Kronos Incorporated

History

Kronos was founded in 1977 by Massachusetts Institute of Technology (MIT) alumnus Mark S. Ain. Under Mark Ain's leadership, Kronos sustained one of the longest records of growth and profitability as a public company in software industry history. Ain's brother, Aron Ain, succeeded him as chief executive officer in 2005 with Mark Ain becoming executive chairman of the Board of Directors.

Originally a manufacturer of time clocks, the majority of Kronos revenue is now derived from software and services. The company provides cloud applications for workforce management and human capital management, as well as consulting, education, and support services to its customers.

In March 2007, Kronos was bought out for US$1.74 billion by the lead investor Hellman & Friedman and the secondary investor JMI Equity. In 2014, private equity firms Blackstone and GIC invested in Kronos alongside Hellman & Friedman and JMI Equity. In the transaction, Kronos was valued at $4.5 billion.[*]

Acquisitions

Kronos has conducted 71 acquisitions, some of the most notable including:

Litigation with EEOC

The Third Circuit Court of Appeals enforced a subpoena seeking production of documents by Kronos, Inc., in an administrative charge before the EEOC alleging disability discrimination. The charge was brought by an individual job applicant against Kroger Food Co., who did not hire the job applicant and used a Kronos assessment as part of its hiring process. EEOC v. Kronos Incorporated, Civ. Act. No. 11-2834 (September 14, 2012, Third Circuit).

Kronos, which was not a party to the litigation, objected to the EEOC’s subpoena on the basis that the information requested was irrelevant, and production would require Kronos to disclose protected trade secret information. While the District Court sustained nearly all of these objections, the Third Circuit found that the District Court had abused its discretion in limiting the scope of the subpoena to documents pertaining to certain of the assessment tests.

This Kronos assessment, among other things, measures five personality attributes that collectively constitute the "five factor" model: conscientiousness; agreeableness; extroversion; openness; and neuroticism. The Five Factor Model is a "dimensional" model of personality. A "dimension" refers to a continuum on which an individual can have various levels of a characteristic, in contrast to the dichotomous categorical approach in which an individual does or does not possess a characteristic. In the dimensional models of personality disorders, personality disorders are classified according to which characteristics are expressed at which levels. This stands in contrast to the traditional categorical models of classification, which are based on the Boolean presence or absence of symptoms and do not take into account levels of expression of a characteristic or its underlying dimension.

When using selection tests, or when contracting with others to administer such tests, employers need to make sure of three things in particular: First, the tests must have been properly validated for the specific positions and purposes to be used (meaning the test or other selection device must be job-related and its results appropriate for the employer's purpose). Second, the tests must be administered without regard to race, color, national origin, sex, religion, age, disability, or any other protected characteristic. Third, the tests must be routinely reviewed to be sure that they continue to be non-discriminatory as applied and from an adverse impact standpoint. Kronos contends that its assessments are compliant with all applicable requirements.