The Year in Review at OFCCP 2017
The Year in Review at OFCCP 2017: What DIDN’T Happen at OFCCP
Many of us working in the affirmative action field had expected that 2017 might be a year of significant change at the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). Instead, the year was striking for the number of things that did not change in regard to OFCCP.

No Head of OFCCP Chosen Until November 2017

While it often takes some time for sub-cabinet positions in the federal government to be filled, the Trump administration has an unusually large number of these types of positions still open. Many of the positions in the Department of Labor where the incumbent reports directly to the Secretary of Labor have not been filled by a political appointee. Instead, agencies are being run by career employees who had been part of their respective agencies. For example, during 2017, the Office of Contract Compliance Programs (OFCCP) has been run by Tom Dowd. Mr. Dowd joined OFCCP in 2011 and was a Deputy Director under former Director Patricia Shiu.

In the last few days, Craig Leen has been chosen to serve as Director of OFCCP. With the announcement of Mr. Leen’s appointment as OFCCP Director, we may begin to see changes in philosophy and approach at OFCCP. However, it may be some time before Mr. Leen begins his work as Director of OFCCP, and it may take some additional time before Mr. Leen’s presence has an impact on the work of the agency.

No Major Changes in Senior Personnel at OFCCP During 2017

With the change in presidential administrations, and the significant changes to OFCCP being proposed by the Trump administration, it appeared likely that there would be changes in the senior staff at OFCCP. However, many of the key administrators who oversee operations at OFCCP have remained in place during 2017. The Director of Policy, the Director of Enforcement, and all of the Regional Directors continue to serve in the same positions they were in at the end of 2016. Now that a head of OFCCP has been announced, we may see changes in some of the key positions at the agency, but it may be awhile before that takes place.

No Merger of EEOC and OFCCP

At the start of 2017, one of the most heavily debated issues involving OFCCP was whether the agency would survive in the Trump administration and if so, in what form. While there were some experts predicting that OFCCP would be abolished, there were far more predictions that OFCCP would be combined with the Equal Employment Opportunity Commission (EEOC). In May of 2017, the Trump administration did in fact propose such a merger, with EEOC and OFCCP to be joined by October of 2018. However, the proposed merger met major resistance from both the civil rights community and the federal contractor community, and the House and Senate ultimately rejected this idea. Whether the possibility of a merger will resurface in the future is unclear, but there will be no movement on such a merger in the near future.

No Increase in the Number of Compliance Reviews

During the last few years of the Obama administration, the number of compliance reviews conducted by OFCCP declined significantly. While OFCCP has traditionally conducted between 4,000 and 5,000 compliance reviews during any particular federal fiscal year, the agency conducted approximately 1,700 reviews during federal fiscal year 2016, and approximately 1,050 reviews during federal fiscal year 2017. (Federal fiscal year 2017 ended in October of 2017.) OFCCP’s announced objective in limiting the number of reviews was that the agency intended to do a “deep dive” during the course of every compliance review in order to ensure there was no discrimination occurring and that organizations were in compliance with all the technical portions of the federal affirmative action regulations.

There had been some speculation that with a change in presidential administrations, OFCCP might return to its traditional practice of conducting 4,000 to 5,000 compliance reviews each year. This was the situation during the Bush administration, where the agency did a cursory review of information submitted as part of a compliance review and then focused its attention on organizations that had statistical indicators suggesting that discrimination had occurred. Instead, the number of OFCCP compliance reviews decreased from 2016 to 2017, and the agency has continued to do a “deep dive” during each review.

No Change in Priorities

Even without the installation of a new head of OFCCP, there had been some expectation that there might be a change in priorities at OFCCP. During the Obama administration, the agency explicitly focused on issues regarding individuals with disabilities, issues regarding protected veterans, and remedying compensation discrimination. There was also an unannounced focus on remedying discrimination in hiring, especially in entry-level positions. This focus on entry-level hiring has been a staple of OFCCP for many years.

Any suggestion that there might be a change in priorities during 2017 has not been fulfilled. In August at the 2017 Industry Liaison Group national conference in San Antonio, Acting OFCCP Director Tom Dowd stated that the hiring of individuals with disabilities, issues regarding protected veterans, and remedying compensation discrimination would continue to be focus areas for OFCCP. It is clear from posts on OFCCP’s website that remedying discrimination in entry-level hiring also continues to be a focus area for OFCCP.

No Decrease in Compensation Inquiries

The differentials in compensation involving men and women had been an explicit part of the Clinton campaign during the 2016 presidential election, and this concern about the pay gap between men and women had been a prominent theme in the Obama administration. In the last few years, OFCCP has spent many hours during compliance reviews examining employee compensation. The agency’s basic position during this period was that there is extensive compensation discrimination against women in the private sector. OFCCP has also stated that there is compensation discrimination against non-white employees. While OFCCP spent millions of dollars and thousands of hours seeking evidence of this discrimination, the agency had limited success in these efforts during the Obama years.

It seemed a reasonable expectation that in a Trump administration, OFCCP would be directed to reduce its attention on compensation issues. However, there has been no diminishment at OFCCP in examining compensation information during 2017. In fact, the agency’s budget justification for federal fiscal year 2018 stated that the agency would “continue its focus on combating pay discrimination” and that “about 35 percent of ... discrimination conciliation agreements will address systemic pay discrimination violations.”

After years of finding little in the way of systemic compensation discrimination, OFCCP had several major successes in this regard during 2017. Among these were the following:

  • In January, LexisNexis Risk Solutions agreed to pay more than $1.2 million to female employees.
  • In August, B&H Foto & Electronics Corp. agreed to pay approximately $2.5 million to Hispanic employees as part of a broader settlement of discrimination issues.
  • In September, State Street Corporation agreed to pay approximately $5.0 million to female and African American executives.
No Reduction in Aggressive Prosecution of Alleged Discrimination

As a general rule during Republican administrations, OFCCP makes efforts to reach out to businesses that are involved in federal contracting. While the agency may aggressively pursue actions against organizations it considers “bad actors,” there is typically an effort to recognize the concerns of federal contractors. This appears to be happening during 2017, as Tom Dowd and other OFCCP representatives have publically announced efforts to provide additional compliance assistance and to gather additional feedback from federal contractors and subcontractors.

However, even with this stated interest in engaging with federal contractors and subcontractors, OFCCP has aggressively pursued actions against some of the largest organizations in the United States. Google, Oracle, KPMG, JP Morgan Chase, and Bank of America have all been involved in extensive litigation with OFCCP during 2017. While only some of these situations have resulted in conciliation agreements and back pay awards, the fact that OFCCP was willing to challenge a number of major American employers is something of a surprise during a Republican administration.

No Annual Collection of Pay Data

As part of its focus on finding compensation discrimination, in 2014 OFCCP announced its intent to collect compensation data from federal contractors and subcontractors on an annual basis. OFCCP abandoned this initiative when the EEOC decided in 2016 to collect compensation data as part of the annual EEO-1 report. EEOC had adopted a revised version of the EEO-1 report that was to be completed by employers for the first time in the first quarter of 2018. However, in August of 2017, the Office of Management and Budget issued a stay regarding the collection of this pay data. Thus, neither OFCCP nor EEOC was involved in an extensive collection of compensation data during 2017.

Summary: OFCCP in a Holding Pattern During 2017

With each new presidential administration, there is a lag in the time the new administration is installed and the time that significant changes are made in the agencies that are part of the executive branch. New heads of agencies must be installed, new priorities must be determined, and new procedures must be developed to execute these priorities.

During the Trump administration, there are agencies such as the Environmental Protection Agency where extensive change has already taken place. While OFCCP has lost a number of employees and there have been renewed efforts to engage with federal contractors and subcontractors, most of the dramatic changes that were being predicated for the agency have not come to fruition.

Whether the agency’s priorities and procedures will change significantly during 2018 will depend in part on what happens when a new head of OFCCP is installed. In the meantime, federal contractors and subcontractors should expect that there may be a limited number of compliance reviews but these compliance reviews will be intensive explorations of an organization’s personnel policies, practices, and decisions. Federal contractors and subcontractors should also expect that OFCCP will continue to focus on issues regarding employee compensation, individuals with disabilities, protected veterans, and entry-level hiring.

The biggest surprise regarding OFCCP in 2017 was that 2017 was much like 2016. We can only wait to see whether 2018 will be a continuation of the past nine years, or if a pivot to new priorities awaits the contractor community.

Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization's particular circumstances. All original materials copyright © HR Analytical Services Inc. 2017