OFCCP presents final gift of 2019 to contractors.
The Office of Federal Contract Compliance Programs issued a Notice of Proposed Rulemaking, seeking to amend its regulations and add procedures relating to resolving alleged violations. The proposed rule would formalize the Predetermination Notice and Notice of Violation procedures that are currently set forth in agency guidance. Such a change would codify the procedures into the OFCCP’s regulations, which would give them the “force of law” and make any future changes subject to notice and comment as opposed to unilateral changes by the agency.
Predetermination Notice stage
When the OFCCP makes preliminary findings of discrimination during a compliance evaluation, it proposes that its resolution procedures would be triggered. First, the OFCCP would send a Predetermination Notice to the contractor outlining its preliminary findings. The OFCCP would issue a PDN only after considering
- Whether the unexplained disparity is both practically and statistically significant, and
- If relevant, whether non-statistical evidence supports a finding of intentional discrimination.
The OFCCP proposes to define “statistical” and “nonstatistical” evidence as follows:
Statistical evidence means hypothesis testing, controlling for the major, measurable parameters and variables used by employers (including, as appropriate, other demographic variables, test scores, geographic variables, performance evaluations, years of experience, years of service, quality and reputation of previous employers, years of education, years of training, quality and reputation of credentialing institutions, etc.), related to the probability of outcomes occurring by chance and/or analyses reflecting statements concluding that a difference in employment selection rates or compensation decisions is statistically significant by reference to any one of these statements: (1) The disparity is two or more times larger than its standard error (i.e., a standard deviation of two or more); (2) The Z statistic has a value greater than two; or (3) The probability value is less than 0.05.
The OFCCP proposes to control for factors in the non-exhaustive list of variables, as appropriate, and exclude any that are found to be discriminatory.
Nonstatistical evidence may include testimony about biased statements, remarks, attitudes, or acts based on membership in a protected class; differential treatment through review of comparators, cohorts, or summary data reflecting differential selections, compensation and/or qualifications; testimony about individuals denied or given misleading or contradictory information about employment or compensation practices; testimony about the extent of discretion or subjectivity involved in making employment decisions; or other anecdotal or supporting evidence.
The OFCCP does not explain how it would weigh evidence from employees who lack personal knowledge with conflicting evidence from decision-makers who have direct knowledge regarding employment decisions and practices. Will an employee’s unsupported allegation of differential treatment be sufficient to trigger the application of “nonstatistical” evidence? The proposal also fails to explain why or to what extent discretion or subjectivity in an employment practice would support a finding of discrimination. Most employers, including the government, regularly use subjective factors in making personnel decisions. Subjectivity is not inherently suspect, but the OFCCP’s inclusion of it here seems to render it so.
Further, the OFCCP proposes that, if it cannot corroborate statistical evidence with nonstatistical evidence, it would issue a PDN only “when the statistical evidence is significant at a confidence level of 99% or higher, which equates to three or more standard deviations or a p value of 0.01 or less.” However, if multiple findings of discrimination without nonstatistical evidence exist at the same or multiple locations of a contractor, the OFCCP would issue a PDN if at least one of the allegations violations is supported by statistical evidence at the level of 95 percent, or two standard deviations.
After receipt of a PDN, a contractor would be required to respond within 15 days unless the OFCCP grants an extension “for good cause.” Yes, the OFCCP would graciously provide a whole two weeks for a contractor to substantively refute allegations of discrimination based on statistical evidence that are likely to involve substantial monetary liability. (Sarcasm alert.)
Notice of Violation stage
If a contractor does not timely respond to the PDN or does not “provide sufficient response,” the OFCCP proposes that it “may” issue a Notice of Violation and invite conciliation of the alleged violation.
The OFCCP also proposes to use the NOV for all “material” violations, even those not involving alleged discrimination. The proposed regulation does not define “material violations,” but the OFCCP’s prefatory statement provides examples, including failure to maintain records and failure to maintain affirmative action programs.
A significant component of the proposal provides that contractors would have the opportunity enter into a conciliation agreement with the OFCCP without issuance of a PDN or NOV. Because compliance evaluations and the resolution process can take an extraordinary amount of time and resources, this option will be attractive for contractors seeking to resolve potential problems earlier and at less expense.
The OFCCP’s proposal is open for comment until January 29.
Our Affirmative Action Alert blog focuses on the latest news and topics affecting federal contractors and subcontractors and their compliance with affirmative action and other employment-related laws and regulations. With breaking news, quick updates, and headlines on the Office of Federal Contract Compliance Programs and affirmative action issues, this blog is a great resource for in-house counsel, HR managers, and other compliance professionals. Our blog is a companion to Constangy’s Affirmative Action newsletters, which address significant legislative, regulatory, and administrative proposals and changes. Subscribe to both to stay current on these important topics!
- February 2020
- January 2020
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- December 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017