This year’s National Industry Liaison Group (NILG) Conference, held August 27-31, 2012 in Waikoloa, Hawaii, celebrated the 30th anniversary of the unique partnership between the NILG and the Office of Federal Contract Compliance Programs (OFCCP). This partnership has been extended over the years to include the Equal Employment Opportunity Commission (EEOC) as regular participants. The conference this year may be best remembered for what did not happen rather than what did.

For the first time ever, OFCCP had no physical presence at the conference. Although members of OFCCP Senior Staff would be presenting later in live interactive broadcasts, OFCCP Director, Patricia Shiu, elected to participate via a pre-recorded message rather than attending personally or using a live feed. She also opted not to include a question and answer segment which could have been accomplished even in a pre-recorded format if questions had been submitted in advance with answers included in the broadcast.

Despite the ambitious, and some might say aggressive, regulatory activity underway at the OFCCP, Director Shiu was virtually silent on the regulatory proposals and other enforcement initiatives. No new information was provided on when the public could expect the Federal Contract Compliance Manual, Scheduling Letter, Compensation Tool, or any of the many proposed regulations to be issued. The interactive broadcasts with various OFCCP senior staff were similarly lacking in information about the status of the various initiatives.

Director Shiu’s presentation also was light on enforcement statistics or updates on current or recent litigation. While she reported on a composite of all the remedies recovered by the agency since the inception of the current administration, she did not provide the actual enforcement statistics for any individual fiscal year including the most recent fiscal year. The agency appears to have discontinued routine annual reporting on it’s operations in the present administration. No explanation has been offered for why this is so. Director Shiu did mention an uptick in technical Conciliation Agreements due to citations for lack of good faith efforts in outreach to individuals with disabilities and protected veterans which she attributed more to aggressive enforcement in this area than to any change in the outreach practices of Federal Contractors. Shiu made reference to a few companies as exemplifying “best practices” but continued her silence on the demise of the Secretary’s EVE and EPIC Awards programs that annually highlighted companies for their best practices.

According to Director Shiu, OFCCP was not present in person because she could not justify sending her senior staff to Hawaii in these economically challenging times. She further stated that the agency’s absence was not really about money and that the audience should read nothing into the agency’s absence from the conference. She described the numerous trips she had personally made around the country to make presentations to several local Industry Liaison Groups (ILGs). The Department of Labor’s Office of the Solicitor which had previously been in regular attendance at the NILG conferences also had no physical presence at the event.

In contrast, immediately following the pre-recorded remarks of Director Shiu, Jacqueline Berrien, Chair of the EEOC appeared in person. The EEOC was also represented by the Director of the Honolulu Office. While the number of EEOC participants was significantly restricted, the EEOC did have a physical presence at the conference. Chair Berrien spoke about the strategic plan of the EEOC as well as the initiative concerning convictions and arrest records. She invited comment on the strategic plan even after the official comment period closed and directed participants to the EEOC website where they could view recordings of Commission meetings that they may have missed and provide comments to her on any issues of concern.

Several non-government presenters at the conference predicted that OFCCP’s initiatives including the regulations, scheduling letter, and compensation tool would not be issued before the coming election. I had the opportunity to sit in on a number of presentations earlier in the week since my presentation was not scheduled until the last day of the conference. The following themes stood out for me. First, presenters observed that the new OFCCP proposals had so many requirements that contractors would have to prioritize the most important and useful requirements and focus on trying to comply with those. Second, that even prior to the finalization of the new enforcement proposals, OFCCP appeared to be implementing as many of the new requirements as possible under expanded interpretations of existing regulatory authority. Specifically, the volume of data requested by OFCCP has escalated and, as noted by Director Shiu, the number of technical violations has increased. Third, that in the absence of any specific indication of the direction that OFCCP would be taking with respect to its compensation and hiring analyses, presenters advised contractors to run the data as many ways as feasible so that they would be prepared for any approach in the audit. Finally, as usual, contractors were advised to cloak these analyses, to the extent possible, in attorney-client privilege while at the same time taking steps themselves to correct any indentified problems.

My presentation was next to the last on the agenda. It was entitled The Good, The Bad and The Ugly: The New Recordkeeping Realities. I explained to the audience that my initial approach was to go through the proposed revised regulations and try to account for every record or document that needed to be kept to ensure compliance. Thirteen pages and 118 items later (not a comprehensive list) I realized an hour long presentation would be insufficient to get into the details of all of the recordkeeping that would be necessary. In exchange for 1-3 topic ideas for this column, I offered to email my list to attendees and some have taken me up on the offer.

Instead of going through every item, I decided to focus on how the new recordkeeping obligations are redefining the concept of affirmative action. As I explained at the conference, under Section 503 of the Rehabilitation Act which is enforced by OFCCP and prohibits discrimination on the basis of disability, all non-affirmative action complaints are to follow the standards in Title I of the Americans with Disabilities Act (ADA). The ADA gives EEOC, not OFCCP, the authority to promulgate non-discrimination regulations under Title I. To the extent that OFCCP promulgates different or expanded regulatory obligations with respect to Section 503, it must be relying on its authority to regulate the affirmative action provisions of Section 503. Section 4212, also enforced by OFCCP, gives the agency the authority to enforce affirmative action for protected veterans.

When I worked at EEOC, I wrote a paper on affirmative action under Title VII of the Civil Rights Act of 1964. In short, under Title VII, affirmative action was based on an observed disparity in the incumbent workforce and the available qualified, interested workforce in the reasonable recruiting area. At that time, the focus was on increasing the employment of minorities and women when they were found to be underutilized; in other words, when they were being hired in lower numbers than would be expected given their presence in the relevant workforce. The hallmarks of an acceptable affirmative action program under Title VII were that the program was narrowly tailored to address a manifest imbalance in the employer’s workforce without unnecessarily trammeling the interests of non-target groups and that the program be temporary in nature and intended to attain, but not maintain, racial or gender balance. Under Title VII, a program satisfying these requirements could take minority status or gender into account in deciding who would be given an employment opportunity. For example, if two applicants were very close in qualifications and one was a man and one a woman, under Title VII you could take into account the fact that there had never been a woman in the position despite their availability in the labor force to justify considering gender as one of many factors in deciding who would get the position.

When I went to OFCCP in 1998, I found that this Title VII definition of affirmative action was actually more aggressive than the OFCCP definition. At OFCCP, affirmative action simply meant making every good faith effort to diversify the applicant or candidate pools and then hiring or otherwise conferring an employment opportunity without regard to race, gender, and other covered bases. OFCCP’s interpretation of affirmative action differed from what I was familiar with under Title VII because affirmative action was just about outreach and diversification of the applicant or candidate pool, but hiring was to take place without regard to one’s membership in the underutilized group. The thought being that, if the hiring was non-discriminatory, the availability of a diverse pool would eventually result in a diverse workforce.

Neither the EEOC nor the OFCCP definitions of affirmative action extended to the kinds of requirements that are being proposed with respect to recordkeeping under the new regulatory proposals. Since OFCCP’s authority to regulate in this area is limited to affirmative action, these new recordkeeping mandates amount to a redefinition of the concept of affirmative action. Under this proposed regulatory framework, affirmative action is anything OFCCP decides to require of Federal contractors that is in anyway related to a traditionally underutilized group. Note there is no requirement that the group be actually underutilized by the particular contractor with respect to a particular job, but just that as a group there is a history of underutilization generally.

For example, under the proposed regulations contractors must be able to identify (in other words track) each vacancy, training program, and promotion for which applicants with disabilities and protected veterans apply. The proposed Section 4212 veterans regulations and Section 503 disability regulations would also require at proposed Section 60-741.44 (with a parallel provision for Section 4212 at 60-300.44):

    • In each case where an applicant or employee who is an individual with a disability [protected veteran in 60-300.44] is rejected for employment, promotion or training, the contractor shall prepare a statement of the reason as well as a description of any accommodation considered. The statement of the reason for rejection (if the reason is medically related), and the description of accommodation(s) considered shall be treated as confidential medical records [citation omitted]. These materials shall be available to the applicant or employee concerned upon request.

 

This is a qualitatively different kind than the traditional affirmative action good faith effort requirement to attain and not maintain levels of employment consistent with what would be expected given availability. Regardless of whether individuals with disabilities or protected veterans are actually underutilized by the employer for the job in question, members of these groups would be permanently given the right to have available to them a contemporaneous written explanation for every denial of an employment opportunity.

This requirement is not narrowly tailored to address an imbalance in the workforce for individuals with disabilities or protected veterans. This new right is not temporary. There is no discontinuance of this right when a contractor attains representation for these groups that is reflective of the qualified, available, interested labor force. In short, this requirement is completely un-tethered to any of the principles traditionally underpinning affirmative action. These regulations essentially redefine affirmative action as any condition OFCCP decides to impose on contractors that is in anyway related to a protected class.

They also require employers to commit to a defense of their selection decisions even where no one has challenged that decision through filing a charge. This requirement to document the reason for non-selection includes the obligation to document the basis for any determination that an applicant poses a “direct threat” including the requirement that the explanatory statement must track the regulatory language of the “direct threat” provision. There are similar requirements for documenting the reasons for denial of reasonable accommodation with the added provision that each denial of reasonable accommodation be provided in writing with a reminder of the right to file a complaint with either the OFCCP or the EEOC.

I note at least two major problems with this approach. With respect to additional reminders of the right to file a complaint, it suggests that individuals with disabilities are somehow less capable than other applicants and employees of understanding and acting on the statement of their rights using the general EEO poster. In my view, if the EEO poster is deemed sufficient notice of the right to file a complaint for everyone else, there is no reason to assume it is inadequate for individuals with disabilities as long as it is available in accessible formats. The kind of over solicitousness exemplified by this requirement for special and repeated notification of the right to file a complaint is reflective of discriminatory stereotypes about the capacity of individuals with disabilities which has proven just as limiting and demeaning as any other form of stereotyping.

Second, as a practical matter, there is a good chance that this requirement will not have the desired effect. I suggested that other rejected employees may not understand why some individuals get a written explanation of their rejection and others do not and that, as a result, employers may have to provide rejection explanations to all employees and applicants. A member of my audience suggested that such a requirement would lead to generic descriptions for rejections. This would minimize legal exposure and treat all applicants the same. He asked if I agreed with this observation. I could not disagree that the minimalist approach to providing reasons for rejection is what I would advise an employer in this situation. I noted that if generic explanations for all were the outcome of the regulation, there was really no point in imposing this requirement.

Another expansion of the concept of affirmative action through the use of recordkeeping requirements is the proposed requirement to calculate applicant, hire, job fill, and other ratios that do not fall within the customary definitions of affirmative action. Each of these ratios are to be calculated and maintained for five years. No instructions are provided to contractors in the proposed regulations telling what the contractor is supposed to do with the collected data for individuals with disabilities. Contractors are instructed to use three years of the data, among other resources, to set benchmarks for hiring goals for veterans, but are given no instruction for the use of the remaining two years of data. The proposals do not address whether the underlying data from which the ratios are calculated must be kept so that the contractor can defend its ratio figures. Affirmative action has traditionally been based on availability data. There is a dearth of reliable availability data for individuals with disabilities and protected veterans. Part of the impetus for this new requirement is to fill this data void. However, rather than the government employing its resources to collect and refine this data, the contractor community is being charged with undertaking this task by the simple expedient of labeling it affirmative action. It is unlike any affirmative action requirement described in the case law on affirmative action to date.

My final comment was on the compensation data proposed to be requested by the revised scheduling letter. On this I pointed out, as I have often done, that the agency does not have a proof pattern for systemic compensation discrimination. In other words, there is no clear set of guidelines defining the specific elements necessary to prove a systemic discrimination case. During the conference it was noted that the National Academy of Sciences reached a similar conclusion that neither the EEOC nor the OFCCP had laid a sufficient foundation for the collection of copious amounts of compensation data. This does not mean that such data is not important, just that the agency needs to know what it will do with the data before burdening the contractor community with reporting requirements.

In sum, the NILG conference left more questions unanswered than answered. Contractors are frustrated because they want to stay on top of compliance but they do not want to make expensive investments in retooling their systems until they have a better handle on what is coming down the pike. Consultants and attorneys are providing advice to try to either cover all the bases or, if that is not possible, to pick the right set of priorities to focus on. My message is that hyper-extending the definition of affirmative action may do more harm than good in the long run. Even with all the language of “narrowly tailored” and “strict scrutiny”, traditional affirmative action under Title VII remains a lightning rod of debate. Affirmative Action defined as whatever OFCCP says it is invites even greater backlash. One can only hope that OFCCP will take advantage of the slowed pace of enforcement reform to thoughtfully examine the appropriate approach government should take with respect to carrying out the mandates of Section 4212 and Section 503 in a way that will work well in practice and not simply in theory.