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Supreme Court Ruling on Affirmative Action and Impact on Companies’ DEI Programs

In June 2023, the US Supreme Court voted 6-3 in a decision that significantly changed the way colleges and universities used affirmative action in their admissions. The targets of the lawsuit were Harvard University and University of North Carolina for alleged racial discrimination in admissions.

The Ruling

The Court ruled that race conscious college admission policies aimed at maintaining racially diverse student bodies violated the Equal Protection Clause of the Fourteenth Amendment. The court, though ruling out admissions solely based on race, did state, “Nothing in the opinion should be construed as prohibiting universities from considering an applicant’s discussion of how race affected his or her life.” It should be noted that court did not impose the same ruling on military academies because of their “distinct interest” in the benefits of a diverse officer corp. Though the ruling has caused an uproar in both academic and business communities, we need to remember the ruling does not significantly impact effect corporate America, yet.

Race Based Employment

The affirmative action ruling only applies to colleges and universities admissions processes. Employers are subject to Title VII of the Civil Rights Act of 1964, which is a federal law that prohibits employment discrimination based on certain factors which include race, color, religion sex (including pregnancy, sexual orientation, and gender identity) and national origin. Further, Title VII applies to all aspects of employment, including, but not limited to recruiting, hiring, promoting training and discharge. Several states, like Massachusetts, have their own version of Title VII to protect both employers and employees. Despite these protections, employers are still cautious with implementing and maintaining diversity equity and inclusion (DEI) programs. This is probably true because most companies do not see the difference between the two. Though they are similar, Title VII protects the employer and employee, while DEI programs aim to enhance the workplace experience and to some extent maximize profits. Plus, most DEI programs go beyond race based concerns and tend to embrace various other aspects of people’s lives that may be subject to bias.

Attack on DEI

Since the ruling by the Supreme Court, several state attorney generals sent letters to Fortune 500 companies stating that race-based preferences “whether under the label of diversity, equity and inclusion or otherwise” may violate federal and state antidiscrimination laws. In addition, corporations like Amazon and Comcast have had their DEI practices challenged. Several states like Florida have proposed and passed anti-DEI legislation banning certain DEI practices in state agencies. All this fervor has created the concern that the “right case” can outright destroy DEI practices and programs. Most recently, which seems like an act out of an abundance of caution, the well-known longstanding Society for Human Resources Management (SHRM) changed their focus from Inclusion, Equity and Diversity (IE&D) to Inclusion and Diversity (I&D). The concern relating to the future of DEI is palatable.

Safety Net for DEI Programs

The DEI movement is far from defeated, we must remember DEI and Affirmative Action are not the same. DEI programs, though want to ensure that various races feel accepted in the workplace, should focus on anti-bias, inclusion of all employees from various backgrounds, allyship and the appreciation of everyone’s professional and personal life experiences. You can call your program whatever you want, but it is really the approach used by employers that will survive future legal scrutiny.

How The U.S. Supreme Court’s Ruling On College Affirmative Action Programs May Impact Private Employers

The U.S. Supreme Court in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College decided that the race-based admissions programs at Harvard College and the University of North Carolina (the “Schools”) violated the Equal Protection Clause of the Fourteenth Amendment. While the Court answered the question for publicly funded schools, it is an open question whether, and how, the Court’s decision will impact affirmative action and diversity programs for private employers, as discussed in more detail below.

Overview

The Fourteenth Amendment states, in relevant part, that no State shall “deny to any person . . . the equal protection of the laws.” Among other things, the clause protects people regardless of their race. A limited exception that permits race-based action by the government is permissible if such action can survive a rigorous standard known as “strict scrutiny.” Under that standard, race-based conduct is permissible only if the government can establish a “compelling government interest” and the race-based action is “narrowly tailored” to achieve that established interest.

The Supreme Court concluded that the Schools’ race-based admissions programs failed strict scrutiny. In support of their race-based admissions programs, the Schools asserted the following educational goals as their compelling interests:

Training future leaders in the public and private sectors/preparing engaged and productive citizens and leaders.
Preparing graduates to adapt to an increasingly pluralistic society/broadening and refining understanding.
Better educating students through diversity/enhancing appreciation, respect, and empathy, cross-racial understanding, and breaking down stereotypes/promoting the robust exchange of ideas.
Producing new knowledge stemming from diverse outlooks/fostering innovating and problem solving.
Preparing engaged and productive citizens and leaders.

The Court noted that although these goals were laudable, they were too amorphous to pass muster under the strict scrutiny standard. The Court recognized that a court would have no way to know whether leaders have been adequately trained; whether the exchange of ideas is sufficiently robust, or whether, and in what quantity, racial diversity leads to the development of new knowledge. In other words, the Court took issue with the fact that the asserted interests could not be measured in any meaningful, quantifiable way.

In addition, the Court found there was no meaningful connection between the Schools’ use of race in the admissions process and the claimed benefits. For example, the Court noted that while diversity may further the asserted interests, the Schools failed to establish that racial diversity would. The Court took particular issue with what it viewed as the overbroad and arbitrary nature of the Schools’ race considerations as they were underinclusive (for example, failing to distinguish between South Asians or East Asians, or define what Hispanic means, or account at all for Middle Eastern applicants). The Court reasoned that the overbroad, arbitrary, and underinclusive racial distinctions employed by the Schools undermine the Schools’ asserted interests—essentially noting that the Schools’ race-based admissions programs sought to “check the diversity box” rather than obtain a truly diverse (racially or otherwise) student body.

In addition to the School’s programs’ failure to survive strict scrutiny, the Court also recognized that the Schools’ race-based admissions processes promoted stereotyping, negatively impacted nonminority applicants, and, contrary to Court precedent, did not have a durational limit or any cognizable way in which to adopt a durational limit.

Supreme Court Precedent

The Court’s decision rested largely on two prior cases addressing race-based admission programs in higher education: Regents Univ. of Cal. v. Bakke, 438 U.S. 265 (1978) and Grutter v. Bollinger, 539 U.S. 306 (2003). As a guiding principle, the Court noted that the Equal Protection Clause of the Fourteenth Amendment bars admissions programs that use race as a stereotype or a negative.

In Bakke, while rejecting other asserted interests, the Court explained that obtaining the educational benefits associated with having a racially diverse student body was “a constitutionally permissible goal for an institution of higher education,” provided that certain guardrails were in place. This is despite the Court’s recognition that racial preferences cause serious problems of justice. The Court said that race only could operate as “a ‘plus’ in a particular applicant’s file” and the weight afforded to race must be “flexible enough to consider all pertinent elements of diversity in light of the particular qualifications of each applicant.”

In Grutter, the Court decided “student body diversity is a compelling state interest that can justify the use of race in university admissions,” provided that sufficient limitations were in place—notably, that under no circumstances would race-based admissions decisions continue indefinitely. The Court cautioned that, because the use of race was a deviation from the norm of equal treatment, race-based admissions programs must not result in “illegitimate . . . stereotyping,” must not “unduly harm nonminority applicants,” and must be “limited in time.”

The Court’s Additional Considerations

Of critical importance to the Court’s ruling was the fact that neither School’s race-based admissions program had an articulable end point. The Court noted that the Schools’ arguments to overcome the lack of a definite end point were, essentially, “trust us, we’ll know when we’re there.” Yet such arguments, the Court held, were insufficiently persuasive to offset the pernicious nature of racial classifications. Justices Thomas and Gorsuch, who joined the majority opinion, took additional issue with the Schools’ “trust us” arguments in separate concurrences, noting (1) their view of the Schools’ histories of harmful racial discrimination, and (2) that courts are not to defer to the morality of alleged discriminators.

Additionally, the Court took issue with the logical necessity that, in any instance when a limited number of positions are available, a race-based “plus factor” for applicants of a certain race is a negative for applicants who do not belong to the favored race. “How else but ‘negative’ can race be described if, in its absence, members of some racial groups would be admitted in greater numbers than they otherwise would have been?” In this, the Court recognized that equal protection is not achieved through the imposition of inequalities.

Impact on Private Employers

The Supreme Court’s recent decisions have no direct legal impact on private employers. The Court based its decision on the Equal Protection Clause of the Fourteenth Amendment, applicable to the Schools under Title VI, which does not intrinsically apply to private companies; it is Title VII and analogous state and local laws that apply to private employers (not Title VI) and prohibit private employers from discriminating against employees and applicants on the basis of race (and other protected characteristics). In employment, the law has always prohibited any consideration of race in decision-making, such as who to hire or who to promote, except in extremely narrow and limited situations but, even then, quotas and set-asides are strictly prohibited.

While not directly applicable, it is highly likely that the Court’s decision will spawn new challenges to private employer diversity and inclusion programs, and the Court’s rationale will be referenced as an indicator of how the Court will view such programs under Title VII. Even before the Court’s decision, the legal landscape around an employer’s use of affirmative action plans to aid in making employment decisions was murky. Generally a private employer’s affirmative action plan is permissible under Title VII in two scenarios: (1) if the plan is needed to remedy an employer’s past discrimination, and (2) if the plan is needed to prevent an employer from being found liable under Title VII’s disparate impact prohibitions (which operate to prohibit facially neutral policies that nevertheless disproportionately disadvantage certain groups).

Regarding the latter scenario, it is unlikely the Court’s ruling will have much if any impact. For an affirmative action plan to survive scrutiny on this basis, an employer must first prove a disparate impact case against itself: it must identify a specific policy, prove that such policy has a disparate impact on a certain group, and either show that the policy is not justified by business necessity or show that there is a viable alternative that both (a) accounts for the employer’s business necessity, and (b) has less of a disparate impact on the affected group. Then, the employer must prove how its affirmative action steps offset the disparate impact. There is nothing in the Court’s opinion that suggests an employer’s effort to remedy an ongoing Title VII violation would itself be a violation of Title VII.

However, there is language in the Court’s opinion that suggests an affirmative action plan implemented in the former scenario could be problematic, especially if it is not designed carefully. Indeed, a number of lower court decisions even before the Supreme Court’s recent ruling have struck down employer affirmative action programs. Permissible affirmative action programs are typically implemented to remedy past racial imbalances in an employer’s workforce overall, and are not tied to past discrimination against an identifiable employee or applicant. At the close of the Supreme Court’s recent opinion, it admonished Justice Sotomayor’s dissent wherein she proposed a world where schools consider race indirectly, through, for example, essays submitted alongside applications. The Court noted that such would nevertheless violate the Constitution, and clarified that admission decisions can rely on the content of application essays, but that such decisions must be based on an individual applicant’s character or experiences, and not based on the applicant’s race. Similarly, Justice Thomas, in his concurring opinion, recognized that “[w]hatever their skin color, today’s youth simply are not responsible for instituting the segregation of the 20th century, and they do not shoulder the moral debts of their ancestors.” Accordingly, challenges to affirmative action plans that attempt to remedy past discrimination generally, by using race in its decision-making may find purchase in the Court’s closing sentiments and Justice Thomas’s concurrence. Although a standard less exacting then “strict scrutiny” is used to evaluate discrimination claims under Title VII, the sentiment expressed by Members of the Court could make the judiciary increasingly skeptical of affirmative action programs that resemble those used by the Schools. In any event, the possibility of being able to continue to use affirmative action plans in the strict sense to increase diversity in an employer’s workforce is likely little comfort to private employers, as few will want to prove a discrimination case against themselves to justify a diversity program.

Additionally, employers’ diversity, equity, and inclusion (DEI) programs may be the subject of challenges based on the Supreme Court’s skepticism of the benefits of “racial” diversity, as opposed to diversity on less-pernicious characteristics. For example, DEI programs that seek to increase racial diversity based on broad racial definitions may be subject to challenges because of their overbreadth or purportedly arbitrary nature. And DEI programs that highlight racial diversity, rather than, for example, diversity based on socio-economic, ideological, or experiential characteristics may suffer challenges to their legitimacy in reliance on the Supreme Court’s implication that there may be no identifiable tether between “racial” diversity and the purported benefits of diversity as a concept.

Of course, to the extent private employers with affirmative action plans have contracts with government entities and/or receive government funding, affirmative action plans under the Office of Federal Contract Compliance Programs (“OFCCP”), require targeted diversity recruiting efforts, aimed at increasing the diversity of applicant pools, although this also does not permit race (or other protected traits) to be used in decision-making.

Practical Tips For Employers

The Court’s decision applies to affirmative action programs in the college setting and applies an analysis under the Equal Protection Clause that does not directly apply to private employers. The decision also deals with very different scenarios where colleges and universities directly used race as a criteria for admissions. As noted, this has generally never been permitted in the employment context and, as a result, the rules of the road for implementing DEI programs have not changed, although they may evolve through future legal challenges in light of the Supreme Court’s recent decisions. There are still countless ways that private employers can design and implement lawful DEI programs. Below are just a few examples employers may consider:

Reiterate D&I as a priority in meetings, conferences, and other communications.
Implement recruiting programs to diversify your talent pool.
Incentivize employees to refer diverse candidates for openings.
Support employee resource groups, mentoring programs, and leadership training.
Educate your managers and supervisors on unconscious bias.
Encourage diversity in suppliers and business partners.
Tie D&I efforts (not results) to managerial performance evaluations.
Under the privilege of working with counsel, monitor changes in workforce demographics and conduct pay audits.
Consider modifying the goal of DEI programs to seek diversity based on broader characteristics that do not involved protected classes, such as experiences, economic background, or worldview.

Conclusion

The Court’s decision is a landmark ruling that will alter the landscape of college and university admissions. And it will almost certainly spawn new challenges beyond the classroom and into the workplace.

However, the decision does not legally require private employers to make changes to their existing DEI programs if such practices comply with already-existing employment laws. Employers can still implement diversity and inclusion programs and promote diversity within their workplaces but, as has always been the case, employers should tread carefully in designing and implementing these programs. Employers would do well to engage counsel to review such programs and initiatives for possible concerns in light of the Court’s decision, as well as existing precedent in the employment context.

For more Labor and Employment Legal News, click here to visit the National Law Review.

City of Birmingham Passes Nondiscrimination Ordinance, Creates Human Rights Commission

On September 26, 2017, the Birmingham City Council passed an ordinance that makes it a crime for any entity doing business in the city to discriminate based on race, color, national origin, sex, sexual orientation, gender identity, disability, or familial status. The ordinance passed unanimously and is the first of its kind in Alabama. Enforceable through the municipal courts, the local law applies to housing, public accommodations, public education, and employment. It carves out two exceptions: one for religious corporations and one for employers with bona fide affirmative action plans or seniority systems.

In a separate measure passed during the same meeting, the city created a local human rights commission to receive, investigate, and attempt conciliation of complaints. The commission has no enforcement authority. Citizens who believe they have suffered unlawful discrimination must appear before a magistrate and swear out a warrant or summons. The entity or individual will not receive a ticket but will face a trial before a municipal judge in the city’s courts. Ordinance violations are classified as misdemeanor offenses, and those found guilty of discrimination will face fines of up to $500. Alabama municipalities have no authority under state law to create civil remedies for ordinance violations, therefore, an employer would not be required to reinstate an employee or provide back pay if it were found guilty of violating the ordinance in municipal court.

Because the city’s courts, which are courts of criminal jurisdiction, operate much more quickly than federal civil courts do, one would expect that a guilty verdict under the Birmingham ordinance likely could be used as evidence of discrimination in a federal civil claim that is almost sure to follow.

Although the city’s mayor must sign the ordinance for it to become effective, the mayor has announced he will sign it into law immediately. The city also expects that the Alabama Legislature will challenge the ordinance.

For more legal analysis, go to The National Law Review

Affirmative Action Policy Upheld By Supreme Court

Race may be taken into account when public universities and colleges admit students, ruled the U.S. Supreme Court today. For the second time, the Court was asked to decide whether the University of Texas at Austin’s admissions policy, which uses a variety of affirmative action factors to increase the diversity of its student population, violates the Equal Protection Clause of the Constitution. In a 4-to-3 decision (with Justice Kagan taking no part in the decision), the Court ruled that the race-conscious admissions program in question is lawful under the Equal Protection Clause. Fisher v. University of Texas at Austin, 579 U.S. __ (2016).

White Applicant Denied Admission Challenged Policy

Abigail Fisher, a white applicant who was denied admission to the University of Texas at Austin, sued the University alleging that its use of racial preferences in undergraduate admissions decisions is unconstitutional. She asserted that by including race in its admissions decisions, the University disadvantaged her and other Caucasian applicants.

The District Court in Texas that considered Fisher’s claims ruled in favor of the University, and the Fifth Circuit Court of Appeals agreed. Fisher appealed to the Supreme Court and in 2013, the Court kept her claims alive by sending them back to the Fifth Circuit so that the University’s admissions policy could be evaluated under the proper strict scrutiny standard. The Fifth Circuit reexamined the policy but came up with the same result, ruling in favor of the University. Fisher appealed to the Supreme Court again.

Court Finds Compelling Interest In Diversity of Students

In Fisher I, the Court ruled that the University’s affirmative action process, in which race was only one factor in assigning a numerical admissions score, needed to further a constitutionally permissible and substantial purpose or interest in order to meet the strict scrutiny standard. In today’s decision, the Court found that the University’s desire to provide its students the educational benefits that flow from having a diverse student body was a compelling interest sufficient to overcome the strict scrutiny standard.

Fisher had argued that the University failed to state more precisely what level of minority enrollment would constitute a “critical mass” at which time race would no longer need to be an admissions consideration. The Court rejected Fisher’s argument, stating that the educational benefits promoted by a diverse student body should not be reduced to pure numbers, especially in light of the fact that the University is prohibited from having a quota for minority student enrollment.

The Court also rejected Fisher’s assertion that the University had already achieved “critical mass” of minority enrollment, finding that the University had studied both statistical and anecdotal evidence that showed that race-neutral programs had not achieved its diversity goals. In addition, the Court rejected Fisher’s position that there were other workable race-neutral means of meeting the University’s educational goals.

University Must Continue to Evaluate Use Of Race In Admissions

Although a slim majority of the Court upheld the University’s ability to use race as a factor in its admissions policy, the Court wrote that the University has a continuing obligation to satisfy the burden of strict scrutiny in light of any changing circumstances. It stated that the University must conduct periodic reassessments of its admissions program and continue to examine data to ensure that “race plays no greater role than is necessary to meet its compelling interest” in promoting the educational benefits advanced by diversity among students.

Three Justices Dissent

Chief Justice Roberts, as well as Justices Thomas and Alito, disagreed with their four colleagues in the majority. Justice Thomas wrote that “a State’s use of race in higher education admissions decision is categorically prohibited by the Equal Protection Clause.” Justice Alito separately wrote that the University had failed to show that its race-conscious plan was narrowly tailored to serve compelling interests so “[b]y all rights, judgment should be entered in favor of [Fisher.]”

Had Justice Antonin Scalia not passed away in February, he almost certainly would have voted along the lines of the dissenters. That would have resulted in an evenly divided court at 4-to-4. Justice Kagan did not participate because she had participated in the government’s part of the case when she was U.S. Solicitor General prior to being appointed to the Court. A 4-to-4 decision would have meant that the Fifth Circuit’s decision would stand, so the University would still have prevailed—but the decision would have had no precedential impact outside of the Fifth Circuit. But now, with Justice Scalia’s absence, the Supreme Court decision upholding the constitutionality of a race-conscious affirmative action plan is a precedential ruling that applies nationwide.

Affirmative Action in the Employment Context

Even though the Fisher case examined affirmative action in higher education admissions programs, the decision may have ripple effects in the employment context. By upholding the use of race-conscious affirmative action plans, the Court may have limited or foreclosed some constitutional challenges to affirmative action in employment policies as well. But race-based programs will still need to meet strict scrutiny standards to pass constitutional muster. Employers seeking a diverse workforce through the use of affirmative action plans will need to articulate the compelling interest that supports their use of race as a consideration in hiring, backed up by data and other evidence that no other race-neutral means are available to achieve the employer’s goal. As such, employers seeking to implement such policies should still proceed with caution.

ARTICLE BY R. Calder Huntington of Holland & Hart LLP

OFCCP Releases Disability Self-Id Public Service Video

As part of its ongoing effort to provide employers with tools to educate and inform employees and non-employees about affirmative action obligations, Office of Federal Contract Compliace Programs, OFCCP, has released a new disability self-identification public service-like video entitled Disability Inclusion Starts With You.

Coinciding with its recognition of National Disability Employment Awareness Month, the Agency invites employers and community organizations to download the video and use it as a way to inform employees (and potential employees) about the importance of self-identification. The video also explains the regulatory obligation employers have to request this information and emphasizes the voluntary nature of the process.

The video and additional information can be found of OFCCP’s webpage.

Article By Laura Mitchell of Jackson Lewis P.C.

Supreme Court to Again Review Higher Education Affirmative Action Case

In a week full of front-page news, the United States Supreme Court has agreed to again review the appropriateness of the University of Texas at Austin’s race-based admissions process in the case of Fisher v. University of Texas at Austin.

The Supreme Court first reviewed the school’s consideration of race as a component of its admission process almost a year ago and remanded the case back to the Fifth Circuit Court of Appeals for reconsideration. Upon re-review the Fifth Circuit again held the University’s practice of using race a factor in its admissions decisions was constitutional. Fisher filed an appeal arguing the Fifth Circuit did not follow the Supreme Court’s direction when conducting the subsequent review.

While the ultimate outcome of this case will certainly impact affirmative action programs of institutions of higher education, its effects on other types of non-admissions affirmative action programs, such as though enforced by OFCCP, remains unknown.

ARTICLE BY Laura Mitchell of Jackson Lewis P.C.

U.S. Supreme Court Upholds Michigan’s Law Prohibiting Use of Race in College Admissions

On Tuesday, April 22, 2014, the U.S. Supreme Court issued an opinion that upholds a Michigan law prohibiting the use of race as a factor in admissions to public collegesand universities. In Schuette v. BAMN, Case No. 12-682 (argued Oct. 15, 2013) the high court reversed a Sixth Circuit Court of Appeals ruling that overturned the voter-enacted state constitutional amendment referred to as “Proposal 2” or Article I Section 26. Although the court’s 6-2 opinion stated “this case is not about the constitutionality, or the merits, of race-conscious admissions policies in higher education,” the decision is likely to influence other states to adopt similar constitutional bans on affirmative action in state-funded higher education.

Since 2003, Michigan has provided a venue for legal challenges to affirmative actionprograms in education. In that year, the U.S. Supreme Court reviewed the constitutionality of race-based admission policies of both the University of Michigan’s undergraduate college and its graduate law school. The outcomes of these cases were mixed. In Gratz v. Bollinger, 539 U.S. 234 (2003) the court struck down the undergraduate admission policy as a violation of the Equal Protection Clause of the U.S. Constitution’s 14th Amendment. In contrast, the court ruled in Grutter v. Bollinger, 539 U.S. 306 (2003) that the school’s more limited admissions policy for its law school was constitutionally permissible. Following those decisions, a number of states, including Texas, California, Oklahoma, Florida and Washington, have adopted constitutional amendments or other laws that prohibit affirmative action in school admissions and public employment.

In 2006, Michigan voters approved the following amendment to the state constitution by a margin of 58-42 percent: “The University of Michigan, Michigan State University, Wayne State University, and any other public college or university, community college, or school district shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.” In a 8-7 decision issued in November 2012, the 6th Circuit Court of Appeals held this language as unconstitutional because Proposal 2 placed “special burdens on minority interests” by targeting a program that “inures primarily to the benefit of the minority.”

In Justice Kennedy’s opinion, joined by Chief Justice Roberts and Justice Alito, the court considered whether authority existed to overturn a constitutional amendment adopted by a state’s ballot initiative. In order to do so, and based on the appellate court’s strong reliance on Washington v. Seattle School Dist. No. 1, 458 U.S. 457 (1982) the court would be able to overturn a ballot initiative that made it “more difficult for certain racial minorities than for other groups” to “achieve legislation that is in their interest.” This expansive reading, Justice Kennedy reasoned, could not conform to principles of equal protection because courts should not be required to declare which political policies serve the interests of a group defined in racial terms. Justice Kennedy cautioned: “…in a society in which those [racial] lines are becoming more blurred, the attempt to define race-based categories also raises serious questions of its own. Government action that classifies individuals on the basis of race is inherently suspect and carries the danger of perpetuating the very racial divisions the polity seeks to transcend.”

This significant decision upholds states’ rights to enact constitutional amendments by voter ballot initiatives. The broader implications of the Schuette decision are unclear. However, the outcome confirms public universities and government employers have a vested and ongoing interest in the changing shape of affirmative action policies.

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Barnes & Thornburg LLP

OFCCP Audits Focus on Veteran Hiring

Tina A. Syring-Petrocchi of Barnes & Thornburg LLP recently had an article regarding OFCCP Audits published in The National Law Review:

Although the new veterans hiring rules have been delayed, the Office of Federal Contract Compliance Programs (OFCCP) will focus its audits in aggressively interpreting the current regulations to support the affirmative action policies. The OFCCP has proposed new rules for veterans that would require contractors to track those who apply for jobs and write reports explaining decisions not to hire protected veterans. However, these proposed regulations have been delayed for at least nine months.

Despite the regulatory delay, the OFCCP will use the audits as a jump-start to the new hiring rules. It is anticipated that the OFCCP will scrutinize federal contractors’ good-faith efforts at hiring or attempting to hire veterans. Employers should be prepared to review and evaluate hiring efforts, including how many military veteran applicants were referred by an agency, how many were interviewed and how many were hired. Federal contractors also should begin tracking the number and quality of veteran applicants referred by recruitment sources and, if ineffective, cease using those sources. Failure to take these affirmative steps may give an appearance that the employer is just “going through the motions,” which will result in technical violations for being deficient in either outreach programs or recordkeeping.

While it is wise for employers to begin the tracking process and reviewing recruitment sources, federal contractors should avoid asking applicants if they are veterans. This particular question could result in further scrutiny by the OFCCP if the employer fails to hire the applicant as it would give the appearance of discrimination. Under the current regulations, employers are not required to make such an inquiry.

In addition to external recruitment efforts, employers should be prepared to demonstrate “known veteran” employees have been considered for promotions and retraining opportunities. The OFCCP’s position is that employers should look internally at known veteran employees (even if none apply for a position) to determine if that employee is qualified and interested for the position. Many companies and their advocates have argued that this runs contrary to equal employment opportunity since it results in preferential treatment of veterans as well as imposes a significant burden on employers. Nonetheless, employers should be prepared for this inquiry during an OFCCP audit.

Tag: affirmative action

Supreme Court Ruling on Affirmative Action and Impact on Companies’ DEI Programs

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