Psychometric Testing in Employment: Strategic Considerations, Legal Risks, and Best Practice Guidance

Psychometric testing has become increasingly popular in recruitment and talent assessment, promising objective insights into candidate suitability, cognitive ability, personality traits, and workplace behavior. However, despite its perceived scientific legitimacy, psychometric testing presents significant legal, ethical, and commercial risks for employers.

At Copy Corp Global, we strongly recommend that organisations avoid the use of psychometric testing in hiring decisions, due to the high risk of unlawful discrimination, evidentiary weaknesses, and regulatory exposure.

What Is Psychometric Testing?

Psychometric testing refers to structured assessments intended to measure:

• Cognitive ability and intelligence

• Personality traits

• Behavioral tendencies

• Emotional intelligence

• Aptitude and problem-solving capacity

These tools are often used to predict job performance or cultural fit and are frequently marketed as “objective” or “evidence-based” hiring solutions.

In practice, however, their legal reliability is far more fragile than commonly assumed.

The Legal Reality: Why Psychometric Testing Is High-Risk

1. Discrimination Exposure

In many jurisdictions (including Australia, the UK, the EU, and the US), employment law prohibits discrimination on grounds including:

• Disability (including neurological and mental health conditions)

• Age

• Sex and gender identity

• Race and ethnicity

• Religion

• Neurodiversity

• Pregnancy or medical status

Psychometric testing routinely intersects with protected characteristics because it measures psychological, neurological, and cognitive traits that may directly reflect underlying medical or developmental conditions.

If a candidate is disadvantaged by a test due to such factors, the employer may face:

• Indirect discrimination claims

• Failure to make reasonable adjustments

• Unlawful exclusion of protected groups

Crucially, intent is irrelevant. Liability is based on effect.

2. Weak Defensibility of Test Validity

Employers must demonstrate that any assessment method is:

• Directly relevant to the role

• Consistently applied

• Scientifically valid

• Necessary and proportionate

In real litigation, most psychometric tests fail this standard.

Courts and tribunals increasingly question:

• Whether the test truly predicts job performance

• Whether less intrusive assessment methods were available

• Whether the test unfairly disadvantages specific groups

The employer bears the burden of proof.

3. Invasion of Privacy and Medical Inference

Psychometric assessments often collect deeply personal psychological information that can effectively function as undeclared medical data.

This exposes organisations to:

• Privacy law violations

• Data protection breaches

• Informed consent challenges

• Improper medical inference liability

Commercial Consequences

Beyond legal exposure, psychometric testing introduces substantial business risk:

• Recruitment delays from legal disputes

• Loss of high-performing candidates

• Brand damage from perceived discriminatory practices

• Increased insurance premiums and regulatory scrutiny

In a competitive labor market, these risks materially undermine long-term organisational performance.

Copy Corp Global’s Position

After extensive analysis of regulatory frameworks, litigation outcomes, and corporate governance risk, Copy Corp Global advises against the use of psychometric testing in recruitment and employment decisions.

We recommend instead:

• Structured behavioural interviews

• Skills-based assessment relevant to the actual role

• Transparent evaluation criteria

• Probationary employment periods with performance measurement

• Ongoing professional development and feedback systems

These methods deliver far stronger legal defensibility, higher candidate trust, and better real-world performance outcomes.

While psychometric testing is often marketed as a modern solution to hiring complexity, the legal and ethical reality is that it exposes organisations to serious and unnecessary risk.

Responsible corporate governance demands recruitment systems that are:

• Fair

• Lawful

• Transparent

• Defensible

For these reasons, Copy Corp Global strongly discourages the use of psychometric testing in employment processes and encourages businesses to adopt safer, performance-driven alternatives.

Notable Lawsuits and Legal Actions:

The risk is not theoretical. Courts and regulators have repeatedly taken action against employers and assessment providers:

Target Corporation: Target settled over $2 million in class-action litigation and EEOC claims over its Psychscreen test. Courts found the test unlawfully invasive, containing questions about religious beliefs and sexual preferences, and not job-related. The EEOC further concluded the test disproportionately screened out applicants based on race and gender.

Best Buy Co. Inc.: In 2018, Best Buy settled an EEOC claim alleging its personality assessment process had an adverse impact on applicants based on race and national origin.

Government Legal Services (UK): A job applicant with Asperger Syndrome successfully sued GLS after being denied reasonable adjustment to a multiple-choice psychometric test. The UK Employment Appeals Tribunal upheld the ruling, confirming indirect disability discrimination.

Dial Corporation: Dial was hit with a $3.4 million jury verdict after a physical strength test introduced to reduce injuries was found to intentionally discriminate against women, drastically reducing female hiring rates.

Broader Regulatory AttentionThe ACLU has formally requested the FTC investigate Aon’s AI employment assessment tools for potential systemic bias.

Courts in Australia and New Zealand have also questioned the validity of personality testing when used for hiring, promotion, or redundancy decisions.