Category: Government Contractors
In an effort to increase the hiring of veterans and the disabled, the DOL has issued new guidelines that will affect Federal contractors. If you are such a company, go to the Department of Labor Website and http://www.dol.gov/ofccp/regs/compliance/section503.htm where there is a summary of the obligations, the Final Rule, FAQ’s and more.
In a recent news release the EEOC and OFCCP recently lauded a judgment against B of A for hiring decisions made in North Carolina in 1995 and 2002-2005. More than 1,100 African-American job applicants are ordered to be paid $2.2 million. So I was curious. What exactly was B of A accused of doing wrong? Was there any underlying proof that this was somehow a well-developed scheme for excluding these applicants across numerous offices? Was it all based on credit background checks? Apparently not. It was in the end a statistical variance. While labeled as a pattern or practice case by the judge, it is really a disparate impact one. And a minor one at that. The gist of the underlying ruling was:
“I find that the OFCCP has established by a preponderance of the evidence that there was a disparity between African American and Caucasian candidates in selection rates for entry level administrative positions in 1993 and 2002-2005, and that this disparity was caused by an unlawful bias against African Americans. The OFCCP has relied primarily on its statistical evidence, as presented by Dr. Crawford, and supported by anecdotal evidence from three unsuccessful applicants. Although the Bank argues that the OFCCP must show a disparity of more than three standard deviations before an inference of discrimination is permissible, this is not consistent with the weigh t of legal authority, which recognizes no such ironclad rule.”
The case started in 1993 with an OFCCP Compliance Review in Atlanta. Various statutes and regulations require that government contractors and subcontractors (1) treat their employees without discrimination based on their color, religion, sex, national origin, age, disability, status as a veteran of the Vietnam Era, or status as a disabled veteran; and (2) take ―affirmative action to employ, advance in employment, and otherwise treat qualified applicants and employees without discrimination based on their color, religion, sex, national origin, age, disability, status as a veteran of the Vietnam Era, or status as a disabled veteran. The OFCCP conducts compliance reviews periodically to determine whether covered government contractors are in compliance with the affirmative action and nondiscrimination requirements of those laws and their implementing regulations. See 41 C.F.R. §60. NationsBank (now Bank of America) complied with the initial request. OFCCP then decided to do an audit on the Tampa, Florida and Columbia, South Carolina locations. NationsBank figured enough was enough so it objected and refused to comply with the review of those facilities.
In March 1995, NationsBank filed an action in the U.S. District Court for the Western District of North Carolina, seeking injunctive relief, alleging that the OFCCP’s selection of the Tampa and Columbia facilities violated the Fourth Amendment’s protection against unreasonable searches. In February of 1997, NationsBank amended its complaint, adding an allegation that OFCCP’s selection of the Charlotte facility also violated the Fourth Amendment. The District Court granted NationsBank’s request for a preliminary injunction, thereby precluding OFCCP from bringing an enforcement action against NationsBank. The U.S. Court of Appeals for the Fourth Circuit subsequently granted summary judgment to OFCCP, thereby vacating the District Court’s preliminary injunction, stating that NationsBank had to first exhaust its administrative remedies.
The OFCCP then filed an Administrative Complaint demanding that NationsBank comply with Executive Order 11246 or risk debarment. Newly-named Bank of America moved for summary decision, contending that OFCCP violated the Fourth Amendment when it selected and searched its Charlotte facility for compliance review.
On August 25, 2000, Administrative Law Judge Richard Huddleston issued a Recommended Decision granting the Bank’s motion for summary decision. Judge Huddleston concluded that OFCCP’s selection of the Charlotte facility was not based on an administrative plan containing neutral criteria, and was arbitrary and unconstitutional. The OFCCP filed exceptions to the Recommended Decision with the Administrative Review Board (hereinafter ―Board). On March 31, 2003, the Board reversed Judge Huddleston’s decision and remanded to the Office of Administrative Law Judges for further proceedings, concluding that the record presented genuine issues of material fact.
See OFCCP, Department of Labor v. Bank of America, No. 00-079 (Mar. 31, 2003).
After a few additional legal maneuvers that lasted until 2004, discovery in the matter began and a hearing was finally scheduled for October 2008. After additional machinations, opening briefs were submitted in September 2009 which led to a decision rendered on January 21, 2010. Here is the subsequent press release. If you actually took the time to read the 66 page decision you would find that there was no direct evidence of discrimination and there was a real battle over whether there was any discrimination at all. This decision represents the exhaustion of the administrative remedies.
After this decision, the Bank then went back to the Circuit court to revive its Fourth Amendment argument which they may have won if not for the fact they voluntarily complied with the OFCCP’s audit, thereby waving and protections. (Note: one reason why you don’t simply hand over the docs). That decision was made by US Magistrate Judge Deborah A. Robinson of the District Court of the District of Columbia on 12/13/11.
With the case was back in her jurisdiction, U.S. Department of Labor Administrative Law Judge Linda S. Chapman ordered Bank of America to pay 1,147 African American job applicants $2,181,593 in back wages and interest for race-based hiring discrimination at the company’s Charlotte facility. This is despite the fact even the OFCCP found no direct evidence of any intent to discrimination on the Banks behalf. In a sense B of A had no way to defend itself other than to say it did what it did for sound hiring purposes. The OFCCP was never required to prove that their argument was a pretext for discrimination.
One can only guess if B of A will try any further appeals. They can still appeal to the Secretary of Labor and then if they lose again, appeal the case to federal court. While they may have lost, commentators believe they forced OFCCP to tighten up their criteria around these “desk audits” and how they select companies to do them.
The OFCCP just announced significant changes for Federal Contractors Here’s the quick summary of it:
The VEVRAA rule provides contractors with a quantifiable metric to measure their success in recruiting and employing veterans by requiring contractors to annually adopt a benchmark either based on the national percentage of veterans in the workforce (currently 8 percent), or their own benchmark based on the best available data. The rule strengthens accountability and record-keeping requirements, enabling contractors to assess the effectiveness of their recruitment efforts. It also clarifies job listing and subcontract requirements to facilitate compliance.
The Section 503 rule introduces a hiring goal for federal contractors and subcontractors that 7 percent of each job group in their workforce be qualified individuals with disabilities. The rule also details specific actions contractors must take in the areas of recruitment, training, record keeping and policy dissemination — similar to those that have long been required to promote workplace equality for women and minorities.
To learn more go to http://www.dol.gov/opa/media/press/ofccp/OFCCP20131578.htm.
As stated by the DOL “OFCCP is issuing this Directive in support of its ongoing policy commitment to address pay discrimination by federal contractors and subcontractors. This Directive specifies the procedures OFCCP field investigators use for reviewing contractor compensation systems and practices. It clarifies and improves OFCCP procedures in further support of the agency’s efforts to align pay discrimination enforcement with longstanding principles under Title VII of the Civil Rights Actof 1964 (Title VII).”
If you do government contracting you would be wise to follow these guidelines. Even if you are not a government contractor they point to the data they will be examining to address disparate compensation practices.
U.S. Department of Labor to Host Prevailing Wage Conference for Government Contracting Officials via Webcast Oct. 4 and 5
The U.S. Department of Labor’s Wage and Hour Division will host a free online conference for federal, state and local contracting officials to provide information on federal rules concerning prevailing wages and other labor law requirements. The conference will be webcast live from 10 a.m. — 3 p.m. EDT on both Tuesday, Oct. 4, and Wednesday, Oct. 5.
Wage and Hour Division staff and federal partners will cover Davis-Bacon Act and McNamara-O’Hara Service Contract Act compliance principles; the process of obtaining wage determinations and adding classifications; compliance and enforcement processes; and the process for appealing wage rates, coverage and compliance determinations. The Oct. 4 session will focus on Davis-Bacon, and the Oct. 5 session will focus on the SCA.
To participate in the online conference, contracting officials should send the following information to email@example.com: name, title, organization, session(s) of choice and email address.
For more information on the federal prevailing wage statutes and other laws administered by the Wage and Hour Division, call its toll-free helpline at 866-4US-WAGE (487-9243) or visit its Web pages at http://www.dol.gov/whd/. The section available by clicking “ARRA Information,” which features information related to the American Recovery and Reinvestment Act, offers many of the division’s most recently developed compliance assistance materials.
DOL Restores and Updates Functional Affirmative Action Program Process for Federal Contractors and Subcontractors
The U.S. Department of Labor’s Office of Federal Contract Compliance Programs has released a new directive to outline the process by which federal supply and service contractors can apply for Functional Affirmative Action Program agreements, which can be viewed at http://www.dol.gov/ofccp/regs/compliance/directives/dir296.htm.
“The FAAP is back and is better than before,” said OFCCP Director Patricia A. Shiu. “Over the past year, I have listened to comments from the contractor community and employee groups, and determined that this is a useful tool for ensuring that federal contractors and subcontractors meet their obligations to provide equal employment opportunity for everyone. I am pleased to share updated guidance that responds to the feedback we received while also renewing our commitment to ensuring discrimination-free workplaces.”
Under Executive Order 11246, any company with 50 or more employees and a federal contract of $50,000 or more is required to develop a written affirmative action program for each of its establishments. An AAP helps contractors identify and analyze potential disparities related to the employment of women and minorities. Where disparities exist, contractors can use AAPs to articulate specific procedures they will follow and good faith efforts they will make to provide equal employment opportunities. FAAP agreements allow large contractors the flexibility to create AAPs by functional or business units rather than by individual establishments. For example, a company could develop an affirmative action program for all sales associates across multiple offices in different states as opposed to creating one for each work site.
OFCCP reviewed its policies regarding the FAAP process and made significant changes, including requiring written approval by the agency’s director before contractors can begin developing FAAP agreements, thereby eliminating the provision for automatic approval if OFCCP failed to act upon the request within 120 days; changing the expiration date for each agreement from three to five years, at which point a renewal will have to be approved; and adding the possibility of a compliance evaluation by OFCCP should contractors fail to submit the required annual updates to their agreements.
All contractors who currently have an approved FAAP agreement will be required to renew it in accordance with the new guidance. Contractors without these agreements should continue to maintain and develop establishment-based AAPs. Answers to frequently asked questions about the FAAP can be found at http://www.dol.gov/ofccp/regs/compliance/faqs/faapfaqs.htm.
The new guidance rescinds a previous directive, Administrative Notice/Functional AAP, issued March 21, 2002, and ends a yearlong suspension in the acceptance of requests to develop or renew FAAP agreements while the program was under review.
In addition to Executive Order 11246, OFCCP’s legal authority exists under Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. As amended, these three laws hold those who do business with the federal government, both contractors and subcontractors, to the fair and reasonable standard that they not discriminate in employment on the basis of gender, race, color, religion, national origin, disability or status as a protected veteran. For more information, call OFCCP’s toll-free helpline at 800-397-6251 or visit http://www.dol.gov/ofccp/.
Read the news release here: http://www.dol.gov/opa/media/press/ofccp/OFCCP20110973.htm