This shouldn’t be news to anyone, but OFCCP audits can last a long time. The question is, does the OFCCP have the authority to request AAP data collected after the contractor received the scheduling letter (i.e., data going forward). In its May, 2012 OFCCP v. Frito-Lay ruling, the Administrative Review Board says it does if the request for additional information is motivated by a deficiency.
OFCCP v. Frito-Lay – a brief overview
Frito-Lay received a Scheduling Letter from the OFCCP dated July 13, 2007, informing them that the OFCCP would be conducting a desk audit and requesting AAP data from 2006 and potentially 2007. Frito-Lay produced data for 2005, 2006, and 2007 giving the OFCCP more AAP data than was requested. One year later, OFCCP informed Frito-Lay that there was “statistically significant disparity” in the AAP data. To further investigate the disparity, OFCCP then requested additional AAP data from 2008 and 2009 as part of its continuing 2007 Desk Audit. Frito-Lay objected and refused to hand over the 2008 and 2009 data saying that it was beyond the scope of the Schedule Letter. OFCCP then initiated an enforcement action and requested a hearing to compel Frito-Lay to comply.
The Administrative Law Judge agreed with Frito-Lay and recommended dismissal of OFFCP’s complaint. The ALJ’s recommended decision focused on the nature of the desk audit with references to the OFCCP’s Federal Contract Compliance Manual (FCCM).
The case then went to the Administrative Review Board (ARB) for a final administrative order. Frito-Lay asserted that it showed good faith by initially providing more AAP data than was originally requested by OFCCP. Additionally, the company argued that the OFCCP’s own manual and procedures intend that desk audits are to be a quick and limited review of the contractor’s activities within the dates specified in the Scheduling Letter. Frito-Lay asserted that OFCCP does not have discretion to request AAP data beyond the dates specified in the Scheduling Letter even if OFCCP discovers evidence of a potential violation.
The ARB disagreed. Looking to Executive Order 11246 and citing several other relevant cases, the final ruling stated that “to enable OFCCP in its mission, the regulations empower it with discretion to conduct various types of compliance reviews .” Furthermore, the ARB reasoned that requesting the two additional years’ of statistical data is a common and reasonable practice in determining whether disparate impact has occurred. When it finds deficiencies, it may make reasonable efforts to secure compliance through conciliation and persuasion.” Since OFCCP was investigating a concern about a statistically significant disparity in hiring women, the request for additional data was consistent with its duty to ensure that Frito-Lay comply with Executive Order 11246.
What does this ruling mean to the Federal Contractor Community?
The cost of being a federal contractor continues to go up and the following are a few suggestions as to where those costs might come from:
- Legal and consulting expense required to assist contractors in pushing for administrative closure of their audit to limit the OFCCP’s ability to seek additional data when the audit is left open.
- More procedural oversight of HR managers and AAP professionals as well as administrative responsibilities within their organization to accurately track employment data, complete their AAP in a timely manner and document action-oriented items within their AAP.
- Additional and more frequent analyses of data, throughout the AAP year, will now become more important for Contractors. Understanding that “snap-shot” data can vary throughout the year will mean that contractors will be compelled to analyze data at greater frequencies and identify patterns or practices that would elicit adverse impact.
Does this mean that the “ball” rests solely in the OFCCP s “court”? Not necessarily!
Here are a few questions, or situations, that the OFCCP will have to address.
- The OFCCP’s request for additional data also opens the door for the contractor to submit additional data while the audit is open.
- If the OFCCP requests additional data only to find out that the additional data resolved the concerns at-issue, will the OFCCP close the audit without assigning conciliation or applying other means of persuasion?
It’s your turn…
As always, if you have any questions regarding this post, please let us know.
If we can assist you in your AAP process or with an upcoming OFCCP Audit, we’re here to help.
For more information:
- “Preparing for an OFCCP Audit”: a webinar recording by BCGi – online HR EEO Training. BCGi Platinum members may access this and all recordings 24 hours a day. (Join BCGi! )
[wpfilebase tag=file id=119 /]
[wpfilebase tag=file id=118 /]