OFCCP Week in Review: April 3, 2017
The OFCCP Week in Review (WIR) is a simple, fast and direct summary of relevant happenings in the OFCCP regulatory environment, authored by experts John C. Fox and Candee Chambers. In today’s edition we discuss:
- Trump signs into law the congressional resolution to kill Obama’s “Blacklisting Rule”
- Acosta cleared by Senate H.E.L.P. Committee; Now on to Senate floor vote
- North Carolina “flushes” HB-2, the controversial bathroom access bill
- OFCCP lowers the protected veterans hiring benchmark to 6.7%
- Is OFCCP getting ready for a transformation?
Monday, March 27, 2017: Trump Signs into Law the Congressional Resolution to Kill Obama’s Dreaded “Blacklisting Rule”
It is done. The Fair Pay and Safe Workplaces Executive Order and the Far Council’s implementing Rules are now withdrawn and no longer legally effective. The USDOL has already ripped down all of the many Webpages it had posted for the last year trying to explain to wary federal contractors how this most feared of all Obama employment-related initiatives would operate to cause bidders on certain federal contracts to report their prior 3 years of labor law compliance activity. The plan had then been for the hundreds of federal contracting officers throughout all the federal Executive Branch procurement agencies to thereafter decide as to which bidders to deny the contract if the contractor did not have a sufficiently laudable labor compliance record (using the murkiest of subjective decision-making standards). Judge Marcia Crone of the United States District Court for the Eastern District of Texas on October 25, 2016 had already enjoined most portions of the Far Council’s Final Rule. (See DE WIR for October 31, 2016) The Judge had not, however, stopped the “paycheck fairness” or anti-arbitration components bolted onto the FAR Council’s Final Rule. President Trump’s action last Monday now wipes even those two components of the Final Rule away. Thus, no portion of the Fair Pay and Safe Workplaces Executive Order or Final Rule remains in effect as of this writing. Federal contractors which began to comply with those two components on January 1, 2017 now have the luxury to decide whether to continue to comply as a matter of their management discretion or whether to “wind the clock back” and revert to their prior paycheck stub and arbitration practices before converting them to comply with the Final Rule. On Wednesday March 29, the U.S. Department of Justice cut the last loose thread on the tortured legal saga of the Blacklisting Rule by withdrawing and dismissing its appeal (lodged by the Obama Justice Department) of Judge Crone’s October 25, 2016 injunction. All gone. The scary Blacklisting Rule roller coaster ride is now over.
Thursday, March 30, 2017: Senate H.E.L.P. Committee Clears Acosta to go to Senate Floor Vote
The Senate Health, Education, Labor and Pensions Committee voted 12-11 to advance Alexander Acosta’s name to the full Senate for a floor vote on his nomination to become the 27th Secretary of Labor of the U.S. Department of Labor. The party-line vote signals that bi-partisanship is still in short supply in Washington D.C. (The full Senate has on three prior occasions confirmed Mr. Acosta for high-level federal political appointee positions, including as Assistant Attorney General for Civil Rights…always an especially sensitive appointment given great care and attention). The H.E.L.P. Committee vote on March 30, coming only seven days after Mr. Acosta’s Confirmation Hearing on March 22 (See DE WIR for March 27, 2016), also signals the White House’s growing frustration that President Trump does not yet have his Cabinet in place now over two months into his Presidency. Senate Majority Leader Mitch McConnell had not determined as of this writing whether to try to push Mr. Acosta’s name for full Senate floor vote before the Senate’s scheduled “long recess” from April 10 to April 21 (Passover to Easter).
Thursday, March 30, 2017: North Carolina Flushes HB-2, the Controversial Bathroom Access Bill
BUT, in enacting last Thursday HB 142 into law to rescind and replace HB-2, the state changed state law, but is it a change without a difference? NOTE: Soon after both houses of the North Carolina Legislature passed HB 142 and sent it forward to the Governor, Governor Roy Cooper signed the measure into law. HB-2 had changed state law to require bathroom users to use the bathroom of the gender stated on their birth certificate and not the bathroom of the gender with which the user identified (i.e. a biological male was required to use the men’s bathroom even if she identified herself with women). (See DE WIR for July 25, 2016) Existing North Carolina state law, as in most states, also required state sheriffs to enforce bathroom access rules to keep men out of the women’s bathrooms and women out of the men’s bathrooms, under penalty of criminal law. North Carolina HB 142 made one other significant change to state law in withdrawing and replacing HB 2. Through and to December 1, 2020, HB 142 pre-empts the rights of any lesser state entity (county/town/school board/University of North Carolina/the North Carolina Community College System, etc.) from regulating access to “multi-occupancy restrooms, showers, or changing facilities.” So, the result is that North Carolina has now withdrawn its law that bathroom users may not use the bathroom of their gender identity if different from their biological gender, but transgender bathroom users nonetheless may still not use the bathroom with which they identify. For example, a male offended at a biological woman’s use of the male bathroom because the transgender user identified as a male, could successfully call a state Sheriff who would arrest the transgender bathroom user for using the wrong bathroom (i.e. a woman was found in the male bathroom). And, the pre-emption feature of HB 142 prevents local cities (like Raleigh) from passing city-wide non-discrimination ordinances allowing transgender bathroom use consistent with the transgender bathroom user’s identity even if different from biologic gender recorded at birth. That pre-emption also thus limits the power of cities and counties to pass ordinances allowing private sector employers in North Carolina to allow bathroom use based on identity rather than biology. For example, a male in a private company bathroom in a company office building which allowed transgender bathroom use consistent with identity could call a State Sheriff to arrest the biological female transgender bathroom user found in the men’s bathroom. So, why did the state of North Carolina take this action to repeal HB-2, and why did it do it now? Middle-of-the-road legislators were concerned both that HB-2 was depressing business relocations and interest in North Carolina and that the NCAA would not consider North Carolina for NCAA collegiate tournaments from 2018-2022 if HB-2 was still on the books. Oh yes, the basketball equation. At this writing, the University of North Carolina’s #1 seeded basketball team is scheduled later tonight to play Gonzaga University’s #1 seeded basketball team for the National NCAA Collegiate Basketball Championship. Go Bulldogs! Go Tar Heels! Witness the power of sports in America!
Friday, March 31, 2017: OFCCP Lowers the Protected Veterans Benchmark to 6.7%
On Friday, the OFCCP pushed out an e-mail blast to recipients of its news releases announcing the Benchmark had dropped from 6.9% to 6.7%. (If you are not on the OFCCP’s press release mailing list, click here to sign up if you care to do so). The “Bad News” for Government Contractors interested to hire Protected Veterans is that there are fewer Protected Veterans in the workforce available to Government Contractors to hire. The “Good News” for veterans, though, is that veterans’ unemployment continues to fall. As of March 22, 2017, the Bureau of Labor Statistics issued an Economic News Release reporting that the unemployment rate for all veterans fell to 4.3%…better than the unemployment rate of the country as a whole (which has fallen to 4.7% amid a suddenly quickly growing economy on the hopes of a coming deregulation of the business community). The bad news for Government contractors, as stated above, is that you are stealing Protected Veterans from your competitors in the marketplace for labor since there are statistically very few Protected Veterans out of work for very long. What does a Government contractor do with the “Benchmark for hires”? OFCCP expects you to do two things: first, “set” the Benchmark, and then second, compare it to the percentage of Protected Veterans the contractor employs in each of its AAP establishments via its annual “Data Metrics” reports to help the contractor evaluate the “effectiveness” of its outreach and recruitment efforts. So, compare your Protected Veterans applicant flow percentage to your establishment as a whole (not in your respective Job Groups) against the 4.3% Benchmark to see if your recruiters are throwing their nets broadly enough.
FRIDAY MARCH 31, 2017: OFCCP Irrelevant, or Getting Ready for Transformation?
As we close the month of March, it was what was not said or what was not asked about OFCCP which was the loudest news of the month. First, Only Senator Orrin Hatch (R-UT) asked Alexander Acosta at his Senate H.E.L.P. Committee Nomination Hearing about OFCCP, and then that was not a friendly question. Senator Hatch criticized the statistical analyses OFCCP has been using to evaluate hiring practices, and asked Mr. Acosta how he would lead the agency to find “evidence of actual discrimination rather than statistical generalizations.” Mr. Acosta gave Senator Hatch a “head fake” and a politically correct answer with a roomful of antagonistic Democrats watching: “Disparate impact is a valid and legally acceptable part of liability in employment litigation. Without more, I would hesitate to say that OFCCP shouldn’t use acceptable tools that are generally considered valid in employment contexts in enforcing the Executive Order.” Second, Mr. Acosta testified at his Nomination Hearing about the USDOL budget. The White House has proposed a provocative 21% reduction to the USDOL budget, as a whole, as you know, but did not identify budgets for the sub-agencies which make-up the USDOL (See DE WIR March 20, 2017) Rather, the White House’s view is that it wishes to leave those decisions to its Secretary of Labor. In back and forth banter at his Nomination Hearing, Mr. Acosta said he would review the budget of each sub-agency with an eye towards the agency’s “rate of return,” without signaling out any particular agency. Of course, OFCCP has just come off the worst two years of enforcement “rate of return” in its over 50-year history and set new low numbers of audits, back pay collections, compensation discrimination recoveries, and morale. (This particular ROI calculation ignores, however, whatever tonic effect OFCCP’s regulations and threat of enforcement augurs in the marketplace to induce Government contractors to voluntarily subject their Applicants and employees to non-discriminatory practices and policies.) Third, Mr. Acosta left the Senate Hearing rooms and spent almost the entire next week in the White House interviewing political appointee candidates for various USDOL sub-agencies and other political appointee jobs within USDOL. As daily leaks of who was seen and who was “up” or “out” spilled out of The White House, nary a word was spoken about interviews with prospective OFCCP Director/Deputy Director candidates. Having served as the Assistant Attorney General of the US Department of Justice in charge of the Civil Rights Division, Mr. Acosta would necessarily have a deep rolodex list of potential candidates of interest to him to run the OFCCP. Did Mr. Acosta just not get to the OFCCP part of his interviews, or is this yet another trail sign of a coming change of direction for OFCCP?
THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.
Reminder: If you have specific OFCCP compliance questions and/or concerns or wish to offer suggestions about future topics for the OFCCP Week In Review, please contact your membership representative at (866) 268-6206 (for DirectEmployers Association Members), or email Candee at firstname.lastname@example.org with your ideas.