Under a recent OFCCP extension, federal contractors have until October 19, 2022 to decide whether to object to the Office of Federal Contract Compliance Programs (“OFCCP”) releasing their EEO-1 Type 2 Consolidated Reports (Consolidated Reports) for 2016 to 2020. See the Federal Register notice of the Freedom of Information Act (FOIA) request for the documentation here.
A Consolidated Report outlines the race/ethnicity and gender distribution of your company. Your leadership may not object to having the race/gender composition of its workforce divulged. Fine – as long as this is an informed decision made after consultation with counsel.
Below is a primer on the Consolidated Report and FOIA, plus context for discussion on whether or not to object to the data release and some thoughts on how hard it may be to avoid disclosure.
The FOIA request does not involve the EEO-1 “Component 2” reports that contain pay data. Instead, the Consolidated Report provides race/ethnicity and gender detail for all employees of a company, regardless of location (companies with only a single work location file a “Type 1 Single-Establishment” report). The Consolidated Report groups employees using 10 EEO-1 Job categories. These include the ‘Officials and Managers’ who direct company operations; the ‘Professionals’ whose detailed knowledge, commonly gained through degrees and certifications, allows them to perform complex job duties; and the ‘Sales’ people who do the deals that create the bottom line.
FOIA is a means by which citizens can obtain government records. The Consolidated Reports at issue become government records once companies file them with the US Equal Employment Opportunity Commission (EEOC). The EEOC passes the records to the OFCCP, which uses them, among other things, to determine which federal contractors to audit.
As outlined in the FOIA notice, “Executive Order 12600 … established a formal process for notifying persons who submit confidential commercial information to the United States when that information becomes the subject of a FOIA request.” Following this requirement, OFCCP gave federal contractors the opportunity to establish that their Consolidated Reports include “trade secrets and other confidential commercial information” protected from disclosure.
The FOIA request for Consolidated Report data was made by investigative reporter Will Evans, who appears interested in determining if the requested data shows patterns of race/gender underrepresentation in U.S. industry.
His recent article, “We Forced the Government to Share Corporate Diversity Data. It’s Giving Companies an Out Instead,” complains that OFCCP is following the FOIA notice requirement outlined above.
The five years of information requested can show large-scale changes in employment (for example, contracting out some company operations, leading to a decrease or elimination of employees in some EEO-1 job classifications). The reports may also show that employees in certain EE0-1 categories appear to be less diverse than standard in the employer’s industry, or that an employer’s diversity profile has not improved over the past few years.
In the past, many companies have filed objections to disclosure of their EEO-1 information. Common objections include that disclosure would threaten competitive advantage or divulge information sufficient for competitors to poach talent. However, as shown below, these arguments may be harder to support today than in the past.
Over the course of the last 10 years, however, many companies have released their Consolidated Reports on their own. Since 2020 the trend of increased interest in corporate engagement to address racial as well as gender imbalance in our society has only accelerated. Both customers and prospective employees are now focusing on a company’s social engagement when deciding to buy or join. More and more companies are releasing their Consolidated Reports in the interest of transparency and accountability, and to display commitment to a diverse work environment. Companies are also releasing information on company make-up similar to the EEO-1 report: Environmental, Social and Governance (ESG) reporting, for example, designed to identify corporate policies that encourage diversity and fair wages, releases more information than the Consolidated Report.
If your employer plans to object to the release of your Consolidated Report, be ready to show that you keep employee composition detail private, that the government promised that the information would remain confidential, and that disclosure of the information will harm your business. Given the court case referenced in the FOIA notice, Center for Investigative Reporting v. U.S. Depot of Labor, 424 F. Supp. 3d 771 (N.D. Cal. 2019), it will likely be hard to prevail with an objection. The court decision makes much of the fact that the Consolidated Report information is very generalized. It will be difficult to present detail showing that the release of summary information creates a specific harm.
Nevertheless, a contractor can argue that at the time it submitted its EEO-1 reports the government gave no indication that the inofrmation would be disclosed to the public. Some contractors may argue that the data does not accurately depict the company’s consolidated demographic workforce – this may be particularly true after mergers and acquisitions. If your company is going to object, consult an attorney to craft your filing.
The case also makes the point that prior release of Consolidated Report detail will undermine a claim of confidentiality. (How can you maintain that information is “private” or “secret”, i.e., remains confidential, if it has already been made public in EEO-1 form or as an ESG or similar report?)
See OFCCP’s Submitter Notice Response Portal for Frequently Asked Questions (FAQs) and access to the submission portal in order to file an objection to disclosure. Written objections to the FOIA request are due by Sept. 19, 2022. Contractors who do not object in time “will be considered to have no objection to disclosure of the information.”
It is important that leadership be aware of issues raised by the FOIA request, that Legal be involved in the decision of whether and how to object, and that Diversity and Inclusion, if not all of HR, be in the loop.