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EEOC is Soliciting Public Comment on Updates to Conciliation Procedures

October 8, 2020 By Matt Nusbaum

Recent federal court cases, most notably the 2015 Supreme Court decision in Mach Mining, LLC v. Equal Employment Opportunity Commission, have prompted the EEOC to issue a new rulemaking to update the agency’s 43 year old conciliation practices.

The proposed rulemaking would commit the EEOC to providing respondents with:

A summary of the facts and non-privileged information that the Commission relied on in its reasonable cause finding, and in the event that it is anticipated that a claims process will be used subsequently identify aggrieved individuals, the criteria that will be used to identify victims from the pool of potential class members;
A summary of the Commission’s legal basis for finding reasonable cause, including an explanation as to how the law was applied to the facts, as well as non-privileged information it obtained during the course of its investigation that raised doubt that employment discrimination occurred;
The basis for any relief sought, including the calculations underlying the initial conciliation proposal; and
Identification of a systemic, class, or pattern or practice designation.

These requirements would apply to actions brought under all of the EEOC’s authorities that require conciliation efforts, specifically Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), the Genetic Information Nondiscrimination Act (GINA), and the Age Discrimination in Employment Act (ADEA).

The proposal would also provide respondents with 14 calendar days to respond to the initial conciliation proposal from the Commission.

The EEOC is seeking public comment on the proposed rulemaking in general, but specifically asks for input regarding whether the Commission should specify that its disclosures must only be done in writing or if it should allow for oral disclosures. Comments must be received by November 8, 2020, and may be submitted online at www.regulations.gov.

OFCCP Publishes FAQs on New Executive Order 13950 – “Combating Race and Sex Stereotyping”

October 7, 2020 By Matt Nusbaum

The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has published new guidance in the form of “frequently asked questions” (FAQs) regarding the recent Executive Order (E.O.) 13950, “Combating Race and Sex Stereotyping.” The guidance is sparse and does not contain any new information not found in the E.O. itself but does clarify a few important things. In particular, we detail the agency’s clarification of the impact on unconscious bias training, what the effective date does and does not mean, and some more detail regarding the attendant “information collection.”

Unconscious Bias Training Not Prohibited

The FAQs note that the concept of unconscious bias is not prohibited by the E.O. altogether. Rather, it is only prohibited to the extent that the training expressly states or implies that unconscious bias is a “problem” or “issue” only for people of a particular sex or race/ethnicity. To the extent that the training materials address unconscious bias, they should be explicit that the concept applies to all people, regardless of those characteristics.

Contractors will want to review their training materials to ensure that unconscious bias, and any other concept, is balanced and does not single out any particular group(s) for finger-pointing. Pay particular attention to any illustrative examples where the sex and/or race/ethnicity of the “characters” in the example are made explicit. Ideally, these examples will reinforce the notion that unconscious bias is an issue that crosses traditionally expected sex and race/ethnicity boundaries.

Effective Date Somewhat Irrelevant

The FAQs also note that the E.O. was effective on the date it was signed on September 22, 2020. Federal contracting agencies are not required to include a new contract provision explicitly invoking the E.O. until November 21, 2020 and normally that would mean the OFCCP could not enforce the E.O.’s provisions unless and until a federal contractor either enters into a new contract or renews an existing one on or after that date.

However, the FAQs point out that the OFCCP has existing authority to enforce E.O. 11246 which prohibits discrimination on the basis of sex and race/ethnicity (along with religion and national origin, in line with Title VII). So to the extent that an existing contractor provides training that can be viewed as discriminatory based on sex and/or race ethnicity, the OFCCP does not need the new E.O. to cite the contractor for a violation and pursue appropriate remedies.

So what does this mean? While the agency cannot cite contractors for violating the specific provisions of the new E.O. without a qualifying contract entered into on or after November 21, 2020, the OFCCP can still investigate complaints under its existing non-discrimination framework.

Note that the OFCCP’s “hotline” for reporting potential violations is live now, and the FAQs commit the agency to investigating all complaints “immediately.” As a result, many organizations are suspending diversity training for the time being while their organizations review materials for compliance with the new E.O.

What the Effective Date Does Mean

The November 21, 2020 effective date still has some meaning, though. On and after that date contractors will be required to provide union representatives with notice of the organization’s obligations under the new E.O. and begin including the four-paragraph contract clause from the E.O. in qualifying federal subcontracts on a going-forward basis.

Note that the E.O. requires federal contracting agencies to provide contractors with the required union notice. It is far more likely that the OFCCP will develop and publish a suitable notice and it is unclear what the deadline will be for contractors to put those notices in the hands of their unions.

Note also that the E.O. does not provide for incorporating the new contract clause “by reference” as is typically done for the existing EO Clause requirements under E.O. 11246, Section 503, and VEVRAA. It is possible, though unlikely, that the OFCCP will issue guidance allowing for and detailing how to include the new contract clause by reference to the new E.O. It is more likely, however, that the agency will require contractors to include the clause verbatim unless and until the clause is formally integrated into the OFCCP’s regulations implementing E.O. 11246. But until such guidance is issued, this is purely speculative.

Finally, note that after the effective date, the “bar” for violations is essentially lowered. If and when the agency reviews a contractor’s training materials under the existing non-discrimination framework, exactly what does and does not constitute a violation here is much less clear and the burden of proof is relatively high. After the effective date, and assuming a contractor holds a qualifying contract, the contractor can be cited for a violation without the training materials necessarily constituting illegal discrimination.

The Information Collection

The new E.O. also requires the OFCCP to publish a notice in the Federal Register no later than October 22, 2020 “seeking information from Federal contractors, Federal subcontractors, and employees of Federal contractors and subcontractors regarding the training, workshops, or similar programming provided to employees.” The FAQs note that the agency is currently racing to meet that short deadline.

However, it is unclear exactly how the agency intends to proceed. The information collection envisioned by the E.O. would appear to be subject to the requirements of the Paperwork Reduction Act. That would normally require the OFCCP to seek and obtain approval from the White House Office of Management and Budget (OMB) for any standardized information collection the agency intends to use for ten or more “persons.”

This process normally involves publication of a notice in the Federal Register of the proposed information collection and an opportunity for public comment regarding the merits of the proposal, followed by another notice once the request for approval is received by OMB, typically with another opportunity for public comment regarding the burdens the collection would impose. Only after OMB approves the proposal could the agency then collect the information. Most agencies typically estimate the process to take between 6-9 months. While there are provisions that allow for “fast-tracking” some information collection requests, it is unclear if any apply here.

Again, this is speculative, but presumably the OFCCP interprets the E.O. to require the agency to take the first step in the OMB approval process by the October 22 deadline, not issue the actual information collection request directly to federal contractors. If that is the case, it would take a Herculean effort for the agency to clear the PRA approval process and actually demand information from contractors before the end of 2020.

Looking Ahead

This is an evolving situation and BCGi will continue to monitor and bring you important developments.

3 Ways to Reduce Risk and Build a Better Company Through Compliance

October 6, 2020 By Matt Nusbaum

Companies must maintain equal employment opportunity (EEO) and affirmative action (AA) compliance, but many leaders mistakenly view it as a set-it-and-forget-it responsibility.

With some forms of compliance, such as adhering to SEC regulations, the path is straightforward. But EEO and AA compliance demands a dynamic and evolving approach. Businesses might implement the required EEO/AA policies, but they don’t always allocate resources to develop their affirmative action compliance training programs in meaningful ways.

From a risk-reduction standpoint, a strong compliance team is necessary to avoid complaints and lawsuits. It is not enough to check the boxes and say you’ve fulfilled mandated policies or regulations. Instead, think about how those policies are enforced at your company and how you can integrate them into your processes.

Why Every Company Needs Compliance Professionals

Naturally, small businesses have a harder time establishing dedicated compliance teams than larger organizations because they don’t have massive legal teams or compliance budgets. But even small companies need to appoint compliance professionals who can create and oversee programs that reflect the business’s ethics while lowering risk.

We worked with one client that wanted to do a compliance compensation analysis with the minimum investment possible. This client wanted to effectively “look the other way” unless it was audited, and it only relented upon realizing that doing so would create discoverable and documented noncompliance evidence. Not only would this approach put the company in a bad position, but it would also set a poor ethical standard for its employees.

Businesses that invest as little as possible in developing HR compliance best practices are doing themselves a disservice. When they scramble to put together compliance analyses, the reports are often rife with errors — and the executive team may have no interest in building a genuine affirmative action compliance training program or any other meaningful system.

What Does Smart HR Compliance Look Like?

Compliance professionals often wear multiple hats at a company. When their focus has to be in so many different areas, you can imagine how difficult it is for them to develop vital resources such as diversity, equity, and inclusion training or other types of compliance programs. Even at companies with dedicated compliance teams, there is little extra assistance from the broader HR department — so they are stretched extremely thin.

To get organizational compliance right, companies must view compliance as an ongoing concern rather than a box to be ticked once a year. Here’s how:

1. Elevate compliance priorities.

Many companies hire chief diversity officers, but fewer create roles for a chief affirmative action officer or chief nondiscrimination officer. Yet equal opportunity employment compliance must be prioritized at the same level as diversity and inclusion training because it directly impacts that program’s success.

When companies “check the box” on compliance, they typically gather data on workforce demographics and look for red flags. They need to go deeper, investing resources to discover why those red flags are appearing and how they can shape their EEO/AA policies to address them.

Sit down with your compliance professionals to figure out what they need in terms of money and personnel to take that deep dive and make compliance a consistent, robust part of your organization — not just when it’s time for annual reports. Provide them with those resources and demonstrate that the company’s leadership is deeply committed to compliance.

2. Encourage compliance professionals to collaborate.

Businesses task their talent acquisition teams with important compliance responsibilities, but those responsibilities can take a back seat to the more immediate demands of hiring managers — and recruiters are not often properly incentivized to focus on EEO/AA compliance. The talent team does not usually report to HR or legal, where the EEO/AA compliance function resides. The disconnect between these departments hurts the talent team’s efforts and causes qualified prospects to fall through the cracks.

The professionals in charge of affirmative action compliance should collaborate with those who are recruiting and interviewing candidates — and with those overseeing the legal framework for these programs. They must also have some level of authority to oversee those efforts.

3. Understand the scope of compliance work.

Whoever you assign to compliance should be able to focus primarily on affirmative action and EEO initiatives. There is no one-size-fits-all affirmative action policy, and your compliance experts need time to develop solutions specific to your company. They need to study past compliance reports, analyze your shortcomings, and explore ways to recruit and retain a more diverse candidate pool.

While generic solutions might technically be in compliance, they will do little to build a dynamic and genuinely inclusive company. Give your team the bandwidth it needs to effect real change through innovative compliance policies.

If you’re ready to dig deep in these areas but aren’t sure how best to support your compliance team, we’re here to help. We specialize in helping compliance professionals put all the pieces together and build excellent human resources compliance programs that leverage the resources your company already has.

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