In recent years, federal contractors have come to know an Office of Federal Contract Compliance Programs (OFCCP) that is, shall we say, a bit forward. More requests for data outside of the compliance review period. Common requests for workforce-wide compensation data, or for odd employee groupings without statistical indicators. Routine requests for exhaustive personal contact information of employees. Short turnaround deadlines on cumbersome information requests. And – perhaps most frustrating to contractors – an unwillingness to share investigative concerns, approaches, or methodology underpinning its initial areas of concern.
These aggressive practices have taken the contractor community aback. While OFCCP’s regulatory authority is centered on a neutral selection process, it has recently employed confrontational tactics traditionally reserved for complaint-driven processes – such as EEOC investigations and litigation.
But since Director Ondray Harris was appointed to lead OFCCP in December of 2017, the landscape for federal contractors has been shifting. For example, during Director Harris’ still-young period of leadership, the Agency has committed to collaboration during compliance reviews, ensured additional National Office oversight of reviews presenting the most significant impact on contractors, and suggested it may revise its approach to compensation reviews. One common theme underlies most or all of the shifts at OFCCP: the persistent drumbeat of “transparency.”
To be clear, OFCCP may be showing signs of an evolution toward a more collaborative relationship with employers; but, contractors should not confuse these signals with lackadaisical oversight. After all, OFCCP is still an enforcement agency. That said, contractors can scrutinize how the Agency’s recent adjustments may impact pending – and future – compliance reviews.
Our colleagues recently wrote on how to leverage the additional time to prepare for an OFCCP audit that the Agency’s Corporate Scheduling Announcement Letters (CSALs) present. Following in series, here we explore how OFCCP’s recent shifts may impact strategy when responding to post submission requests.
Contractors are wise to listen to this consistent drumbeat from the National Office. When presented with a significant, unanticipated request, consider attempting to engage the compliance officer on the basis for the request, and even escalate through management to understand the scope and direction of the review. This kind of exploration can help ensure OFCCP’s requests are “sufficiently limited in scope, relevant in purpose, and specific in directive so that compliance [with them] will not be unreasonably burdensome.” See United Space Alliance, LLC v. Solis, 824 F.Supp.2d 68, 91 (D.D.C. 2011).
All of that changed on February 27, 2018, when OFCCP issued Directive 2018-01, which requires all OFCCP Offices to use a PDN whenever it has identified preliminary findings of discrimination in a compliance review. According to the Directive, this shift “encourages communication with contractors and provides them an opportunity to respond to preliminary findings prior to OFCCP deciding to issue an NOV.”
The key here for us is that there is no room for local offices to skip this step: “Regional discretion is no longer permitted.”
One can interpret this change as the National Office installing layers of oversight on any proposed finding of discrimination to ensure the field office’s approach is sound. It also ensures transparency before OFCCP officially concludes a discrimination violation is appropriate.
Contractors can rest a bit easier knowing that there will be an opportunity to vet and respond to any potential discrimination violation before the Agency issues it.
We anticipate that this loss of established leadership will usher in more consistent enforcement across Regions, and that enforcement strategies will likely be set by the National Office – including the direction for increased cooperation (i.e. transparency).
Again, contractors should not view these changes as a “free pass” in compliance reviews. All of these former Agency leaders installed capable and competent deputies and direct reports who will continue to evaluate compliance and ensure fair treatment.
In fact, reports are that OFCCP leadership is expected to rescind or modify its large scale statistical analysis approach to compensation analyses known as “Directive 307.” (Directive 307 abandoned the concept of “similarly situated employee groups” in favor of broad “pay analysis groups” that OFCCP, in its sole discretion, creates based on its own conclusions of who should be “similar” for pay purposes.)
As of the date of this submission, there has been no official news on this front – but the impact of this potential change could be big. While sheer speculation, OFCCP may:
What we do know is that the climate of compensation reviews is shifting. For now, contractors that receive requests for robust compensation data or documents should evaluate the requests carefully to ensure they are only submitting “relevant” information. Ask questions. Engage with OFCCP. Attempt to understand the methodology and results of the initial analyses that prompted the additional request from OFCCP. The Agency has invited transparency, and prudent contractors should accept the invitation.
If the Agency rhythm from recent months bears out, contractors should remain informed throughout a compliance review. Contractors should understand the analyses OFCCP is conducting and concerns it may have. If not, engage the compliance officer and appropriate OFCCP management. Neither a PDN nor an NOV should be a surprise.
Contractors should remain hopeful that compliance reviews will eventually have a more collaborative tone. Until then, ask questions, push back where necessary, and engage the Agency as it implements its self-described initiative of transparency.
For assistance in or questions regarding OFCCP audit defense, affirmative action planning, pay equity, or related subject matters, please contact authors Christopher Patrick at 303-876-2202 or firstname.lastname@example.org or Elizabeth Hernandez at 303-225-2410 or email@example.com.
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