report. All of this communication should be in writing and the records retained. The EEOC has provided detailed guidance on complying with FCRA.³⁸

Several states also have "mini–FCRA" statutes that provide the applicant with additional rights. Using a reputable, FCRA–compliant third–party vendor can help to meet these procedural requirements, but the organization still is responsible for compliance.

2. Age Discrimination in Employment Act

The Age Discrimination in Employment Act (ADEA) prohibits employers with 20 or more employees from discriminating against individuals age 40 and older in the workplace.³⁹ Under this federal law, age discrimination is forbidden in all aspects of employment including hiring, firing, training, promotions, benefits, job reassignments, and any other terms or conditions of employment. Asking about a candidate's age in the screening process could demonstrate a possible intent to discriminate based on age. If knowledge of age is required by law, it is safer to ask after an employee is offered a position.

3. State and Local Laws

Depending on the jurisdiction, other state or local laws may apply to restrict what an employer can ask during the hiring process. For example, many states have their own version of the FCRA that gives applicants certain rights when it comes to pre–employment checks. Also, some of the anti–discrimination laws on the state level apply to much smaller organizations.

States and local jurisdictions often now prohibit employers from asking about the applicant's salary history or using prior compensation to determine pay. Some jurisdictions, like Colorado, require employers to disclose salary ranges in job postings.

Employers must also consider data privacy laws like the California Privacy Rights Act and the Colorado Privacy Act. These may create obligations for: data collection disclosures, data retention limits, applicants' access to their information, or safeguards against unauthorized disclosures.

F. Other Liability Issues Connected with Pre–Employment Screening

Even when an organization's psychological screening may not run afoul of state or federal law, there are several other risks involved with conducting in–depth testing.

1. Practicing Psychology Without a License

One concern is that conducting psychological screening without proper authorization can be considered practicing psychology without a license. For example, if an employer is giving psychological tests of the variety normally administered by licensed professionals (such as the MMPI–2), without using a licensed professional, there is potential for liability (or at least a lawsuit). In Karraker v. Rent–A–Center, where the employer was using the MMPI as a screening tool for employment decisions, the disgruntled employees sued, arguing in part that the use of the MMPI in this manner constituted malpractice and that it was practicing psychology without a license in violation of the state's licensing act.⁴⁰ The suit was unsuccessful on that claim, but the company still had to defend it through summary judgment, which can be quite costly.

The best way to address this risk is to partner with a licensed professional to administer and interpret any assessments that could qualify as a medical examination under the ADA. This reduces the risk of a licensing act claim.

But the professional must still make it clear who the client is, the organization or the applicant. This relationship should be disclosed to the candidate in writing before the assessment begins. In addition, appropriate informed–consent waivers should address confidentiality limits and the purpose of the evaluation. It is also a good idea for the professional to provide the organization with a conclusions–focused report, rather than sharing raw data or medical history. This limits the possibility of misusing sensitive personal information.

2. Other Possible Claims

When an employer chooses to conduct in–depth screening as part of hiring, there is always a risk that a disgruntled applicant may attempt to bring a common law tort claim under state law. These claims primarily revolve around the argument that such invasive screening violated privacy rights. Again, this possibility of liability is somewhat remote, but it has occurred and employers should be aware of the risks. The following case is the main example of how liability might arise in these circumstances.

Technically, once an employer is permitted to perform a medical examination of a job applicant under the ADA, the test can be performed regardless of whether it is job–related and consistent with business necessity. But if the test is not job–related, it could implicate an employee's privacy rights and lead to liability. In some states, the right to privacy is a constitutional right equal to life, liberty, and property, and improper screening may violate this constitutional right.

For example, in Soroka v. Dayton Hudson Corp., applicants for security positions at a retail store were given a psychological screening that included the MMPI. The applicants later brought suit against the company to stop the testing, arguing, among other things, that the test violated their constitutional right to privacy. California makes the right to privacy a constitutional right. A California appellate court agreed that the applicants had a likelihood of success on the merits of the case because it held the questions, particularly about religion and sexual orientation in the MMPI, were not job–related, despite the fact that the employer tried to argue that police officers and other security staff are given these tests all the time.⁴¹ The case reportedly settled for over $2 million.⁴² In states with strong privacy protection, employers should be aware that they may have to justify tests like psychological screening by demonstrating why the tests are necessary to determine whether the candidate is fit for the particular position.

3. Negligent Supervision and Negligent Retention

Thorough employee screening is crucial to avoiding negligent hiring claims. But when an organization has in–depth screening, it may actually be imposing a higher duty on itself to monitor anyone it hires if there are red flags, and make sure that there is no risk to third parties to whom the organization may owe a duty of care.

The proper amount of screening is a delicate balance, as there is also the potential that failure to do adequate screening or monitoring can subject the organization to liability. Negligent hiring claims are more likely, however, when an organization fails to do any due diligence in screening, which typically includes background and reference checks. For example, in at least one case, a law enforcement agency was held liable for insufficient psychological screening during employment.

II. Conclusion

A solid employee screening protocol is important for every organization. It serves two purposes: it helps identify the right candidates for the role and it protects the organization from legal liability. However, if done incorrectly, it can also create liability.

As a practical summary, organizations should consider:

Stage the process correctly. Conduct all non–medical screening (interviews, reference checks, background checks, personality assessments) before making an offer. Reserve any psychological assessment that qualifies as a medical examination under the ADA for the post–offer stage.

Consider what testing is really needed and apply it consistently. For any given class of position, the same examination must be offered to all candidates.

If there may be a disability, engage in the interactive process. Before withdrawing a conditional offer, engage in a good–faith dialogue with the candidate about possible accommodations.

Protect confidential medical information. Keep all medical records in separate, secured files, apart from ordinary personnel records.

If the organization uses AI–driven screening software, audit the tools. Request documentation of the vendor's adverse impact testing and ensure accommodation procedures are in place.

Follow FCRA procedures precisely. Provide disclosure and authorization before screening and follow pre–adverse and adverse action notice requirements before declining to hire someone based (even in part) on a consumer report.

Know the jurisdiction. State and local laws often impose requirements stricter than federal law, particularly on ban–the–box, mini–FCRA, and AI screening tools.

Employers that are unsure about their organization's compliance with these screening procedures should consult with experienced employment counsel. Given how fast these laws are changing, employers should also periodically review and update their screening procedures.

___________________________________________

¹ Hosanna–Tabor Evangelical Lutheran Church & School v. EEOC, 132 S. Ct. 695 (2012); Our Lady of Guadalupe School v. Morrissey–Berru (2020)

² 132 S. Ct. at 710.

³ EEOC Enforcement Guidance on Disability–Related Inquiries and Medical Examinations of Employees Under the Americans with Disabilities Act (ADA) (7/27/00), available at https://www.eeoc.gov/laws/guidance/enforcement-guidance-disability-related-inquiries-and-medical-examinations-employees#5 ("ADA Enforcement Guidance").

⁴ 42 U.S.C. § 12112(a), (d).

⁵ See Karraker v. Rent–A–Center, Inc., 411 F.3d 831 (7th Cir. 2005); see also ADA Enforcement Guidance.

⁶ ADA Enforcement Guidance.

⁷ 42 U.S.C. § 12112(d)(2).

⁸ 42 U.S.C. § 12102(1)(A).

⁹ See ADA Enforcement Guidance, ("Any employee . . . has a right to challenge a disability–related inquiry or medical examination that is not job–related and consistent with business necessity."); see also Griffin v. Steeltek, Inc., 160 F.3d 591 (10th Cir. 1998); but see Armstrong v. Turner Indus., Inc., 141 F.3d 554 (5th Cir. 1998) (plaintiff seeking to bring a claim under section 12112(d) must show compensable injury and holding that violation of the section alone does not constitute a compensable injury in fact).

¹⁰ 29 CFR § 1630.14(a) ("A covered entity may make pre–employment inquiries into the ability of an applicant to perform job–related functions, and/or may ask an applicant to describe or to demonstrate how, with or without reasonable accommodation, the applicant will be able to perform job–related functions.").

¹¹ Id.

¹² EEOC Enforcement Guidance: PreEmployment Disability–Related Questions and Medical Examinations, October 1995, available https://www.eeoc.gov/laws/guidance/enforcement-guidance-preemployment-disability-related-questions-and-medical

¹³ 42 U.S.C. § 12112(d)(3).

¹⁴ Leonel v. Am. Airlines, 400 F.3d 702, 708 (9th Cir. 2005).

¹⁵ See id. at 708–09.

¹⁶ Id. at 708.

¹⁷ See id.

¹⁸ EEOC v. Grane Healthcare Co., No. 3:10–250 (W.D. Pa. July 7, 2014) ("[A] violation of § 12112(d)(2)(A) occurs as soon as 'an employer conducts an improper medical examination or asks an improper disability–related question, regardless of the results or response.'"), see also Nawara v. Cook County, 132 F.4th 1031 (7th Cir. 2025).

¹⁹ 42 U.S.C. § 12112(d)(3)(A).

²⁰ 42 U.S.C. § 12112(d)(3)(B).

²¹ 42 U.S.C. § 12112(d)(3)(C).

²² Garrison v. Baker Hughes Oilfield Operations, Inc., 287 F.3d 955 (10th Cir. 2002).

²³ ADA Enforcement Guidance; see also 42 U.S.C. § 12112(b)(6); 29 CFR §§ 1630.10, 1630.14(b)(3), 1630.15(b)).

²⁴ 29 CFR § 1630.14.

²⁵ ADA Enforcement Guidance.

²⁶ EEOC Enforcement Guidance on the Americans with Disabilities Act and Psychiatric Disabilities (1997), available https://www.eeoc.gov/laws/guidance/enforcement-guidance-ada-and-psychiatric-disabilities

²⁷ Id.

²⁸ ADA Enforcement Guidance.

²⁹ 29 CFR § 1630.14(b)(1)(i)–(iii).

³⁰ 29 CFR § 1635.8(a).

³¹ Maxwell v. Verde Valley Ambulance Co., CV–13–08044–PCT–BSB (D. Ariz. Sept. 10, 2014) (quoting Poore v. Peterbilt of Bristol, LLC, 852 F. Supp. 2d 727, 730 (W.D. Va. 2012)).

³² EEOC, Facts About the Genetic Information Nondiscrimination Act, available https://www.eeoc.gov/laws/guidance/fact-sheet-genetic-information-nondiscrimination-act.

³³ Bostock v. Clayton County, 590 U.S. 644 (2020).

³⁴ BMW to Pay $1.6 Million and Offer Jobs to Settle Federal Race Discrimination Lawsuit (Sept. 8, 2015), available at https://www.eeoc.gov/newsroom/bmw-pay-16-million-and-offer-jobs-settle-federal-race-discrimination-lawsuit

³⁵ 820 ILCS § 75.

³⁶ Chapter 9–3500 of the Philadelphia Code.

³⁷ National Employment Law Project, Fair–Chance Employment Guide, available at https://www.nelp.org/insights-research/ban-the-box-fair-chance-hiring-state-and-local-guide/.

³⁸ Background Checks: What Employers Need to Know: at https://www.eeoc.gov/laws/guidance/background-checks-what-employers-need-know?

³⁹ 29 U.S.C. § 621.

⁴⁰ Karraker v. Rent–A–Center, Inc., 316 F. Supp. 2d 675 (C.D. Ill. 2004).

⁴¹ Soroka v. Dayton Hudson Corp., 1 Cal. Rptr. 2d 77 (1991).

⁴² Saterfiel and Associates, Saroka v. Dayton Hudson, available at https://www.employment-testing.com/legality.htm.

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