Friday, September 30, 2022: The Air Went Out of OFCCP’s Tires in FY 2022 as Unlawful Discrimination Allegations Fall to New Lows
It has been a steady stair-step down for OFCCP since the Trump OFCCP: in the just concluded FY 2022 (the first full year of the Biden OFCCP – President Biden took office on January 20, 2021, with the 2nd quarter of FY 2021 in full swing), OFCCP has reported it signed only 16 Conciliation Agreements (“CAs”) in the last twelve months (between October 1, 2021 and September 30, 2022), with covered federal Government contractors alleging unlawful discrimination. That is down 75% from the last full year of the Trump Administration in FY 2020 in which OFCCP signed 65 Conciliation Agreements alleging unlawful discrimination and down over 80% from the 88 Conciliation agreements alleging unlawful discrimination the Trump OFCCP signed in FY 2019.
A newly developed trend also continued to change the historic look of the data being reported. That change first began to emerge in earnest in the last several years as more individual complaint settlements began to appear in the discrimination settlement data. This has occurred because the Trump OFCCP fundamentally changed the OFCCP’s Memorandum of Understanding with the EEOC to allow OFCCP, for the first time, to keep in its investigation inventory all individual Complaints (the EEOC calls them Charges) arising under Title VII and the Americans with Disabilities Act. We wrote about that change here. As a result, OFCCP is now being flooded with individual Complaints and is remedying more of those than ever before. Those individual settlements are now showing up in dribs and drabs in OFCCP’s enforcement statistics. Indeed, while still relatively small in number at OFCCP compared to the 60,000 plus such claims the EEOC intakes every year, these individual Complaints are accounting for more and more of the number of OFCCP settlement transactions, while accounting for relatively insignificant dollar value settlements relative to OFCCP’s typical class claim settlements.
This Year’s 16 Discrimination Settlements: Of the sixteen CAs OFCCP has reported signing during the just closed FY 2022 (FY 2022 ended Friday, September 30, 2022), “Failure to Hire” claims again led the number of discrimination claims settled (as it has for over four decades) with 10 of the 16 (~62%) reporting discrimination in various forms of hiring claims, although no testing claims. This is also a new low percentage of “Failure-to-Hire” claims relative to other OFCCP discrimination claims settlements. Historically, OFCCPs F-T-H claims have averaged over 90%of OFCCP’s alleged discrimination settlements.
“Compensation” discrimination claims came in second place in terms of the number of claims OFCCP alleged at 4 of the 16 (25%), but two of these settlements were not “compensation” claim violations, in fact. The first of these four was actually not a Compensation claim at all, but rather was a sex discrimination claim that the contractor assigned women to lower-paying jobs. The remedy was to have the contractor pay back pay to the women in the amount of the value of the higher-paying job. So, compensation was the remedy, not the claim of unlawful discrimination.
The second of these four CAs OFCCP classified as “compensation” claims is actually a claim involving the termination of an employee for allegedly disclosing and discussing the pay of others. The $6,250 of back pay paid was make-whole money to gap the employee’s time before finding alternative employment. OFCCP’s mistake in classifying this and the prior claim as “compensation” discrimination was to confuse the payment of back-pay as a claim for compensation discrimination. If every backpay resolution were a “compensation claim,” all OFCCP discrimination settlements would be “compensation” resolutions. The type of claim is dictated not by the employer’s payment of backpay, but rather by the type of employment transaction identified as having caused the alleged unlawful discrimination (failure-to-hire; demotion; involuntary termination; etc.).
The remaining two true “compensation” cases were statistical cases claiming the contractor paid women less than men for work in jobs allegedly similar (a class-based equal pay claim). NOTE: OFCCP lacks Equal Pay authority. Moreover, OFCCP identified no policies or practices allegedly causing the at-issue pay differentials (as opposed to mere statistical imbalance). It is thus highly doubtful either of these claims were even proper discrimination claims made unlawful by Title VII.
Note: The dollar value of all Failure to Hire claims settled came to $5,154,997.79. This is a much smaller dollar value than OFCCP usually harvests for Failure to Hire claims and reflects another trend emerging at the Biden OFCCP: the shift away from Failure to Hire claims and the dogged pursuit of compensation discrimination claims. OFCCP believes compensation discrimination is widespread, even though OFCCP’s investigations have shown, like this year, for over 40 years (through seven different political administrations of the OFCCP) that there is no widespread unlawful compensation discrimination in the United States based on a legally protected status.
Note: Once the two CAs which were not in fact “compensation” claims are removed from OFCCP’s compensation ledger, the number of OFCCP resolutions of “compensation” discrimination claims shrinks to two (2) for FY 2022 and the value of OFCCP’s compensation recoveries properly shrinks to $4,100,000.
One of the two remaining CAs resolved both a claim that the contractor terminated an employee because of his sexual orientation rather than merely disciplining him for misconduct (as OFCCP claimed should have occurred), and in another situation discriminated against an employee because of his disability.
The last of the 16 CAs is an odd one in that it claimed the contractor discriminated against an employee by allegedly improperly denying her a promotion based on her protected status as a woman and as a Protected Veteran. Since this was an intentional discrimination allegation, it is first unlikely that the contractor discriminated against this employee both because she was a woman and a Protected Veteran. Second, OFCCP does not have non-discrimination authority under that portion of VEVRAA it enforces (38 USC Section 4212). Rather, 38 USC Section 4212 imposes only “affirmative action” compliance” obligations. (Yes, we know that OFCCP has quietly converted its VEVRAA Rules (beginning in 2000 and finally completed that unauthorized transition in 2014) to make discrimination based on Protected Veteran status unlawful. However, a basic tenet of federal administrative laws is that federal agency Rules must faithfully implement the Congressional statutory mandate. As a result, federal agencies may neither enlarge nor shrink that delegation of authority from Congress. So, federal agency Rules, like OFCCP’s modern VEVRAA Rules, different from and larger than the statute the Rules are designed to implement are simply unenforceable. Because OFCCP’s conciliation demand was less than $7,000, it appears the contractor just “wrote the check” rather than spending more money to defend against OFCCP’s unusual allegations.
OFCCP collected a total of $10,479,129.81 in backpay settlements for FY 2022. This collection represents another large stair-step down in OFCCP’s recent backpay collections. This represents a 74% decline in backpay collections since OFCCP’s FY 2019 collection and a 70% decline in backpay collections since OFCCP’s FY 2020 collection.
Special Note: We have not reported here the “affirmative action” compliance violations the agency resolved in FY 2022 since OFCCP has not yet reported those data. (It typically takes OFCCP about 30-60 days to report these data and then correct them). We previously reported here on July 25, 2022, as to all OFCCP audits and CAs through the end of OFCCP’s Third Quarter (which ended June 30, 2022). At this writing, it appears that OFCCP has signed a total of 90 CAs in the past 12 months with declining production through the year even as the COVID-19 pandemic lifted: