LAW FIRM SUBJECT OF OFCCP RULES

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

In a ruling by Administrative Law Judge (ALJ) Linda S. Chapman, the law firm of O’Melevny & Myers (or simply the “Firm”) was deemed a federal contractor subject to the provisions of Executive Order 11246, the Rehabilitation Act, and the Vietnam Era Veterans' Readjustment Assistance Act (OFCCP v. O'Melveny & Myers LLP, DOL OALJ, No. 2011-OFC-00007, 10/31/11). Both sides filed summary judgment motions in this case, and ALJ Chapman granted the motion of the OFCCP (the case may be read at http://hr.cch.com/eld/OFCCPOMelveny.pdf).

The facts of the case are that the Firm entered into a contract in 2001 to provide legal advice and related services relating to the Department of Energy’s (DOE) divestiture of the Elk Hills Naval Petroleum Reserve. Key services were provided from January 2007 through April 2011. In January 2009, the OFCCP sent an audit letter to the Firm, which refused to provide requested documents on grounds that the DOE contract did not fall under the OFCCP’s jurisdiction.

A critical element in this case was that the DOE contract referenced OFCCP provisions in several places (e.g., “The Contractor complied with Executive Order 11246, as amended, and the rules, regulations, and orders of the Secretary of Labor”). Nevertheless, the Firm argued that OFCCP provisions apply only to “Government contracts” for “nonpersonal services.” Furthermore, the Firm argued that the OFCCP regulations do not define “nonpersonal services”, but instead, provide a list of examples that include “utilities, construction, transportation, research, insurance, and fund depository.” The Firm argued it is therefore exempt from OFCCP provisions because the services it provided are not on that list. The OFCCP argued that the list itself is “non-exhaustive”, and ALJ Chapman agreed.

The bottom line is that Chapman order requires the Firm to provide all requested documents, permit the OFCCP to access the to its facilities (if requested), and “otherwise allow the OFCCP to conduct and complete its compliance review.” The Firm was given 30 days to comply.

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