School Days at Prudential High

Rejected job applicants will get a second chance

During the past six years, about 8,000 members of minority groups were turned down for jobs at Prudential Insurance, in part because they could not meet minimal standards for reading or math. Though most were high school graduates, scores of 3 or lower were common on math-competency tests, where the scale runs to 9. Last week Prudential revealed that it was going into the business of remedial education. In a precedent-setting agreement with the U.S. Department of Labor, the company promised to spend an estimated $3 million to offer 260 classroom hours of training to the same people it had rejected for jobs. At least 600 graduates will be offered full-time employment.

Newark-based Prudential's endeavor, which could have a wide-ranging impact on affirmative-action programs in many industries, followed a five-year Labor Department investigation of the company's hiring practices. Prudential, wary of a potential Government suit and mindful of its $50 million worth of business with federal agencies and their employees, agreed to the compromise settlement.

The investigation began after a routine review by the Labor Department's Office of Federal Contract Compliance Programs, which enforces a 1965 presidential order barring racial discrimination by federal contractors. The findings suggested that Prudential was rejecting a disproportionate number of minority applicants.

Prudential at first refused to release detailed employment information to the Government, claiming that to do so would violate employee confidentiality. The Labor Department retaliated by threatening to bar Prudential from further Government insurance business. The company relented after being served with a court order. No formal administrative hearings were ever held, and no official conclusion of wrongdoing was ever made. Said a Labor Department official: "There was never any finding of discrimination."

Prudential already has sent out 3,000 etters to rejected applicants in the New York-New Jersey area whose names are still in the company's files. The rest, for whom current addresses are not available, will be traced through Internal Revenue Service records. The company will help cover the Government's costs by paying the IRS up to 800 for every name the agency tracks successfully.

The agreement is the first requiring a company to upgrade a rejected applicant's skills. Stressed will be English, math, reading and keyboard training, all with the goal of raising competency to at least the ninth-grade level. Participants will be paid the minimum wage of $3.35 an hour while learning, and some of the classes will be at night so that trainees now working elsewhere can attend. At the same time, those employment tests that gave the applicants such a hard time will be reviewed with an eye to making them more job related.

The settlement will also aid the company's female employees. It calls for the firm to take a hard look at how new women agents are paid to determine if they are being discriminated against. Prudential, it seems, is moving to make life on the Rock a little more equitable for everyone.