by Eric Dunleavy, Sul-Kee Kim, David Morgan & Keli Wilson, DCI Consulting Group
DCI staff attended the Washington Metro Industry Liaison Group (WMILG) meeting at U.S. Foodservice’s Manassas facility on February 19, 2009. The meeting was organized into three separate presentations, including (1) expected changes at OFCCP under the Obama administration, (2) adverse impact analyses of termination decisions, and (3) recognition of G-Five award winners from the Washington D.C. metro area. This blog describes some of the highlights of the meeting.
The Obama Presidency: Changes Ahead for the OFCCP
Bill Doyle, Esq. at Morgan Lewis, discussed some expected changes at OFCCP under the new administration. Doyle addressed the potential of an aggressive agency focus on compensation discrimination, glass ceiling issues, termination discrimination, the revision of the Internet Applicant regulations and a concentration on contractors receiving Federal bailout funds.
A majority of the presentation was devoted to discussions on the recent passage of the Lilly Ledbetter Fair Pay Act of 2009 and the potential implications of the current version of the Paycheck Fairness Act. The Ledbetter Fair Pay Act allows for timely claims to be brought, each time a compensation decision or practice resulting from a discriminatory compensation decision or other practice, is applied (“other practices” do not include hiring, promotion or termination). Since the Act covers “compensation decision(s) or other practice(s),” plaintiffs may challenge any employment decision that affects pay, such as performance appraisal ratings, pay grade, and department placements.
The Paycheck Fairness Act (PFA), if passed in its current form, will strengthen the Equal Pay Act (EPA) and make both compensatory and punitive damages available for EPA violations. The PFA would also require the EEOC to collect pay data by employees’ race and sex. Specific OFCCP provisions are also included in the PFA. Evidence of discrimination through pay grade analysis would once again be permitted; additionally, the EO Survey would be reinstated. Doyle explained, however, that even though pay grade methodology could be used as evidence and could impose litigation costs on the employer, OFCCP may not be able to win an actual court case using the methodology and would likely seek pre-litigation settlements.
Doyle explained there are important steps contractors should take to avoid or prepare for violations of the Ledbetter Fair Pay Act, PFA or forthcoming OFCCP initiatives. Recommendations included, but were not limited to: reviewing pay systems, reviewing performance appraisal systems, reviewing record-keeping related to compensation (e.g., starting pay decisions, merit pay decisions, market adjustments and pay scales), and conducting privileged internal equity studies. Even if the provisions of the PFA do become law, Doyle suggests contractors continue to include multiple regression analyses when conducting privileged internal equity studies, in addition to the types of pay grade analyses that OFCCP would be using. These suggestions would allow contractors to make proactive adjustments to avoid violations, and ensure that appropriate defense models have been developed if necessary.
Economic and Statistical Analysis for Layoffs
The presentation by Dr. Rick Holt at ERS Group was very useful and timely now that more and more organizations are engaging in mass layoffs. Holt stated a best practice would be to conduct a reduction-in-force analysis under attorney-client privilege prior to receiving a lawsuit of potential discrimination. Holt also mentioned some key factors to keep in mind when conducting a termination analysis, such as who’s affected by the layoff(s), the number of reductions (e.g., one round or several rounds of layoffs), and what considerations are made when determining potential layoffs (e.g., employee rank).
One interesting thought to ponder from this meeting is how the economy may drive OFCCP focus in future compliance evaluations. Will OFCCP be more focused on termination analyses now that organizations are engaging in reductions in force due to economic pressures? Only time will tell, but some questions to be thinking about include:
- Does your organization conduct a reduction-in-force analysis to determine whether there’s adverse impact against a protected group in a mass layoff?
- If so, is the analysis covered under attorney-client privilege?
- Are you analyzing similar jobs (e.g., specific job title within a job group)?
- What are you using as your comparison pool (e.g., employee snapshot)?
A best practice discussed in the WMILG meeting was to use a snapshot of employment at a point in time directly prior to the reduction-in-force as a comparison pool of those employees who potentially could be terminated.
The meeting concluded with a presentation of G-FIVE award recipients in the WMILG area. Michele Hodge, Acting Regional Director of OFCCP’s Mid-Atlantic region, recognized (1) Computing Technologies INC and (2) Engineering Systems Solutions for their best practices in the employment and advancement of veterans. Representatives from both organizations discussed some of their best practices, which included:
Becoming involved in veteran transition assistance programs like the Wounded Warrior Project and Hire a Hero. For example, volunteer to help veterans write resumes, with emphasis on ‘translating’ military education and experience into a format that clearly links to public and private sector work;
- Supporting the Marine for Life Program with donations or volunteering; this is an example of a noble cause that also connects companies to qualified veterans;
- Putting job advertisements in local military base newspapers;
- Publicizing military contributions by employees. For example, be sure to announce who is on active duty and update your company website with military and veteran accomplishments;
- Tailoring your compensation and benefits package to be flexible toward veteran needs.