OFCCP TO CONDUCT WEBINAR ON COMPLIANCE WITH THE NEW FUNCTIONAL AFFIRMATIVE ACTION PROGRAM (FAAP) DIRECTIVE

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

The OFCCP announced today that it will host a Webinar on August 9, 2011 on how to comply with the new FAAP Directive, which became effective June 14, 2011 for covered contractors and their subcontractors. The webinar will overview key changes to the FAAP Directive, and procedures for requesting, renewing, modifying and terminating FAAP agreements. Under regulations implementing Executive Order 11246 [at 41 CFR 60-2.1 (d) (4)] permits federal supply and service contractors to develop affirmative action programs (AAPs) organized around distinct business functions or lines of business rather than AAPs based on contractor establishments. Under the new regulation, federal contractors must have an agreement approved by the OFCCP Director to develop and operate under a FAAP. The webinar is scheduled for 1.5 hours, including 30 minutes of Q&A. Interested readers should e-mail questions in advance of the webinar (subscriptions@subscriptions.dol.gov), as it is expected that maximum capacity will be reached quickly. It was noted that due to constraints in the system, registration confirmation does not guarantee a slot in the webinar.

8TH CIRCUIT COURT UPHOLDS EEOC SUBPOENA FOR CLASSWIDE DATA BASED ON INDIVIDUAL SEX DISCRIMINATION CLAIM

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

The case is EEOC v. Schwan’s Home Service [ 2011 U.S. App. LEXIS 14291, 7/13/11]. The facts are that Schwan hired Kim Millren in March 2007 as a location general manager under the condition that she successfully complete the company’s General Manager Development Program (GMDP). Schwan informed Millren she lacked the leadership skills needed to graduate and offered her a customer service job. Millren refused the offer and filed a charge of sex discrimination with the EEOC, alleging, among other things, that during the GMDP training, she was subject to sexually offensive remarks and derogatory emails. End of Act 1.

In Act 2, the EEOC asked Schwan for a list of all employees participating in GMDP in 2006 and 2007 (name, gender & date of hire), to which Schwan forked over data for 2007, but not 2006, and no breakdown for gender even for 2007. Subsequently, Millren made an additional allegation that she observed a female managerial candidate rejected because she had three children at home. Millren also offered that had she graduated from GMDP she would be only one of two female managers among 500 managers nationwide. The EEOC then requested information related to Millren’s additional allegation, and reiterated its request for data (with gender breakdown) for 2006 and 2007. Schwan failed to respond, leading to an EEOC subpoena in July 2008, followed by an amended claim of classwide sex discrimination by Millren in February 2009.

Schwan mounted two defenses: (1) that the charge of systemic discrimination was time barred by Title VII’s (300 day) statue to limitations and (2) that Millren’s charge of systemic discrimination was based solely on Millren’s unsubstantiated beliefs. The 8th Circuit ruled that the timeliness charge was “premature” because “ the appropriate time to address the timeliness issue is if and when an actual lawsuit is filed, not during the subpoena enforcement stage.” On the second defense, the 8th Circuit ruled that the EEOC charge “is valid regardless of the strength of its evidentiary foundation” as long as EEOC’s basis for an administrative subpoena is “valid”, the main criterion for which is the so-called “relevancy requirement.” According to the 8th Circuit, the relevancy requirement is met as long the requested data “might cast light on the allegations” (as opposed to wandering into “wholly unrelated areas.”

The bottom line is that both the lower court and the 8th Circuit favored the EEOC’s right to subpoena the requested data. The implications of this ruling is fairly obvious. Except in cases where an administrative body engages in a “fishing expedition”, the 8th Circuit supported the right to seek data that can range well beyond an individual claim.

OFCCP DIRECTOR SHIU CONDUCTS Q&A SESSION

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

The Q&A occurred on July 12, 2001 and a text of the session may be accessed at http://www.dol.gov/regulations/chat-ofccp-201107.htm (July 12, 2001). During the session, Director Patricia A. Shiu revealed several important pending developments. Among her introductory remarks, she announced that the OFCCP is “engaged in several efforts to strengthen and update our regulations, bringing them in line with current law and adjusting to the realities of a modern labor force.” She also said OFCCP agenda is consistent with the DOL’s 2011 Semi Annual Regulatory agenda, which reflect DOL Secretary Hilda Solis’ vision of “Good Jobs for Everyone in workplaces that are safe, fair, equitable and free of discrimination.” Shiu emphasized that there are five entries in the DOL’s new regulatory agenda “to improve employment opportunities for veterans, for people with disabilities and for women and minorities in the construction trades. Shiu also noted that the OFCCP is moving forward with a data tool to improve its ability to combat pay discrimination, and it will be seeking public comment on proposed revisions to guidelines on sex discrimination.

The following are selected sample excerpts from Director Shiu’s responses to specific questions.

• The final Section 503 regulations are still under review, and the proposed regulations will be published for public comment in the Federal Register sometime in the next month. Once review is complete, an NPRM for Section 503 will be published sometime in the next month.


• It takes an average 40 works hours to complete a desk audit, depending on the size of the contractor’s workforce and issues identified during the audit.


• The OFCCP is reviewing minority and female construction goals and is considering updating affirmative action requirements.


• ANPRM (a compensation data collect tool) is in the final stages of review and should be published within the next few weeks.


• The OFCCP is currently recruiting for a Regional Director in the Midwest and Deputy Regional Directors in the Northeast, mid-Atlantic, Midwest and Dallas regions.


• In response to a question specific to community colleges, Director. Shiu responded that any non-construction contractor with a federal contract of $10,000 or more is covered by the OFCCP regulations.


• There are a variety of ways to document good faith compliance, including copies of job postings, correspondence, and documentation of community outreach with workforce agencies or training and educational organizations.


• Once regulations are finalized, contractors will have 120 days from the time of becoming a covered contractors to revise AAPs in relation to Section 503


• Contractors should continue to use 2000 census data until 2010 data is available.


• Contractors with fewer than 50 employees at a given establishment may cover their employees in an AAP covering just that establishment, in an AAP that covers personnel functions, or in an AAP of the managing official to whom they report.


• The OFCCP has published guidance on the use of race and ethnic categories at http://s.dol.gov/H7


• The OFCCP does not require any particular methodology for analyzing pay practices.


• The OFCCP is not actively auditing establishments with fewer than 50 employees, but will investigate complaints against contractors of any size.


• The updated OFCCP Compliance manual will be published sometime this fall.


• If there are no technical violations and no findings of discrimination, an audit will generally be completed in 90 days.


• There are several major differences between Active Case Enforcement (ACE) and Active Case Management (ACM). Under ACE, OFCCP uses all of the compliance evaluation investigative methodologies specified in the regulations (i.e., compliance review, offsite review of records, compliance check and focused review), whereas under ACM, only the compliance review method id used. Under ACM, a full desk audit was only conducted where there were indicators of discrimination or in every 50th review. ACE procedures require a full desk audit in every compliance evaluation. Additionally, ACM procedures focused on identifying cases where there were 10 or more affected class members, whereas ACE does not have a minimum affected class member threshold.


• The OFCCP applies Title VII standards in compensation cases as it did in the AstraZeneca case.


• The OFCCP has increased communications with the EEOC and DOJ to develop a unified civil rights agenda in light of President Obama’s vision for these agencies.


• There are non-statistical tools consistent with Title VII principles including anecdotal evidence, evidence of individual instance of discrimination, and any other evidence relevant to the question of whether there is unlawful discrimination.


• The OFCCP uses several databases to determine whether an employer is a federal contractor, such as the Central Contractor Registration (CCR), Federal Procurement Data System-New Generation (FPDS-NG), EEO-1 Surveys, and Dun & Bradstreet.


• In the first six months of Fiscal Year 2011, OFCCP has completed 44 financial conciliation agreements that include $5.66 million and 657 job offers for 8,090 victims. This compares favorably to the same period last year when we had completed 35 financial CAs totaling $2.77 million and 582 job-offers for 3,157 victims. This represents a 25 percent increase in CAs, more than double the financial remedies and, most importantly, an increase in job opportunities for workers who faced discrimination.

Please note that these are excerpts I found most interesting. Also, among all the issues discussed, I think the most noteworthy event to look forward to are changes in sex discrimination guidelines, which have not been made in several decades.

HILDA SOLIS ADDRESSES WAL-MART V. DUKES RULING

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

Secretary of Labor Hilda L. Solis addressed the 22nd convention of the National Employment Lawyers Association (NELA) on July 1, 2011, and a highlight, if not the focus of her remarks, was on the Supreme Court’s recent ruling in Wal-Mart v. Dukes. Her major point is that class certification under Federal Rule 23 does not apply to the OFCCP. Or to use her words:

Here's an important point: The Supreme Court's Walmart ruling was limited to class actions under Rule 23 of the Federal Rules of Civil Procedure. But my department's efforts to eliminate workplace discrimination in America don't depend on this rule. …. We enforce an executive order that says federal contractors can't discriminate. We have oversight over any company doing at least $10,000 of government business a year. This means that Pat's office can obtain class-wide relief for victims of pay discrimination without having to file a class action lawsuit. … 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.

Solis then emphasized the DOL’s commitment to seek remedies for pay discrimination against women and minorities and promised to increase the percentage of pay investigation from 14% in the preceding year to 20 to 40% going forward. She also noted that the Obama administration remains committed to the Paycheck Fairness Act, which failed by only two votes in Congress last year.

Among other comments, Solis promised to:

• close loopholes that give employers unjustified defenses to discrimination


• strengthen the ban on retaliation against those who complain about unequal pay


• rescind the Bush-era guidelines that prevent effective enforcement of equal pay laws.


• create more flexible workplaces so women don't have to choose between motherhood and a fulfilling career


• enforce a new provision in the Affordable Care Act that guarantees break time for nursing mothers.

Solis also promised to focus Wage & Hour cases on “enterprise-wide” enforcement, meaning that if violations are found in one workplace, it will be assumed that the practice is occurring at other company locations. She gave two examples of recent violations in Ohio (a company with 520 locations) and a biometric equipment company in California that markets to police and government agencies. Solis credited recent successes to the hiring of 350 new wage and hour investigators. She then warned that “anyone who views back wages and fines for pay violations as the cost of doing business is going to have big problems with my Department.”

She closed by telling the audience “I'm proud to be here today. Good morning, God bless, and have a wonderful convention.” I’m sure a good time was had by all. For the full text of the address, go to http://www.dol.gov/_sec/media/speeches/20110701_NELA.htm

5TH CIRCUIT DECLINES EN BANC REVIEW OF FISHER V. UNIVERSITY OF TEXAS

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

On August 17, 2009, Judge Sam Sparks of the US District Court for the Western District of Texas granted summary judgment to the University of Texas (UT) at Austin in a lawsuit by two white applicants claiming, via the 14th Amendment, that they were unfairly denied admission on the basis of race [556 F. Supp. 2d 603]. Citing the Supreme Court’s rulings in Grutter v. Bollinger (2003) and Parents v. Seattle School District (2007), Judge Sparks ruled that UT had a compelling government interest in achieving diversity in their undergraduate programs, UT exhausted race-neutral methods in failed attempts to achieve diversity, and therefore, UT’s race-conscious plan was narrowly tailored toward the goal of achieving diversity. In the words of Judge Sparks:

Accordingly, the Court finds UT's consideration of race in admissions is narrowly tailored. In fact, it would be difficult for UT to construct an admissions policy that more closely resembles the policy approved by the Supreme Court in Grutter. Nothing in Grutter prohibits a university from using both race-neutral alternatives and race itself, provided such an effort is necessary to achieve the educational benefits that stem from sufficient student body diversity. Such efforts should in fact be encouraged as the next logical step toward the day when consideration of a person's race becomes completely unnecessary. But, until that day, universities are not required to exhaust every possible race-neutral alternative as long as they consider those alternatives seriously and in good faith. UT not only considered several race-neutral alternatives, it implemented them and continues to use them to this day. But, despite those efforts, UT still found diversity lacking in its student body and thus decided to consider race as part of its admissions process. Under Grutter and Parents Involved, UT's decision and the ensuing admissions policy is narrowly tailored to further a compelling governmental interest.

This ruling was subsequently supported in a unanimous opinion by a four-judge panel of the 5th Circuit on January 18, 2011 [631 F.3d 213], and on June 17, 2011, a larger panel of 5th Circuit judges voted 9 to 7 to refuse an en banc hearing [2011 U.S. App. LEXIS 12387]. Therefore, unless it goes to the Supreme Court, this case is over.

The precedent setting cases for the present case are Hopwood v. Texas (1996), Grutter v. Bollinger (2003) and Gratz v. Bollinger (2003). Briefly, in Hopwood, the 5th Circuit struck down an admissions plan UT had in which minority applicants were placed in higher categories. In Grutter, a 5-4 majority of the Supreme Court ruled that the University of Michigan’s race-conscious Law School admissions policy was legal under the 14th Amendment because diversity is a compelling government interest and the Law School’s plan for establishing a “critical mass” of underrepresented minority students because, in Justice O’Connor’s words “the program is flexible enough to ensure that each applicant is evaluated as an individual and not in a way that makes race or ethnicity the defining feature in the application.” In contrast, in Gratz, a 7-2 majority of the Supreme Court overturned the University of Michigan’s undergraduate admissions plan. In comparing the Gratz and Grutter rulings, Justice O’Connor stated:

Unlike the law school admissions policy …. The procedures employed by the …. Office of Undergraduate admissions do not provide for a meaningful individualized review of applicants. … The Law school considers the various diversity qualifications of each applicant, including race, on a cases by case basis. … By contrast, the Office of Undergraduate Admissions relies on the selection index to assign every underrepresented minority the same, automatic 20-point bonus without consideration of the particular background, experiences, or qualities of each individual applicant.

Readers interested in more detailed accounts of the facts and circumstances surrounding the Gratz and Grutter rulings should check out the following links.

http://www.siop.org/tip/backissues/Oct03/pdf/412_117to127.pdf
http://www.siop.org/tip/backissues/July03/pdf/411_144to153.pdf
http://www.siop.org/tip/backissues/Apr03/pdf/404_060to069.pdf


What’s interesting with respect to the present case is that UT found a way to provide individualized attention in a race-conscious undergraduate admissions program, where other undergraduate universities have failed.

More specifically, after the Hopwood ruling, UT eliminated all race-conscious admissions programs. However, after the Grutter ruling, UT commissioned studies that showed there were failures in the system to enroll a “critical mass of underrepresented minorities.” Ultimately, the university applied a “two-tier” system for Texas residents, which account for 90% of UT annual admissions (the other 10% goes to out of state and international applicants). The first tier consists of Texas residents in the top 10% of their high school graduating class, who are guaranteed admission. This accounts for roughly 88% of the Texas residents admitted. Second tier Texas Residents are then considered on an individual basis based on their Academic Index (AI), which considers standardized test scores and high school rank, and the “Personal Index (PI), which is based on performance on two required essays and the “Personal Achievement” (PA) score. The calculations are complex, but in a nutshell, the kicker is a section in the PA score that permits consideration of “special circumstances”, including socioeconomic status.

The moral of the story is that large undergraduate institutions can engage in race-conscious plans if they (1) study their own diversity (or lack thereof), (2) make serious attempts to enforce race-neutral solutions (that subsequently fail), and (3) focus the definition of diversity not so much on race, per se, but rather, on socioeconomic and/or sociocultural disadvantage.

VERIZON SETTLES WITH EEOC ON ADA LAWSUIT

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

In an agreement announced on July 6, 2011, the EEOC reported that Verizon Communications has agreed to a $20 million settlement related to the company’s “no fault” attendance plan (see http://www.eeoc.gov/eeoc/newsroom/release/7-6-11a.cfm). Under this plan, employees who accumulate a designated number of “chargeable absences” are placed on a disciplinary step that ultimately, could result in termination. The basis of the original ADA lawsuit is that Verizon failed to provide reasonable accommodations by failing to consider if “chargeable absences” are caused by disabilities. This is the largest EEOC settlement ever in an ADA lawsuit. Court approval is pending.

In addition to the monetary relief, the proposed consent decree, which is for three years, includes injunctions against “engaging in any discrimination or retaliation based on disability, and requires the company to revise its attendance plans, policies and ADA policy to include reasonable accommodations for persons with disabilities, including excusing certain absences.” Verizon is required to train employees responsible for administering attendance plans on critical requirements of the ADA. Verizon is also required to report individual complaints to the EEOC, post a notice about the settlement, and to appoint an internal monitor to ensure compliance.

CCE SUBMITS COMMENTS ON VETERANS NPRM AND PROPOSED SCHEDULING LETTER CHANGES

July 11, 2011 - CCE submitted the following comments on OFCCP’s NPRM for the Veterans AAP regulations and proposed changes to the scheduling letter’s itemized listing. These comments were submitted through www.regulations.gov.

CCE Comments on Veterans Regulations
CCE Comments on Changes to the Scheduling Letter

OFCCP RELEASES 2011 REGULATORY AGENDA

OFCCP Director Patricia Shiu announced last Thursday, July 7th, the release of their regulatory agenda for this past spring of 2011. In the agenda, OFCCP has ambitiously proposed regulations over the next year for veterans, individuals with disabilities, women, and minorities. Additionally, OFCCP casually noted a new compensation data collection tool that was slated for proposal last month. An outline of the regulatory agenda and timeline is as follows:

• Compensation data tool - ANPRM June 2011 with NPRM June 2012


• Veteran Regulations – final rule target date not announced


• Section 503 - NPRM August 2011


• Sex discrimination guidelines (41 CFR 60-20) - NPRM February 2012


• Construction regulations - NPRM November 2011

If the Spring 2011 Regulatory Agenda is an accurate depiction of when new regulations will be proposed, both OFCCP and the contractor community will be facing a busy upcoming year. Director Shiu invites the contractor community to join her for a live web chat on Tuesday (7/21) at 1:00 PM (EST) which will feature an open dialogue to discuss the regulatory agenda with questions from the contractor community welcomed.

CCE SUBMITS COMMENTS ON VETERANS NPRM

The Equal Employment Advisory Council, the U.S. Chamber of Commerce, the National Association of Manufacturers, The Associated General Contractors of America, the Center for Corporate Equality, and the HR Policy Association submitted a letter to the Hon. Hilda L. Solis (Secretary of Labor), Debra A. Carr (OFCCP) and others asking for immediate withdrawal of the Notice of proposed Rulemaking (“NPRM”) in regard to Veterans. The letter stated that they fully support OFCCP’s stated overall goal of increasing employment opportunities for covered veterans, but could not support a significant new regulatory scheme that places far greater emphasis on ineffective paperwork requirements than it does on practical programs to employ U.S. veterans. The letter urges OFCCP to engage businesses, organizations, and other experts to develop a proposal that would meaningfully improve the quantity and quality of job opportunities for our nation’s veterans, without imposing the burdensome administrative, recordkeeping, and paperwork requirements contained within OFCCP’s proposal as written on the very employers expected to provide those job opportunities. See attached for full letter

DCI STAFF ATTEND EEOC MEETING ON DISPARATE TREATMENT IN HIRING

by Eileen Curtayne, Ph.D. and Jana Moberg, HR Analysts DCI Consulting

On June 22, 2011 the EEOC hosted a commission meeting to address potential strategies for identifying and remedying disparate treatment in applicant hiring. According to the agency, although many organizations are taking proactive steps to prevent unlawful discrimination in their workplaces, disparate treatment is still a pressing concern.

Katharine W. Kores, District Director, EEOC Memphis District Office; Bill Lann Lee, Partner, Lewis Feinberg, Lee, Renaker, & Jackson, P.C. and Grace E. Speights, Partner, Morgan, Lewis & Bockius, LLP participated in the first panel discussion (“Overview of Disparate Treatment in Hiring”). Kate Boehringer, Supervisory Trial Attorney, EEOC Baltimore Field Office; Ana Lopez, Charging Party/Class Member, EEOC v. Area Temps, Inc.; Diane Smason, Supervisory Trial Attorney, EEOC Chicago District Office and Jeannette Wilkins, Charging Party/Class Member, EEOC v. Scrub, Inc. participated in the second panel discussion (“Overview of EEOC’s Litigation”). Marc Bendick, Jr., Ph.D., Bendick & Eagan Economic Consultants, Inc. and Rae T. Vann, General Counsel, Equal Employment Advisory Counsel participated in the third panel discussion (“Overview of Hiring Discrimination Research & Training”).

Panelists generally agreed that disparate treatment in hiring poses a unique problem for enforcement agencies, lawyers, and victims of discrimination because applicants frequently do not know that they have been victims of unlawful discrimination. Once an applicant submits his/her application to a hiring organization, there is rarely any feedback regarding why a particular employment decision has been made.

EEOC General Counsel David Lopez characterized the disparate treatment challenge as the result of a fundamental “asymmetry between employee and employer”. The imbalance of knowledge necessitates the EEOC’s consideration of non-traditional methods for identifying potential instances of discrimination. Some of the strategies proposed by the panelists and the commissioners included:

1. Increased reliance on Commissioner Charges. The EEOC does not need an employee or private citizen to bring a claim against an employer. An EEOC commissioner can file a charge against an employer if there is reliable anecdotal evidence to support the charge.




2. Examining the narratives of an individual’s claim for potential indicators of systemic discrimination in organizations. For example, if a woman files a claim of sex discrimination in a termination case and it is revealed during the course of the investigation that she was the only woman working in her department, this may be evidence of a larger systemic problem.




3. Joining forces with outside organizations and agencies (e.g., DOJ, OFCCP, other DOL agencies) to capitalize on available resources;




4. Investigating the utility of conducting “matched pair” inquiries. Essentially, individuals with the same qualifications but different demographic characteristics apply for the same position. The outcome of the application/interview process is then evaluated to determine whether an organization or hiring manager is engaging in discrimination. This methodology was used by both EEOC and OFCCP in the 1990s.




5. comparing EEO1 data of similar companies (i.e. industry, size, location, etc.) as a baseline comparator to identify potentially meaningful differences in workforce composition.

Education and training regarding an employer’s responsibility under the law and the value of diversity in an organization have proven to be effective in combating discriminatory practices. However, the panelists and the commissioners emphasized a need for the EEOC and employers to expand on those efforts. In particular, concern was expressed regarding how to effectively identify and address HR professionals/hiring managers who are aware of the law, but nevertheless act to circumvent the law based either on a directive by their employer or the execution of the employee’s personal hiring prejudices. The panelists also discussed the challenge of identifying and properly training hiring managers who are unconsciously behaving in a manner that is not consistent with the law, and how to educate and provide resources for small companies that do not have an HR Department or professional on staff.

The Commission and panelists also engaged in a dialogue about the value of pursuing legal avenues and organizational remedies for holding the individual employee (e.g. hiring manager) accountable for perpetrating disparate treatment in the hiring process. Commissioner Feldblum stated that a literal reading of the statute suggests that an individual agent of an organization who engages in behavior that results in disparate treatment could be held liable for damages. Commissioner Feldblum recognized that this interpretation was not supported by case law and asked the members of panel one to discuss whether they thought holding individuals (e.g. hiring managers who are dismissive of the regulations) responsible for damages would be a worthwhile endeavor. Mr. Lee suggested that the best mechanism for individual accountability in these circumstances was likely not the law, but organizational culture and policy. The panelists suggested that companies can increase employee compliance by encouraging a “top down” culture that supports EEO and affirmative action initiatives, encourage HR professionals to interact with operations professionals, and develop accountability mechanisms within the company to address the actions of rogue hiring managers.

Additional recommended best practices for organizations to consider implementing include:

• training recruiters and HR professionals on their responsibility to maintain accurate records;



• adopting the use of sophisticated applicant tracking systems to detail and keep accurate records of the hiring process;



• taking proactive steps to broaden the pool of qualified applicants;



• providing companywide training programs on regulatory compliance and how to eliminate unconscious biases from the interview exchange; and



• conducting proactive audits of employees (particularly HR professionals and hiring managers) on their knowledge of EEO and affirmative action regulations.

Detailed transcripts of the Commission meeting, a video of the event, and witnesses’ statements can be found here. Please contact Eileen Curtayne at ecurtayne@dciconsult.com if you have questions about this topic.