The city of Minneapolis must pay $190,000 to settle a lawsuit brought by a former police recruit who said the city rescinded its job offer after learning of his post-traumatic stress disorder, the U.S. Department of Justice (DOJ) announced Tuesday.

Federal officials also charged that the Police Department ran afoul of the 2008 Genetic Information Nondiscrimination Act (GINA) by “routinely requesting and obtaining genetic information from officer applicants during the pre-employment process,” according to a news release. The department said the unnamed plaintiff, an Army and Minnesota National Guard veteran who applied for an officer’s job in September 2012, will receive $189,339 in back pay and compensatory damages as part of the settlement.

“Veterans who are qualified should not face discriminatory barriers to employment because they have post-traumatic stress disorder or other disabilities, and no applicant or employee should be asked to disclose genetic information unlawfully, including family medical history,” acting Assistant Attorney General John Gore said.

The department was also ordered to “revise its policies, practices, and procedures to ensure that it does not discriminate in its hiring practices on the basis of disability, and does not request, require or unlawfully obtain information in violation of ADA (Americans with Disabilities Act) or GINA.”

In a brief statement, City Attorney Susan Segal said the settlement was in the best interest of “all involved,” and that the department has changed its contractor used to conduct psychological screens of potential employees.

Based on its investigation, the DOJ found that the department violated federal disability law after withdrawing its conditional job offer to the plaintiff, who had been diagnosed with PTSD in 2005 after returning from a deployment to Iraq — but who later passed a department background check, oral interview, and fitness and medical exams.

He met several times with Dr. Thomas Gratzer, a psychiatrist who was hired by the city to screen would-be officers. Gratzer ultimately concluded the plaintiff was not “psychiatrically fit” to be an officer, listing among several reasons his PTSD diagnosis.

The plaintiff later lodged a complaint with the Equal Employment Opportunity Commission, alleging that he was discriminated against because of his condition.

In 2013, he was hired by the Anoka Police Department, according to the filings.

Earlier this year, the City Council voted to replace Gratzer with the St. Louis Park firm Aspen Psychological Consulting LLC, amid concerns that his methods failed to meet state standards and that too many candidates were washing out during the psychological screening process.

The department typically conducts its own background vetting and physical tests, but uses outside contractors for the psychological screening process, long a source of frustration for some senior commanders, who insisted that a system designed to weed out recruits harboring racist or sexist views is actually making it harder to hire minorities.

The case is seen as a first-of-its-kind federal lawsuit under the decade-old law prohibiting discrimination by insurers and employers based on genetic testing results.

University of Minnesota law professor Bill McGeveran said the GINA law was envisioned as a check on employers or insurers denying coverage or employment to someone who is at high risk for a disease, in order to avoid anticipated health care expenses. But until recently, he said, it had rarely been invoked.

“I think people think genetics is only about DNA under a microscope, but this statute sweeps more broadly and talks about family history and really is about predicting a likelihood of a condition based on genetics,” he said. “I think it’s likely that employers are thinking to themselves, ‘Well it’s not like we’re taking DNA samples,’ but as this proves, it’s not always like that.”

Marshall Tanick, a Twin Cities employment lawyer, said the case serves as a cautionary tale for other employers who pry into potential hires’ genetic history.

“This isn’t just about Minneapolis Police Department — this is a case that has serious repercussions not just in Minnesota, but across the country as well, particularly with law enforcement,” said Tanick, who says he handled one of the first GINA cases in the state about six years ago. He added that he suspects such cases are “occurring with increasing frequency, and this is why the Justice Department apparently is getting involved.”

“To the extent this settlement finds that this practice to be improper, is going to have a huge impact on all kinds of police departments hiring personnel because they rely heavily on pre-employment psychological exams,” he said. The Police Department didn’t immediately return a request for comment.