In September, the NLRB suffered two notable rebukes from the D.C. Circuit. In the first case, though the appeals court agreed that an employer unlawfully suspended two employees for alleged misconduct during a strike and eliminated a position held by a union worker, it remanded the case as to the discharge of a third employee, finding the NLRB had misapplied the legal standard in evaluating that employee’s strike misconduct. Striker misconduct justifies disciplinary action if it may reasonably tend to coerce or intimidate employees in the exercise of NLRA-protected rights, including the right to refrain from striking. By stressing the “absence of violence,” the NLRB compounded the error by holding that any ambiguity as to the seriousness of the employee’s conduct should be resolved in favor of the employee. Judge Millett filed a separate concurring opinion, taking the Board to task for regularly tolerating sexually and racially offensive conduct during strikes that would never be tolerated in other contexts. Time and again the Board’s decisions have given short shrift to gender-targeted behavior, she said, pointing out that the Board had been equally unmoved by racially derogatory and demeaning epithets and behavior (Consolidated Communications, Inc. dba Illinois Consolidated Telephone Co. v. NLRB, September 13, 2016, Millett, P.).
In the second case, the D.C. Circuit ruled that the Board litigated in bad faith, against Circuit precedent, and was hit with attorneys’ fees totally $17,649. The Board’s suit was predicated upon its view that the employer unlawfully refused to bargain on a matter allegedly within the scope of a collective bargaining agreement without a “clear and unmistakable” waiver. But D.C. Circuit precedent has consistently rejected that view, regarding the contents of a CBA to be a question of “contract coverage.” The appeals court assumed that the Board would recognize a stalemate with circuit case law and seek certiorari to the Supreme Court to resolve it, yet the Board neither confessed the error of its underlying order against the employer under D.C. Circuit law, nor sought to preserve its argument against that precedent for certiorari (or even en banc reconsideration). It did not even seek a transfer to the Sixth Circuit, which embraces the Board’s “clear and unmistakable” waiver policy—and which covers Michigan, where the employer’s operations exist, and where the conduct underlying the dispute occurred. Proper nonacquiescence should be characterized by the agency clearly asserting its nonacquiescence, and specifying its arguments against adverse precedent to preserve them for Supreme Court review. Here, the Board chose obstinacy, and its nonacquiescence amounted to bad faith. The legal dispute in this case demonstrated persistent nonacquiescence without either candor or the pursuit of judicial finality. Judge Millett dissented (Heartland Plymouth Court MI, LLC dba Heartland Health Care Center–Plymouth Court v. NLRB, September 30, 2016, Brown, J.).
Earlier this week, the Justice Department and the Equal Employment Opportunity Commission (EEOC) announced the release of a report that examines barriers and promising practices – in recruitment, hiring and retention – for advancing diversity in law enforcement.
The agencies engaged with dozens of law enforcement leaders, officials and officers; researchers; civil rights advocates and other experts to produce the report, which builds on the recommendations of the President’s Task Force on 21st Century Policing. The comprehensive report, developed with support from the Center for Policing Equity, aims to provide law enforcement agencies with a resource to enhance the diversity of their workforce by highlighting specific strategies and efforts in place in police departments around the country.
“Ensuring that law enforcement agencies represent the diversity of the communities they serve can help restore trust and improve policing,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Building on innovative and creative strategies implemented by law enforcement around the country, our report highlights how agencies are bridging divides and creating lasting results. We hope agencies utilize this resource as they strive to strengthen their diversity and we look forward to engaging with law enforcement on this critical topic over the coming months.”
“When law enforcement agencies remove barriers to equal opportunity, the agencies and the diverse communities that they serve both stand to benefit,” said EEOC Chair Jenny R. Yang. “Departments from around the country have been working to build a robust and diverse talent pipeline to strengthen their workforce. This report raises up some of the most promising recruitment and retention practices of these departments.”
The full report, released on October 5, is available on the Justice Department’s website.
The Justice Department and the EEOC are partnering with U.S. Attorneys around the country to host “Diversity Dialogues” in Madison, Wisconsin; Savannah, Georgia; and San Francisco from October to December. The sessions will facilitate working-group discussions with local law enforcement agencies about how to address the barriers and implement the promising practices outlined in the report. Members of law enforcement who would like to learn more about the Advancing Diversity in Law Enforcement initiative or the Diversity Dialogues, should email firstname.lastname@example.org
Beginning in March 2018, the Employer Information Report, commonly known as the EEO-1 Report, will include the collection of summary pay data from employers with more than 100 employees, the EEOC announced on September 29, 2016. The deadline for the new 2017 EEO-1 report will be March 31, 2018, which gives employers 18 months to prepare, the announcement notes. This revision does not change the reporting deadline for the 2016 EEO-1 Report, which is due on September 30, 2016. EEO-1 respondents must continue to use the July 1st through September 30th workforce snapshot period for the 2016 report. On its website, the EEOC has a landing page with a sample of the new form and instruction booklet, and well as a Q&A and other information.
The Office of Management and Budget (OMB) approved the changes to the form on September 29, 2016, and that approval expires on September 30, 2019. An EEOC spokesperson confirmed to Employment Law Daily that there will not be a Federal Register notice regarding the finalized changes.* However, the EEOC’s supporting statement for this new information collection, as submitted to the OMB on September 28, 2016 is available at on the RegInfo.gov website.
The new data will improve investigations of possible pay discrimination, which remains a contributing factor to persistent wage gaps, according to the EEOC announcement. For purposes of self-assessment, employers can use published aggregated data to compare or benchmark their own data with data from other employers in their industry or geographical area, the EEOC says.
Current reporting obligations. Federal regulations currently require that all employers in the private sector with 100 or more employees, and some federal contractors with 50 or more employees, annually file the EEO-1 Report, with the Joint Reporting Committee (a joint committee consisting of the EEOC and the OFCCP) by September 30. The current EEO-1 Report requires covered private sector employers to provide workforce profiles by race, ethnicity, sex, and job category. The EEOC refers to this data as “Component 1.”
New compensation data collection. The new requirements, which the Commission says was formulated in partnership with the OFCCP, will add aggregate data on pay ranges and hours worked to the form, in addition to the Component 1 data. The EEOC refers to this added data collection as “Component 2.” The new information will be reported for each of the 10 EEO-1 job categories and by each of 12 pay bands. The 10 EEO-1 job categories have not changed with this revision. Employers will count the number of employees they have in each pay band for each job category. If no employees are in a job category or pay band, employers will leave the cell blank. Reporting of specific salaries of each individual employee will not be required.
Covered employers will be required to tally and report the number of hours worked that year by all the employees accounted for in each pay band. Hours worked data is being collected so that the EEOC and the OFCCP can account for part-time and partial year employment when they analyze EEO-1 pay data.
Pay bands. The EEO-1 pay bands track the 12 pay bands used by the Bureau of Labor Statistics for the Occupation Employment Statistics survey, and are as follows:
(1) $19,239 and under;
(2) $19,240 – $24,439;
(3) $24,440 – $30,679;
(4) $30,680 – $38,999;
(5) $39,000 – $49,919;
(6) $49,920 – $62,919;
(7) $62,920 – $80,079;
(8) $80,080 – $101,919;
(9) $101,920 – $128,959;
(10) $128,960 – $163,799;
(11) $163,800 – $207,999; and
(12) $208,000 and over.
How to determine appropriate pay band. To identify the pay band on the revised EEO-1 in which to count an employee, employers will rely on the pay reported for income tax purposes that year in Box 1 of the W-2 form. The EEOC notes that wages earned after the conclusion of the last full pay period in December are often paid to employees in the next calendar year. For EEO-1 purposes, these wages will be reported for the same year in which they are reported for W-2 purposes.
Reporting demographic information. After tallying the total number of employees in each pay band by job category, employers will enter this data in the appropriate columns of the EEO-1 Report based on the sex and ethnicity or race of the employees. For example, a financial services firm may report that it has 10 employees in the “Professionals” job category in pay band 6, which is $49,920 – $62,919, who are men and black; and that it also has 35 Professionals in pay band 6 who are men and white.
Measuring and reporting hours worked. For the new EEO-1 Reporting requirements, hours worked will be counted by consulting employer records already required under the Fair Labor Standards Act (FLSA):
- For non-exempt employees, for whom the FLSA already requires employers to keep records of hours worked, employers will consult these records to identify the number of hours worked.
- For employees who are exempt from the FLSA, employers have a choice. They may either: (a) Report 20 hours per week for each part-time employee and 40 hours per week for each full-time employee; or (b) Report actual number of hours worked by exempt employees, full- or part-time, if they prefer to do so.
Hours worked data will be reported on the EEO-1 by tallying the total number of hours worked by all the employees counted in each pay band, for the W-2 reporting year.
Coverage. Federal contractors with 50-99 employees will not be required to report pay data but will continue to report ethnicity, race, and sex by job category. Consistent with current practice, non-contractor employers with 1-99 employees and federal contractors with 1-49 employees will not be required to file the EEO-1 Report.
Date changes. The due date of the 2017 report has been moved from September 30, 2017 to March 31, 2018, to simplify employer reporting by allowing employers to use existing W-2 pay reports, which are calculated based on the calendar year. Employers will use Box 1 of Form W-2 (W-2 income) as the measure of pay for Component 2 of the EEO-1 Report. By definition, W-2, Box 1 includes income that is received between January 1st and December 31st of the relevant calendar year.
Each employer may choose any pay period during the three-month “workforce snapshot period” to count its full and part-time employees for the EEO-1 report. For reporting years 2016 and before, the “workforce snapshot period” was July 1 to September 30. The final rule will change the “workforce snapshot” to a pay period between October 1st and December 31st of the reporting year, starting with the EEO-1 Report for 2017.
Filing process. Consistent with current reporting practices, employers will submit EEO-1 reports via the EEO-1 Online Filing System on the EEOC’s website or utilize that portal to electronically transmit a data file containing the EEO-1 data. The Joint Reporting Committee file specifications for the revised EEO-1 collection are available on the 2017 EEO-1 Survey landing page.
Compliance assistance. The EEOC will offer free webinars for interested employers and stakeholders on October 20 and October 26, 2016. Individuals may submit questions or request assistance by contacting the EEO-1 Coordinator at: EEOC Survey Division — Room 4SW22G, 131 M Street, N.E. Washington, D.C. 20507, or by email at: Suggestion Box on EEO-1 Additional Documentation or email@example.com.
Background. Starting in 2010, the EEOC and the OFCCP participated in the President’s National Equal Pay Task Force; following the task force’s recommendation, the EEOC commissioned a National Academy of Sciences (NAS) study on how to collect pay data from employers. The NAS issued its report in 2012, and based on a recommendation from that report, the EEOC contracted to conduct an independent pilot study on collecting pay data, which was completed in September 2015. In 2012, the Commission also convened human resources information systems (HRIS) experts, information technology specialists, and employer stakeholders, to discuss EEO surveys, including the EEO-1 and pay data.
The EEOC published its original proposal in the Federal Register on February 1, 2016 (81 FR 5113- 5121), and the comment period for that original proposal closed on April 1, 2016. A revised proposal was published in the Federal Register on July 14, 2016 (81 FR 45479-45497), and the public comment period closed on August 15, 2016.
According to the Commission, it considered, in total, written comments from thousands of individuals, employers and their representatives, civil rights and women’s organizations, human resources and payroll associations, and Members of Congress.
OFCCP dropped separate Equal Pay Report proposal. The “OFCCP plans to utilize [the EEOC’s proposal for] EEO-1 pay data [collection] for federal contractors with 100 or more employees instead of implementing a separate compensation data survey as outlined in its August 8, 2014, NPRM,” the initial EEOC proposal states in a footnote (#63). The OFCCP’s now defunct proposal would have required covered federal contractors and subcontractors to submit an annual “Equal Pay Report” on employee compensation as a supplement to the EEO-1 Report (79 FR 46562- 46606; corrections published on August 20, 2014 at 79 FR 49260-49261). The extended deadline for public comments on that proposal ended on January 5, 2015.
In its original proposal, the EEOC said it discussed the above-referenced OFCCP pay data proposal with the OFCCP and considered the public comments submitted in response to that proposal prior to issuing the EEOC proposal. The Commission further stated that it and the OFCCP together consulted with the Department of Justice, focusing on how EEO-1 pay data would be used to assess complaints of discrimination, focus investigations, and to identify employers with existing pay disparities that might warrant further examination. The two agencies plan to develop statistical tools that would be available to staff to use the EEO-1 pay data for these purposes. They also anticipate developing software tools and guidance for stakeholders to support analysis of aggregated EEO-1 data.
Confidentiality. Addressing data privacy concerns that have been expressed by employers throughout the rulemaking process, the Commission maintains that is has “robust cybersecurity and privacy programs, in compliance with the Federal Information Security Modernization Act and based on NIST Special Publication 800-53, Security and Privacy Controls for Federal Information Systems and Organizations.” These privacy and security controls protect organizational operations and information system assets against a diverse set of threats, including malicious attacks, natural disasters, structural failures, and human error, according to the Commission.
Further, “the hosting service for the EEO-1 data collection system provides a defense-in-depth security program with many layers of security utilizing different physical and software components in order to provide a high level of protection. Security monitoring – both inside and outside the network, ensures the detection and rejection of unauthorized use. These security controls and measures are monitored continuously with automated vulnerability and compliance software suites,” the agency says.
In addition, the EEOC notes that it does not disclose EEO-1 data for a specific employer; it only publishes large-scale aggregated EEO-1 data in a way that fully protects employer confidentiality and employee privacy. At a minimum, the EEOC does not publish data if it does not include at least three firms, or if one firm represents more than 80 percent of the data. The EEOC says it will ensure that any published aggregate data based on the revised EEO-1 will continue to protect the privacy and confidentiality of individual employers and employees.
The Commission also notes that the OFCCP holds EEO-1 data for federal contractors and subcontractors confidential to the maximum extent possible under the Freedom of Information Act and the Trade Secrets Act. The OFCCP will notify contractors of any FOIA request for their EEO-1 pay and hours worked data. If a contractor objects to disclosure and the agency determines that the contractor’s objection is valid, the OFCCP will not disclose the data. FOIA Exemptions 3 and 4 recognize the value of this data and provide, in combination with the Trade Secrets Act, the necessary tools to appropriately protect it from public disclosure, the EEOC points out.
Moreover, the EEOC has a current privacy impact assessment for the EEO-1, which is published on the EEOC website for employers that file the EEO-1 report. The Joint Reporting Committee’s information technology system will be fully compliant with recently revised Circular A-130 well before the first deadline for the new EEO-1 in March 2018, the Commission states, adding that the privacy impact assessment for the EEO-1 will be updated to address these revisions.
Justification for compensation reporting requirements. “More than 50 years after pay discrimination became illegal it remains a persistent problem for too many Americans,” said EEOC Chair Jenny R. Yang in the Commission’s September 29, 2016 statement. “Collecting pay data is a significant step forward in addressing discriminatory pay practices. This information will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal antidiscrimination laws.”
“Collecting data is a critical step in delivering on the promise of equal pay,” said U.S. Secretary of Labor Thomas E. Perez. “Better data will not only help enforcement agencies do their work, but it helps employers to evaluate their own pay practices to prevent pay discrimination in their workplaces.”
*On October 3, 2016 an EEOC spokesperson confirmed to Employment Law Daily that there will not be a Federal Register notice regarding the finalized changes.
First Amendment free speech rights, including freedom of expression and religion, are among the hallowed traditions of our republic. Those rights notwithstanding, a Washington fire captain’s persistent use of the fire department’s internal email system to disseminate Christian messages to coworkers were not enough to save him from discharge for engaging in such conduct, ruled a Washington Court of Appeal in Sprague v. Spokane Valley Fire Department. Concluding that the email system was a nonpublic forum, and that limiting its usage to fire department business was reasonable and viewpoint neutral, the court determined that the employee was unable to prove that his First Amendment free speech rights were violated.
Christian firefighters fellowship. The captain formed a Christian fire fighters fellowship and began distributing newsletters and meeting notices for that group via the fire department’s internal email system, often including scriptural passages in his messages and mentioning the topics being discussed at upcoming meetings. The fire chief reminded him the email system was to be used for fire department business only and that emails announcing meetings should not include religious references.
Nevertheless, the captain refused to follow the written policy and continued to use the email system in much the same way as he had before. After a series of progressive disciplinary actions culminated in his termination; and the civil service commission upheld his termination on grounds of insubordination, he brought suit in state court asserting that his First Amendment rights had been violated.
Judicial scrutiny. As an initial matter, the appeals court observed that when it is alleged that the government is improperly infringing on free speech rights, the first question is to identify the nature of the forum that is being regulated in order to determine what level of judicial scrutiny applies. In a traditional public forum, the government generally can only impose content neutral restrictions on the time, place, and manner of expression, if those restrictions are narrowly tailored to serve a significant government interest and leave open adequate alternative fora.
Nonpublic forum. However, in a nonpublic forum, the government may impose restrictions on speech so long as they are “reasonable in light of the purpose served by the forum and are viewpoint neutral.” Here, the appeals court found that the fire department’s internal email system was a nonpublic forum. While there was evidence that employees were permitted to use the system when it was incidental to work, such as arranging for a babysitter because of the necessity of working late or posting flyers about events or occasions, these exceptions were “narrowly drawn.”
Thus, the department’s email policy met the requirements for a nonpublic forum. The policy was viewpoint neutral in that it completely banned private usage (absent work-related necessity) without regard to content. And it was reasonable to limit the use of a government computer system to government business. Further, there was no evidence the department had ever opened its email system to permit “expressive activity.” Therefore, the email system must be considered nonpublic, and the employer’s policy was constitutional, the appeals court concluded.
“As applied” challenge. Moreover, the captain did not truly contest the validity of the written policy on its face. Rather, his argument challenged the policy as it was allegedly practiced rather than as it was written. However, the appeals court found no need to reach his “as applied” challenge due to collateral estoppel. The court noted that at the civil service commission proceeding on his termination, the commission specifically found no evidence of any alternative “as applied” policy or any uneven application of the email rules. Finding that all of the elements for collateral estoppel were satisfied—identity of issues, identity of parties, and so forth—the captain could not collaterally attack the administrative factual findings.
GAO issues report critical of how OFCCP focuses its enforcement efforts, cites insufficient training
The OFCCP’s process in selecting federal contractors for compliance evaluations, the agency’s primary tool for enforcement, is not designed to focus on contractors with the greatest risk of noncompliance, the U.S. Government Accountability Office (GAO) has concluded in a report that identifies multiple deficiencies in the OFCCP’s enforcement efforts. In the September 22, 2016 report, the GAO also found that the OFCCP lacks a mechanism to ensure contractors are voluntarily complying with nondiscrimination requirements by annually updating their Affirmative Action Plans (AAPs). Further, the OFCCP is not providing consistency in its enforcement efforts across its offices because it is failing to timely train new compliance officers and provide essential ongoing professional training for all of its compliance officers, the report concluded.
In addition, although regulatory requirements regarding contractors’ nondiscrimination obligations have changed—thereby requiring contractors to significantly adjust their policies, practices, and data collection systems in order to comply—the agency has reduced the outreach and compliance assistance efforts that can help contractors understand these changes and workers understand their protections. The report advises that, while enforcement has been the OFCCP’s predominant approach to achieving its mission, outreach, compliance assistance, and guidance in support of voluntary compliance provide important opportunities to extend the agency’s influence beyond the few contractors that are evaluated and help the OFCCP better achieve its mission.
Based on its conclusions, the GAO made six recommendations to the Department of Labor (DOL), including that the OFCCP develop a contractor selection process that reflects contractor noncompliance risk, develop a mechanism to monitor contractors’ compliance with AAP requirements, and review and assess the clarity of its contractor guidance. The DOL agreed with the GAO’s recommendations, the report notes.
Republican Congressman requested report. The GAO issued the 56-page report in response to a request from House Education and the Workforce Committee Chair John Kline (R-MN) and Workforce Protections Subcommittee Chair Tim Walberg (R-MI). The report opens with a letter addressed to the Congressmen which notes that “[S]ince fiscal year 2011, the OFCCP has changed its enforcement practices and updated its regulations to, among other things, reflect recently issued amendments to Executive Order 11246 that established new nondiscrimination requirements, and to increase contractors’ collection of data on workers’ and applicants’ veteran and disability status. Protected worker advocacy organizations have lauded OFCCP’s efforts and many of these changes. However, other stakeholders, including some in the federal contracting community, are concerned OFCCP’s efforts are imposing excessive compliance burdens on contractors, including what they perceive as overly broad and unnecessary document and data requests, as well as unreasonably numerous and lengthy compliance evaluations.”
What did the GAO analyze? In the report, the GAO notes that the OFCCP has jurisdiction over roughly 200,000 federal contractor establishments. The report assessed how the OFCCP conducts supply and service compliance evaluations, including the methodology, resources, and results, and evaluated the OFCCP’s outreach, assistance, and guidance efforts to assist contractors in complying with the requirements it enforces. To conduct this assessment, the GAO reviewed 6 years of OFCCP data—from fiscal years 2010 through 2015—on evaluations and enforcement, including the number of cases referred to the DOL’s Office of the Solicitor for administrative enforcement proceedings.
The GAO also analyzed both OFCCP Information System data and a nongeneralizable sample of 43 randomly selected files of compliance evaluation cases generally closed in fiscal years 2013 through 2015, ensuring representation from the six OFCCP regions and a variety of outcomes with respect to how cases were closed and types of violations identified. It reviewed agency policy, procedures, and operating plans used to conduct and oversee the compliance evaluation process and assessed them against standards for internal control in federal government. Further, the GAO interviewed a nongeneralizable sample of 24 contractor—4 in each of OFCCP’s 6 regions—with and without experience with a compliance evaluation; managers and staff in the OFCCP’s headquarters and all six regional offices; and representatives of 14 national organizations representing contractors interests and 13 civil rights advocates and organizations representing protected groups, such as veterans, individuals with disabilities, and working women. In addition, the GAO examined prior reviews of OFCCP by GAO, DOL’s Office of Inspector General, and others, and interviewed managers and staff in OFCCP’s headquarters, all six regions, and one district or area office in each region. The district or area offices were selected to reflect a range of workloads and geographic diversity.
Weaknesses in compliance evaluations impact effectiveness of enforcement. There are weaknesses in the OFCCP’s process for selecting contractors for compliance evaluations that make it challenging to know the extent to which EEO requirements are followed, the GAO notes. The OFCCP conducts evaluations for about 2 percent of federal contractor establishments annually, and since 2010, about 78 percent of evaluations found no violations and about 2 percent had discrimination findings. However, when the OFCCP selects contractors for evaluations, it does not use a generalizable sample that would allow for conclusions about the federal contractor population. Therefore, it does not have reasonable assurance that it is focusing its compliance efforts on those contractors with the greatest risk of noncompliance, the GAO concluded. Moreover, because the OFCCP distributes its scheduling list—or assigns compliance evaluations to OFCCP district or area offices—based on the number of compliance evaluation officers located in each district and the physical address of the contractor establishments, there may be geographic imbalances in the way establishments are selected for review. In addition, some contractors reported inconsistencies among the OFCCP’s regional and district offices in the way compliance officers interpret the legal requirements enforced by the OFCCP, and these inconsistencies may be exacerbated by lack of training, the GAO concluded.
Production of AAPs. During evaluations, the OFCCP requested and reviewed documents related to contractors’ equal employment efforts, including their AAPs. In 2015, close to 85 percent of evaluated contractor establishments did not submit their AAP within 30 days of the OFCCP’s request and were granted extensions in some cases, the GAO found. This finding, the GAO reasoned, suggests that the OFCCP processes do not ensure that all contractors are complying with their obligation to complete and annually update an AAP.
Decrease in compliance assistance and outreach; improvement needed. Since 2012, OFCCP’s outreach and compliance assistance activities to assist contractors and other stakeholders, such as protected workers and industry groups, have declined as the agency refocused its activities on enforcement, and some stakeholders said guidance could be clearer. Outreach activities, such as community group presentations and job fair participation, decreased more than 80 percent from 2012 to 2014. Some stakeholders told GAO that workers, applicants, and contractors may benefit from more outreach activities. OFCCP’s compliance assistance activities, such as seminars, for contractors—are down 30 percent since 2012. Many contractors told GAO they do not feel comfortable contacting OFCCP for assistance and hire third party support to help comply with federal nondiscrimination and affirmative action requirements. While contractors generally found OFCCP guidance helpful, both stakeholders and contractors said the guidance could be clearer to help them understand the requirements. Without clear guidance, contractors may not be able to understand their equal employment obligations.
Expert commentary on GAO recommendations. John C. Fox, a former OFCCP official and current president of Fox, Wang & Morgan P.C. in Los Gatos, California, shared his insights on the GAO’s six recommendations with Employment Law Daily. The following is a listing of the GAO recommendations, along with Fox’s insights regarding them.
(1) GAO: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of the OFCCP to make changes to the contractor scheduling list development process so that compliance efforts focus on those contractors with the greatest risk of not following equal employment opportunity and affirmative action requirements.
Fox comment: “The GAO’s suggestion to design a new audit selection system is long overdue. The current OFCCP audit selection system dates back in design and function to 1982 when Robert Gerlerter, a senior OFCCP Policy Branch Manager, and I designed and deployed the system still in place at OFCCP today with only a few modernizing adaptions. The OFCCP has not changed the basic simplistic design I conceived over a two-day period over 30 years ago. I had intended the audit system to remain in place as an emergency ’stop-gap’ selection tool for, perhaps, two years until OFCCP could design a more thoughtful and well-designed audit selection system. The current system merely compares the employment of minorities and women in the (now) ten EEO-1 categories and selects for audit the [g]overnment contractor with the fewer minorities and women employed within the contractor’s same industry (measured by NAICS code) and in the same general geographical location. OFCCP observed deficiencies in this system by the late 1980s. Nonetheless, the system—then called EEDS (Equal Employment Data System) and now called, since the [George W.] Bush Administration, the FCSS (Federal Contractor Selection System)—has endured under these two different names over the years because no Administration could conceive of and design a better one.
“OFCCP has been working for the last several years to convert its audit selection tool to cause it to base decisions wholly on the compensation paid minorities and women. OFCCP published this announcement in its ill-fated Equal Pay Report proposed Rule (which OFCCP withdrew last December 2015). However, the EEOC has now championed the same idea in its currently pending EEO-1 proposal to collect pay data from all employers which file EEO-1 reports. Bottoming OFCCP audit selection decisions on compensation data broadly reported by EEO-1 category, without refinement for job title and shift information, is another colossally failed architectural design. Many Government contractors so commented to the EEOC in response to its proposal. [ELD note: The EEOC published its original proposal to add the collection of summary pay data to the EEO-1 Report in the Federal Register on February 1, 2016 (81 FR 5113- 5121), and a revised proposal was published in the Federal Register on July 14, 2016 (81 FR 45479-45497.)]
“Studies of past violation trends is the best predictor of future violations coupled with ‘Quick-in’/’Quick-out’ audit diagnostics similar to the ‘Tiered Review’ strategy the Clinton Administration successfully inaugurated in 1996. Surprisingly, the Obama Administration discarded the Clinton Administration ‘Tiered Review’ audit model in favor of what has turned out to be a deeply failed ‘Deep Dig’ strategy finding no more and no fewer alleged discrimination occurrences than ‘Quick-in’/’Quick-out’ audits. ‘Deep Dig’ audits, however, take many years longer to accomplish than ‘Quick-in’/’Quick out’, and they cost both OFCCP and contractors much more to complete and exhaust both contractors and OFCCP personnel with no greater reward for the taxpayers or applicants and employees. ‘Deep Dig’ audit strategies simply mean fewer audits, more cost and less back pay collections.”
(2) GAO: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to develop a mechanism to monitor AAPs from covered federal contractors on a regular basis. Such a mechanism could include electronically collecting AAPs and contractor certification of annual updates.
Fox: “The GAO recommendation for OFCCP to annually collect AAPs and annual certifications of annual updates is an old idea every Administration since 1972 has considered and rejected. But, the concept, as modified as noted below, has great merit. OFCCP’s regulations at 41 CFR Section 60-2.31 have required such annual reports and summaries since 1978. However, OMB [(the Office of Budget and Management)] has never authorized such extensive and burdensome data collections and no Administration has thought it had sufficient personnel to even review the hundreds of thousands of detailed reports which would consume tens of millions of pages of space and which would annually flood into OFCCP. Accordingly, no Administration has thought this idea sufficiently important to push the issue with OMB.
“The modification which would ease the burden on contractors and allow OFCCP an instant and digital diagnostic of potential contractor discrimination would be to cause contractors to annually deliver digitized copies to OFCCP of the Disparity Analyses for hires and promotions they develop as part and parcel of each Executive Order 11246 AAP. Contractors would not like this idea, but it would be VERY effective to allow OFCCP to better target contractors with potential problems for audit. OFCCP does not need or want the Affirmative Action portions of the AAP, just the discrimination diagnostics contractors already are required to prepare BUT NOT SEND TO OFCCP except in OFCCP’s (currently) only 2,000 audits per year.”
(3) GAO: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to make changes to the current scheduling list distribution process so that it addresses changes in human capital and does not rely exclusively on geographic location.
Fox: “The GAO is right. OFCCP no longer needs to audit based on where OFCCP has brick and mortar district offices. Given the change in 1996 to no longer require onsite audits to occur in each and every OFCCP compliance review, and given the practice which has emerged in the last 10 years for OFCCP to come onsite in only about 5 percent of OFCCP audits, OFCCP could audit from any location. Indeed, most OFCCP audits are conducted by phone and via e-mail today. Accordingly, because of the advent of remote office technology and the infrequency of onsite audits, OFCCP should now audit based on the location of the contractors which are highest on OFCCP’s audit priority list regardless of where OFCCP is geographically officed.
“Correspondingly, the same forces operating to free OFCCP to audit wherever it determines to be the best audit sites irrespective of the presence or absence of an OFCCP local district office, also opens the path for greater specialization within the agency and to consolidate all OFCCP personnel into perhaps 6-10 offices and close perhaps 40 existing brick and mortar office locations. Former OFCCP Chicago Regional Office Administrator Sandra Zeigler came to this same conclusion 10 years ago, consolidated district offices into her Chicago Regional Office and saved almost $1M in payroll and travel/training expenses per year by not staffing 6-10 District Director positions in the Chicago Region.”
(4) GAO: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to provide timely and uniform training to new staff, as well as provide continuing training opportunities to assist compliance officers in maintaining a level of competence to help ensure quality and consistency of evaluations across regions and district offices.
Fox: “GAO’s recommendation that OFCCP improve its training is very appropriate. OFCCP training materials are currently very poor and Compliance Officers are at a very low ebb in training, especially as to discrimination law. Recently, I have deposed investigators under oath in OFCCP litigation in cases making major claims of unlawful employment discrimination. I found that they have never been trained in discrimination law, never trained in investigations, recordkeeping of their audit files, statistics, and/or evidence or in interview techniques. The lack of training is a long-standing problem exacerbated by very high turnover, inadequate training materials, and insufficient funds to properly train OFCCP’s workforce.”
(5) GAO: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to review outreach and compliance assistance efforts and identify options for improving information provided to federal contractors and workers to enhance their understanding of nondiscrimination and affirmative action requirements to ensure equal employment opportunities for protected workers.
Fox: “GAO’s recommendation that OFCCP extend more training to contractors concerning outreach and recruitment will fail so long as OFCCP continues to engender distrust in the contractor community about the audit selection system OFCCP uses. Contractors are afraid that if they raise their hand in the crowd, OFCCP will audit them since their question infers a lack of knowledge and a consequent lack of compliance. Instead, contractors rely upon resources they trust including their HR consulting firms and law firms, trade associations and member-driven groups ([such as] DirectEmployers/Industry Liaison Groups (ILGs) , etc).”
(6) GAO: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to assess existing contractor guidance for clarity to ensure that contractors have information that helps them better understand their responsibilities regarding nondiscrimination and affirmative action requirements to ensure equal employment opportunities for protected workers.
Fox: “OFCCP has poor trainers and cannot teach what they do not yet themselves understand. Contractor reaction to OFCCP training Webinars the agency offers to the public is uniformly poor, coast to coast. As a result, ILGs rarely invite OFCCP personnel to train at their monthly and quarterly conferences. OFCCP personnel, themselves, reportedly often drop off quickly in droves from OFCCP National Office-sponsored webinars because agency personnel widely view their fellow employees as poor trainers.
“To make GAO’s otherwise well founded recommendation effective, OFCCP would have to first: hire persons knowledgeable about:
(a) discrimination law,
(b) how private sector employers operate (too many OFCCP personnel—especially in its senior ranks in Washington D.C.—have never worked in the private sector and do not understand employment systems private companies deploy, let alone in the hundreds of existing and emerging markets); and
(c) training investigators (most of OFCCP’s trainers are just out of college or law school, have not been trained to teach and have little experience in either teaching or public speaking).
Finally, OFCCP would also have to write entirely new training materials.”