President Obama and the OFCCP: 2014 in Review – Part II

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In Part I of this post we examined the close connection between the OFCCP’s focus on pay equity and the hiring of veterans and individuals with disabilities (IWD’s) in 2014 and President Obama’s agenda. We continue here by comparing the President’s agenda and actions regarding LGBT workers and other, more general workers’rights issues with those of the OFCCP during 2014.

I. LGBT Workers:

A. President Obama: The President has made clear his intentions to ensure that anti-discrimination laws include bans on discrimination based on sexual orientation and gender identity. In 2014 he issued an Executive Order amending E.O. 11478, thereby banning discrimination in the military based on sexual orientation and gender identity. The President openly supports the passage of the Employment Nondiscrimination Act (ENDA), which has passed in the Senate but has not yet passed in the House. Apparently frustrated with Congress’ lack of progress, on July 31, 2014, President Obama issued Executive Order 13672, which amends Executive Order 11246 to prohibit sexual orientation and gender identity discrimination.

B. The OFCCP: Along with his Executive Order, the President issued a memorandum to the OFCCP to in turn issue an implementing rule, which it did, and which should take effect in early April 2015. Included in this rule is a requirement that the contractors and sub-contractors include relevant language in their EEO clauses.

II. General Workers’ Rights Protections and Issues:

A. President Obama: President Obama’s openly pro-worker agenda is obvious in numerous contexts. He has appointed pro-labor members to the National Labor Relations Board, which in turn is a much more activist Board than previous ones. He has supported and urged Congress to pass the Employee Free Choice Act, which would make it easier for workers to form unions and would significantly curtail an employer’s right to oppose them. The EFCA has stalled in the Senate. The NLRB has ruled that mandatory arbitration provisions in employment agreements violates the NLRA, but has been overruled by at least one federal circuit court of appeals. While it has again issued a ruling invalidating or at least curtailing such provisions, the issue is far from settled. It is only a matter of time before the issue is appealed again. Until either the US Supreme Court rules on the issue or Congress passes legislation either validating or invalidating mandatory arbitration provisions, the issue will continue to be in a state of flux. Here again, the President has exerted at least a measure of control using Executive Orders as a vehicle.

The President on July 31 signed E.O. 13673, the Fair and Safe Workplaces Executive Order, which requires contractors during the bidding/solicitation process for contracts of $500,000 or more to disclose any violations of federal or state anti-discrimination, safety, wage and hour and leave laws in the three years prior to the bidding/solicitation. Contractors may also disclose steps it has taken to correct any such violations. In addition, this Executive Order requires contractors to provide their employees with notification of wages, hours worked, overtime and deductions within each pay period; if they are being classified as independent contractors, then federal contractors must notify them as such. Finally, subject to some narrow exceptions, in contracts of $1million or more, contractors cannot require employees to enter into binding arbitration of Title VII or other sexual harassment/assault claims. In this last prohibition, you can see that what he has been unable to achieve in the larger context, he has managed to impose in the federal contracting world. While the President did, of course, direct the OFCCP to implement regulations, it looks like it may be awhile before we see them, as full implementation is not expected to begin until 2016 (Stay tuned for more on that in Part III of this series.)

Prior to this Executive Order the President signed EO 13658 in February, thereby raising the floor on federal contractor employees’ wages to $10.10 an hour. The rationale is that raising wages improves quality and efficiency of services provided to the government, lowers turnover, increases morale and should lead to higher productivity overall on federal contracts. Note however, that since the President cannot re-write existing contracts, this pay raise will not take effect until the start of new contracts between the contractor firms and the federal agencies. This E.O. directed the OFCCP to issue regulations.

B. The OFCCP: In October, the OFCCP issued its Final Rule implementing EO 13658.The rule applies to all “new contracts” with the federal government. A “new contract” is a new or replacement contract resulting from a solicitation issued on or after January 1, 2015 or is awarded outside the solicitation process on or after January 1, 2015. You can access the Final Rule here for more details.

The OFCCP found itself compelled to push off some items originally on its agenda for 2014 in order to respond to the President’s call for action on his Executive Orders targeting pay equity and non-discrimination against LGBT employees of federal contractors and sub-contractors.

The OFCCP had announced last year that it expected to issue proposed rules updating affirmative action regulations for construction contractors—specifically focusing on sex discrimination in the construction industry. Originally it was to have issued proposed rules by April. In June the OFCCP announced that contractors were not likely to see these proposed rules until January 2015. Given the absence of any indication of further action here, it is reasonable to assume that contractors will not see proposed rules this month either. Similarly the OFCCP announced its intention to update sex discrimination regulations for non-construction contractors by May, and then pushed the date back to September, only to have to push that item off again.

Again, the OFCCP’s failure to deliver the proposed rules in these two areas appears to be caused by the President’s issuance of other Executive Orders and memoranda directing the OFCCP to implement regulations within specific timeframes, rather than a change of heart on the OFCCP’s part. The OFCCP’s continued commitment to addressing issues of systemic discrimination against women and minorities can be seen in the settlements it procured in 2014. Here are just a few examples:

  • Cargill Meat Solutions agreed to pay $2.2 million to settle allegations of race, ethnic and sex discrimination in its hiring practices allegedly involving 2959 applicants for production jobs at three facilities between 2005 and 2009;
  • G.E. agreed to pay $537,000 to settle allegations that included use of selection tests that resulted in a disproportionate number of otherwise qualified women being rejected for entry-level attendant positions;
  • Westat Inc. paid $1.5 million to settle allegations of hiring discrimination against African American, Asian American, Hispanic and female applicants;
  • Fort Myer Construction agreed to pay $900 million to settle sex discrimination, harassment and pay discrimination allegations involving female and African American employees.

While these are just a few of many settlements during 2014, they show that the OFCCP continues to be aggressive in its enforcement efforts and continues to focus on issues of systemic discrimination against women and minorities. As you can see however, the OFCCP clearly does not –and cannot—work on its own. It acts in direct response to the pronouncements, directives and actions of our President. Stay tuned for Part III of this post, where we discuss what this may mean in 2015 and beyond.

This blog was provided to BirdDogHR by HR UnlimitedRead the original post. For more information, contact Ahmed Younies at ayounies@hurunlimitedinc or 714-426-2918 x 1.