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Weekly UpdatesThe question of what constitutes "merit" and whether civil service examinations adequately test for merit has been, and remains, a key issue in public personnel administration since late in the nineteenth century. This article examines the controversy surrounding one examination--the Professional and Administrative Careers Examination (PACE)--and a subsequent lawsuit and consent decree on the issue. At its conclusion, the article assesses whether the so-called Luevano consent decree effectively resolved the problems identified in PACE, as well as the decree's effect on subsequent civil service reform.
The Underlying Issue: PACE and "Adverse Impact"
Civil Service Examinations
When Congress passed the landmark Pendleton Act in 1883, it recognized that the central problem in public personnel management was to identify merit. Accordingly, the task of the newly created U.S. Civil Service Commission (CSC) was to develop a measure of merit that stressed neutral competence as the basis for hiring and promotion instead of the patronage considerations that had marred much of federal personnel management since the Jacksonian era of the 1830s. Within a decade after its creation, the CSC had developed a competitive examination designed to identify merit "of the achievement type" and which the commission believed was suitable for determining who should and should not be eligible for public sector employment. (1)
In the ensuing years, the federal government attempted to refine the type of examinations used to determine employment eligibility. In some instances, such as during World War II, decentralized examinations were used to meet the divergent needs of federal agencies. The demands of war mobilization and production required different agencies to use different tests to determine which candidates would meet specific agency needs. After the war ended, the CSC concluded that recentralization of personnel functions was needed to instill cohesion in federal employment. As a result, in 1954 the commission established the Federal Service Entrance Examination (FSEE) for most federal jobs. The exam was designed "as a 'universal' instrument for selecting college graduates in entry level positions." (2)
The FSEE was criticized as "overly general" because it did not adequately pose questions that were reasonably related to job performance. Recognizing this problem, in 1974 the CSC replaced the FSEE with PACE as the primary tool for selecting entry-level applicants in 118 professional and administrative occupations at the General Schedule ratings of GS-5 and GS-7. PACE would allow the CSC to create a large, centralized applicant pool from which specific federal agencies could select qualified candidates; however, most candidates who received passing scores could not realistically expect to secure federal employment. The statistics graphically illustrated this conclusion. Between fiscal years 1976 and 1980, only 35,419 of 723,563 candidates who sat for the exam actually were selected for federal jobs)
PACE and Merit
PACE was designed to improve on the FSEE by testing the "knowledges, skills and abilities" necessary for candidates to assume professional and administrative responsibilities in government service. The CSC specifically developed the new exam in response to a landmark 1971 U.S. Supreme Court case, Griggs, et al. v. Duke Power Company. In Griggs, the court prohibited the use of selection methods for federal civil service employment that "cannot be shown to be related to job performance." Moreover, the court outlawed selection methods that discriminate on the basis of race. (4)
To compete for an entry-level job that was subject to PACE testing, an applicant had to possess a four-year college degree, three years of professional experience, or the equivalent combination of education and experience. The applicant was required to complete an application and sit for the examination. Test scores were converted into numerical scores, with 40 being the lowest possible score and 100 being the highest. A score of 70 or above was considered passing. Veterans were awarded five or 10 additional points depending on their length of service and whether they had incurred a disability during their time in uniform. (5)
After identifying eligible candidates with a score of 70 or higher, the U.S. Office of Personnel Management (OPM), which replaced the CSC in 1979, prepared a rank-ordered list of applicants known as the "PACE Register." Federal agencies seeking to fill open positions within the 118 designated occupations had discretion either to consult the PACE Register or elect to fill its open positions by promoting, reassigning, or transferring current employees. When an agency chose to use the register, it would request a list of eligible candidates from the local OPM area office. The requested list--called a "certificate" in agency parlance--was forwarded to the requesting agency, which then used the "rule of three." Under this rule, the agency could select any of the top three candidates, with preference given to veterans by statute. (6)
The OPM certificate was not the sole factor by which requesting agencies would fill positions. Depending on the request of the agency involved, the OPM could institute additional job-related requirements such as knowledge of a foreign language, certain types of computer skills, or other specialized training, education, or certifications. The willingness and ability to relocate or to travel extensively was a factor in some instances. As a result of additional requirements, even candidates with PACE scores significantly higher than 70 were not guaranteed a position in a federal agency. In fact, according to OPM's data for fiscal years 1976-1980, only 4.9% of applicants who sat for PACE were selected for PACE occupations. Table 1 provides the raw OPM data for those five years. Clearly, an applicant who sat for PACE could not harbor a reasonable expectation of securing employment in a federal administrative agency. (7)
Four years after PACE was developed, the OPM joined with the Equal Employment Opportunity Commission, the U.S. Department of Labor, and the U.S. Department of Justice to issue a series of guidelines that became known collectively as the Uniform Guidelines on Employee Selection Procedures (hereinafter the Guidelines). The Guidelines represented the agencies' attempts to establish a rule for determining whether a particular examination had an "adverse impact" on a particular racial or ethnic group. Under the "four-fifths rule," any examination that resulted in a selection rate of less than 80% for members of a particular racial, ethnic, or gender group was deemed to have an adverse impact, regardless of the intent behind the development of the examination. The Guidelines did not absolutely prohibit the use of an examination that failed the four-fifths rule, but it did specify that such examinations must be validated through a series of fairly stringent validation standards. (8)
PACE's Proportionality Problem
During the late 1970s, an increasingly large group of detractors began to criticize PACE because of the significant differences between the proportions of white, black, and Hispanic job applicants who received a 70 or higher in the examination. Before these complaints were raised, the OPM generally did not collect data on the race and national origin of PACE applicants. Owing to growing number of questions about the examination's potential adverse impact on certain races, however, the agency collected sample data during the January 1978, April 1978, and April 1980 administrations of PACE. The four-fifths rule certainly supported the arguments voiced by PACE critics.
The data indicated that in the January 1978 and April 1978 administrations of the exam sampled by the OPM, approximately 42% of white test takers earned at 70 or higher, while only 12.9% of Hispanics and 5% of blacks achieved comparable scores. Table 2 provides the raw data from the 1978 samples. Yet even these figures on scores of 70 or above did not illustrate the extent of the disparities. With a glut of highly qualified applicants competing for some positions, in many cases, the threshold score necessary to procure employment was closer to 90. Table 2 shows an even greater adverse impact by race for scores of 90 or higher, especially those augmented by the veterans' preference. Slightly more than 13% of whites received a score of 90 or higher, while only 0.6% of blacks and 2.6% of Hispanics did so. (9)
In light of the clear disparities in PACE results by race--the legal definition of adverse impact--it was only a matter of time before the examination was challenged. The challenge came on January 29, 1979, when Angel G. Luevano and a group of plaintiffs representing a nationwide class of blacks and Hispanics filed suit against then-OPM Director Alan Campbell, alleging that PACE discriminated against class members in violation of Title VII of the Civil Rights Act of 1964. Based on the number of PACE applicants who were black and Hispanic, the class included more than 100,000 members. Scrambling to answer the suit, the OPM asked for, and was granted, four time extensions for filing an answer, which it finally did on December 14, 1979. (10)
For almost two years, the parties litigated the case, exchanging requests for admissions, interrogatories, and the production of documents. At the end of several rounds of settlement negotiations, the parties jointly moved on January 9, 1981, for a court order granting preliminary approval to a consent decree to settle the case. After a minor amendment, the U.S. Court of Appeals for the District of Columbia Circuit granted the order for a consent decree on February 26, 1981, and the final decree was approved on November 19 of that year. (11)
The Luevano Consent Decree and "Life After PACE"
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