In recent months, the Office of Federal Contract Compliance Programs of the United States Department of Labor (“OFCCP”) has made clear that it will vigorously pursue government contractors who are not in compliance with the affirmative action and nondiscrimination requirements of Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Veterans’ Readjustment Assistance Act of 1974, as amended. In pointed contrast to the more conciliatory approach that OFCCP historically has utilized, OFCCP has taken the following action:
- OFCCP has formally ended the agency’s longstanding Case Management Process that had focused the agency’s enforcement efforts and resources on cases involving systemic discrimination. Under OFCCP’s discontinued protocols, investigations in which there was "no indicator of systemic discrimination (i.e. 10 or more potential victims") most often were resolved and closed out at the desk audit stage. OFCCP will now apply stricter scrutiny to investigations in which there is evidence of individual disparate treatment or failure to adhere to technical affirmative action requirements. Contractors, therefore, are well advised to ensure that any and all submissions to OFCCP are meticulously and accurately prepared and reviewed.
- OFCCP has traditionally focused and limited its investigations by “establishment.” OFCCP Director Patricia Shiu recently announced, however, that the agency will attempt to impose nationwide obligations and remedies where there is evidence that a contractor’s policies or practices are in place at more than one establishment. This enforcement initiative faces almost-certain legal challenge in light of relevant regulatory language and historical enforcement practice.
- OFCCP Director Shiu has made enhanced veterans’ employment a primary goal of the agency’s regulatory initiatives. To this end, the agency is actively considering whether to compel contractors to meet numerical benchmarks in the hiring of protected veterans. The agency’s implementation of additional numerical goals will add to the compliance and recordkeeping burden that currently challenges contractors in the hiring of women and minorities under Executive Order 11246.
- OFCCP traditionally has filed few administrative complaints, eschewing litigation in favor of conciliation and negotiation. OFCCP recently, though, has trumpeted the filing of three complaints: 1) a complaint against Tyson Foods for alleged systemic discrimination against women seeking entry-level positions at the Company’s Joslin, Illinois plant; 2) a complaint against Meyer Tool for alleged systemic discrimination against African-American applicants seeking entry-level machinist positions at the Company’s Cincinnati, Ohio plant; and 3) a complaint against Nash Finch for alleged systemic discrimination seeking order selector positions at the Company’s Lumberton, North Carolina plant. Although OFCCP by no means has discarded conciliation as the preferred method of dispute resolution, the filing of these complaints cannot be ignored. Contractors now assume at their own risk that non-compliance can be smoothed over by protracted negotiations.
- According to published reports, OFCCP plans to continue its practice of issuing Corporate Scheduling Announcement letters. These letters provide contractors with advance notice that two or more of their establishments may be subject to OFCCP investigations. In light of the significant changes at OFCCP, contractors receiving such letters should take advantage of any such advance notice and take steps to audit their affirmative action plans, payroll and compensation practices, and generally ensure that they are in compliance with OFCCP regulatory requirements both at the establishments that OFCCP has officially targeted and at other establishments that now more than ever could become enmeshed in OFCCP investigations.
Baker Hostetler has extensive experience in the maze of OFCCP requirements and stands ready to help contractors navigate through OFCCP compliance issues and investigations. Please contact the Baker Hostetler attorney with whom you normally communicate or feel free to call or email David Grant (dgrant@bakerlaw.com or 202.861.1638) or Tom Seger (tseger@bakerlaw.com or 216.861.7416).
All best wishes for the holidays and for a safe and healthy New Year.
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