In prior articles in this series, published on November 17, 2017 and February 14, 2018, I proposed an evaluation of OFCCP’s recent regulatory and enforcement positions through the lenses of the fundamental and perennial question, “What is Law?” This review is timely because the new Administration is building its team and considering the regulatory and enforcement approaches to be implemented on its watch.
In the last article, we examined OFCCP’s concept of “Pay Analysis Groups” and found it wanting under the Rule of Law for various reasons related to “a failure to achieve rules at all, so that every issue must be decided on an ad hoc basis.” Lon L. Fuller, The Morality of Law, at 39.
Yet another way that OFCCP may have failed to apply the Rule of Law is by “a failure of congruence between the rules as announced and their actual administration.” Id. Prior to 1997, OFCCP regulations expressly addressed OFCCP compliance review procedures, providing a degree of clarity and guidance to both OFCCP field officials and contractors. See 41 C.F.R. Part 60-60 (1996) (“Contractor Evaluation Procedures for Contractors for Supplies and Services”). In 1997, OFCCP eliminated these regulations and provided field instructions primarily in the Federal Contract Compliance Manual (FCCM) and in policy directives. See 62 Fed. Reg. at 44,186-87 (Aug. 19, 1997).
Since the rescission of the Part 60 regulations, contractors have expressed concerns about a lack of uniformity and predictability in the way OFCCP field offices conduct compliance reviews and apply OFCCP regulatory requirements. OFCCP has expressly sought to allay contractors’ concerns by providing published assurances:
However, OFCCP’s assurances, the FCCM provisions, and policy directives have not in practice addressed contractors’ concerns because contractors have routinely experienced that OFCCP field offices ignore the published instructions without any apparent consequences. The examples are myriad and ongoing:
Some of the more prominent examples of OFCCP’s failure to honor its own published rules occurred in the context of Agency enforcement actions related to requests for additional information during audits:
Finally, other examples of the dissonance between stated policy and the reality facing contractors during actual OFCCP audits are more serious and involve substantial conflicts with Title VII. The Supreme Court has ruled that sex-based or race-based remedial actions are lawful under Title VII if there is a “strong basis in evidence” that the challenged employment practices are unlawful under Title VII. See Ricci v. DeStefano, 557 U.S. 557, 585 (2009). Title VII recognizes no exemptions for OFCCP settlements. See Maitland v. Univ. of Minn., 155 F.3d 1013, 1018 (8th Cir. 1998). However, contractors often find that OFCCP field offices refuse to provide the legal and factual basis for allegations of systemic discrimination contained in an Notice of Violation (NOV) or Predetermination Notice (PDN). This practice occurs despite the FCCM instructions to the contrary. The FCCM instructs that the PDN (or NOV, if no PDN is issued), “describes the discrimination, identifies the affected class, identifies the employment action giving rise to the finding of a violation and identifies the basis for the liability determination (e.g., disparate treatment in the selection of minority technicians). The PDN should also include facts and the results of analyses that support the alleged violation and recommended remedies.”). FCCM, at § 8E01. Similarly, the NOV must “[r]estate the problem, with any modification from the contractor’s response (to the PDN), include specific facts, and where applicable, the results of the analyses that support the violations.” FCCM, at § 8F.
When field offices fail to provide the information required of the FCCM, contractors are left with the untenable option of facing OFCCP threats of enforcement litigation or of settling allegations without understanding their basis in law or evidence. The risk entailed by the latter choice is that OFCCP’s statistical analyses, especially those in support of pay discrimination allegations, are often improper and likely to be insufficient to justify the Agency’s demands for race- or gender-based remedial actions. See, e.g., Rudenbusch v. Hughes, 313 F.3d 506, 515–16 (9th Cir. 2002) (regression analysis was not technically sufficient to justify gender-based pay adjustments); Maitland, 155 F.3d at 1016–18 (same); Smith v. Virginia Commonwealth Univ., 84 F.3d 672, 676–77 (4th Cir. 1996) (criticizing regression for “an illogical comparison involving an inflated pool” and for failing to account for factors such as actual prior experience).
As noted, these are important considerations for the incoming leaders of OFCCP and DOL who are intent on adhering to the Rule of Law. OFCCP Director Ondray Harris has just issued Directive 2018-01, which addresses one of the areas of concerns noted above: the refusal of field offices to afford contractors an opportunity to understand and attempt to rebut OFCCP’s allegations through the use of a Predetermination Notice (PDN). Directive 2018-01 provides that “OFCCP will issue PDNs for preliminary individual and systemic discrimination findings identified during the course of a compliance review.” It further makes clear that “Regional discretion is no longer permitted.” Directive 2018-01 indicates that it is also intended to ensure that contractors have “transparency about preliminary findings” and that the PDN must identify specifically the “sufficient evidence . . . of discrimination” that OFCCP believes exists in the particular matter. To ensure that this intent is fulfilled by the field offices, the Directive requires that PDNs be reviewed by both the regional Office of the Solicitor and OFCCP’s National Office.
Director Harris’s new directive is a welcome development on the path toward restoring OFCCP to the Rule of the Law.