OFCCP FILES ADMINISTRATIVE COMPLAINT AGAINST CARGILL MEAT SOLUTIONS

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

The complaint was filed on 11/29/11 with the OFCCP’s Office of Administrative Law Judges (see http://www.dol.gov/opa/media/press/ofccp/OFCCP20111648.htm). It alleges that Cargill “systematically discriminated against 4,069 qualified female, white, black, Hispanic and Native American applicants who sought entry-level production jobs at its Springdale facility”, and was filed after the OFCCP was unable to secure a settlement that would provide back pay and interest to rejected job applicants and extend job offers to at least 167 applicants.

According to the OFCCP, the source of the alleged discrimination is that “the company's selection criteria were subjectively and inconsistently applied.” As a result, the OFCCP alleges that women were less likely to be hired for entry level jobs than man and, more interestingly, there was systemic discrimination against whites and blacks (among others), which the OFCCP attributed to favoritism of Asian and Pacific Islanders over other racial groups.

The OFCCP is seeking cancellation of Cargill’s existing government contracts (estimated at 550 million dollars) and debarment from entering into future contracts “until the company resolves all violations and corrects its discriminatory employment practices.

RECOMMENDED ACTIONS AND RESOURCES FOR THE RECRUITMENT AND RETENTION OF QUALIFIED VETERANS

by Eileen Curtayne, Ph.D., DCI Consulting Group

The government is responding to the return of our military service members with various initiatives to increase veterans’ employment opportunities in the civilian workforce. One initiative that will directly affect the federal contractor community is the proposed revisions to the Affirmative Action regulations for Veterans (i.e. Section 4212).

DCI Consulting invited Ron Drach, the President of Drach Consulting, to provide DCI’s clients with guidance on best practices and resources for transitioning and recruiting military service members into the civilian workplace. Mr. Drach is a service disabled veteran who has more than 40 years of experience working on veteran’s issues including employment, vocational rehabilitation, homelessness, transitioning service members, and disability issues.

Mr. Drach indicated that the successful recruitment and retention of qualified veteran applicants involves (1) creating a corporate image and environment that is friendly to veterans, (2) identifying sources that are relevant to your organization for the recruitment of veterans (a central system currently does not exist), (3) identifying resources to assist with translating military experience into civilian job related skills and (4) considering how to provide accommodations to wounded veterans.

The following is a list of recommended actions and resources presented by Mr. Drach:

• Use ONET (www.onetonline.org) to assist in translating the skills and abilities of military personnel to comparable skills and abilities for the position(s) your organization has posted.


• Work with the resources you have in your organization to assist with finding qualified candidates and supporting those candidates once they have become employees in your organization.
  ---It is highly probable your organization already has veteran employees. These employees can assist in translating corporate job descriptions or resumes submitted by veterans; they can assist with developing affinity groups in your organization to provide support for recently returned veterans; and they can assist with mentoring programs for newly hired veterans.


• Collaborate with employers in your industry to develop coalitions designed to train and recruit veterans.
  -- Northrop Grumman established Operation IMPACT (Injured Military Pursuing Assisted Career Transition) with a network of other companies to provide services that will assist injured returning service members and their families with career transition support and job placement.


• Develop partnerships with DOL, non-profits like Wounded Warrior, or Universities to increase the pool of qualified candidates.
  -- Microsoft has partnered with the DOL to provide technology training and certification packages to 10,000 U.S. military veterans.
  -- Cisco Systems and Wounded Warrior partnered with the DOL/VETS to develop the Transition Training Academy to assist members of the military with learning new career skills in IT.
  -- JP Morgan Chase has committed funds to the creation and launch of an Institute for Veterans and Military Families at Syracuse University.


• General resources for recruiting:
  -- Employer Partnership Office of the Armed Forces www.employerpartnership.org
  -- National Resource Directory – www.nationalresourcedirectory.gov
  -- VetSuccess – Department of Veteran Affairs – www.vetsuccess.gov


• Many returning military service men and women are returning with injuries; in particular, the soldiers of today are more likely to be diagnosed with Post Traumatic Stress Disorder (PTSD) and Traumatic Brain Injuries (TBI) than soldiers of past generations. Part of the challenge for employers is overcoming the stigma associated with these injuries.
  -- Educate yourself about the spectrum of PTSD and TBI. People with these diagnoses are capable of working and having successful careers. The key is being aware of how these diagnoses can affect behavior and the types of accommodations that are required to assist individuals with these injuries (e.g. a pair of headphones may help an individual with PTSD by blocking out startling noises).
  -- Two sources of information include www.americasheroesatwork.gov and www.woundedwarriorproject.org


• Sources of information regarding accommodations:
  -- Job Accommodations Network (JAN) – www.askjan.org. This organization provides free guidance on workplace accommodations.
  -- America’s Heroes at Work – www.americasheroesatwork.gov. This organization provides guidance on the unique employment challenges faced by service members who have been diagnosed with Traumatic Brain Injury and Post Traumatic Stress Disorder.
  -- Computer Electronic Accommodations Program (CAP) - http://www.cap.mil/wsm. This program provides free assistive technology and support services to wounded service members that they may keep after separation from the armed forces. The implication is that many veterans may be bringing their accommodation with them.

Additional questions regarding the recommendations and resources listed should be directed to Mr. Drach at consultrwd@yahoo.com.

OFCCP NAMES NEW DIRECTOR OF THE MIDWEST REGION

DCI has learned that Bradley A. Anderson will become the Director of OFCCP’s Midwest Regional Office. Director Anderson has been with the agency for 16 years and was most recently the director of the Charlotte District Office in North Carolina. The Midwest region had been run by SWARM Regional Director Melissa Speer since former Midwest Regional Director Sandy Zeigler stepped down earlier in the year.

EEOC MEETING FOCUSES ON AGE DISCRIMINATION RULES AND REMOVING EEO BARRIERS FOR DISABLED VETERANS

by Eric Dunleavy, Ph.D., DCI Consulting Group

On November 16th the EEOC held their last public meeting of calendar year 2011. I was able to attend the meeting, which focused on (1) ADEA regulations and (2) disabled veteran equal employment opportunity (EEO). The meeting began with an EEOC Commissioner discussion and eventual vote on proposed EEOC regulations related to defending adverse impact against older workers under the ADEA. Based on Commissioner comments, it became clear that there were substantial disagreements along partisan lines regarding the reasonableness of the regulations. Not surprisingly, the vote was a close one. After the vote the focus of the meeting shifted to the identification and removal of EEO barriers faced by disabled veterans, and included a top notch panel of staff from EEOC, DOD, OPM, OFCCP, DVA, VetsFirst, JAN and the Chamber of Commerce. A summary of the meeting and relevant written testimony can be found at: http://www.eeoc.gov/eeoc/meetings/11-16-11/index.cfm. I strongly recommend that those of you interested in this topic take a look at the written testimony.

Art Gutman recently wrote a revealing post on the proposed ADEA regulations. As Art described, disparate impact has been an appropriate theory under the ADEA since the Supreme Court ruling in Smith v. City of Jackson (2005), and the chronology of disparate impact burdens was later clarified in the Supreme Court ruling in Meacham v. Knolls Atomic Power Lab (KAPL) (2008). One important distinction between disparate impact under Title VII and disparate impact under the ADEA relates to the employer burden of justifying impact when it exists. Under Title VII, the employer burden is to show that the policy of procedure that produced the impact is job-related or a business necessity, while under ADEA the employer burden is to show that a reasonable factor other than age was used to make decisions that produced the impact. The purpose of the new EEOC regulations was to clarify and exemplify what is a reasonable factor other than age from what is not.

After a detailed discussion, the regulations were passed in a 3-2 vote. Commissioners Ishimaru, Feldblum, and Chair Berrien endorsed the regulations while Commissioners Barker and Lipnic voted to reject them. The regulation now goes to the U.S. Office of Management and Budget (OMB) for review. Chair Feldblum commented that she hopes that this partisan split is the exception and not the norm moving forward.

Among other concerns, Commissioners Barker and Lipnic argued that (1) the regulations were too burdensome on employers from a financial perspective, (2) small business owners that do not have sophisticated Human Resource departments or strategic general counsel would not be able to easily meet the requirements of demonstrating RFOAs, and (3) the employer requirement to take preventive or corrective steps was outside scope of the ADEA. As Art pointed out in his post, this last issue is a controversial one, because it reads very similar to the Title VII requirement of considering alternatives with less adverse impact. ADEA has no such requirement, so EEOC will be adding this requirement via their regulations. Art described this additional burden as “an overstep that is likely to be tested in court”, and I wouldn’t be surprised if Art has a follow up post on the topic. Burdens for demonstrating that reasonable alternatives were considered or that other alternatives existed and should have been used are still ambiguous under Title VII, so it will be interesting to see how this plays out under the ADEA. Stay tuned.

The later portion of the meeting focused on initiatives for identifying and eliminating EEO barriers to disabled veterans. A group of knowledgeable panelists from federal agencies and the private sector shared strategies and experiences that varied in focus and scope. Some of the more compelling success stories emphasized the importance of training veterans on how to describe their skillset via resumes and applications, ensuring that veterans are aware of all of their protections, early intervention to help veterans transition from active duty to the civilian workforce, and being strategic in developing and making reasonable accommodations. Again, I strongly recommend that readers review the written testimony available on the EEOC website found above for more detail.

Two panel presentations may be of particular interest to regular readers of this blog. The first came from Ray Decker, Assistant Director for Veteran Services, Office of Personnel Management (OPM). The presentation was very informative and emphasized, among other things, strategies that federal agencies have used to increase veteran hiring. In fact, 24 agencies have recently developed formal hiring goals for disabled and non-disabled veterans. Based on the public testimony, it appears that these hiring goals used 2009 representation data as a baseline and compared veteran hiring and representation percentages over time to see if they are moving in the right direction. Thus, these goals were not based on comparisons of workforce representation or new hires to some availability measure. It is unclear whether this decision to track changes over time instead of comparing rates to some availability is a function of the lack of readily available/accurate availability metrics.

Another interesting presentation was made by Claudia Gordon, Esq., Special Assistant to the OFCCP Director Patricia Shiu. Her informative testimony summarized recent OFCCP activity, and emphasized, among other things, OFCCP enforcement of VEVRAA and Section 503 of the Rehabilitation Act. One topic that was not discussed as part of the public testimony was OFCCP’s proposal to revise and update the regulations implementing Section 4212. However, a portion of written testimony does describe the proposed regulations. As mentioned in other posts on this website these proposed regulations would change the requirements for veteran outreach and recruitment efforts, and require the development and monitoring of quantitative metrics to assess the success of those efforts. These are obviously noble and important goals.

Numerous public comments submitted in response to the proposed regulations reiterated their importance, but also identified challenges to implementing such initiatives in meaningful and reasonable ways. One of the common themes across the set of comments focused on the difficulty in developing specific quantitative goals based on accurate availability data for protected veterans. Perhaps the OPM approach is a reasonable alternative in the absence of available and accurate availability data. Regardless, the federal contractor community continues to wait for an update on the status of these regulations, which have already been reviewed by OMB.

One of the clear messages from the panelists and EEOC Commissioners was to make sure that veterans, federal agencies, and private employers are all aware of the resources available to ensure that there are no EEO barriers. I expect that the EEOC will update their website based on the hearing and help to develop a centralized resource repository for veterans and potential employers. Identifying and removing EEO barriers for all veterans is a goal we can all agree is worth pursuing.

SENATE PASSES THE VOW TO HIRE HEROES ACT

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

In an unusual show of bipartisan support, the Senate voted 95-0 on 11/10/11 to pass the “Vow to Hire Heroes Act” (or simply the “Act”). The Act is designed to help unemployed veterans find work via a two-pronged approach. The first prong involves incentives to employers, including:

• A tax credit of up to $5,600 for hiring veterans who have been looking for a job for more than six months, as well as a $2,400 credit for veterans who are unemployed for more than four weeks, but less than six months; and



• A tax credit of up to $9,600 for hiring veterans with service-connected disabilities who have been looking for a job for more than six months.

The second prong involves assistance to veterans, including:

• The Transition Assistance Program—an interagency workshop coordinated by the departments of Defense, Labor, and Veterans Affairs—mandatory for service members moving on to civilian life to help them secure jobs through resume-writing workshops and career counseling;,



• To expand education and training opportunities for older veterans by providing 100,000 unemployed veterans of past eras and wars with up to one year of additional Montgomery GI benefits to go toward education or training programs at community colleges or technical schools;



• To provide disabled veterans up to one year of additional Vocational Rehabilitation and Employment Benefits; and



• To allow service members to begin the federal employment process prior to separation in order to facilitate a seamless transition from the military to jobs at federal agencies.

EEOC & OFCCP UPDATE THEIR MEMORANDUM OF UNDERSTANDING

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

A new Memorandum of Understanding (MOU) between the EEOC and OFCCP was signed on 11/7/11 by EEOC Director Jacqueline A. Berrien and Patricia A. Shui and may be viewed at http://www.eeoc.gov/laws/mous/eeoc_ofccp.cfm. The original MOU was entered into in 1970, and revised in 1974, 1981 and 1999. According to the EEOC, the updates within the MOU include:

• using contemporary office names and titles;


• designating a “Coordination Advocate” at both agencies;


• reorganizing and/or condensing language for clarity;


• streamlining the Compliance Coordination Committees; and


• clarifying the complaint/charge referral procedures”

The major updates are in Paragraphs 1(A), 6(A), 7(A), 8 and 10. More specifically, Paragraph 1(A) on sharing information states:

EEOC and OFCCP shall share any information relating to the employment policies and/or practices of employers holding government contracts or subcontracts that supports the enforcement mandates of each agency as well as their joint enforcement efforts. Such information shall include, but is not limited to, affirmative action programs, annual employment reports, complaints, charges, investigative files, and compliance evaluation reports and files.

Paragraph 6(A), among other things, creates Compliance Coordination Committees (CCC’s) for joint enforcement initiatives and coordinated efforts to minimize duplication. The CCC attorneys will meet biannually to “review enforcement priorities, systemic investigations of mutual interest, compliance review schedules, potential Commissioner Charges, and potential litigation.”

Paragraph 7(A) focuses on investigation, processing, and resolution of complaints, and states that for “Dual-Filed Complaints/Charges” and states:

OFCCP shall act as EEOC's agent for the purposes of receiving the Title VII component of all complaints/charges. All complaints/charges of employment discrimination filed with OFCCP alleging a Title VII basis (race, color,
religion, sex, national origin, or retaliation) shall be received as complaints/charges simultaneously dual-filed under Title VII. In determining the timeliness of such complaint/charge, the date the matter is received by OFCCP, acting as EEOC’s agent, shall be deemed the date it is received by EEOC. When OFCCP receives such a complaint/charge and determines that the employer is not a federal contractor subject to E.O. 11246, it shall transfer the charge to EEOC within 10 days of that determination and notify the parties. Such notification shall explain that OFCCP, as EEOC’s agent, has received the Title VII charge and that the date OFCCP received it will be deemed the date it was received by EEOC.

Paragraph 8 focuses complaints misfiled with the EEOC. Accordingly:

When EEOC receives a complaint not within its purview, but over which it believes OFCCP has jurisdiction, it will refer the complaint to OFCCP. In determining the timeliness of such complaint, the date the matter is received by EEOC shall be deemed the date it is received by OFCCP.

Paragraph 10 establishes a “Coordination Advocate” and states”

OFCCP and EEOC seek to ensure consistent compliance and enforcement standards and procedures, and to make the most efficient use of their available resources through coordination. Therefore, within sixty (60) days of the effective date of this MOU, the headquarters offices of each agency shall appoint a Coordination Advocate who will be available to assist, as necessary, in obtaining a full understanding of, and compliance with, the procedures set forth in this MOU.

SUPREME COURT REFUSES TO HEAR APPEAL IN LUFKIN INDUSTRIES V. MCCLAIN

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

The refusal to grant certiorari in this case was handed down on 11/14/11 (2011 U.S. LEXIS 8265). Ordinarily, refusal to grant certiorari is no big deal … indeed, it’s the norm, not the exception. But this case has some interesting facts in light of the Supreme Court’s ruling in Wal-Mart v. Dukes (2011).

This case began in 1999 when the District Court Judge Howell Cobb of the Eastern District of Texas granted class certification for two plaintiffs and a class of similarly situated plaintiffs in McClain v. Lufkin (1999 U.S. Dist. LEXIS 6779) under Federal Rules 23(a) and 23(b)(2). The plaintiffs claimed there was adverse impact against blacks in job assignments and promotion because of subjective decision making, and Judge Cobb ruled the plaintiffs established a prima facie case based on statistical evidence. Subsequently, Judge Cobb then ruled for the plaintiffs on both charges, and awarded an injunction and back pay (2005 U.S. Dist. LEXIS 42545). Issues relating to attorney and expert fees remained, but are less relevant for present purposes. More importantly for present purposes, the 5th Circuit ultimately reversed the lower court ruling on job assignments, but upheld the ruling on promotions in 2009 (519 F.3d 264), and a class of 700 former or current employees at Lufkin was awarded more than three million dollars.

As an aside, the basis for the adverse impact (in promotion) claim was of interest in its own right. The plaintiffs’ expert (Dr. Richard Drogin) argued successfully that applicant flow data was unreliable because of missing data (and other factors). Therefore he constructed “hypothetical pools” of those potentially eligible for promotion and concluded that black received 127 fewer hourly promotions and 8.85 fewer salaried promotions would been expected from chance alone, and that these differences were statistically significant for hourly promotion (7.61 standard deviations) and salaried promotion (2.02 standard deviations). The defense expert (Dr. Mary Baker) based her calculation on bid data from Lufkin’s paper bid sheets and concluded there were no statistically significant differences. Faced with this “battle of experts”, Judge Cobb favored Drogin’s analysis, and the 5th Circuit upheld. Of course, it could be argued that Drogin’s analysis lacked controls for important covariates. However, because of the unreliability of the applicant flow data, Judge Cobb felt he had no choice but to favor Drogin’s approach. Obviously one take home message from this case is for employers to keep accurate records on data that would be used in adverse impact analyses.

So now, 12 years after the original class certification ruling, Lufkin argued that the Supreme Court’s ruling in Wal-Mart v. Dukes highlights two major errors made by Judge Cobb in his 1999 ruling relating to commonality under Rule 23(a) and the award of back pay under Rule 23(b)(2). On the commonality issue, Lufkin used language from the Wal-Mart ruling claiming there was no “glue” to hold the claims together because there unionized employees promoted under one set of rules and non-unionized employees promoted under another set of rules. Therefore, there was also no specific employment practice. Lufkin also argued that Rule 23(b)(2), generally reserved for injunctive and declaratory relief, does not apply to back pay under the Wal-Mart ruling. Interestingly, the plaintiffs never challenged either of these directly, but instead, argued that they were not made in prior appeals.

We do not know why the Supreme Court declined to review this case. However, a reasonable person could assume that under normal circumstances, these are appeasable issues based on the Wal-Mart ruling. So my best guess is that the case was deemed to be moot.

EEOC TO FINALIZE PROPOSED RULES ON THE ADEA

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

The proposed rules (or simply “Rules”) were published on 2/18/10, as reported in an Alert on 3/2/10. The Rules may be viewed at http://edocket.access.gpo.gov/2010/2010-3126.htm. The vote to finalize the Rules is scheduled for 11/16/11, the call for which is at http://www.eeoc.gov/eeoc/newsroom/release/11-9-11.cfm.

The Rules themselves were written in response to Supreme Court rulings in Smith v. City of Jackson (2005) and Meacham v. Knolls Atomic Power Lab (KAPL) (2008). In Smith, a 5-4 Supreme Court majority ruled that: (1) that adverse impact is a valid ADEA claim and (2) the Factors Other Than Age (RFOA) defense (a lighter defense than job-relatedness in Title VII) is the appropriate defense in ADEA cases. In Meacham, a unanimous Supreme Court ruled that RFOA is an affirmative defense, meaning it requires proof (rather than a simple “articulation” or “explanation”). The Smith and Meacham rulings are discussed in detail by Gutman & Dunleavy (2008) (at http://www.siop.org/tip/Oct08/11gutman.aspx).

The crux of the RFOA defense as noted in the Rules is that the “reasonable factor” must be proven “factually”, or one that is objectively reasonable when viewed from the position of a reasonable employer under like circumstances.” The Rules provide the following six examples of factors relevant for determining reasonableness:

• whether the employment practice and the manner of its implementation are common business practices;


• the extent to which the factor is related to the employer’s stated business goal;


• the extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);


• the extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;


• the severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected, and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps;

It is important to note that this list is not exhaustive. Among them, though, employers should take notice of the last factor, which included preventative/corrective steps to minimize the severity of harm. This looks like a statement warning employers to consider alternatives with less adverse impact, a factor that is relevant in Title VII defenses, but not in statutory defenses such as RFOA. In my opinion, this may be an overstep that is likely to be tested in court.

The Rules also provide the following three examples of factors relevant for determining the meaning of other than age:

• the extent to which the employer gave supervisors unchecked discretion to assess employees subjectively;


• the extent to which supervisors were asked to evaluate employees based on factors known to be subject to age-based stereotypes; and


• the extent to which supervisors were given guidance or training about how to apply the factors and avoid discrimination.

Each of these is critical. However, employers should particular attention to age-based stereotypes. For example, in Meacham, the employer argued that “flexibility of skills” was one of two RFOAs (the other being criticality of skills). The rules, on the other hand, suggest that “flexibility” may fall under the definition of an age-based stereotype. Indeed, the rules provide the following example of how flexibility should be proven if it is used as an RFOA. Accordingly:

For example, an employee's flexibility may be assessed through concrete examples of behavior such as accepting or resisting new assignments, seeking or refusing training, and being open or opposed to new ways of doing things. Similarly, the steps the employer took to apply the factor fairly and accurately affect the determination of whether the factor was reasonable. For example, the extent to which the employer provided decision makers with training or other guidance on how to implement the practice may be relevant to whether the practice was administered in a reasonable way.

The bottom line is that even though the RFOA defense is easier to pass than its Title VII counterpart (that the cause of adverse impact is job related and consistent with business necessity), the actual RFOA defense as proposed in the Rules is likely to be stiffer than previously anticipated by legal experts.

EEOC ORDERED TO PAY DEFENSE LEGAL FEES --- AGAIN

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

In a ruling on 10/26/11, Judge John E. Conway of the District Court of New Mexico ordered the EEOC to pay $140,000 in attorneys’ fees to Tricore Reference Labs for “frivolous, unreasonable, or groundless” pursuit of an ADA claim (EEOC v. TriCore Reference Labs., D.N.M., No. 09-CV-956 JEC/DJS). This is the latest in a list of setbacks for the EEOC --- but more on that later.

The claim in the Tricore case is that the employer failed to reasonably accommodate Rhonda Wagnoer-Alison, a phlebotomist, for her Osteoarthritis. The EEOC alleged that Wagoner-Alison can perform the essential functions of her job with or without reasonable accommodation. However, it turns out that (1) Wagoner-Alison’s Osteoarthritis rendered her incapable of standing and walking, both of which were deemed essential job functions, and that (2) the EEOC continued to pursue the claim beyond the point of knowing it had a failed claim. In the words of Judge Conway:

“reasonable accommodation” does not require an employer to substantially restructure or reallocate essential functions of a disabled employee's position and that in answering TriCore's requests for admission, EEOC admitted that Wagoner-Alison's condition rendered her unable to stand and walk, which were essential functions of the phlebotomist position.

Translated, that means Wagoner-Alison faced an insurmountable barrier (i.e., inability to perform all essential job functions even with accommodations), and that the monetary award of legal fees is based on Judge Conway’s belief that the EEOC knew (by June 4, 2010) that it could not establish a prima facie ADA claim, but continued to pursue the claim anyway.

By itself, the Tricore ruling is not that big a deal. However, when viewed in the context of other recent rulings against the EEOC, some of the defense attorney blog cites are claiming that the EEOC has adopted a “shoot-first, aim later” habit (see, for example http://www.workplaceclassaction.com/eeoc-litigation/eeocs-shoot-first-aim-later-tactics-result-in-751942-sanction/). Let’s examine the facts.

As a starter, two rulings against the EEOC have been noted in past Alerts. First, as posted on August 20, 2011, the EEOC was ordered to pay 2.6 million for attorneys’ fees and costs in EEOC v. Cintas [2011 U.S. Dist. LEXIS 86228] for failure to fully investigate individual claims in a class action suit, and failure to engage in “conciliation measures”, both of which are Title VII requirements. Second, as posted on March 2, 2010, the EEOC was ordered to pay roughly 4.5 million in EEOC v. CRST Van Expedited [2010 U.S. Dist. LEXIS 11125] because it based a pattern or practice claim for 68 women on the claim of one of the women before it knew of or investigated the claims of the other 67 women, prompting the judge to claim the EEOC pursued a “sue first, ask questions later litigation strategy.”

On top of that, we have EEOC v. Peoplemark decided on March 31, 2011 [2011 U.S. Dist. LEXIS 38696]. Here, the EEOC claimed that Peoplemark had a “blanket policy” of excluding felons in the hiring process, and this policy adversely impacted blacks. Critically, the EEOC had a list with of 286 names of supposed rejected black applicants, and 22% of these applicants were, in fact, hired. The court ruled:

This is one of those cases where the complaint turned out to be without foundation from the beginning. Once the EEOC became aware that its assertion that Peoplemark categorically refused to hire any person with a criminal record was not true, or once the EEOC should have known that, it was unreasonable for the EEOC to continue to litigate on the basis of that claim, thereby driving up defendant’s costs, because it knew it would not be able to prove its case.

As a result, the claim was dismissed and Peoplemark was awarded $750,000 in attorneys’ fees, expert witness fees, and costs.

There are other cases, but what piques our interest in Peoplemark is that the EEOC has, since 2008, placed special emphasis on discouraging discrimination based background checks, and has held numerous open meetings on the issues. Furthermore, we at DCI Consulting have contributed to this process. For example, Eric Dunleavy wrote a treatise on background checks in an alert dated August 17, 2010. As well, I documented one of these EEOC hearings on background checks in an Alert posted on October 26, 2010 and David Cohen highlighted Dr. Michael Aamodt’s invited testimony at that hearing in which he testified:

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.’

Here’s the point. We have little doubt that background checks can have adverse impact on minorities, and agree with the EEOC that blanket exclusions based on (say) felony conviction may be unjustified depending up the nature of the felony and the description of the job. Therefore, the fact that the EEOC was embarrassed in one such case hardly means that all such cases are frivolous.

Similarly, even though above, I highlighted four embarrassing rulings against the EEOC, one needs to keep things in perspective. The EEOC has prosecuted thousands of cases over the years, and “embarrassing” rulings are the exception, not the rule.

LAW FIRM SUBJECT OF OFCCP RULES

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

In a ruling by Administrative Law Judge (ALJ) Linda S. Chapman, the law firm of O’Melevny & Myers (or simply the “Firm”) was deemed a federal contractor subject to the provisions of Executive Order 11246, the Rehabilitation Act, and the Vietnam Era Veterans' Readjustment Assistance Act (OFCCP v. O'Melveny & Myers LLP, DOL OALJ, No. 2011-OFC-00007, 10/31/11). Both sides filed summary judgment motions in this case, and ALJ Chapman granted the motion of the OFCCP (the case may be read at http://hr.cch.com/eld/OFCCPOMelveny.pdf).

The facts of the case are that the Firm entered into a contract in 2001 to provide legal advice and related services relating to the Department of Energy’s (DOE) divestiture of the Elk Hills Naval Petroleum Reserve. Key services were provided from January 2007 through April 2011. In January 2009, the OFCCP sent an audit letter to the Firm, which refused to provide requested documents on grounds that the DOE contract did not fall under the OFCCP’s jurisdiction.

A critical element in this case was that the DOE contract referenced OFCCP provisions in several places (e.g., “The Contractor complied with Executive Order 11246, as amended, and the rules, regulations, and orders of the Secretary of Labor”). Nevertheless, the Firm argued that OFCCP provisions apply only to “Government contracts” for “nonpersonal services.” Furthermore, the Firm argued that the OFCCP regulations do not define “nonpersonal services”, but instead, provide a list of examples that include “utilities, construction, transportation, research, insurance, and fund depository.” The Firm argued it is therefore exempt from OFCCP provisions because the services it provided are not on that list. The OFCCP argued that the list itself is “non-exhaustive”, and ALJ Chapman agreed.

The bottom line is that Chapman order requires the Firm to provide all requested documents, permit the OFCCP to access the to its facilities (if requested), and “otherwise allow the OFCCP to conduct and complete its compliance review.” The Firm was given 30 days to comply.

DOL GRANTED SUMMARY JUDGMENT BY DISTRICT COURT IN UNITED SPACE ALLIANCE V. SOLIS

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

On November 14th, 2011 a D.C. District Court judge dismissed a complaint by United Space Alliance that OFCCP violated its 4th amendment and other rights by requesting detailed employee compensation data without reason. We reviewed this case in March when it was before an Administrative Law Judge. This is a rare case in that United Space Alliance escalated the issue of contention above an Administrative Law Judge ruling in the agency’s favor and made a complaint to federal district court. This time a District Court Judge ruled in favor of DOL and OFCCP, concluding that the agency has broad investigative authority over federal contractors that are audited. Stay tuned for a more detailed post that deconstructs the ruling into important implications for federal contractors. In the meantime, the concluding paragraph of the ruling summarizes Judge Lamberth’s opinion nicely:

Despite the vigor with which United Space has litigated it, there is surprisingly little at stake in this case. The Department of Labor has not accused United Space of employment discrimination. It has not ordered United Space to permit agency investigators onto company premises. The Department has merely required United Space to submit data about its employee compensation. The Court understands that United Space and the entire community of federal contractors are keenly interested in how OFCCP decides whether to request additional data on a contractor's compensation practices, but that interest does not allow those companies or this Court to interfere with the agency's investigatory practices. Submission to such lawful investigations is the price of working as a federal contractor.

TINNEY V. NEW HAVEN: RICCI ACT 2

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

In a lawsuit filed in the District Court of Connecticut, Garry Tinney and six co-plaintiffs sued the City of New Haven and the International Association of Firefighters Local 825 for racial discrimination in relation to the promotion exams targeted in Ricci v. DeStefano. Recall that the Supreme Court ruling in this case was that New Haven could not prove a reasonable basis for believing they would lose an adverse impact challenge to minority applicants for promotion to lieutenant and captain. Of course, there was every reason to believe they would be sued, and the lawsuit was filed on October 7, 2011 (see http://www.newhavenindependent.org/archives/upload/2011/10/Firefighters.pdf). The lawsuit cites the 5th and 14th Amendments, and both adverse impact and disparate treatment under Title VII.

This lawsuit follows on the heels of the 2nd Circuit ruling in Brisco v. New Haven, a case discussed in a DCI Alert dated August 20,2011. Briscoe challenged the 60-40 weighting for written versus oral tests. He was the top scorer among 77 applicants for lieutenant on the oral exam, but ranked 24th overall because of his poor performance on the written test. Briscoe claimed that a 70-30 oral versus written weighting “would be equally good or better at identifying the best-qualified candidates for promotion, and would have less disparate impact on racial minorities.” Interestingly, in Brisco, New Haven argued unsuccessfully that “an employer may defeat a disparate-impact claim if it had a strong basis in evidence that it would have been subject to disparate-treatment liability” which, in effect, is the corollary argument to what the Supreme Court ruled in Ricci. However, the 2nd Circuit rejected this argument ruling that “Ricci did not substantially change Title VII disparate-impact litigation or preclusion principles in the single sentence of dicta targeted at the parties in this action.”

The Tinney lawsuit goes beyond Brisco. Michael Brisco focused primarily on alternative selection procedures that produce less or no adverse impact, an important third phase in the adverse impact scenario after the plaintiff proves adverse impact in the first phase and the defendant establishes job relatedness and consistency with business necessity in the second phase. The Tinney lawsuit asserts that there is no basis in evidence for supporting the 60-40 split favoring written over oral exams in the second phase. What’s interesting here, is in the process of trying to undo their original exams, New Haven never received a final validity report from the test maker. Therefore, if this lawsuit goes forward, the validity of this 60-40 split will be a central issue in determining if the testing process, in its entirety, is job related and consistent with business necessity, let alone, the best procedure for the promotion process.

Also of interest, the Tinney plaintiffs are suing for disparate treatment on grounds that the 60-40 split is the product of 20 years of collective bargaining by a union whose members are primarily white. Thus, the question here is whether there was motive to maintain this split given past test performance showing adverse impact based primarily on the written portion.

If this case goes forward, it is likely to be a battle of experts on the relative merits of written versus oral exams. Look for proponents of assessment centers to reemerge. We will keep you posted.