ARB REVERSES PRIOR ALJ RULING FAVORING FRITO-LAY


by Art Gutman Ph.D., Professor, Florida Institute of Technology



In an Alert posted on 7/30/10 we reported on a ruling by ALJ Larry W. Price supporting Frito-Lay’s appeal relating to the a request by the OFCCP requesting data from 2008 and 2009 based on a desk audit conducted in 2007.  And just last week, in an Alert dated May 9, 2012, we reported that Frito-Lay moved for case closure on the case, a motion opposed by the OFCCP.  While all this was going on, the ARB reversed Price’s original ruling on May 8, 2012.

To recap, being six months or more into its plan year, Frito-Lay sent data for the required 12 months (June 2006 through May 2007) consisting of applicant flow data for the annual plan and the required six months of update data (June 2007 through December 2007). After the desk audit, the OFCCP identified “adverse impact” in the supplied applicant flow data and, on November 10, 2009, requested that Frito-Lay supply more recent applicant and hire data from January 1, 2008 through October 31, 2009. Frito-Lay refused and the OFCCP filed an administrative complaint.  Price’s ruling was:

In summary, I find that the EO, regulations, case law and the FCCM contemplate that the temporal scope of the desk audit phase of a compliance review cannot be extended beyond the date that the contractor received its Scheduling Letter. Accordingly, Frito-Lay's Motion for Summary Decision should be granted.

In reversing Price’s original ruling, the ARB ruled that the OFCCP has the authority to request data beyond the date of the scheduling letter because it was motivated by an “objective deficiency” discovered during the 2007 audit, namely an alleged statistically significant hiring disparity involving women.  The ARB stated further that:

When OFCCP finds “deficiencies,” it may make reasonable efforts “to secure compliance through conciliation and persuasion.” A significant statistical disparity can indicate a “deficiency,” for example, proof of discriminatory disparate impact. Ultimately, there is no question that seeking “compliance” with the affirmative action mandate in Executive Order 11246 is a primary duty of OFCCP. We conclude that OFCCP has regulatory authority to request the 2008 and 2009 AAP data in furtherance of its 2007 Desk Audit.

This is clearly a setback for what seemed like a major ruling favoring federal contractors in ALJ Price’s original ruling. OFCCP’s track record on denial of access cases continues to be strong. It will be interesting to see if this is taken to federal court. 


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