WOMAN WITH NEUROLOGICAL DISORDER LOSES ADA CASE

by Art Gutman Ph.D., Professor, Florida Institute of Technology

The case is Insalaco v. Anne Arundel County Public Schools, decided by District Court of Maryland on 1/26/12. (see 2012 U.S. Dist. LEXIS 9110). Jennifer Insalaco, a special education teacher, lost on summary judgment on her claims that the school failed to provide reasonable accommodation, that she experienced harassment and retaliation, and that she was terminated because of her disability. Generally, an ADA plaintiff faces three prongs: (1) a physical or mental impairment that (2) substantially limits a major life activity, and (3) that the plaintiff can perform the essential functions of the job either with or without reasonable accommodation. Insalaco easily passed the first two prongs (her disorder substantially interfered with her ability to walk), but failed on the third prong. Normally, I would not comment on this type of ruling; ADA summary judgments against plaintiffs are hardly a novelty. However, this case has a very important message with respect to reasonable accommodation.

The facts of the case were that in October 2007, Insalaco fainted at work and was taken to the hospital, where she was diagnosed with the neurological impairment and was advised to use a walker at work. At a later point, the school offered her a temporary position at another school, which Insalaco rejected because it was a longer driving distance from her home. The plaintiff returned to work following a “loosening” of her medical restrictions, and in January 2008, she left work in the middle of the day because of “tensions between her and her colleagues.” She was then placed on administrative leave pending a fitness for duty evaluation (which was never completed), and was notified in April 2008 that her contract would not be renewed for the 2008-2009 academic year.

The key to the reasonable accommodation ruling is that Insalaco denied, when asked, that she required a reasonable accommodation, and that her attorney told the school that she was "able to perform the essential duties and functions of her job with or without an accommodation." Judge James K. Bredar ruled that it is not necessary to actually request an accommodation, but in this case, her actual denial of such a need defeats the failure to reasonably accommodate claim.

On the harassment claim, Judge Bredar ruled that Insalaco could not prove that the tensions between her and her colleagues was unrelated to her disability, and even if they were, it was not "sufficiently severe or pervasive to alter a terms, condition, or privilege of employment", that there were “ no incidents of physical threats or humiliation directed against her”, and that she has not demonstrated that any of the conduct at issue has affected her work performance”.

On the other two issues, that although the failure to renew the contract occurred after Insalaco made a formal charge to the EEOC (she also made one afterwards), the evidence indicated that she was terminated for performance reasons.

OFCCP EXTENDS COMMENT PERIOD ON NPRM FOR SECTION 503

by Art Gutman Ph.D., Professor, Florida Institute of Technology

The OFCCP has posted the following supplementary information related to its December 9, 2011 related to comments on its NPRM on Section 503.

On December 9, 2011, OFCCP published a proposed rule entitled, "Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Individuals with Disabilities" (76 FR 77056). OFCCP was to receive comments on this NPRM on or before February 7, 2012. Various organizations and entities submitted requests to extend the comment period by an additional 90 days or more. We considered these requests and determined that it is appropriate to provide an additional 14-day period for comment on the proposed regulation. We are, therefore, extending the comment period until, Tuesday, February 21, 2012.

Comments may be submitted (identified by RIN 1250-AA02, by any of the following methods:

• Federal e Rulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments.


• Fax: (202) 693-1304 (for comments of six pages or less).


• Mail: Debra A. Carr, Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

FOR FURTHER INFORMATION CONTACT: Debra A. Carr, Director, Division of Policy, Planning and Program Development, Office of Federal Contract Compliance Programs, 200 Constitution Avenue, N.W., Room C-3325, Washington, D.C. 20210.

Telephone: (202) 693-0103 (voice) or (202) 693-1337 (TTY).

OFCCP REJECTION FOR EXTENSION OF PUBLIC COMMENT PERIOD ON PROPOSED CHANGES TO SECTION 503 OF THE REHABILITATION ACT DRAWS CONGRESSIONAL RESPONSE

by Art Gutman Ph.D., Professor, Florida Institute of Technology

On Wednesday, January 25th all of the employer associations and other organizations that requested an extension to the February 7th public comment deadline in response to proposed regulatory changes to Section 503 received official word that those extension requests were rejected. These proposed changes are related to equal employment opportunity and affirmative action requirements for persons with disabilities. Check out a recent webinar DCI staff gave on the NPRM for more information on the topic (http://dciconsult.com).

The OFCCP’s response appeared coordinated, because most of the organizations that submitted an extension request received a fax and/or hard copy letter at about the same time. Extension requests were based on the fact that (1) the NPRM was released just before the winter holidays, (2) the NPRM is dense (over 50,000 words), (3) some of the burden estimates were controversial, and (4) organizations wanted time to appropriately survey constituents and stakeholders about the specifics of the NPRM.

In response to the OFCCP’s rejection to extend the comment period, On January 27, 2012, Congressman John Kline, Chairman of the Committee on Education and the Workforce and Congressman Phil Roe, Chairman Subcommittee on Health, Employment, Labor, and Pensions wrote a letter to Secretary Hilda Solis requesting a 90-day extension of the public comment period. Three major concerns are addressed in the letter.

The first concern is that the NPRM introduces a first-time requirement to establish a 7% hiring goal for disabilities, and questions “the legal authority under Section 503 permitting OFCCP to establish a numerical hiring standard,” There is also a concern that a “hiring standard would, in effect, institute a quota, which has been met with great scrutiny from the Supreme Court.”

The second concern is that the NPRM would “ask job applicants to self-identify as disabled” which, according to the letter conflicts with ADA statutory language prohibiting employers “from asking disability-related questions before an offer of employment has been made.” Additionally, it is noted the need for accuracy in the self-identification and disclosure in the job application process “has the potential to create more problems than solutions.”

The third concern is about potential burdens associated with the “NPRM's myriad new paperwork and recordkeeping requirements”, noting that this contradicts President Obama’s call in January 2011 for reduced paperwork, and also, creates “a burden for employers with questionable benefits for individuals with disabilities.”

In light of these concerns, the letter ask the OFFCCP to respond to the following six inquiries “no later than February 10, 2012, and to provide “all documents and communications from OFCCP, the Office of the Solicitor, or any other agency related to the inquiries below.”

1. Identify and explain OFCCP's statutory authority under Section 503 to establish a numerical hiring standard.



2. Identify and explain the basis for OFCCP's decision that federal contractors' good faith efforts are insufficient affirmative action under Section 503.



3. Identify and explain OFCCP's statutory authority to require contractors to ask job applicants to self-identify as a qualified individual with a disability, given that the ADA prohibits disability-related questions before an offer of employment has been made.



4. Identify and explain the basis for OFCCP's assumption that job applicants and contractors' current employees would understand the legal definition of "disability," as defined in the NPRM's prescribed self-identification notice.



5. Under proposed section 60-7 41.44(b), 0FCCP assumes contractors would spend 30 minutes per year to draft and provide written "statement[s] of reasons explaining the circumstances for rejecting individuals with disabilities for vacancies and training programs." Simple math would suggest the amount of time required would far exceed this estimate. Explain how OFCCP determined the 30 minutes per year estimate.



6. Under proposed section 60-7 41.44( d), OFCCP failed to consider the costs federal contractors would incur to make their "electronic or online job application system[s] compatible with assistive technology commonly used by individuals with disabilities, such as screen reading and speech recognition software. Likewise, under proposed section 60-741.44(g), OFCCP failed to consider the economic burdens associated with discussing the NPRM's new affirmative action requirements with all employees during, for example, orientation and training events. II) Explain why OFCCP failed to consider the costs of contractors' compliance with these provisions of proposed sections 60-7 41.44( d) and (g).

Stay Tuned for further developments.

HOSANNA-TABOR EVANGELICAL LUTHERAN CHURCH & SCHOOL V. EEOC COMPLETING THE STORY

by Art Gutman Ph.D., Professor, Florida Institute of Technology

This case was featured in an Alert on 10/18/11 featuring the Supreme Court’s oral arguments on 10/15/11. The question was whether Cheryl Perich met the definition of “minister.” If so, the church would be entitled to the “ministerial exception” under the 1st Amendment, thereby foiling her claims of discrimination. At the lower levels, the district court granted summary judgment to the church, but the 6th Circuit reversed. However, in a unanimous ruling on 1/11/12 (2012 U.S. LEXIS 578), the Supreme Court ruled that Cheryl Perich met the definition of “minister”, and therefore, the church was entitled to the “ministerial exception” under the 1st Amendment.

As previously noted Cheryl Perich, a teacher, was diagnosed with narcolepsy and given a medical leave of absence with the promise that her job would be held open. However, Hosanna-Tabor ultimately denied Perich’s request to return to work and she threatened to sue. Perich was then fired. Had Perich been a public school teacher, this would be a no-brainer retaliation ruling in her favor. However, churches may discriminate for any reason for the position of minister. There is no doubt that the exception applies to Priests, Rabbis and any other leaders of a congregation. The question here was whether the exception applies to a “called” teacher.

More specifically, Hosanna-Tabor has (1) “lay” or “contract” teachers, who are clearly not ministers, and (2) “called” teachers, who must complete colloquy classes and receive a certificate of admission into the teaching ministry. Once admitted, called teachers received the title of “commissioned minister.” The EEOC argued that the exception does not apply to Perich because her duties mimicked those of the lay teachers (she taught math, language arts, social studies, science, gym, art, and music).

To make a long story short, the Supreme Court extended the ministerial exception to “called” teachers, but emphasized that its ruling is narrow. Speaking for the Court, Justice Roberts ruled:

Every Court of Appeals to have considered the question has concluded that the ministerial exception is not limited to the head of a religious congregation, and we agree. We are reluctant, however, to adopt a rigid formula for deciding when an employee qualifies as a minister. It is enough for us to conclude, in this our first case involving the ministerial exception, that the exception covers Perich, given all the circumstances of her employment.

Basically, in addition to her label as a “minister”, Roberts ruled that “ Perich held herself out as a minister of the Church by accepting the formal call to religious service, according to its terms.” Perich also claimed a special housing allowance available to employees who are are compensated in “the exercise of the ministry” and, following her termination, she filled out a form stating "I feel that God is leading me to serve in the teaching ministry. . . . I am anxious to be in the teaching ministry again soon."

In short, it appears that the church won not only for its label of “minister”, but because Perich held acted in accordance with the label.

CONGRESSMAN MEEKS CITES ROMNEY IN PROPOSED BILL ON DISCLOSURE OF MINORITIES AND WOMEN IN VARIOUS PAY BRACKETS

by Art Gutman Ph.D., Professor, Florida Institute of Technology

On 1/18/12, Rep. Gregory Meeks (D-N.Y.) introduced H.R. 3791 requiring public companies to disclose their pay brackets and how many women and minorities fall within them. This bill would amend the Securities Exchange Act and is aimed at 10-K filings with the Securities and Exchange Commission. According to Meeks, the “inspiration” for his bill is none other than Mitt Romney. Meeks wrote the following “testimonial” to Romney on his website: (see http://meeks.house.gov/press-release/congressman-gregory-w-meeks’-staetement-bill-implement-mitt-romney’s-idea-benefit).

In 1994, Mitt Romney advocated for putting pressure on public companies to benefit women and minorities, stating: ‘I believe that public companies… should be required to report in their annual 10K the number of minorities and women by income group across the company, so we can identify where the glass ceiling is and break through it. And I think that the market of America will say ‘that company has not promoted women has not promoted minorities’ and will put pressure on American corporations and agencies to respond."

He writes further:

“It is heartening to note that Governor Romney recognized the lack of opportunity and the unlevel playing field that women and minorities face in the employment market. While Governor Romney and Republicans have often said one thing and done another, Romney’s proposal to, in his words ‘pressure,’ American corporations to respond to inequality deserves consideration. That is why I have introduced H.R. 3791."

And Concludes:

“My bill, following Governor Romney’s logic, requires the United States Securities Exchange Commission (SEC) to issue rules to require public companies to disclose pay brackets within the company, and the number of women and minorities that fall within each bracket."

Interesting, to say the least!!!

DCI RELEASES 2012 TRAINING SCHEDULE

DCI Consulting is excited to release its 2012 Equal Employment Opportunity (EEO) and Affirmative Action (AA) Training program. This program is catered toward HR practitioners, compliance analysts, and lawyers in both internal and external counsel roles.

Click here to see the training schedule

DCI is offering 6 seminars in the first half of 2012, and will be adding additional training (e.g., Section 503, 4212, compensation standards, etc.) as regulatory change continues in Washington D.C. The initial seminar set includes:

• Developing Technically Compliant and Strategic Affirmative Action Plans


• Hot Off the Press! OFCCP Policy and Enforcement Update


• Navigating the Maze of an OFCCP Audit


• Conducting Defensible Compensation and Pay Equity Analyses


• Understanding Employment Testing and Validation Research


• A Primer on Valuable EEO/HR Statistics

DCI faculty have advanced degrees in relevant fields and bring together expertise in human resource management, law, statistical methods and personnel selection. We realize that EEO/AA compliance is a complex intersection of regulatory guidance, Washington D.C. insider context, HR best practices, and the practicality of doing business. As such DCI training seminars provide deeper and more nuanced training content, practical applications, and real world value.

The goal of DCI's training is for participants to leave each seminar with a clear understanding of relevant (1) law and regulations, (2) Washington D.C. insider context, (3) HR data used in EEO analyses, (4) statistical methods and (5) practical recommendations for implementation.

All DCI training seminars are held in Washington, D.C. at DCI's new Training Center located at 1920 I St NW.

OFCCP SETTLES RACE BIAS HIRING CASE WITH JACINTOPORT INTERNATIONAL

by Art Gutman Ph.D., Professor, Florida Institute of Technology

JacintoPort, a subsidiary of Seaboard Corp., has $1.2+ million in federal contracts to store and transport cargo with the Defense Commissary Agency. Interestingly, the allegations against JacintoPort amount to discrimination against white and black applicants based on favoritism for Hispanic applicants. The settlement was announced on 1/12/12 (see http://www.dol.gov/ofccp/OFCCPNews/LatestNews.htm#news1).

The current settlement is a follow-up to a compliance review conducted in 2005 that resulted in 2006 conciliation agreement for technical violations in which JacintoPort agreed to “to implement an applicant tracking system for new hires, and to develop and execute action-oriented programs to recruit women and African-Americans”, and to submit semi-annual reports over the ensuing 18-month period. The current settlement is based on the first progress report, which showed preference for Latino applicants. Additionally, taken together, the three reports showed “statistically significant adverse impact against African-American and Caucasian applicants” in hiring for longshoremen.

The current settlement calls for JacintoPort to pay $219,000 to 48 black and 21 white applicants; to offer positions to 17 qualified applicants as they become available; and to “undertake extensive self-monitoring measures to ensure that all hiring practices fully comply with the law, including record-keeping requirements.” JacintoPort also agreed to submit four semi-annual reports over the next two years.

EEOC SETTLES WITH PEPSI ON ALLEGED DISCRIMINATION BASED ON BACKGROUND CHECKS

by Art Gutman Ph.D., Professor, Florida Institute of Technology

The EEOC announced on 1/11/12 that Pepsi Beverages has agreed to a 1.3 million settlement to head off litigation (see http://www.eeoc.gov/eeoc/newsroom/release/1-11-12a.cfm). Most of the money will be divided among black applicants who applied for positions, with a portion reserved for administration and claims expenses. Additionally, Pepsi agreed to monthly reports on its hiring policies, to hire class members in their top three job location preferences, and to report to the EEOC on a regular basis its new background check policies, which were initiated prior to the actual settlement.

According to the EEOC, Pepsi used arrest and conviction criteria, which adversely impact blacks and therefore, are illegal under Title VII. More specifically, the EEOC noted:

When employers contemplate instituting a background check policy, the EEOC recommends that they take into consideration the nature and gravity of the offense, the time that has passed since the conviction and/or completion of the sentence, and the nature of the job sought in order to be sure that the exclusion is important for the particular position.

According to the report, the EEOC began its investigation in 2007 after an applicant filed a charge with the EEOC, claiming for an arrest even though his case had yet to be prosecuted. Based on its investigation, more than 300 individuals were illegally excluded between 2006 and 2010. Apparently, Pepsi also excluded applicants guilty of minor offenses bearing no relationship to the requirements of the at issue jobs. Pepsi also agreed to hire class members in their top three job location preferences, and to report to the EEOC on a regular bases on its new background check policies, which were initiated prior to the actual settles.

A Pepsi spokesman said “the company decided to enter into the conciliation agreement because it valued its relationship with EEOC and because it is committed to diversity and inclusion.” What company would say otherwise.

WINDS OF CHANGE: AN UPDATE ON THE NEW CSAL LETTER

by Eric Dunleavy, Keli Wilson and Joanna Colosimo, DCI Consulting Group


During the week of December 19th, the OFCCP issued Corporate Scheduling Announcement Letters (CSALs) to the federal contractor community. The letters were sent to those federal contractors that have an establishment(s) identified for a potential compliance evaluation by the OFCCP during the current scheduling cycle. It is important to note that this was the first time CSALs were sent to ALL federal contractors on the scheduling list, not just contractors with two or more establishments identified for potential evaluation. On the surface, the new CSAL letter seems relatively routine since the OFCCP typically sends them to contractors in December. However, DCI has noticed three unexpected trends related to the recent CSALs. We believe that these changes may represent a seismic shift in OFCCP audit strategies.

The three changes that caught our attention include:

1. A majority of the CSAL letters only have one or two total establishments listed for review. In fact, so far we have seen only one letter that listed more than two locations. That is a significant change from CSALs that were sent in the past. Typically, for mid- to large-sized contractors, many establishments would be listed on the CSAL.



2. Corporate headquarters are being listed as an establishment that is eligible for review, and, in many cases, is the only establishment on the CSAL. Historically, corporate headquarters for large contractors would not be selected by the FCSS, or listed on the CSAL. Instead, corporate headquarters would usually be selected from a separate pool of establishments for a Corporate Management Compliance Evaluation (CMCE).



3. There are establishments on some of the CSALs that are currently open or have recently been audited. As a note, the OFCCP cannot audit an establishment within 24 months of undergoing a compliance evaluation, with a few exceptions (i.e. – a contractor is not complying with reporting requirements, an individual or class complaint is received, etc.). Please see the OFCCP’s FCSS Q&A, or the ACE directive, for additional information on this issue.

These three trends may have significant implications for contractors. First, the fact that a majority of the CSAL letters are only listing one or two establishments signals a clear reduction in the total number of reviews that OFCCP is planning on conducting.

Second, and more significantly, the fact that corporate headquarters is being listed as an establishment review is a major change in OFCCP audit protocol, and there must be a reason behind this trend. As described above, reviews of corporate headquarters were conducted as a CMCE, per a directive released by OFCCP to the public (Directive Number 202). The goal of a CMCE is to determine whether there are artificial barriers to advancement into mid-level and senior corporate management positions. Furthermore, the regulations state that if OFCCP discovers problems at the corporate headquarters as part of a CMCE then the agency may expand the review to other establishments (CFR 60-2.30).

However, the new CSAL makes it clear that CMCE reviews are NOT included in the listing of potential compliance reviews, which implies that the corporate headquarters currently listed in the CSAL letter would undergo a routine evaluation. Specifically, the letter states:

In addition, the enclosed list does not include any establishment of your company that has been selected for an evaluation because of a contract award notice (i.e., pre-award review); monitoring activity during a conciliation agreement; credible reports of an alleged violation of a law or regulation, including complaints filed with the agency; or as part of the agency’s Corporate Management Compliance Evaluation (CMCE), Functional Affirmative Action Program (FAAP), or other agency initiative approved by the Director of OFCCP.

Why the change in audit direction? One possibility is that OFCCP is now changing its audit strategy and focusing on corporate compensation practices, with the idea of expanding this review to ALL of the contractors’ establishments if any issues are identified. Expanding a compliance review beyond one establishment would be a substantial change for not only OFCCP, but for the vast majority of federal contractors. Having worked on some audits that expanded to multiple establishments, we can say with confidence that these expanded audits could ultimately lead to very complicated and time consuming geographic and nationwide compliance reviews. In addition, potential contractor liability is greatly expanded. This may not be so farfetched considering the Secretary of Labor’s statement last summer after the Supreme Court’s ruling in Dukes v. Wal-Mart, “The Walmart decision won't affect our ability to address pay disparities on a broad scale — even if our lawyers have to tweak some of their legal arguments based on the reasoning used in that case.”

If this speculation is accurate and OFCCP proceeds down this path we can only assume that the legal community will challenge this issue under the 4th Amendment. The question will be whether OFCCP has the authority to expand a routine compliance evaluation more broadly and to other locations that were not selected using the FCSS system. Expansion to other locations may only be authorized when a headquarters establishment is selected as a CMCE, as described in CFR 60-2.30. OFCCP and Office of the Solicitor (SOL) may need to get creative (as recommended by the Secretary) and provide sufficient justification for audit expansion under Executive Order 11246.

One other issue to consider is whether OFCCP has officially altered the method in which an establishment is being selected for an audit by including corporate headquarters in selection for routine compliance evaluations. In other words, has the FCSS formally been changed? Since corporate headquarters are now being selected via the FCSS algorithm for the first time, it is logical to assume that something has changed. As such, it is also worth considering whether a refined FCSS is still admissible under the 4th Amendment’s requirement of administratively neutral establishment selection. Could an administratively neutral process select all corporate headquarters for compliance reviews? We doubt it.

We note one last and less controversial point; if there are establishments listed on the CSAL that have had another compliance evaluation of any kind in the prior 24 months from the date of closure, the location may be exempt from additional compliance evaluations. Stay tuned.

OFCCP SUBMITS SECOND NOTICE TO RESCIND COMPENSATION STANDARDS AND GUIDELINES TO OMB FOR REVIEW

by Fred Satterwhite, Principal Consultant, DCI Consulting Group

OFCCP submitted a "Notice of Proposed Rescission, Interpreting Nondiscrimination Requirements of Executive Order 11246 With Respect to Systemic Compensation Discrimination and Voluntary Guidelines for Self-Evaluation" to the Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA) on January 17, 2012.

This notice follows OFCCP’s first notice proposing to rescind the 2006 Standards and Guidelines, which was published in the Federal Register just over one year ago for public comment. It is expected that OMB will complete its review of the notice within the next few months, and the notice will appear in the Federal Register sometime around April or May, 2012. The Federal Register publication will likely include OFCCP’s interaction with the comments received from the public after the first notice was published and an official conclusion to rescind the Standards and Guidelines, in accordance with the agency’s stated goal since 2010.