Posts Tagged ‘compliance review’

Federal Contractor and OFCCP Go Blow for Blow

by HDlawblog Posted: Wednesday, 3/13/2013

The Labor Department’s Office of Federal Contract Compliance Programs (“OFCCP”) and a federal contractor that provides security services to the State Department are engaged in a battle over whether the federal contractor was obligated to produce written affirmative action plans for certain sites.  The OFCCP has asked an administrative law judge to order the federal contractor to produce the affirmative action plans or risk termination of its current federal contracts and debarment from future contracts.  Meanwhile, the federal contractor appears to be steadfast in its position that it is not obligated to produce the affirmative action plans because the OFCCP failed to establish it had probable cause to commence compliance evaluations at 21 of its establishments in fiscal year 2011.

If you don’t already know, companies with federal contracts of $50,000 or more and more than 50 employees have obligations under Executive Order 11246, Section 503 of the Rehabilitation Act, and the Vietnam-Era Veterans Readjustment Assistance Act to develop, implement and maintain affirmative action plans (“AAPs”) for each establishment.  Under the applicable regulations, when requested, a federal contractor is required to submit to the OFCCP the company’s annual AAP and supporting documentations for the facility selected for a compliance review.

In the case discussed above, the OFCCP notified the federal contractor via a scheduling letter that the agency had selected its Milwaukee, Wisconsin establishment for a compliance review.  The federal contractor had previously received scheduling orders notifying it that its Portage, Indiana establishment was chosen for a compliance review.  When compliance officers requested information from the federal contractor pursuant to the desk audit phase of the compliance reviews for the establishments, the federal contractor failed to provide copies of its AAPs and other supporting documents to the OFCCP.  As stated above, the OFCCP filed a complaint with an administrative law judge asking the judge to order the federal contractor to produce the AAPs or risk termination of its federal contracts and debarrment from future federal work.  The outcome should be interesting.

The attorneys at Harmon & Davies are here to assist you with your affirmative action plan and OFCCP compliance needs.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Learning from Monsanto: Ideas for Increasing Good Faith Efforts to Hire Women

by HDlawblog Posted: Monday, 8/6/2012

Recently, Monsanto entered into a settlement agreement with the OFCCP whereby it agreed to create a formal, paid training program for some female applicants rejected for entry-level operator-mechanic-engineer (“O-M-E”) positions at Monsanto’s site in Soda Springs, Idaho and to expand its good faith efforts to recruit qualified female applicants for the O-M-E positions.

The settlement came as a result of a 2006 compliance review during which the OFCCP found that between 2003 and 2005, all 26 individuals hired at Monsanto’s Idaho site were male.  The OFCCP alleged that Monsanto’s hiring process resulted in a statistically significant disparity that adversely affected female applicants citing “inconsistencies in the selection process along with anecdotal evidence.”  The OFCCP also claimed that the availability analysis for the O-M-E job group in Monsanto’s affirmative action plan “was not representative of actual job duties.” Although Monsanto denied the OFCCP’s allegations, it chose to settle with the OFCCP to avoid timely and expensive litigation.

As part of the settlement agreement, Monsanto has agreed to expand its good faith efforts to increase the number of successful female applicants by doing the following:

  • Sponsoring welding scholarships and internships for women at Idaho State University;
  • Conducting “industrial hiring preparation” workshops;
  • Expanding advertising for O-M-E positions;
  • Increasing outreach efforts at career fairs and conferences for women;
  • Considering the development of scholarships and internship programs at other vocational and educational institutions;
  • Requesting outreach ideas and participation from current female O-M-Es;
  • Including “family-friendly and female-friendly” benefits in its job posting;  and
  • Identifying “women centered” community activities and organizations for potential financial sponsorship

We encourage other employers to be proactive in adopting such practices as part of their good faith efforts to increase the number of successful female (or minority) applicants for job positions, particularly if they notice that a certain job position is being filled predominately by males (or whites).  If your company needs assistance in this regards, or with any aspect of its affirmative action plan, the attorneys at Harmon & Davies are here to assist you.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Posted in OFCCP, Sex Bias | No Comments »

FedEx Makes Economic Decision to Settle Charges of Hiring Discrimination for $3 Million Dollars

by HDlawblog Posted: Tuesday, 4/3/2012

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) proudly announced on March 22, 2012 that it entered into a conciliation agreement to resolve allegations of hiring discrimination by two subsidiaries of FedEx Corp. with federal contracts.  These subsidiaries, like most companies that are awarded federal contracts, must comply with OFCCP requirements and regulations.

By way of background, federal contractors of a certain size or with federal contracts of a certain amount must file annual affirmative action plans (“AAPs”).  AAPs are generated using computer software.  The computer software creates an overview of the federal contractor’s workforce based on the overall workforce and the number of applicants, hires, promotions, and terminations that occurred during the previous year.  Such computer programs specifically look at the number of female and minority applicants, hires, promotions, and terminations to determine whether the federal contractor’s decisions with respect to hiring, promoting, and terminating indicates any statistically disparate impact on females and minorities.

In the case of the two FedEx subsidiaries, the OFCCP’s allegations against the FedEx subsidiaries were based on computer statistical analysis that presumably indicated a disparity in the subsidiaries’ hiring process and sparked the OFCCP’s investigation.  In other words, the OFCCP’s allegations against FedEx did not step from individual complaints of discrimination.  Even though no one apparently complained that FedEx’s subsidiaries discriminated against them during the hiring process, according to Secretary of Labor, Hilda L. Solis, that is okay because findings of discrimination can rest on disparate impact statistical analysis alone.  In the FedEx case, according to Solis, the OFCCP saw statistical “trends of discrimination, not only against one group, but against many groups across the country.”

More specifically, according to the OFCCP News Release, during a series of regularly scheduled reviews, OFCCP compliance officers found evidence that FedEx’s hiring processes and selection procedures violated Executive Order 11246 by discriminating on the bases of sex, race, and/or national origin against specific groups identified at 23 facilities in 15 states.  The reviews also allegedly uncovered extensive violations of the executive order’s record-keeping requirements.

The FedEx subsidiaries admitted no wrongdoing, but rather than engage in a prolonged and expensive resolution process with the Department of Labor, the subsidiaries entered into a conciliation agreement with the OFCCP under which the companies agreed to pay a total of $3 million in back wages and interest to 21,635 applicants who were rejected for entry-level package handler and parcel assistant positions and agreed to extend job offers to 1,703 of the affected workers as positions become available.

The FedEx subsidiaries also committed to wide-ranging reforms including: (1) the company promising to correct any discriminatory hiring practices and implement equal employment opportunity training; (2) launching extensive self-monitoring measures to ensure that all hiring practices fully comply with the law; (3) agreeing to engage an outside consultant to perform an extensive review of the company’s hiring practice and provide recommendations to change and improve those practices; (4) agreeing to train incumbent and future supervisors and employees to monitor compliance with the equal opportunity laws enforced by the OFCCP; and (5) taking necessary steps to comply with all record keeping requirements.

The conciliation agreement entered into by the FedEx subsidiaries appears to have been an economic decision made by the company.  It will forever remain unknown whether FedEx actually engaged in discriminatory hiring decisions.

What’s clear from the FedEx ordeal is that federal contractors should be particularly attentive when it comes to OFCCP compliance. In addition to Executive Order 11246, the OFCCP enforces certain other acts aimed at protecting the disabled and veterans.  Those who do business with the federal government, both contractors and subcontractors, must not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran.

For assistance with creating your Affirmative Action Plan or other OFCCP compliance issues, please contact Harmon & Davies, P.C.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Posted in Affirmative Action Plans and OFCCP Compliance, FedEx SmarkPost Inc. | No Comments »