As one of his first actions as President, Joe Biden has issued an executive order overturning the much controversial Executive Order 13950: Combatting Race and Sex Stereotyping.  In addition to additional actions aimed at promoting and ensuring equity, the new Executive Order On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government expressly revokes EO 13950.

We are digesting the full Executive Order and will provide additional details soon.

As suspected, it appears imminent that former EEOC Commissioner will be named as Director of OFCCP under newly inaugurated President Joe Biden.  Ms. Yang’s name appears on the list of Department of Labor leadership as Director of OFCCP though no formal announcement has been made by OFCCP.

We will bring additional details as they develop.

As we are preparing for a change in leadership at OFCCP,  the Agency has published its first Section 503 Focused Reviews Annual Report and issued Section 503 Certificates of Merit.  As many are aware, OFCCP Director Craig Leen is passionate about fighting for and protecting the rights of individuals with disabilities and, as such, has developed a Section 503 compliance and recognition program that no doubt, will be one of his legacies with OFCCP.  We thank Director Leen for his service as OFCCP’s Director and wish him well in his future endeavors.

The Certificates of Merit announced to day go to ten federal contractors which met the established criteria:  (1) meeting the 7% disability goal in at least 50% of all job groups; and, (2) receiving a Section 503 audit closure letter with no violations.  Congratulations go to:

  • Ventech Solutions, Inc.
  • Professional Management Enterprises
  • Quantitech, Inc.
  • Goodwill Industries of Central Indiana
  • Systems Application & Technologies
  • Didlake Incorporated Consolidated
  • Airbus Helicopters, Inc.
  • Centers for Habilitation
  • Paul Hastings, LLP
  • Lighthouse for Blind – New Orleans

These certificates are in addition to the Agency’s highest disability achievement award – the Excellence in Disability Inclusion Award – which the Agency awarded earlier to CVS Health and PepsiCo.

Award of the Certificates of Merit comes on the heels of OFCCP’s first Section 503 Focused Reviews Annual Report, which is a summary of not only audit results but also a summary of the Section 503 audit process, compliance assistance resources and best practices.  Notably, although OFCCP has yet to complete the other 50% of these audits from the March 2019 audit list, as of the end of fiscal year 2020, “OFCCP has not found any discrimination or reasonable accommodation violations in the focused reviews.”  OFCCP has entered into conciliation agreements with contractors to remedy other violations, the top five of which are:

  1. Failure to conduct appropriate outreach and positive recruitment of individuals with disabilities that were reasonably designed to effectively recruit qualified individuals with disabilities;
  2. Failure to invite applicant and employees to self-identify as an individual with a disability;
  3. Failure to document the computations or comparisons pertaining to applicants and hires, as described in 41 CFR 60-741.44(k) and maintain this data for three (3) years;
  4. Failure to design and implement an acceptable audit and reporting system which measured the effectiveness of its affirmative action program; and
  5. Failure to develop and submit acceptable Section 503 AAPs and support data.

As an important note, the Annual Report provides that:

“OFCCP plans to schedule the remaining contractors on the FY 2019 list before scheduling the 250 Section 503 Focused Reviews on the FY 2020 supplement.”

As the new administration and leadership of OFCCP transitions into place we will make sure to continue to bring you update information and insights.

The U.S. Equal Employment Opportunity Commission (EEOC) announced today that the collections for the 2019 and 2020 EEO-1 Component 1 Data that was postponed in 2020 will begin in April 2021.

The noticed stated:

The precise opening dates of the collections, as well as the new submission deadline dates, will be announced by posting a notice on the EEOC’s home page at www.eeoc.gov as well as on the new dedicated website for the agency’s EEO data collections at https://EEOCdata.org.

As in previ­ous years, EEOC will also be sending a notification letter to eligible filers.

As we’ve previously shared, there is no pay data collection component to the EEO-1 reports at this time.

We will provide additional details as we learn of them, including the submission deadline when announced.

Following on the heels of its final rule clarifying the religious exemption found at Section 204(3) of Executive Order (EO) 11246 and codified at 41 C.F.R. 60-1.5(a)(5) (the Exemption), OFCCP this week issued an Opinion Letter addressing the scope of the Exemption. Specifically, the Opinion Letter provides insights on “six possible religious discrimination scenarios.”

As a reminder, federal contractors are prohibited from discriminating based on religion and national origin and must provide appropriate religious accommodations, absent undue hardship.  41 C.F.R. 60-50.2.  However, these regulations are subject to limits:

  1. The Exemption excludes any contractor or subcontractor that is a religious corporation, association, educational institution, or society regarding the employment of individuals of a particular religion;
  2. The Religious Freedom Restoration Act may require an exemption or accommodation for a contractor under EO 11246; and
  3. The First Amendment ministerial exception bars employment discrimination suits on behalf of employees who work at religious institutions in positions deemed to be “ministerial.”

According to the Opinion Letter, an organization sought guidance from the Agency regarding the six scenarios due to its concern “that employees in the technology, education, public, and other sectors may face discrimination at work based on faith-related activities and beliefs.”  The letter, cited, as an example the following fact pattern:

An employee suffers an adverse employment action because, during a company-provided rest break in which coworkers were discussing current events or social issues, the employee stated that he or she has religious views that others may find offensive (e.g., he or she believes in traditional marriage or, conversely, supports an expanded definition of the family).

OFCCP responded with the following answer (scenario 4):

Generally speaking, unless the employee has been told such comments are unwelcome, an employee’s respectful expression of religious views in off-duty conversation are not objectively hostile, nor do they constitute harassment. We assume that this is the case in this scenario, as it appears to be. If so, then the adverse employment action here, based as it is on the employee’s religious belief, would be a violation of 41 C.F.R. § 60-50.2.

OFCCP Director Craig Leen’s Opinion Letter also points out that OFCCP’s Federal Contract Compliance Manual provides additional guidance in the Religious Accommodation section (2J01).

While the Exemption seems clear, there are many complicated nuances, potential conflict with LGBTQ+ protections and perhaps grounds for legal challenge.  As always, we will continue to monitor this area and provide any insights and updates as they develop.

OFCCP has published a notice in the Federal Register extending the public comment period on its proposal to require federal contractors to submit an annual certification of their AAP compliance.  The new comment deadline is January 28, 2021.  While this notice does not state the reason for the extension, it appears the Agency received only 15 comments by the November 13, 2020 deadline.

As reflected in OFCCP’s original notice, it seeks regulatory authority to:

  • Require federal contractors to annually certify they have prepared AAPs via an online interface; and,
  • Institute “a secure method” to electronically submit AAPs when contractors are scheduled for an audit.

In a supporting document, OFCCP says it will use an online platform – the Affirmative Action Program Verification Interface (AAP-VI) – to execute a GAO recommendation “to collect and monitor Affirmative Action Programs (AAP) from covered federal contractors and subcontractors on a regular basis.”  This recommendation stems in part from GAO’s observation that OFCCP audits only about 2% of federal contractor locations each year.

OFCCP designed AAP-VI to increase contractor compliance by creating an annual certification process and to optimize the compliance review process by creating a tool for scheduled contractors to upload their AAPs electronically for OFCCP’s review.

AAP-VI will have five user interfaces for federal contractors, including an AAP Upload Interface and an Annual Certification interface.  Federal contractors would receive an OFCCP email with AAP-VI user registration instructions, which would also be posted on OFCCP’s website.

Once the process is effective, federal contractors would have 90 days to complete the certification process.   “After the initial certification year, OFCCP will set a date by which all existing contractors must renew their annual certification.”  New contractors would  have 90 days from development of their AAPs to make the certification.

The proposed certification process would require each federal contractor to annually select one of the following options in the AAP-VI interface:

  1. Entity has developed and maintained affirmative action programs at each establishment, as applicable, or for each functional or business unit. See 41 CFR Chapter 60.
  2. Entity has been party to a qualifying federal contract or subcontract for 120 days or more and has not developed and maintained affirmative action programs at each establishment, as applicable. See 41 CFR Chapter 60.
  3. Entity became a covered federal contractor or subcontractor within the past 120 days and therefore has not yet developed applicable affirmative action programs.  See 41 CFR Chapter 60.

Additionally, it is proposed that when scheduled for an audit, contractors would use AAP-VI to upload the applicable AAP(s) for the “scheduled establishment(s), functional business unit, or corporate headquarters.”

By January 28, 2021, OFCCP is seeking comments on a number of topics, including:

  • The frequency of the certification (the proposal is for annual certification, but some comments suggest every other year);
  • The type of information and level of detail to be required in the certification;
  • Whether certification would be practically useful to OFCCP in service of its mission, as compared to the burden on contractors; and,
  • Whether the estimated burden on contractors (36 minutes to certify) is accurate.

Contractors can submit their input to OFCCP via the federal e-Rulemaking portal at https://www.regulations.gov/ .

 

Since it was issued in September 2020, Executive Order 13950 – Combatting Race and Sex Stereotyping has been a source of controversy and criticism.  Speculation as to the fate of the Executive Order in the future Biden/Harris administration has accelerated in recent weeks with talks of rescission and legal challenges.  While we await the ultimate fate of the Order, a federal district court entered a nationwide preliminary injunction stopping the administration from enforcing Executive Order (EO) 13950. Santa Cruz Lesbian and Gay Cmty. Ctr., et al. v. Trump, No. 5:20-cv-07741-BLF (N.D. Cal. Dec. 23, 2020).

As a reminder, EO 13950 prohibits federal contractors and subcontractors from using “any workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating,” including a list of “divisive concepts.”  The district court ruled that the EO violates the Free Speech Clause of the First Amendment “because it impermissibly chills the exercise of the Plaintiffs’ constitutionally protected speech, based on the content and viewpoint of their speech.” The court also ruled that parts of the EO are so vague that they violate the Fifth Amendment Due Process Clause because

“it is impossible for Plaintiffs to determine what conduct is prohibited.”

The Office of Federal Contract Compliance Programs (OFCCP) has taken action to enforce the EO through the advent of a hotline to accept complaints and also issued a voluntary information collection.  While the court order is preliminary in nature and may be reversed, for now, OFCCP and other federal government agencies may not enforce the EO.

For more information on this development, check out our Article detailing today’s order.

OFCCP issued today the last of a series of Directives aimed at defining the Agency’s enforcement relationship with federal contractors – this Directive 2021-02 focuses on providing federal contractors “Certainty” when interacting with the Agency.

Since he took the leadership role, OFCCP Director Craig Leen has focused on providing federal contractors with “four pillars” on which they can rely in interactions with OFCCP:  Certainty, Efficiency, Recognition and Transparency – the “CERT” principles.

The CERT principles commit OFCCP to certainty in the policies and practices it enforces, efficiency in the conduct of its compliance evaluations, recognition of top-performing stakeholders and best practices, and transparency in information sharing and engagement with the stakeholder community.

According to the terms of this Directive, it builds on other publications but specifically:

  • Commits to ongoing Agency reviews of policies and enforcement practices “to ensure they are clear and certain to the stakeholder community, and to provide for a process by which a member of the stakeholder community can seek clarification or disclosure of a policy or practice to ensure greater certainty.”
  • Extends the enforcement moratorium applicable to federal contractors participating in Veterans Administration Health Benefit Provider (VAHBP) agreements.  The moratorium is extended by  two years, until May 7, 2023.  The ultimate goal, according to the Directive, is to give OFCCP time to “consider whether a national interest exemption for VAHBP providers is warranted” – similar to the TRICARE determination.

Also, according to the new Directive, it builds specifically upon, reaffirms and incorporates the 2018 publication:  What Federal Contractors Can Expect.  In that document, OFCCP committed to these significant actions:

  • Access to Accurate Compliance Assistance Materials
  • Timely Responses to Compliance Assistance Questions
  • Opportunities to Provide Meaningful Feedback and Collaborate
  • Professional Conduct by OFCCP’s Compliance Staff
  • Neutral Scheduling of Compliance Evaluations
  • Reasonable Opportunity to Discuss Compliance Evaluation Concerns
  • Timely and Efficient Progress of Compliance Evaluations
  • Confidentiality

While directives do not have the force of law and, therefore, can be rescinded, it may be difficult for any subsequent OFCCP administration to do so given the points outlined above are reasonable, and designed to further OFCCP’s agenda and objectives.

Rounding out the Agency’s efforts to beef up its Technical Assistance Guides (TAGs) for different types of federal contractors, OFCCP recently published a “Small Contractor” TAG.  TAGs can be helpful resources for both new and experienced federal contractors, and the aim of this TAG is to guide those small contractors with limited resources through the maze of affirmative action obligations.

In particular, the Small Contractor TAG provides guidance for contractors with supply or service contracts or subcontracts, as well as construction contractors and subcontractors.  OFCCP explains that the TAG can be used as a “self-assessment tool” for compliance with all three affirmative action laws:  Executive Order 11246, Section 503 and VEVRAA.

Small contractors would be well-served by relying on the TAG as a checklist for their compliance efforts.

As anticipated, on December 7, 2020, OFCCP published on its Website a lengthy final rule clarifying the religious exemption found at Section 204(3) of Executive Order (EO) 11246 and codified at 41 C.F.R. 60-1.5(a)(5) (the Exemption).

The purpose of this final rule is to clarify the contours of the E.O. 11246 religious exemption and the related obligations of federal contractors and subcontractors to ensure that OFCCP respects religious employers’ free exercise rights, protects workers from prohibited discrimination, and defends the values of a pluralistic society.  This is the final version of OFCCP’s proposed rule published in August 2019.

Importantly, the rule specifically acknowledges that

[t]he rule does not affect the overwhelming majority of federal contractors and subcontractors, which are not religious, and OFCCP remains fully committed to enforcing all E.O. 11246 nondiscrimination requirements, including those protecting employees from discrimination on the bases of sexual orientation and gender identity. Even for religious organizations that serve as government contractors or subcontractors, they too must comply with all of E.O. 11246’s nondiscrimination requirements except in some narrow respects under some reasonable circumstances recognized by law.

The final rule is a culmination of a multi-year effort by OFCCP to reconcile the Exemption with Supreme Court cases, including those cited in the final rule:

  • Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm’n, 138 S. Ct. 1719, 1731 (2018) (holding the government violates the Free Exercise Clause of the First Amendment when its decisions are based on hostility to religion or a religious viewpoint);
  • Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012, 2022 (2017) (holding the government violates the Free Exercise Clause of the First Amendment when it decides to exclude an entity from a generally available public benefit because of its religious character, unless that decision withstands the strictest scrutiny);
  • Burwell v. Hobby Lobby Stores, , 573 U.S. 682, 719 (2014) (holding the Religious Freedom Restoration Act applies to federal regulation of the activities of for-profit closely held corporations);
  • Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171, 196 (2012) (holding the ministerial exception, grounded in the Establishment and Free Exercise clauses of the First Amendment, bars an employment-discrimination suit brought on behalf of a minister against the religious school for which she worked);
  • Bostock v. Clayton Cnty., 140 S. Ct. 1731, 1754 (2020) (“[T]he promise of the free exercise of religion . . . lies at the heart of our pluralistic society.”);
  • Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania, 140 S. Ct. 2367, 2379–84 (2020) (holding the Departments of Labor, Health and Human Services, and the Treasury had authority to promulgate religious and conscience exemptions from the Affordable Care Act’s contraceptive mandate);
  • Espinoza v. Mont. Dep’t of Revenue, 140 S. Ct. 2246 (2020) (a state “cannot disqualify some private schools [from a subsidy program] solely because they are religious” without violating the Free Exercise clause); and,
  • Our Lady of Guadalupe Sch. v. Morrissey-Berru, 140 S. Ct. 2049, 2069 (2020) (holding the ministerial exception applies “[w]hen a school with a religious mission entrusts a teacher with the responsibility of educating and forming students in the faith”).

None of these cases specifically addressed the Exemption applicable to federal contractors, and some address the ministerial exception that is not part of the EO 11246 Exemption.  Moreover, the 2020 cases were decided after OFCCP issued its initial proposed rule in August 2019.  Nonetheless, OFCCP found a reconciliation of these cases and the Exemption to be necessary to protect religious organizations that may be reluctant to do business with the federal government.  OFCCP specifically stated that the rule

is intended to correct any misperception that religious organizations are disfavored in government contracting by setting forth appropriate protections for their autonomy to hire employees who will further their religious missions, thereby providing clarity that may expand the eligible pool of federal contractors and subcontractors.

The primary clarifications of the Exemption are via new terminology definitions, including defining “particular religion” and “religious corporation, association, educational institution, or society,” “exercise of religion” and “sincere.” The final rule also provides a few examples of application of the exemption.

Finally, the Exemption is amended to dictate that it “be construed in favor of a broad protection of religious exercise, to the maximum extent permitted by the U.S. Constitution and law, including the Religious Freedom Restoration Act of 1993, as amended, 42 U.S.C. 2000bb et seq.”

OFCCP has also published FAQs addressing the finalize rule.

The Exemption, albeit having a significant potential impact in individual instances, is theoretically narrow in application from OFCCP’s perspective.  EEOC has weighed in on the topic separately and issued its own guidance.  As noted in OFCCP’s discussion of the many comments it received in response to the proposed rule, many groups opposed the proposed rule arguing, for example, that an expansion of the Exemption is but “a  pretext to permit discrimination against or harm others.”  Given this, the publication of the final rule may prompt formal challenges.

It remains to be seen, of course, how OFCCP under a new presidential administration will interpret and enforce the final rule.   We will keep you updated on any developments along this, or any other, front.