Audit Poker: When Federal Contractors Call, OFCCP Must Show Cards

Two recent OFCCP rulings in the Pacific region have clarified information exchange obligations between contractors and OFCCP in audit matters. Although we have summarized the Administrative Law Judge (ALJ) rulings in both the Google (OFCCP v. Google, Inc.) and Oracle (OFCCP v. Oracle America, Inc.) matters previously, an integration of the rulings and discussion of what they mean for future audits may be interesting to our clients.

 

OFCCP v. Google, Inc. (Google)
Our readers will recall that in July 2017, Administrative Law Judge (ALJ) Steven Berlin ruled that OFCCP’s data request was (a) unreasonable, (b) outside its authority, (c) irrelevant to the investigation, (d) unfocused, and (e) unduly burdensome. This was a major win for contractors, who in recent years have faced more and more expansive data requests in audit matters.

 

OFCCP v. Oracle America, Inc. (Oracle)
Even more recently, ALJ Christopher Larsen ordered OFCCP to submit information, requested by Oracle, upon which OFCCP was basing its allegations of discrimination. The ruling was in response to Oracle’s motion to compel OFCCP to produce documents, answer interrogatories, and designate witnesses for deposition. The Court directed OFCCP to:
a) provide details related the database of individuals used in analyses, including identification of class members, information to show how OFCCP used pay analysis groups to determine “similarly situated” employees, and identification of comparator employees;
b) provide information related to the methodologies and computations used to determine “standard deviations”;
c) produce information related to regression analyses, including the documentation used to identify model factors (such as “legitimate explanatory factors”) and any “statistical, arithmetical, or mathematical calculations supporting the allegations” of the complaint;
d) produce information related to communications with third parties which support the allegations of the complaint;
e) produce documents setting forth “anecdotal evidence” of discrimination set forth in the complaint;
f) identify the specific policies, practices, procedures, and tests that are alleged to have disparate impact; and
g) identify witnesses to the facts of the case and make them available for deposition.

 

What this means for federal contractors
Together, these rulings are great news for federal contractors, and provide a balanced, even playing field for resolving audit investigations. In effect, federal contractors are obligated only to submit information that is relevant to OFCCP’s focused investigation, and OFFCP is compelled to show federal contractors the basis for their claims of discrimination.

 

Stay tuned!

 

By Kayo Sady, Associate Principal Consultant, and Emilee Tison, Associate Principal Consultant, at DCI Consulting Group

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