ISSUE # 1: OFCCP’s quiet about-face as to 52 years of consistent regulatory and audit enforcement interpreting 41 CFR Section 60-4 to require now suddenly:
- Construction contractors that also sign a Supply and Service contract must build, OFCCP recently has announced (via FAQs) Supply and Service-like Affirmative Action Plans for (apparently) the construction contractor’s Non-Craft Minorities and Women. The effect of this change of interpretation of OFCCP’s Rules was to define the contractor’s obligation by the type of contract it signed, and NOT by virtue of the kind of contractor the company was – as had been true since 1972 (See OFCCP’s Supply and Service Rule at 41 CFR Section 60-2.1(a)) and 1978 (OFCCP Construction Rule at 41 CFR Section 60-4.1 – second sentence).
And even more oddly, just as soon as OFCCP changed its analytic thinking from “type of contractor” governs the type of Affirmative Action required to “type of contract” governs, OFCCP (now through its demands in audits) has changed its analytical approach to coverage yet again. The latest pronouncement, again without Rulemaking, is to exalt the “type of employee” as the governing compass that dictates the type of affirmative action required, as we will see below. (So, internally inconsistent policy and with poor procedure to get us here).
Note: OFCCP did not make these two changes by Rulemaking, as it should have done…even if it thought it had the legal authority to make either of these changes at all.
No, No. Rather, OFCCP just published an Answer to FAQ # 7 (Construction Compliance FAQs) it created and one day silently published to create the first leap from “type of contractor” governs to “type of contract” governs. Here is what that FAQ says:
- “7. If a prime contractor has both a construction and a supply and service contract, which employees are covered under 41 CFR part 60-2 and which employees are covered under 41 CFR part 60-4?”
- ANSWER: “A contractor’s obligation to comply with 41 CFR part 60-2 and/or 60-4 requirements will depend on the type of contract(s) it has.”
- Now, to add to the confusion, that FAQ Answer conflicts with OFCCP’s Answer to FAQ # 4 (Construction Compliance FAQs):
- “4. Are federal construction contractors required to develop a written affirmative action program (AAP) under Executive Order 11246?”
- ANSWER: “No, OFCCP does not require construction contractors to develop a written AAP under Executive Order 11246”; AND
- Construction contractors that have not signed Supply & Service contracts must nonetheless develop Supply & Service-like AAPs for Minorities and Women as to the contractor’s Non-Craft workforce now says OFCCP. You will not find even an FAQ on this latest dip of the roller coaster ride OFCCP is taking us on. Rather, OFCCP is only announcing this “Non-Craft employees go into Supply & Service-like AAPs for Minorities and Women” interpretation of its 60-4 Rules in audits with no public notice.
Of course, this interpretation of OFCCP’s Rules renders OFCCP’s prior interpretation (above, as to construction contractors that also sign Supply & service contracts) wholly unnecessary. While few oppose change following proper procedure and based on clear and beneficial policy determinations, the remarkable thing as to these changes is the fact that the OFCCP seems to believe that the ten (10) previous Democrat and Republican OFCCP Directors just did not have it right for five decades. “It is better to learn late than never” must be the OFCCP’s new guiding mantra.
OFCCP predicates this new and emerging policy position on the premise that the contractor operates a “hybrid” workforce. By that, OFCCP means that the contractor operates a workforce composed of:
- “Construction craft employees” (who perform their work on-site and are thus subject to the 60-4 “Construction Contractor Rules” in OFCCP’s view); and
- Non-Craft employees who do not work on-site (and are thus subject to OFCCP’s 60-2 Supply & Service Rules in OFCCP’s new view).
Yes, of course, this is true of every construction company since they have CEOs, bookkeepers, estimators, receptionists, schedulers, and necessarily many other types of Non-Craft employees needed to run their front and back-end office depending on their size and their market.
But please notice that this new OFCCP “audit position” is now suddenly an abandonment of the very recently announced OFCCP position that the “type of contract” defines the type of Affirmative Action required (see issue A., above). Now OFCCP announces a new OFCCP operating “Rule”: the type of employee you are defines the type of Affirmative Action required.
WOW! This confirms the wisdom and the necessity of Rulemaking to allow the public to help define and align the sometimes (as described here) confused misthinking of federal government policymakers.
NOW, a Word About FAQs: The OFCCP is improperly using FAQs to announce new policies, as opposed to communicating information about existing policies and procedures OFCCP has properly developed and deployed. This goes back to the re-education reset that now needs to occur following the Loper Bright case decision discussed above.
Knowing a bit about history helps explain how OFCCP got to this current precarious position. Previously, from the Johnson Administration to the end of the Obama Administration, OFCCP and its predecessor agencies operated internally through written orders, later known as “Directives.” These written documents contained the OFCCP Director’s instructions to OFCCP staff. Since Directives were public documents, federal contractors often read Directives to know in advance how OFCCP was ordered to behave as to any particular policy or enforcement issue. (It always felt a little sinful to read OFCCP Directives since it felt like reading the other football coach’s playbook.) Of course, Directives, even though in writing, did not either aim at contractors or have the binding force and effect of law on contractors, and thus, of course did not bind federal contractors/subcontractors…just OFCCP personnel obedient to the OFCCP Director. Rather, OFCCP Directives were merely internal (to OFCCP) operating instructions.
The Trump OFCCP then unwittingly muddled things. It published several Directives that wandered off the path a bit by (aberrationally and suddenly) speaking directly to contractors in the Directive tool previously aimed only at the in-house OFCCP audience. (See notably OFCCP’s Compensation Directive, discussed below as to other issues).
With the Dawn of the Online Era, OFCCP Realized it Could Then Speak for the First Time to the Entire Nationwide Affirmative Action Community. The Biden OFCCP Then Drove the Train Off the Track by Turning Online FAQs & Their Answers into a New Vehicle to Seek to Impose New Substantive Requirements Directly on Federal Contractors.
We see this in the above welter of confusion as to what construction contractor requirements are supposed to be. At this point, OFCCP needs to review all of its almost 50 FAQs and make sure they do not announce new policy “requirements” not already in OFCCP’s Rules. Moreover, OFCCP needs at this time to quality control check all its interpretations of its existing Rules to ensure they are faithful to the OFCCP Rule they are designed to implement. Finally, OFCCP must ensure that all Rules it has implemented are faithful to the Congressional statute (or Executive Order) OFCCP is tasked to implement and enforce.
After wandering alone and off-leash for 40 years, as OFCCP was entitled to do until 10 days ago, one cannot simply assume a presumption of regularity. Indeed, every OFCCP Rule issued in the last 40 years, as with all other agencies, now comes laden with a presumption AGAINST its validity since written in an era when cheating a statutory delegation up or down WAS the rule of law.