OFCCP Archives - The National Law Forum

Federal Contractors Beware – More Data Disclosures Coming!

On October 29, 2024, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) published a Freedom of Information Act (FOIA) notice, inviting federal contractors to respond to FOIA requests that the OFCCP received related to federal contractors’ 2021 Type 2 EEO-1 Consolidated Reports. These reports, required of federal contractors and subcontractors with at least 50 employees, contain data critical to the government’s diversity efforts consistent with anti-discrimination mandates under Title VII and Executive Order 11246. Contractors have previously relied on FOIA Exemption 4 to protect against disclosing sensitive commercial information that could impact competitive positioning, but in late December 2023 as previously reported here, a federal court ruling concluded that certain demographic data did not qualify as confidential under FOIA Exemption 4. That court decision may spur an increase in FOIA requests for EEO-1 reporting information.

Contractors who wish to object to the disclosure of their EEO-1 reporting information must do so via OFCCP’s online portal, email, or mail on or before December 9, 2024. Per the OFCCP’s notice, contractors can object to releasing their 2021 EEO-1 Type 2 data by providing evidence showing the data satisfies FOIA Exemption 4. To do this, contractors should:

Specifically identify the objectionable data;
Explain why this data is commercial or competitive to render it confidential;
Outline the processes the contractor has in place to safeguard the data;
Identify any prior assurances or expectations that the data would remain confidential; and
Detail the damage that would occur if the data were disclosed by conducting assessments to see how disclosure would impact business operations.

In addition to raising timely objections to disclosure of data, contractors should also implement clear policies to maintain a consistent approach to data confidentiality. Specifically, contractors should be thoughtful and consistent as to how they define confidential information and the protection measures they take related to such information.

FOIA requests and court decisions in this space will likely continue to make striking a balance between government transparency and protecting contractors’ confidential business information more difficult. To navigate these changes, federal contractors should remain vigilant by staying informed, preparing objections to FOIA requests, and consulting with legal counsel to ensure compliance with this evolving area of law.

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.

OFCCP Issues Supplemental CSAL – Were You Selected For A New VEVRAA Focused Review?

On November 8, 2019, OFCCP released its Corporate Scheduling Announcement List (“CSAL”) Supplement. The list identifies 500 establishments selected for the new VEVRAA focused review compliance evaluation. In 2018, OFCCP announced that it would be conducting focused reviews during which it would target its analysis on contractors’ compliance with Executive Order 11246 (the “EO”) (equal employment opportunity regardless of race, color, religion, sex, sexual orientation, gender identity, or national origin); Section 503 of the Rehabilitation Act (“Section 503”) (equal employment for individuals with disabilities), or the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”) (equal employment for protected veterans).

OFCCP has already commenced Section 503 focused reviews, but this is the first time the agency has scheduled VEVRAA focused reviews. In its November 8, 2019 announcement, OFCCP also shared that it has created a VEVRAA focused review webpage “[t]o help contractors prepare for the upcoming reviews.” The agency touts the resource as providing “best practices, protected veteran resources, answers to frequently asked questions, and other compliance assistance resources.”

Contractors are advised to review the Supplemental CSAL (available online) to see if they have been selected for a VEVRAA Focused Review and, if so, review the current and proposed VEVRAA Focused Review scheduling letters to prepare for their upcoming compliance evaluation, and consult with counsel as necessary.

ARTICLE BY Guy Brenner of Proskauer Rose LLP.

For more OFCCP actions, see the National Law Review Government Contracts page.

OFCCP Proposes New Rule to “Ensure Religious Employers are Protected”

As previewed in the Spring regulatory agenda, the Office of Federal Compliance Contract Programs (OFCCP) has proposed a new rule to clarify aspects of a religious exemption available to federal contractors. In the proposed rule, the agency said it intends to address concerns from religious organizations that ambiguity in the exemption left them reluctant to participate in federal contracts.

The proposed rule was published August 15 in the Federal Register. OFCCP will accept public comments on the rule for 30 days, until September 16, 2019.

The rule would clarify the religious exemption in Executive Order 11246, which includes anti-discrimination obligations for federal contractors. The exemption allows religious organizations to prefer individuals of a particular religion, while still requiring adherence to other anti-discrimination provisions. The rule comes one year after OFCCP issued a Directive reminding its staff to tread lightly when dealing with religious contractors and “proceed in a manner neutral toward and tolerant of . . . religious beliefs.”

As proposed, the rule would clarify that:

The exemption covers “not just churches but employers that are organized for a religious purpose, hold themselves out to the public as carrying out a religious purpose, and engage in exercise of religion consistent with, and in furtherance of, a religious purpose.”
Religious employers can condition employment upon acceptance of, or adherence to, a religious tenet, provided that they do not discriminate based on other protected bases.
Define terms such as “Religion,” “Particular Religion,” and religion “As understood by the employer.”

The rule does not explicitly mention sexual orientation or LGBTQ protections. However, it does cite Masterpiece Cakeshop, the recent U.S. Supreme Court decision involving a business owner’s decision to deny service to gay customers based on the owner’s religious beliefs. In a news release, OFCCP said it considered that case while drafting the rule, in addition to other Supreme Court cases, statutes, and executive orders.

Today’s proposed rule helps to ensure the civil rights of religious employers are protected,

said Patrick Pizzella, acting U.S. Secretary of Labor.

“As people of faith with deeply held religious beliefs are making decisions on whether to participate in federal contracting, they deserve clear understanding of their obligations and protections under the law.”

The proposed rule also comes at the same time it has been reported by Bloomberg Law that the Department of Justice and EEOC are seemingly taking differing positions on LGBTQ rights before the Supreme Court.

This article was written by Laura A. Mitchell, Elizabeth P. Hernandez and F. Christopher Chrisbens of Jackson Lewis P.C.

For more on religious protections, see the National Law Review Civil Rights page.

Are Your AI Selection Tools Validated? OFCCP Provides Guidance for Validation of AI-Based Algorithms

We have long counseled employers using or contemplating using artificial intelligence (“AI”) algorithms in their employee selection processes to validate the AI-based selection procedure using an appropriate validation strategy approved by the Uniform Guidelines on Employee Selection Procedures (“Uniform Guidelines”). Our advice has been primarily based on minimizing legal risk and complying with best practices. A recently updated Frequently Asked Questions (“FAQ”) from the Office of Federal Contract Compliance Programs (“OFCCP”) provides further support for validating AI-based selection procedures in compliance with the Uniform Guidelines.

On July 23, 2019, the OFCCP updated the FAQ section on its website to provide guidance on the validation of employee selection procedures. Under the Uniform Guidelines, any selection procedure resulting in a “selection rate for any race, sex, or ethnic group which is less than four-fifths (4/5) (or eighty percent) of the rate for the group with the highest rate will generally be regarded by Federal enforcement agencies as evidence of adverse impact,” which in turn requires the validation of the selection procedure. These validation requirements are equally applicable to any AI-based selection procedure used to make any employment decision, including hiring, termination, promotion, and demotion.

As stated in the Uniform Guidelines, and emphasized in the FAQ, the OFCCP recognizes three methods of validation:

Content validation – a showing that the content of the selection procedure is representative of important aspects of performance on the job in question;
Criterion-related validation – production of empirical data demonstrating that the selection procedure is predictive or significantly correlated with important aspects of job performance; and
Construct validation – a showing that the procedure measures the degree to which candidates possess identifiable characteristics that have been determined to be important in successful performance on the job.

With the exception of criterion-related validating studies, which can be “transported” from other entities under certain circumstances, the Uniform Guidelines require local validation at the employer’s own facilities.

If a selection procedure adversely impacts a protected group, the employer must provide evidence of validity for the selection procedure(s) that caused the adverse impact. Thus, it is crucial that employers considering the implementation of AI-based algorithms in the selection process both conduct adverse impact studies and be prepared to produce one or more validation studies.

The new FAQ also provides important guidelines on the substantial methods utilized by OFCCP in evaluating potential adverse impact. In accordance with the Uniform Guidelines, OFCCP will analyze the Impact Ratio – the disfavored group’s selection rate divided by the favored group’s selection rate. Any Impact Ratio of less than 0.80 (referred to as the “Four – Fifths Rule”) constitutes an initial indication of adverse impact, but OFCCP will not pursue enforcement without evidence of statistical and practical significance. For statistical significance, the OFCCP’s standard statistical tests are the Fisher’s Exact Test (for groups with fewer than 30 subjects) and the Two Independent-Sample Binomial Z-Test (for groups with 30 or more subjects).

With the publication of this new FAQ, employers – and particularly federal contractors – should be sure to evaluate their use of AI-based algorithms and properly validate all selection procedures under the Uniform Guidelines. Moreover, although not addressed in the OFCCP’s new FAQ, employers should also ensure that their AI-based algorithms are compliant with all other state and federal laws and regulations.

Article by Nathaniel M. Glasser, Adam S. Forman and Matthew Savage Aibel of Epstein Becker & Green, P.C.

For more OFCCP guidelines, see the National Law Review Government Contracts, Maritime & Military Law page.

Business and Employee Groups Oppose Merger of OFCCP with EEOC

President Trump’s 2018 budget, released on May 23, proposes to merge the Office of Federal Contract Compliance Programs (OFCCP) with the Equal Employment Opportunity Commission (EEOC) by the end of FY 2018. The proposed merger purports to result in “one agency to combat employment discrimination.” The Trump administration asserts that the merger would “reduce operational redundancies, promote efficiencies, improve services to citizens, and strengthen civil rights enforcement.”

Both business groups and employee civil rights organizations have opposed the measure, albeit for different reasons. The OFCCP is a division of the U.S. Department of Labor, while the EEOC is an independent federal agency. Although both deal with issues of employment discrimination, their mandates, functions and focus are different. The OFCCP’s function is to ensure that federal government contractors take affirmative action to avoid discrimination on the basis of race, color, religion, sex, national origin, disability and protected veteran status. The OFCCP, which was created in 1978, enforces Executive Order 11246, as amended, the Rehabilitation Act of 1973, as amended, and the Veterans’ Readjustment Assistance Act of 1975. The EEOC administers and enforces several federal employment discrimination laws prohibiting discrimination on the basis of race, national origin, religion, sex, age, disability, gender identity, genetic information, and retaliation for complaining or supporting a claim of discrimination. Its function is to investigation individual charges of discrimination brought by private and public sector employees against their employers. The EEOC was established in 1965, following the enactment of Title VII of the Civil Rights Act of 1964.

Business groups oppose the OFCCP’s merger into the EEOC due to concerns that it would create a more powerful EEOC with greater enforcement powers. For example, the OFCCP conducts audits, which compile substantial data on government contractors’ workforces, while the EEOC possesses the power to subpoena employer records. Combining these tools could provide the “new” EEOC with substantially greater enforcement power. Civil rights and employee organizations oppose the merger, believing that overall it would result in less funding for the combined functions currently performed by each agency.

The budget proposal is consistent with the Trump administration’s goal to reduce costs and redundancies through a reorganization of governmental functions and elimination of executive branch agencies. In light of opposition from both employers and employees, however, the measure lacks a powerful proponent; as a result, it is unlikely that the administration will succeed in effecting a combination, at least as it is currently proposed.

This post was written by Salvatore G. Gangemi of Murtha Cullina.

OFCCP Reduces Veteran Hiring Benchmark

On June 16th, Office of Federal Contract Compliance Programs, OFCCP, announced that, effective March 4, 2016, the annual hiring benchmark for veterans pursuant to Vietnam Era Veterans’ Readjustment Assistance Act, VEVRAA,regulation is 6.9%. This is a slight decrease from last year’s 7.0% benchmark.

As part of the release OFCCP clarified that

“Contractors who adopted the previous year’s national benchmark of 7 percent after March 4, 2016, but prior to this announcement may keep their benchmark at 7 percent.”

The agency noted that going forward the effective date for the annual benchmark will match the date the Bureau of Labor Statistics publishes the data from which OFCCP calculates the benchmark. This usually takes place in March every year.

ARTICLE BY Laura A. Mitchell of Jackson Lewis P.C.

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.

The New OFCCP Sexual Orientation And Gender Identity Protections Are Now In Effect

Executive Order (“EO”) 11246, as amended by EO 13762, officially went into effect, representing the first time in the federal sector that sexual orientation and gender identity have been expressly protected. On July 21, 2014, President Obama issued EO 13762, which amended EO 11246 to prohibit federal contractors from discriminating against employees on the basis of sexual orientation or gender identity. These additional protections are being incorporated into the Federal Acquisition Regulations (“FAR”), which will become effective tomorrow, April 10, 2015.

In order to educate the public on these new protections, the Office of Federal Contractor Compliance Programs (“OFCCP”) is conducting a series of webinars regarding the new sexual orientation and gender identity protections. Thus far, the webinars have focused on the obligations of federal contractors and the procedures available to claimants for filing a complaint under the new protections. We have summarized below key points from the webinar:

To Whom Does This Apply?

These new protections apply to any federal contractor, subcontractor, or government funded construction contractor that enters into or renews a federal contract or contracts valued at $10,000 or more per year. These new protections only apply to contracts entered into or renewed on or after April 8, 2015. These protections do not apply to organizations receiving grants from the federal government.

Administrative Changes Required By Employers

Under the new protections, employers must update the EEO language on their job advertisements, their EEO policies, and their “EEO is the Law” poster. The poster need not be updated until the OFCCP releases a supplement. The OFCCP has not yet announced when this supplement will be released.

With respect to the EEO language, the OFCCP has said that employers can simply say “Equal Employment Opportunity” on their job postings. However, if the employer chooses to list out the protected groups, it must list “sexual orientation” and “gender identity.” The OFCCP does not endorse the use of the acronym “LGBT,” as this is not representative of the entire protected class.

Dual Filing With The EEOC

The OFCCP clarified that any complaints alleging sexual orientation or gender identity discrimination are considered “dual-filed” with the EEOC. This means that the OFCCP will stand in the shoes of the EEOC when investigating the Title VII component of the complaint. While Title VII does not overtly protect against gender identity and sexual orientation discrimination, the EEOC has taken the position that these classifications are protected under Title VII and will pursue cases on behalf of these individuals.

As a consequence of the dual-filing process, if the OFCCP does not find cause or does not dispose of a case within 180 days, an employee can request a Notice of Right to Sue from the OFCCP to bring a private cause of action against the employer. This is significant as EO 11246 does not provide for a private cause of action. The OFCCP clarified, however, that it does not intend to pursue the compensatory and punitive damages available under Title VII (which are not available under the EO).

Religious Affiliated Contractors

In one of the webinars, the OFCCP clarified that all federal contractors, including religiously affiliated federal contractors, are required to comply with the new protections. This means that even those contractors who have been granted certain religious exemptions under EO 11246 may not discriminate based upon sexual orientation or gender identity.

Restroom Access Policies

The OFCCP clarified how employers must approach restroom access under the new protections. OFCCP explained that employers must allow employees to use restrooms based upon their gender identity. This means that if an employee was identified as a male at birth, but identifies as a female, the employer must permit that employee to use the female restroom if the employee desires to do so.

Benefits

The new protections provide that the same benefits must be provided to same-sex spouses as non-same-sex spouses. However, employers are not required to provide the same benefits to couples in civil unions or domestic partnerships as long as the denial of benefits is not based on discrimination. Consequently, if a contractor provides heterosexual domestic partners with benefits, it must provide homosexual domestic partners with the same benefits.

ARTICLE BY

Connie N Bertram

Alex C Weinstein

Proskauer Rose LLP

Will Religiously Based Federal Contractors Challenge OFCCP's New LGBT Regulations?

As 2014 headed toward close, the Office of Federal Contract Compliance Programs (“OFCCP”) gave the federal contractor community, already presented with five Executive Orders in 2014, one last compliance gift. On December 9, 2014, without notice or an opportunity for public comment, OFCCP issued its final rule (“Rule”) implementing Executive Order (“EO”) 13672. President Obama signed EO 13672 on July 14, 2014, extending protections against workplace discrimination to members of the lesbian, gay, bisexual, and transgender (“LGBT”) community by amending Executive Order 11246 to add sexual orientation and gender identity as protected characteristics. It also requires contractor employers to take affirmative action to ensure that applicants and employees are treated without regard to their sexual orientation or gender identity during their employment. The Executive Order was effective immediately. The Rule is effective April 8, 2015, and applies to all new or modified federal contracts and subcontracts after that date.

The issuance of EO 13672 and the requirements of its implementing Rule highlight OFCCP’s intention to focus on LGBT protections and might be seen as steps to squarely tee up the issue of enforcement of LGBT protections in the post-Hobby Lobby era. First, and seemingly to leave no doubt of its intention, OFCCP had also issued Directive 2014-02 in August 2014, with its stated purpose, “[t]o clarify that existing agency guidance on discrimination on the basis of sex under Executive Order 11246, as amended, includes discrimination on the bases of gender identity and transgender status.” The directive explicitly piggybacked off of the EEOC’s 2012 decision in Macy v. Holder, where the EEOC concluded that gender identity and transgender status did not need to be specifically addressed in Title VII in order to be protected bases of discrimination, as they are simply part of the protected category of “sex” under Title VII. Anticipating the question of why EO 13672 was then necessary if already protected under Title VII, OFCCP offered a questionable explanation that the directive “does not address gender identity as a stand-alone protected category, which (along with sexual orientation) is the subject of Executive Order 13672.”

Second, as written, the Rule is relatively straightforward. It amends EO 11246’s implementing regulations by replacing the phrase “sex or national origin” with the phrase “sex, sexual orientation, gender identity, or national origin” wherever the former appears in the regulations. The Rule also places the following obligations on employers:

Ensure that applicants and employees are not discriminated against based on their sexual orientation or gender identity.
Update existing affirmative action plans and all equal opportunity, harassment, and nondiscrimination policies to reflect the additional protected categories.
Make available to applicants and employees a revised version of the “EEO is the Law” poster that includes a notice regarding the protections for LGBT workers.
Include “sexual orientation” and “gender identity” as protected traits in the equal opportunity job solicitation taglines. (OFCCP suggested in the Rule preamble that “equal opportunity employer” may be sufficient to cover all protected categories of EO 11246.)
Incorporate the new categories into new or modified subcontracts and purchase orders.
Report to OFCCP and the Department of State any suspicion that it cannot obtain a visa for an employee, from another country with which it does business, due to the employee’s sexual orientation.
Ensure that facilities (e.g., restrooms, locker rooms, and dressing areas) provided for employees are not segregated on the basis of sexual orientation and gender identity.

The Rule does not burden contractor employers with the same data collection and analysis obligations that are required with respect to females and minorities and does not require contractor employers to set placement goals on the bases of sexual orientation or gender identity, nor does it require them to collect or analyze any data with respect to the sexual orientation or gender identity of their applicants or employees. Contractor employers are also not required to, or prohibited from, soliciting applicants or employees to self-identify regarding their sexual orientation or gender identity.

Finally, it is notable that EO 13672 and its implementing Rule were issued despite the growing number of states (currently 20 states plus the District of Columbia) that have implemented protections against sexual orientation and/or gender identity discrimination. And further, that they are set within the larger context of the legalization of same sex marriage by, as of this article, 37 states, as well as the US Supreme Court’s consideration of the status of same sex marriage this year. Thus, the issue brought to focus by these OFCCP actions and the Executive Order may be more pointed than an identification of sexual orientation and gender identity as protected traits and may go towards whether a religious contractor employer may base employment decisions on the LGBT status of an applicant or employee.

EO 13672 contains no exemption for religiously affiliated federal contractors. Section 204(c) of EO 11246, which allows a religious corporation, association, educational institution or society, to base employment decisions on the religious membership of a particular individual (rather than on the beliefs of the organization), was specifically not amended by EO 13672. Possibly by design, this may result in a test of the reach of the Supreme Court’s 2014 decision in Burwell v. Hobby Lobby Stores, Inc., which, broadly speaking, allowed a closely-held, for-profit corporation to be exempt from the Affordable Care Act’s birth control mandate based upon its owners’ religious objection because it found that there was a less restrictive means of furthering the law’s interest.

A similar legal challenge may play out in the arena of employee benefits governed by EO 13672. OFCCP enforcement of the new Rule’s nondiscrimination prohibitions would bring within OFCCP’s purview the provision of benefits to an employee’s same sex spouse. Title VII and Supreme Court precedent require employers to make available the same benefits for spouses regardless of the gender of the employee. Closely-held contractor employers who oppose same sex marriage as a violation of religious belief may object to this requirement’s enforcement as a burden on their religious beliefs, similar to the arguments made by Hobby Lobby. While the Hobby Lobby majority attempted to dismiss the idea that its decision might allow an employer to “cloak as religious practice” prohibited acts, such as racial discrimination in hiring, the reach of the Hobby Lobby decision is far from settled, and the next batch of cases may seek to extend that decision to regulations requiring equal benefits based upon sexual orientation or gender identity.

And, lest employers think that the OFCCP was done, just today it announced that on January 30, 2015, it will publish a Notice of Proposed Rulemaking to update contractors’ obligations to not discriminate on the basis of sex under EO 11246 to “reflect present-day workplace realities and align OFCCP’s rules with current law under Title VII.” The new rules will touch on “compensation discrimination, sexual harassment, failure to provide workplace accommodations for pregnancy, and gender identity and family caregiver discrimination, among other topics.” The regulatory landscape for federal contractors saw many changes in 2014, and it seems 2015 is shaping up to be no different.

ARTICLE BY

Jill Pedigo Hall

Gonzalez Saggio & Harlan LLP

Tag: OFCCP

Federal Contractors Beware – More Data Disclosures Coming!

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