On Monday, OFCCP Director Pat Shiu announced the selection of Janette Wipper to fill the Pacific Region Regional Director position which had been vacant for more than a year since the retirement of Bill Smitherman in December 2012.

This is the second consecutive Regional Director position OFCCP has filled from outside the Agency.  Ms. Wipper’s selection follows the Agency’s placement last year of Diana Sen as the Regional Director for OFCCP’s Northeast region.

Like Regional Director Sen, Regional Director Wipper comes to OFCCP from outside the government.  Both Regional Directors Sen and Wipper were plaintiff-side attorneys for many years prior to joining OFCCP.  Like Regional Directors Sen and Wipper, prior to being named OFCCP Director, Pat Shiu also represented plaintiffs in civil rights suits against employers.

Most recently, Regional Director Wipper was the Managing Partner of Sanford Heisler, a national Plaintiff’s civil rights law firm, in which she served as lead litigator in many class-action lawsuits against employers.  Regional Director Wipper’s practice focused on the use of statistical evidence in employment discrimination cases, as evidenced in the landmark Novartis gender discrimination lawsuit in which the use of statistical evidence lead to a jury verdict against Novartis for $250 million.

March 24, 2014 – the effective date for OFCCP’s new veterans and disability regulations – is fast approaching.   The Agency continues to present webinars, publish FAQs and provide other guidance in the hopes of clarifying what remains a less than a clear picture of these new obligations.  Despite the OFCCP’s laudable attempts, employers are still searching for answers as March 24th approaches.

With that in mind, come join me for a one-day training seminar on the new regulations where you will get practical tips and tools to help in making important decisions about implementation and compliance in the face of these groundbreaking new obligations.  The seminar will take place January 23, 2014 in Washington, D.C.   To learn more about the conferences and to register, click here.  Hope to see you there.

This may be considered attorney advertising in some states.

Continuing its focus on applicant-to-hire-adverse impact, OFCCP announced today a settlement with a New Jersey contractor involving allegations of hiring discrimination against women, African Americans and Asian Americans.

In its press release, OFCCP indicated the contractor aggreed to pay close to $325,000 to a class of nearly 230 applicants who applied for warehouse positions in 2010.

This, and other recent settlements, are evidence that investigating hiring discrimintion continues to be the agency’s “bread and butter.”

On December 17, OFCCP held the first of what will be several public webinars in an effort to provide assistance to the contractor community with implementation of the new Veterans and Section 503 regulations.  The series of trainings, entitled “Moving Toward Compliance: Training Webinars on SEction 503 and VEVRAA” will cover topics such as developing AAPs (Jan. 16 and Feb 6), listing job openings (Feb 20), and undstanding the new disabiltiy goal and veterans hiring benchmark (March 6).

Check the OFCCP’s webpage for registration and other informaiton regarding this training series.

In a recent court filing, the National Association of Manufacturers and the Virginia Manufacturers Association have challenged the legality of OFCCP’s requirement that federal contractors post notices informing employees of their rights under the National Labor Relations Act in connection with Executive Order 13496. In addition to other arguments, the complaint contends that while OFCCP has the jurisdiction to enforce compliance with antidiscrimination and affirmative action requirements, it does not have the same authority with respect to “union status” thus making the Agency’s enforcement of the posting requirements of EO 13496 during compliance reviews unauthorized.

Earlier this year, in what was at the time a much more publicized struggle, the NAM successfully challenged the NLRB’s authority to require all employers subject to the NLRA (not just federal contractors) to display a similar notice as the one required by EO 13496.

As this litigation is only in the preliminary stages, make sure to stay tuned for updates . . .

 

In a public webinar and new FAQs released today, OFCCP answered questions around timing of compliance with obligations set forth in Subpart C of the Agency’s new Veterans and Disability regulations.  OFCCP sought to clarify and clear up what has been widespread confusion about the timing of required compliance with the data collection aspects of these new regulations.

In part, Subpart C of the regulations require:

  • Pre-offer self – identification for protected veterans and individuals with disabilities
  • Annual disability utilization review
  • Annual veteran benchmark assessment

In the call today, OFCCP clarified, we think correctly, that the regulations do not require compliance with Subpart C until the date of an employer’s next regular annual affirmative action plan update following March 24, 2014 – the effective date of the new regulations.

While OFCCP confirmed the regulations do not require compliance before this time, the Agency recommended employers begin compliance earlier, or “as soon as practical.”

Based on the answers and information provided today by OFCCP, it is now up to employers to assess their readiness for compliance and determine when they will begin implementation of the components of “Subpart C” – March 24, 2014 or the date of the company’s next regular AAP or somewhere in between.

On Wednesday, December 4th at 10:00 a.m., the Subcommittee on Workforce Protections held a hearing entitled, “Examining Recent Actions by the Office of Federal Contract Compliance Programs.”  During the hearing, witnesses offered testimony on (1) the effects of the new veteran and disability regulations on workers and employers, and (2) attempts by OFCCP to exert jurisdiction over health care providers.  Witnesses included OFCCP Director Patricia Shiu, David Fortney (representing HR Policy Association), Thomas Shanahan (on behalf of the University of North Carolina), Brian Fitzgerald (on behalf of Easter Seals New Jersey), and Curt Kirschner (representing the American Hospital Association).  A webcast and statements from each of the witnesses are available here.

The timing of this hearing is no coincidence — just the day before, Representative Tim Wahlberg introduced new proposed legislation entitled “Protecting Health Care Providers from Increased Administrative Burdens Act (HR 3633)” designed to protect health care providers from OFCCP jurisdiction “through executive fiat” as described in the associated Press Release.  In the press release, Wahlberg expresses concern that the increased costs incurred by health care providers in complying with EEO laws will be passed along to the American public through increased health care costs.

This is the second recent Congressional hearing on OFCCP’s aggressive enforcement/regulatory activity (the last one was in April 2012).

 

 

 

The OFCCP announced it has settled its allegations with M.C. Dean Inc. that the company engaged in hiring discrimination against minorities due to the use of an allegedly invalid pre-employment test.  The Company settled for $875,000 that will be paid to nearly 400 minority applicants and must make 39 job offers as part of the settlement.

This settlement provides (at least) two lessons to all federal contractors.  First, the OFCCP is digging deeper than just the overall applicant-to-hire adverse impact analyses.  Where there is overall applicant-to-hire adverse impact in the hiring process, the Agency will analyze each stage (screen, test, interview, offer, etc.) in the hiring processes for adverse impact.  Second, where there is adverse impact at the testing stage, employers must evaluate the validity of their “tests.”  In these cases, OFCCP will request and send the validation materials to its Industrial-Organization Psychologist for review, so it must be able to withstand scrutiny, including whether the test has been (i) validated recently, (ii) validated for the employer’s specific position, and (iii) that there are not less discriminatory methods for achieving the same predictive results of job performance.  In particular, employers who are using employment tests that have never been validated, have not been validated for the specific position for which they are being used, have not been validated for their specific company, have not been reviewed by someone other than the testing vendor who created the test, or have not been revalidated as the position changed over time may not realize they may be “at risk” in these audits.

In short, own each step of your hiring process – even if a third-party testing vendor created and/or administers your test, the employer will be held accountable if the test causes adverse impact and is not properly validated.  Employers need to get in front of these testing issues by analyzing the test’s potential adverse impact and existing validation to minimize exposure during audits.  Notably, this has also become a “hot button” for EEOC, so taking a close look at your tests can help minimize exposure to both OFCCP and EEOC claims.

In the wake of the financial crisis a few years back, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which focused on an overhaul of federal financial regulations.  What does that have to do with affirmative action and OFCCP?  Well, buried on page 166 of the Act are new obligations imposed on federal financial agencies to evaluate the EEO and diversity in the workforces of contractors who work with the agencies.  On October 25, 2013, six of these agencies – the Comptroller of the Currency, the Federal Reserve System, the FDIC, the NCUA, the Consumer Financial Protection Bureau, and the SEC – published a Proposed Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities.

The proposed standards allow the six federal agencies to investigate contractors regarding their commitment to diversity, fair employment practices, and supplier diversity.  If an agency determined that a contractor or subcontractor has failed to make sufficient good‑faith efforts to include minorities and women in its workforce, it may terminate the federal contract, refer the matter for investigation to OFCCP, or take other appropriate action.

Many financial industry employers are unaware of this part of the Dodd-Frank law.  But, it serves as a reminder that financial entities – including investment firms, asset management firms, banks, brokers, and investment consultants – may fall within OFCCP jurisdiction . . . and that other government agencies apart from OFCCP and EEOC also are monitoring your EEO and affirmative action efforts.

Financial industry employers should review the requirements of the proposed standards and consider what steps to take.

On September 24, 2013, OFCCP published the final rules for veterans and individuals with disabilities.  The new rules require that employers make substantial changes to their hiring processes and systems within 120 days, or by March 24, 2014.  For more information on these changes, click here.  However, because it is unclear how the Agency will interpret and enforce components of the new rules (such as data collection and analysis, disabled self-identification forms, and other technical compliance issues), employers need further guidance from the Agency in order to effectively implement the new rules.

On Friday, OFCCP placed answers to Frequently Asked Questions (“FAQs”) on the new veteran and disability regulations on its website.  While the FAQs do provide some additional information, they do not “flesh out” some of the more critical employer issues described above.

We will post further information delving into the information provided in the FAQs and as more information is provided by the Agency.