[co-author: Dylan Tomsey, M.S.]

On July 26th, OFCCP issued Directive 2024-01, which outlines new procedures for expedited conciliation, with the option to enter into an Expedited Resolution Conciliation Agreement (ERCA). Through the expedited conciliation option, OFCCP can waive the agency’s pre-enforcement notice procedures and may offer “enterprise-wide” conciliation (i.e., an agreement that includes all establishments). This Directive is long overdue given the revision to OFCCP’s Pre-Enforcement Notice and Conciliation Procedures rule (“PDN Rule”) in August 2023. Furthermore, this is the first directive released by OFCCP in over two years, as the last directive issued was Directive 2022-02 in March 2022.

Directive 2024-01 also serves to rescind Directive 2019-02, which outlined OFCCP’s Early Resolution Procedure (ERP). Directive 2024-01 effectively rebrands the resolution procedures and conciliation option from “early” to “expedited.” Subsequently, the FAQs for ERPs have also been removed, but OFCCP has not yet replaced them with FAQs for Directive 2024-01 and expedited conciliation. As a reminder, both directives and FAQs are sub-regulatory guidance and can be revised or rescinded without public comment or OMB approval.

Expedited conciliation offers an opportunity for OFCCP to move through compliance evaluations with increased efficiency, while also offering federal contractors the choice to conserve resources they would otherwise spend on an extensive review process. Importantly, federal contractors should be aware that the option of an ERCA is just that – there is no requirement from OFCCP to accept an ERCA. Also, it’s especially prudent to decline this offer if alleged violations outlined by the investigator(s) are inaccurate. An ERCA is not without cost or new risk, as they will include three years of progress reports. However, OFCCP leadership confirmed during the 2024 NILG National Conference that an employer with an ERCA will continue to have the typical 24-month exemption period from scheduling that non-ERCAs receive (see Directive 2019-01). This exemption period would cover all establishments or FAAPs covered under the ERCA and would begin after the final progress report is accepted. This is not clear in Directive 2024-01, so we hope feedback given to OFCCP during the 2024 NILG National Conference will lead to updated language in the Directive or at least some FAQs.

The Directive outlines these expedited procedures in two main sections, depending on whether cases involve preliminary findings of Non-Discrimination or Discrimination.

1. Non-Discrimination Violations

• If there’s more than one establishment, the ERCA may be proposed as an “enterprise-wide resolution” (e.g., encompassing the entire organization) or multiple establishments/plans.
• Non-discriminatory violations include, but aren’t limited to, recordkeeping, applicant tracking, lack of auditing/reporting systems, and failure to conduct a self-analysis.
• Denial of access to requested data, facilities, or other information is still addressed via the process described in the Federal Contract Compliance Manual (FCCM), not via ERCA.
• If accepted, the scheduled establishment and other establishments covered by the ERCA will be exempt from a compliance review for a minimum of three years from the effective date of the ERCA and will submit progress reports across the three-year period.

2. Discrimination Violations

• Following a desk audit, but before issuing a Notice of Violation (NOV), OFCCP may offer an ERCA to resolve allegations of discriminatory violations by the contractor.
• If there’s more than one establishment, the ERCA may be proposed for a negotiated subset of establishments or as an enterprise-wide resolution.
• Within 14 days of completing a desk audit, the Investigator reports findings and potential ERCA to the district and regional offices.
• The district office may conduct additional review to solidify findings prior to offering an ERCA; the contractor will have 14 days to provide any newly requested information. The Investigator has 14 days to complete new analyses based on the newly provided information. If potential discrimination is found, an ERCA can be offered and OFCCP may continue the compliance review while the ERCA is pending.
• Contractors may provide additional information for OFCCP to consider during conciliation; this can result in removal of violations or even closure of the review entirely.
• OFCCP may request contractor’s proposed financial remedy and models used for analysis. In these cases, OFCCP will pursue make-whole relief for impacted class members.
• OFCCP will monitor implementation of the ERCA for three years, including regular progress reports. If accepted, the scheduled establishment and other establishments covered by the ERCA will be exempt from a compliance review for at least three years from the effective date of the ERCA.

DCI will continue to monitor how OFCCP implements this directive in practice and how the rescission of Directive 2019-02 affects ongoing compliance review proceedings.