Is OFCCP, only now under the Obama administration, valuing the full scope of E.O. 11246? We all know that E.O. 11246 prohibits government contractors from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin. But in the past, has OFCCP ever fully evaluated employment decisions impacting all racial groups?
The first two definitions of affirmative action below are representative of the many definitions that exist. Other than OFCCP’s definition, all specifically address either “remedying past discrimination” or “improving opportunities for minorities and women.”
In the 25+ years that I’ve been working in the affirmative action field, the OFCCP has followed the common practice of interpreting the executive order as applying to minorities and women and not to non-minorities (Caucasians) or males. Since affirmative action programs are intended to remedy past discrimination, they have never been applied to those groups for which discrimination has not traditionally impacted.
This conventional way of interpreting affirmative action has made it easy for government contractors to develop programs and plans and evaluate their success. When we develop an affirmative action plan and conduct supporting analyses for our clients, it has been fairly simple to articulate the results to the management team. This is because we have always addressed issues such as under-representation or adverse impact as it affects a particular protected group. When evaluating applicant flow and hiring activity, we could easily determine if minorities or females were adversely affected by the hiring decision and, therefore, identify the non-minority and/or male candidates who created the potential liability.
More recently, the Obama Administration has charged the government agencies with ending discrimination and pay inequity for all individuals, regardless of their race and gender. This in itself is a good thing, but doesn’t it make implementing affirmative action programs confusing? Let’s be realistic, anyone can be discriminated against and that is why there is Title VII, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and a myriad of other EEO laws. But where does this all fit in with regard to affirmative action?
Let’s play this out in a typical affirmative action plan results analysis…
In PDQ, Inc.’s workforce (and AAP), the minority representation of 20.4% in the Professionals job group falls below the availability by 17.0% and therefore, an annual placement goal has been set. (Chart 1) During the goal year, PDQ had 2 open positions in this job group for which there were five applicants – 2 non-minorities and 3 minorities. (Chart 2) In selecting the best qualified candidates and at the same time attempting to balance the workforce, PDQ fills both positions with minority candidates. The result of this decision resulted in statistically significant adverse impact for non-minority applicants. (Chart 3)
So it is now time to review the results of your AAP and supporting analyses with your management team. They are expecting to hear whether there are areas of the organization where goals have been set to place minority and/or female incumbents. They may also be expecting to learn if the company has any potential areas of vulnerability associated with its hire, promotion, and termination process and pay practices.
You are about to deliver a mixed message which will be difficult for the management team to digest. The good news is that PDQ, Inc. has met its minority placement goal in the Professionals job group by placing two minority incumbents. The bad news is that by meeting the goal, PDQ, Inc. has also created potential liability for not hiring either of the three non-minority applicants in this job group.
Since you know that under the current administration, it is likely that statistically significant adverse impact may result in additional scrutiny by the OFCCP during a compliance evaluation, the bad news is more significant to PDQ, Inc. than the good news.
According to the OFCCP Compliance Manual: Goals are not Quotas: 41 CFR 60-2.12(e) indicates that goals “. . . may not be rigid and inflexible quotas which must be met, but must be targets reasonable attainable by means of applying every good faith effort to make all aspects of the entire affirmative action program work.” This means that there is no financial liability for not meeting goals. However, financial liability could be associated with unsupported potentially biased personnel decisions.
Your managers are now thinking or expressing one of the following thoughts:
Here is where the conundrum occurs –
How do you make good on one affirmative action goal/effort and at the same time create a problem in another area? For most of my career, I have seen compliance officers (COs) conduct compliance evaluations piece meal, meaning that they go through the desk audit submission and check off the boxes on the Standard Compliance Review Report (SCRR). This essentially meant that the CO would look at each compliance area (goals, adverse impact, good faith efforts) in a vacuum. Recently, I have witnessed a more blended approach to the audit whereby the CO has integrated the various parts of their evaluation to better assess the overall efforts of the contractor. Only when this broad based approach to the audit takes place, will the contractor have the opportunity to explain why the adverse impact occurred in this Professionals job group in the example above. However, this explanation without written documentation to support the hiring decision based on non-discriminatory reasons (experience, education, certifications, etc.) won’t end OFCCP’s investigation.
To prepare for an audit, it may be helpful to conduct a side-by-side comparison of your annual placement goals and the results of your impact ratio analyses by job group. This will assist in identifying those groups where these anomalies exist. Additionally, this exercise will help you prepare a rationale for the adverse impact if questioned by the OFCCP.
The bottom line is that OFCCP’s view of affirmative action may not have changed in writing, but it definitely has in practice. This means that the implementer of the affirmative action plan must ensure that they are assessing how each personnel decision and practice, including pay practices, is affecting all groups, regardless of their protected status.