October 28, 2010
As all federal contractors and subcontractors should know, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), is the federal agency charged with enforcing the non-discrimination and affirmative action obligations imposed on federal contractors and subcontractors by Executive Order 11246 (E.O. 11246). Although OFCCP’s ability to pursue a more ambitious agenda under the Obama administration has recently been hampered by budget issues, the Agency has been far from dormant. Its recent activity should serve as a warning to federal contractors that they may face a more aggressive Agency once the budget issues are straightened out. Some of OFCCP’s most recent activity is described below.
Settlements In Hiring Discrimination Cases
As reported in BNA’s Daily Labor Report, this month alone, OFCCP has announced the approval of three consent decrees which settled allegations of discrimination in hiring. In all three matters, the case was generated not by the filing of an individual complaint of discrimination, but by an OFCCP compliance audit which uncovered apparent statistical evidence of discrimination. On October 7, 2010, OFCCP announced that it had entered into a consent decree with one of the nation’s largest Coca-Cola bottlers. The litigation arose out of an OFCCP compliance audit of the employer’s Charlotte facility, during which OFCCP concluded there was evidence of a statistically significant adverse impact on minority applicants for sales support positions. The employer agreed to pay a class of African-American and Hispanic applicants $495,000.
In a consent decree filed with the United States Department of Labor’s Office of Administrative Law Judges on October 20, OFCCP and a Texas employer settled allegations of sex discrimination in hiring which arose out of an OFCCP compliance evaluation at one of the employer’s California facilities. The employer agreed to pay $167,000 to members of a class of female applicants, to hire some of the applicants and to provide future compliance reports to OFCCP. The very next day, OFCCP announced that it had entered into a $570,000 settlement with a subsidiary of Tyson Foods in another hiring discrimination case. That case was also generated by an OFCCP compliance audit which uncovered a statistically significant adverse impact in hiring which disfavored white and African-American applicants and favored Hispanic applicants.
All three settlements serve as timely reminders of the benefits federal contractors can obtain by following the hiring practices prescribed in their affirmative action plans, properly tracking applicant flow data, and analyzing that data regularly to determine whether the hiring practices are generating any potential adverse impact. Failure to do so creates the risk of potential liability even without the filing of a complaint by an applicant, if OFCCP conducts a routine compliance audit.
OFCCP Jurisdiction Over Health Care Providers
In an unrelated development also reported in the Daily Labor Report, OFCCP continues to assert jurisdiction over health care providers that provide services to federal employees pursuant to a government contract or subcontract. On October 18, a Department of Labor Administrative Law Judge found that a Florida hospital which provides medical services to active and retired military personnel, pursuant to a contract with another federal contractor administering a health care plan for those individuals, was a federal subcontractor covered by E.O 11246, and was subject to OFCCP’s jurisdiction. The Administrative Law Judge relied on a case decided last year, which held that University of Pittsburgh Medical Center branches are federal subcontractors because they have a contract with the federal Office of Personnel Management to provide health care services to federal employees. That ruling is currently being challenged in United States District Court.