OFCCP Enforcement: The Year 2013 in Review

The year 2013 has been anything but quiet on the OFCCP enforcement front for the federal contracting community. Contractors have certainly been kept on high alert over the past 12 months with the release of the final regulations for protected veterans and individuals with disabilities, the new Federal Contractor Compliance Manual (FCCM), Directive 307 (which has been re-numbered as Directive 2013-03), and a 16-day government shutdown. As we approach the end of 2013, here is a look back at some of the most prominent cases, as well as updated OFCCP enforcement data.

According to the US Department of Labor’s enforcement data, OFCCP compliance evaluations have resulted in a total of 96 financial settlements for FY2013. Allegations of hiring discrimination, which comprised approximately 42% of the financial settlements, were the most common. Of the hiring cases, 30 of the 40 settlements (75%) were coded as “systemic” discrimination. Compensation cases (19%) were the second most common financial settlements, followed closely by accommodation cases (18%). Cases involving promotion (2%) and termination (1%) made up only a small fraction of financial settlements.

The year has also brought about some interesting cases that federal contractors should be familiar with. Here is a brief summary of some of the more interesting OFCCP cases for FY2013.

Goodwill Industries of Southern California (April 2013) and ResCare Homecare (August 2013)

The year included several cases that focused on non-traditional victims of discrimination. The OFCCP made allegations that Goodwill’s selection process systemically discriminated against men, favoring female applicants for entry-level positions. Goodwill agreed to pay $130,970 in back wages and make 18 job offers to qualified men as part of a conciliation agreement. Similarly, OFCCP made allegations of systemic hiring discrimination against ResCare Homecare in a case involving 77 male applicants who were rejected for in-home care positions. ResCare agreed to pay $92,059 in back pay and interest to the alleged victims. In a press release, OFCCP stated that after contacting a sample of ResCare clients, support was not found for ResCare’s claim that female clients preferred female caregivers.

Tufts Associated Health Plans (July 2013)

Tufts agreed to pay $372,739 to 12 Asian, Hispanic, and African American workers following an investigation by OFCCP. The agreement settles allegations that the Massachusetts-based federal contractor retaliated against employees that OFCCP had determined were victims of discrimination in an earlier investigation. This settlement follows a prior May 2009 settlement related to alleged discriminatory hiring practices, in which Tufts agreed to hire minority applicants as customer service representatives. On March 10, 2010, OFCCP received a complaint of discrimination from an individual hired under that agreement, alleging he had been terminated due to his OFCCP class membership status. A follow-up OFCCP investigation of this claim resulted in the identification of 12 affected class members, according to the agency. In addition to the monetary settlement, the company will also provide equal employment opportunity training to its managers.

VF Jeanswear Limited (August 2013)

In what was arguably one of the most significant rulings of the year, an Administrative Law Judge (ALJ) ruled against OFCCP in its allegations that the VF Jeanswear hiring process resulted in disparate impact against non-Asian applicants. The ALJ ruled in favor of VF and stated that “non-Asian” is neither a race nor an ethnic group. Ultimately, this ruling indicated that aggregating total minority for the purpose of disparity analyses is not appropriate or acceptable.

Medtronic Interventional Vascular Inc. (September 2013)

In the first systemic compensation case filed under Directive 2013-03, Medtronic agreed to pay $290,000 in back pay and interest to 78 entry-level Hispanic workers. OFCCP alleged that disparities beginning in April 2008 between Hispanic and white senior production associates served as evidence of systemic pay discrimination.

Baltimore Gas and Electric Co. (September 2013)

OFCCP alleged systemic hiring discrimination against Baltimore Gas and Electric (BGE), who agreed to pay $350,000 in financial remedies to 58 black applicants. The alleged victims were rejected for positions within three utility trainee job categories between 2007 and 2008. The President and CEO of BGE stated that the disparity stemmed from a prior heavy reliance on employee referrals for these job categories (among others). The company also claimed that it had already implemented a number of improvements to the hiring process by the onset of the 2009 audit.

by Rachel Gabbard, M.A., HR Analyst and David Morgan, Senior Consultant, DCI Consulting Group

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