In FY 2016, the Office of Federal Contract Compliance Programs (OFCCP) quietly settled twelve compliance reviews without a press release. This is unusual. Historically, OFCCP publishes a press release with each conciliation agreement. If you missed reading about these resolutions, you missed out on some valuable lessons.
Overall, the time frames for the alleged periods of discrimination ranged from January 1, 2006, through December 31, 2013. This means that these audits were open for a period ranging from three to ten years. What does this tell federal contractors? Be prepared for a very lengthy audit process, especially if you have any initial “flags” or indicators in your affirmative action plan (AAP). In one case, the federal contractor no longer holds federal contracts; therefore, the agreement is not in effect until the company becomes a federal contractor again. In another case, the facility had actually closed by the time the review was completed; as a result, the contractor agreed to extend job opportunities at other stores in the metropolitan area as part of the conciliation agreement.
Two of the twelve conciliation agreements were related to Individuals with Disabilities (IWDs). In one case, OFCCP claimed the contractor failed to engage in the interactive process to determine whether a worker’s disability could be reasonably accommodated. In the other case, the contractor terminated two pregnant workers, and also had a policy requiring written verification of pregnancy, which OFCCP claimed violated Section 503 of the Rehabilitation Act. This same contractor failed to meet its outreach and recruitment requirements regarding IWDs and Protected Veterans (PV). Another contractor was cited for failing to comply with the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) job listing requirements – a requirement that is frequently overlooked by federal contractors. The lesson here is OFCCP is focusing more and more on a contractor’s compliance with IWD and PV requirements in its compliance reviews.
The conciliation agreements also provide some guidance about how contractors should evaluate their personnel activity annually. Three of the twelve conciliation agreements were related to an alleged failure to hire women in (1) male-dominated professions, such as security officers, (2) in less desirable environments, such as a freezer or perishable dry storage area, or (3) to higher paying positions given to men. The key takeaway here is to watch out for steering issues. Avoid making assumptions that certain groups of people, such as women, are not qualified or would be disinterested in a particular position. Two other conciliation agreements identified a failure to hire males. This serves as a reminder to contractors that hiring decisions should be fair and equitable to both men and women, and that the contractor’s selection decisions should be evaluated for impact on both women and men.
Almost half of the conciliation agreements without press releases found that contractors were discriminating against African Americans in hiring. There was one case where the agency alleged Asian and Native American/Alaskan Native applicants were negatively impacted by the contractor’s selection practices. In two of the cases, OFCCP claimed the contractors were discriminating against white applicants. In both of these cases, the agency claimed the contractors were favoring Hispanics in the hiring process. A review of census data for the geographic area for both contractors revealed there were large Hispanic populations, especially for the types of jobs in question.
These resolutions serve as a reminder to contractors that they need to evaluate their personnel activity using a favored group analysis, and not just by total minority or non-minority status. Indeed, one of the conciliation agreements specifically noted the contractor was only conducting adverse impact analyses comparing non-minorities to minorities, and males to females. OFCCP specifically noted the contractor failed to conduct adverse impact analyses on each racial and ethnic group that constituted at least two percent of the labor force in the relevant labor area or two percent of the applicable workforce.
In another unpublicized conciliation agreement, OFCCP asserted the contractor applied a blanket policy of rejecting candidates based on criminal history without an individualized assessment. The policy at issue was allegedly used by a previous employer at the location under review, but the contractor that acquired the plant was held responsible for the actions of the previous employer. This resolution serves as a good reminder that it is critical to include affirmative action compliance as part of any acquisition discussions and to limit any liability from actions taken by a previous employer.
Interestingly, one of the conciliation agreements resulted from complaints filed by employees who had been hired as part of an earlier resolution with OFCCP. As a reminder, although most contractors are selected for compliance reviews using a neutral selection process, OFCCP compliance reviews can be initiated by an employee complaint. In this particular case, the employees that filed the complaint were hired by the contractor per an earlier consent decree between the contractor and OFCCP. One of the hired employees claimed that training and disciplinary processes were applied differently to him, as compared to employees who were not hired pursuant to the consent decree, resulting in termination. OFCCP also claimed the contractor failed to provide this employee with the seniority provided for under the earlier consent decree. Additionally, OFCCP claimed the contractor retaliated against, failed to provide seniority to, and failed to hire or promote another consent decree hire into a full-time position. This conciliation agreement serves as a good reminder that contractors who enter into consent decrees, or conciliation agreements with OFCCP, should prepare to follow up with the agency to ensure compliance is maintained into the future.
Contractors are well advised to pay attention to all of OFCCP’s conciliation agreements, even those that are not the subject of press releases. OFCCP resolutions provide contractors with valuable insight into OFCCP enforcement priorities and serve as good reminders for how contractors can remain in compliance, and avoid any allegations of discrimination.