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Target settles with U.S. on charge of race, gender bias in hiring

The exterior of a Target store is seen in the Chicago suburb of Evanston, Illinois, February 10, 2015. REUTERS/Jim Young

By Jonathan Stempel

(Reuters) - Target Corp has agreed to pay $2.8 million to settle a U.S. Equal Employment Opportunity Commission (EEOC) charge that it used hiring tests that disproportionately screened out candidates for various professional positions based on race and gender.

The EEOC on Monday said three "employment assessments," which Target no longer uses, were not sufficiently job-related or necessary for the discount retailer's business, and therefore violated Title VII of the Civil Rights Act of 1964.

It also said one of the assessments, which was performed by psychologists, violated the Americans with Disabilities Act, which bans employers from subjecting applicants to medical exams before receiving job offers.

The EEOC said the settlement payment will be distributed among thousands of people affected by Target's employment screening.

It also said the Minneapolis-based company will more closely monitor its hiring, and retain an outside consultant to train personnel responsible for administering similar assessments.

In a statement, Target said it cooperated with the EEOC review, which addressed employment judgments it had used over the last decade. It said the EEOC found that "only a small fraction" could have been problematic.

"We continue to firmly believe that no improper behavior occurred regarding these assessments," Target added.

(Reporting by Jonathan Stempel in New York; Editing by Alden Bentley)