What the Obama Re-Election Means For OFCCP
It does not mean “more of the same”. The President won a narrow, but nonetheless decisive, victory. But, he has little or no “mandate” and had very short “coattails”, as pundits say in the Nation’s Capital. While the states will continue to tally ballots for several more weeks and refine the election results, it appears the morning after the election that President Obama won the popular vote by only about 2.8 percentage points. The House of Representatives remains firmly in Republican control with a healthy margin, although the President’s coattails did apparently shrink the margin by adding two more Democratic House members in a chamber in which all 435 seats were up for re-election (a gain of .0045 of the total seats). The Senate stayed in Democratic control and is now more firmly controlled by Democrats (up from 51 to 53 Democrats), although it is still often “iffy” for the President because of the pressure of numerous conservative Southern “Blue Dog” Democrats and the presence of two “Independents” who caucus with the Democrats. And, the President lost over 50 Electoral College votes from his 2008 landslide victory over John McCain. Significantly, too, Governor Romney attracted more votes than successful President Bush did in 2004. And while 120 million people voted in this election, 93 million registered voters (over 40%) decided to sit it out and not vote.
It is not just the Congress which is at loggerheads: the country is divided almost right down the middle. The first President Bush could not win re-election. His son’s re-election was the closest Presidential race in history. And now, we have another very close conclusion to a bitterly fought election. We remain a nation divided.
Will OFCCP Director Pat Shiu stay? OFCCP, unlike the EEOC, is run by a de facto “CEO”. There is one Director who essentially runs a $100 million dollar company called the OFCCP. The OFCCP Director’s job is terribly important and the Director can and does immediately affect the agency’s policy, regulatory, and audit direction. Every OFCCP Director tries to “get out” of OFCCP in the second term if s/he can. The OFCCP Director’s job is a terribly demanding job running a very controversial agency, with 750 employees flung wide and far over 70+ offices and with technical compliance and challenging regulatory initiatives abounding. Being an EEOC Commissioner with nothing but personal staff and almost no responsibility, or being a Civil Rights Commission member with little responsibility (and no clout), is a part-time job for an OFCCP Director. It’s hard work to be the OFCCP Director, as it is for any CEO responsible to run a large organization. And the job exhausts most people who have sat in the Director’s chair. Shirley Wilcher and Charles James got stuck in their jobs at OFCCP. Pat Shiu will look, but will she find an opening elsewhere in the Administration or in the private sector to her liking? She is really dedicated to public service.
But, even if there are jobs elsewhere available within the Administration, there are no applicant flow logs kept on who was considered and “the reason for rejection”. This is all political decision-making, often influenced by luck, timing, and serendipity. (I was called to The White House soon after a White House dinner at which the Secretary of the Cabinet happened to ask two of my clients, about an hour apart, who should be the next EEOC General Counsel? When I went for the interview, I told the Secretary I was not interested. In the process, the Secretary told me, though, that the Secretary of Labor had just offered the OFCCP Director job to one of my clients. I called her that night to congratulate her on her appointment. She said was declining the job in the morning. I urged her to reconsider. Over the next few days she agreed to take the job, but on one condition: that I become her Deputy. Can you be an “Applicant” without having first expressed interest?)
OFCCP Director Shiu is a substantive person and lawyer and I do not see her taking “a lateral” or a demotion to the EEOC or the Civil Rights Commission. The Justice Department would be very hard work and the head of the Civil Rights Division is always a difficult position to secure and fraught with much political in-fighting. If Director Shiu leaves OFCCP, I see her going to the White House as a liaison to women and families, perhaps.
If Pat does leave OFCCP, her replacement could take the agency in an entirely different direction, either good or bad for contractors, and could do so within months of arrival. There is so much work started, but left undone at this point; though, my sense is that Director Shiu will stay put and try to finish what she has started.
Only an expensive and concerted contractor campaign on Capitol Hill will stop OFCCP’s regulatory agenda dead-in-its-tracks. The coming regulatory fights (plural: this will be a running gun-battle) also weigh heavily on whether Pat Shiu will want to stay at OFCCP. This is not going to be any fun. It is clear the President is going to try to bull his agenda through as though he had the massive mandate he had in the first term when he won in a landslide and carried Democrats into power in both Houses of Congress on the strength of his (then) very long coattails. At the same time, Congressman Kline is not going anywhere, and he has Secretary Solis and Director Shiu radar locked. I don’t envy either side of that scrimmage, but do recommend helmets, full pads, and much valium. There is going to be constant and bruising scrimmaging ahead on OFCCP regulatory reform.
The compensation discussion at OFCCP, said another way, will not care that an occasional federal contractor is trampled and victimized in the course of the SNARK hunt. And federal contractors generally must understand this issue is just a political expedient offering a discussion platform during the next four years. The compensation issue is not going away despite the damning statistics to date. The Obama OFCCP has now convincingly demonstrated that there is no widespread unlawful compensation discrimination in America affecting women adversely because of their sex. (OFCCP is harvesting only about $500,000 per Fiscal Year in compensation settlements from the almost 10,000 audits OFCCP has undertaken since June 6, 2010 when it went to full “employee-level” compensation audits. OFCCP harvested, it reports, only 27 Conciliation Agreements, nationwide, recovering back pay for compensation discrimination in FY 2011 (the last full year for which reporting data are available.) That is .006 of the 4300 reported OFCCP audits in FY 2011. (Yes, there are 3 places after that wee-little hard-to-see decimal point). At the same time, contractors are now spending a reported $30,000-$50,000 per audit to defend to OFCCP each and every compensation decision they have made as to each and every employee. (That is well over $100 million per year.) A Martian landing on our planet and seeing this situation would surely wonder if we had all lost our senses. Terrible regulatory policy, but GREAT politics!
FINALE: I am also reminded of the Chinese proverb, which many consider a curse: “May you live in interesting times”. 2013 is going to be an “interesting year”. And that reminds me finally of an oft forgotten Chinese proverb, which is actually the second (of three total) of escalating curses which start with the “interesting times” proverb. The second is: “May you come to the attention of those in authority”, often translated as “May the government be aware of you”. And that reminds me, in turn, of what my son said election night as it became clear that the President was going to be re-elected and my OFCCP practice would continue its head-knocking journey of hand-to-hand combat in difficult OFCCP audits: “Dad, do you want us to get you a flak jacket for Christmas?” My wants-to-be a Marine daughter then offered to give me hers off her back. But, in fact, I am privately hoping for an IronMan suit from Santa – so you can fight, and then fly away, to fight another day… And that leads us to the third Chinese proverb in the series: “Be careful what you wish for”!
The LocalJobNetwork.com will not publish in December, so this is my last column for 2012. Enjoy the Holidays! May 2013 be less interesting for federal contractors!
|THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.