DCI PRINCIPAL CONSULTANT DR. MICHAEL AAMODT TESTIFIES ON JOB-RELATEDNESS OF CREDIT CHECKS AT EEOC MEETING

by David Cohen, President, DCI Consulting Group

As described in a previous post, on October 20th EEOC held its first commissioner’s meeting of the year. The topic of interest was the use of credit checks to make employment decisions. The meeting was organized into 4 panels, and included panelists representing stakeholders who were both for and against the use of credit checks in employment decision-making.

Dr. Michael Aamodt, Principal Consultant at DCI, was invited by EEOC to testify as part of a final panel on a critical issue related to legal defensibility: what does the research show on job-relatedness? In other words, do credit checks predict importance aspects of performance on the job? If credit checks produce substantial impact against particular racial/ethnic groups and are generally not related to job performance, they may be a discriminatory selection tool. However, if credit checks are meaningfully related to important aspects of job performance, they may be defensible.

Mike summarized the available literature on this topic and concluded:

‘Given the potential levels of racial/ethnic adverse impact as well as the impact on individuals whose poor credit history is due to reasons often out of their control (e.g., divorce, illness), it would seem prudent for organizations using an applicant’s credit history to do so in the context of a thorough background check that would indicate whether a poor credit history is an anomaly or is indicative of a problematic lifestyle that might impact behavior at work.’

In other words, context matters in interpreting credit checks and making inferences from this information.

All of the panelists and testimony can be found here. The Washington Post published an insightful article on the topic over the weekend and emphasized Dr. Aamodt’s testimony. That article can be found here.

Dr. Aamodt’s complete written testimony can be viewed here.

OFCCP SUBMITS NOTICE TO RESCIND COMPENSATION STANDARDS AND GUIDELINES TO OMB

by Fred Satterwhite, Senior 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 October 25, 2010.

This is the first step in the official process to rescind the compensation standards and guidelines under which OFCCP has been operating since 2006- a move that has been publicly discussed by OFCCP Director Patricia Shiu in the last few months.

OIRA is also currently reviewing OFCCP's Notice of Proposed Rulemaking (NPRM) that would revise the regulations implementing the nondiscrimination and affirmative action provisions for veterans, including requirements to conduct substantive analyses of recruitment and placement activities and to use numerical goals to measure the effectiveness of the affirmative action program for veterans. OFCCP submitted this NPRM to OIRA on July 2, 2010, and it is currently targeted for publication in December, 2010.

EEOC HOLDS HEARING ON CREDIT HISTORY AS A SELECTION CRITERION

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

On October 20, 2010, the EEOC held a public meeting to explore the use of credit history in employment selection. There were essentially four major views registered.

The first view is that credit history is unfairly exclusionary during the current depressed economy. For example, EEOC Chair Jacqueline A. Berrien noted:

As a result, an ever increasing number of job applicants and workers are being exposed to employment screening tools, such as credit checks, that could unfairly exclude them from job opportunities. Today’s discussion provided important input into our agency’s work to ensure that the workplace is made free of all barriers to equal opportunity.

A similar opinion was expressed by several others, including Chi Chi Wu of the National Consumer Law Center (NCLC) who observed “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.”

A second view, expressed by Sarah Crawford of the Lawyers’ Committee for Civil Rights Under Law and Dr. Avis Jones-DeWeever from the National Council of Negro Women is that credit checks adversely impacts people of color, women, and people with disabilities. Crawford also argued that credit history is a poor predictor of job performance, and both Crawford and Woo argued that credit reports are riddled with errors and incomplete information.

A third view, expressed by Michael Eastman of the U.S. Chamber of Commerce, Christine V. Walters of the Society of Human Resources Management (SHRM) and Pamela Quigley Devata of the law firm Seyfarth Shaw, LLP was that use of credit histories is permissible by law, are limited in scope, and predictive in certain situations of reliability. Walters also argued that “credit histories are but one piece of the puzzle.”

Finally, DCI’s own Michael Aamodt, a Ph.D. industrial-organizational psychologist, said that there is considerable research on credit scores in relation to consumer decisions, but little research on their use in the employment context. He suggested that in view of the potential for discriminatory exclusion, it would be best to limit the use of credit history within the context of a thorough background check.

SUPREME COURT HEARS ORAL ARGUMENTS IN FLSA RETALIATION CASE

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

The case is Kasten v. Saint-Gobain Performance Plastics. The retaliation provision in the FLSA [from FLSA, 29 U.S.C. § 215(a)(3)] makes it unlawful for an employer covered by the FLSA to:

Discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about to testify in any such proceeding.

The key term in this provision is the word “filed.” More specifically, does the word “filed” apply to internal (or intra company) complaints made orally to supervisors and/or other high-level representatives of the employer, or must the complaint be in writing?

In this case, Kevin Kasten refused on four occasions to swipe in and out on a time clock because the location of the clock prevented employees from being paid for time spent donning and doffing protective gear. He made oral complaints to his supervisor and to HR representative. Kasten, who was later terminated, claimed his termination was retaliation for numerous verbal complaints he made regarding the location of the clock. The company argued that he was terminated for failing to time in and out after several warnings, and that no formal complaints were made. The district court rendered summary judgment for the company, and the 7th Circuit affirmed on grounds that internal complaints that are “purely verbal” are not protected by the FLSA (see 507 F.3d 834).

The Supreme Court heard oral arguments on October 14, 2010. A summary of the oral arguments may be viewed at the Law.com website. The oral arguments in there entirety may be heard here.

Key excerpts from the oral arguments are as follows:

Justice Alito: posed the scenario of a machine breaking down on the factory floor and a worker who, upon seeing a supervisor walking by, taps the supervisor on the shoulder and says the broken machine needs to be fixed or there is a violation of the statute. "Is that enough" to constitute a filed complaint, he asked.

Justice Sotomayor: wondered about the employee who is at a cocktail party, sees a supervisor and complains of a wage-and-hour violation.

Assistant to Solicitor General Wall: there are 20 or more federal statutes with similar anti-retaliation provisions that cover oral complaints. He said the practical problems suggested by the justices have not materialized under those laws.

Justice Breyer: pressed Wall for a rule or standard that provides some formality to oral complaints in order to avoid the cocktail party scenario. "Whether the employee has put the employer on notice that he is asserting rights to something that he is entitled to," responded Wall. "Here there is no question that [Kasten] asserted his statutory rights. He went to his supervisor and went up the ladder to complain. He said he was thinking about suing because workers were not getting overtime pay."

Attorney Phillips for Defendant: said the justices' questions proved that his opponents were arguing for an "inherently unworkable standard." Phillips said the law's anti-retaliation provision covered only written complaints, and written complaints filed only with the government, not within the company. "This statute was not intended for the protection of the employee or employer," he argued. "It was intended to get information to the government. It's a very narrow approach."

Justice Ginsburg: told Phillips that she thought the act protected workers. In 1938, when the law was enacted, she noted, many workers were poor, illiterate or did not speak English. "Wouldn't Congress have meant to protect them?"

Attorney Phillips Responded: The retaliation provision was enacted later, noted Phillips, adding, "Here we're talking about a Congress that made a very different judgment. When [the statute] talks about filing a complaint, about initiating or instituting a procedure, what they have in mind is an official government agency."

Attorney Kaster for Plaintiff: said other statutes, such as the Migrant Workers Act, have identical language to the FLSA and cover oral complaints. "It's implausible to think migrant workers would leave the field to file written complaints with a government agency," he said. "Migrant workers, coal miners, factory workers -- they don't write memos. This has to have a broad interpretation. Employees are the engine that drive this act."


What does it all mean?

There are major differences in wording in the FLSA versus other statutes. For example, Title VII has a participation clause (i.e., filing a formal complaint with the EEOC) and an opposition clause (opposing an employer action by complaining to supervisors or HR representatives). The record in this case reveals that Kasten satisfied the opposition clause as written in Title VII. The problem is that the FLSA does not have an opposition clause. My own feeling is that Kasten may have a winning hand given prior Supreme Court rulings relating to statutes in which retaliation claims were upheld despite absence of controlling language, including Section 1981 (CBOCS West v. Humphries, 2008), Section1982 (Sullivan v. Little Hunting Park, 1969), Title IX (Jackson v. Birmingham Bd. of Ed., 2005), and the ADEA (Gomez-Perez v. Potter, 2008).

COCA-COLA BOTTLER SETTLES WITH OFCCP FOR $495K

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

The Black Satchel Road distribution facility in Charlotte, North Carolina, the second-largest Coca-Cola bottling company in the United States, agreed to a $495,000 settlement to be distributed equally to 95 African-American and Hispanic jobseekers who applied for sales support positions. The company also agreed to make employment offers to the 95 applicants until at least 23 interested applicants are hired. Those hired will receive retroactive seniority benefits accruable since July 21, 2002. The settlements are a result of an OFCCP investigation showing statistically significant differences in the hiring rates of minorities versus non-minorities. In the words of the OFCCP:

OFCCP's statistical analysis determined that the disparity in hires was too great to occur solely by chance. Additionally, OFCCP found that the bottler's own records revealed instances in which rejected minority applicants had more experience and education than some non-minority hires.

The full text of the settlement may be found on the DOL web site.

OFCCP FY 2010 COMPLAINTS AND COMPLIANCE EVALUATIONS – THAT’S A WRAP

by David Cohen, President, DCI Consulting Group

OFCCP’s fiscal year ended on Thursday, September 30th, marking the close of the second year under the Obama administration. During the 2010 fiscal year, the OFCCP proposed many regulatory and policy changes, and some of those new initiatives are currently under review, while others have been implemented. In the meantime, the OFCCP continued to conduct routine and complaint driven compliance evaluations. The following snapshot of 2010 enforcement data was summarized from the Department of Labor’s enforcement database as of October 2, 2010.

Note: Some of the information in the database and summary data do not correspond with publicly made statements by officials at OFCCP and other reports based on actual conciliation agreements. In addition, other information appears to be incorrect due to database input errors. For example, an individual claim of discrimination under Section 503 of the Rehabilitation Act (disabilities) had a finding of gender discrimination. Another example is a technical violation that resulted in a conciliation agreement for hiring discrimination.

FY 2010 Complaints
There were 107 complaints of discrimination made to OFCCP during the 2010 fiscal year. Based on the data, the OFCCP conducted an investigation on 105 out of the 107 (98%). Interestingly, 20 of the individual claims were classified under the ‘class action’ category. According to the data, only 14 (13%) findings of discrimination were identified based on these complaints.

Total Number of Complaints - 107
• Executive Order 11246 - 26 (24.3%)
• Section 503 of the Rehabilitation Act – 33 (30.84%)
• VEVRAA - 42 (39.25%)
• Other – 6 (5.61%)

Violations Identified based on these complaints
• Seniority – 3
• Job Benefits – 1
• Pregnancy – 3
• Religious Discrimination – 3
• Violation Other – 4


FY 2010 Compliance Evaluations
The OFCCP closed 3,896 compliance evaluations during the FY 2010 year. This number does not include the number of compliance evaluations that were initiated during the fiscal year nor does it include those compliance evaluations that were scheduled prior to FY2010 and remain open.

Total Reviews Closed – 3,896
• Notice of Compliance – 3.363 (86.32%)
• Conciliation Agreement (Technical Violation) – 466 (11.96%)
• Consent Decrees – 3 (0.08%)
• Financial Settlements – 64 (1.64%)

Violations from Conciliation Agreements (with only Technical Violations) - 466
• No Written AAP - 44
• Past Performance – 136
• Record Keeping – 191
• Outreach and Recruitment – 240
• Denial of Records – 1
• Hiring – 3
• Selection or Testing – 3
• Salary – 2

Violations from Consent Decrees – 3
• No Written AAP – 1
• Record Keeping – 2
• Denial of Records – 1
• Hiring – 3
• Systemic Discrimination – 3

Violations from Financial Agreements - 64
• No Written AAP – 3
• Past Performance – 12
• Record Keeping – 38
• Outreach and Recruitment – 3
• Hiring – 49
• Promotion – 1
• Termination – 1
• Salary - 7

UNLIKELY GROUP CHARGES BIAS AT UNIVERSITY

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

So says Lisa W. Foderaro in a New York Times article dated September 14, 2010. According to Foderaro, the City University of New York (CUNY) which she described as one the country’s most diverse higher educational systems has “quietly” struggled with a minority group that has been passed over for jobs --- Italian-Americans. Accordingly, an employee filed a lawsuit, and some state lawmakers want to hold hearings on what they call “blatant ethnic bias.”

Interestingly, Foderaro writes that CUNY may be the only university system that has declared Italian-Americans as an official affirmative action category. This declaration was made in 1976 after Italian-American state legislators responding to complaints from faculty and staff created a research institute to counsel students of Italian heritage and study the “Italian-American experience.” The original declaration has been reaffirmed in later years. The research institute is now known as the John D. Calandra Italian American Institute, named after the late state senator who first held hearings on Italian-Americans at CUNY.

In the intervening years, a group of Italian-American professors and staff members of the research institute have continued to make the case that CUNY has failed them. As noted by Ms. Foderaro:

They have produced a mountain of manifestoes, research studies and lawsuits, and exposed a deep vein of grievance in an ethnic group that has risen to prominence in fields like politics, law and medicine. Some of the dissidents have lamented that Italian-Americans are still stereotyped in popular culture as mobsters or muscle-bound buffoons; others have described an unsympathetic Italian-American administrator as an “Uncle Tony” — the equivalent of an Uncle Tom.

Interestingly, in 1994, CUNY agreed to settlement sanctioned by Federal Judge Constance Baker Motley who, at the time, called the lack of progress, “unconscionable given the existence of an affirmative action commitment.” The current lawsuit was filed by Dr. Vincenzo Milione, a researcher at the Institute. Dr. Milone has charged that the Anthony J. Tamburri, the current director of the Institute, retaliated against him by cutting his staff and denying him a prestigious job title after he mad a presentation to Italian-American lawmakers in Albany in 2006.

There is a good deal here for the interested reader. There are charges and denials, statistics, and more statistics. There is even mention of two Italian-American presidents at CUNY branches (Kingborough Community College and City College (which is the original CUNY school).

DCI CONTRACTOR SURVEY

Applicant Tracking Systems have become a great tool for recruiting, they are used widely throughout the federal contractor community and have revolutionized the hiring practice. While assisting our clients, DCI has encountered numerous ATS vendors and products. To get a better idea of the collective feedback of the contractor community, DCI has created the following industry survey.

https://www.surveymonkey.com/s/F78H9K3

This ten question survey will take approximately five minutes to complete. The intent of this survey is to gather information from a compliance perspective on applicant tracking systems currently used by the federal contractor community. Specifically, DCI Consulting Group will be compiling your survey responses to deem the functionality, effectiveness and overall satisfaction of various applicant tracking systems. The information gained from this survey will be made available to the federal contractor community through a DCI Consulting Group client alert.

Your specific responses will be kept confidential.