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GRANITE CITY -- An Illinois rail company will pay more than $4 million after courts ruled it was discriminating against job applicants in Granite City by using a medical test, according to a statement issued Tuesday by the Equal Employment Opportunity Commission.

Amsted Rail Co. of Chicago manufactures steel castings for the rail industry. The EEOC had backed a claim that job applicants were being subjected to a nerve conduction test for carpal tunnel syndrome performed by a third-party contractor and then disqualified on the results of that test, rather than an individual assessment of the individual applicant's ability.

The facility was in Granite City, and the applicants were vying for jobs as "chippers," removing metal protrusions from the casings with a hammer or grinder. In November 2017, the U.S. District Court ruled there was little or no value to the nerve conduction test in terms of the likelihood of future injury, and thus the test was unlawful.

"While it is lawful under some circumstances for employers to conduct limited medical exams after making conditional offers to job applicants it is not 'anything goes,'" said Andrea Baran, regional attorney for the EEOC St. Louis District. "If workers are concerned about whether a particular medical exam is lawful or necessary, they should ask questions and seek legal advice if necessary."

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Amsted then opted to settle with the EEOC and will provide lost wages and compensatory damages to 40 applicants turned down because of the nerve conduction test. The company will make job offers to some of the applicants and revise its policies.

The total cost of the settlement is $4.4 million, according to a statement issued Tuesday by the EEOC.

EEOC District Director James Neely Jr. added that employers cannot avoid liability for discrimination by contracting out its hiring functions to third-party contractors.

"Moving forward, we're hopeful that Amsted's compliance with the consent decree will provide equal opportunities to all applicants, without respect to disability," he said.

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