Is It Likely the OFCCP Will Merge Into the EEOC, Lock, Stock & Barrel?

OFCCP in the News

Is It Likely the OFCCP Will Merge Into the EEOC, Lock, Stock & Barrel?

John Fox was previously the Executive Assistant to the Director of OFCCP (now retitled Deputy Director) from 1981 to 1984 and one of the two political appointees then running the agency. The idea of merging OFCCP into the EEOC is not new: at the direction of the then Secretary of Labor, John spent about 1/3 of his time at OFCCP 30 years ago fending off threatened consolidation with the EEOC. Almost every Administration examines the relationship and struggles to rationalize how these two agencies should divide and share non-discrimination authority. The idea of two federal agencies combating employment discrimination also baffles many laymen and Congressmen and women new to Capitol Hill.

Short Answer: No.

A lock, stock and barrel “merger” is unlikely. (The term “merger” comes from OFCCP’s FY2018 Budget Justification where the notion of consolidating the two agencies was first publicly mentioned and announced). While the proposal has a certain simplicity and elegance in design, it is the most politically difficult path Secretary Acosta could have chosen.  Specifically, US Secretary of Labor Alexander Acosta is proposing to merge the entire OFCCP into the EEOC (i.e. all four major operational and legal components of the OFCCP: (a) budget, (b) personnel; (c) affirmative action authority; and (d) non-discrimination authority). The proposal is to finalize the merger beginning on the first day of FY2019 (which starts October 1, 2018 = 16 months from now). However:

  • Civil Rights and covered “Government contractors” are already lining up to oppose Secretary Acosta’s merger (giving new meaning to the old Capitol Hill cliché: “Politics makes strange bedfellows”).
  • The merger would require four significant legal changes to OFCCP’s authorizing legal authorities as the Labor Department specifically acknowledges in its FY2018 Budget Justification(see the bottom of page 14, first 3 bullet points).
    • The President would have to amend Executive Order 11246 to assign legal responsibility for the Order to the EEOC (President Trump may do this alone without need of the Congress);
    • Both Houses of Congress would have to agree to amend Section 503 of the Rehabilitation Act of 1973 to transfer its authority to the EEOC (Obtaining such agreement in The House is almost a foregone conclusion: the Senate is another matter, however: see below);
    • Both Houses of Congress would have to amend 38 USC Section 4212 (VEVRAA) to transfer its authority to the EEOC (Protected Veterans, USDOL’s Veterans’ Education and Training Service (V.E.T.S.), the Veterans Administration and DirectEmployers Members would then get on the playing field); and
    • The OFCCP would have to issue both “Proposed” and “Final” Rules (OMB would need to approve those Rules to transfer OFCCP’s regulatory authority to the EEOC. Secretary Acosta and OMB can do this themselves without need of the Congress. However, Rulemaking is a very public exercise and will immediately become politicized and stir passionate and fiery debate in the Halls of Congress and across the country. Also, accomplishing Rulemaking in only 16 months is very ambitious as Rulemakings go).
  • The “merger” proposal thus necessarily takes a path through the United States Senate to review, debate and approve. Fasten your seatbelts! Turbulence ahead!

What are the Politics Around this Proposed Merger?

First, the November 2018 mid-term elections are now only 17 months away.

Second, Republicans currently hold 52 seats in the US Senate, while Democrats hold only 46 seats, but Independents (who normally caucus with the Democrats) hold 2 seats (52+46+2=100).

Third, of course, in case of a “tie” vote, The Vice President casts the deciding vote, so the Republicans can afford to lose only three Republican votes (52-3 = 49).

Fourth, 33 Senate seats are up for election, per the usual, in 2018.

Fifth, in an unusual development, 23 Democrat Senators are up for re-election vs only eight Republicans. Capitol Hill pundits are unanimous in their view that the Republicans stand poised to pick up a substantial number of Senate seats in 2018. Indeed, if everything broke right for Republicans, there is even a chance they could have a super-majority of 60 or greater Republican Senators. If so, Republicans could then easily dominate all voting and filibusters in the Senate. But, reaching a super-majority is a stretch for the Republicans in 2018 and could only happen if Republicans fielded some stellar candidates in those states with vulnerable Democrat opponents. This looming gravitational shift in the Senate thus commends speed of rejection for those who oppose the merger and patience for those who favor the merger. After January 2019, the likely 56+ Republicans in the Senate likely will be able to “run the table”—whether they have a super-majority or not–as Democrats only sit and fester, unable to stop much of anything. There are five Democrat Senators who are the most vulnerable: in Indiana, Missouri, Montana, North Dakota, and West Virginia (all states which both voted for Mitt Romney in 2012 and for Donald trump in 2016). But then, there are also races in five states which voted for Trump in 2016 making those races suddenly more challenging for largely secure Democrats in Florida, Ohio, Pennsylvania, Wisconsin and Michigan.

Sixth, opponents of the merger will target the two vulnerable incumbent Republican US Senators up for re-election in Nevada (R-Dean Heller) and Arizona (R-Jeff Flake). Opponents of the merger will make the OFCCP merger issue a campaign issue to differentiate the Democrat challenger if Senators Heller and Flake choose not to oppose the merger. If both Senators Heller and/or Flake oppose the merger as part of their election platforms, however, opponents will be two votes closer to being able to stop the merger in the Senate and only one vote away from being able to stop it cold (46+2+2=50 Nay votes, one shy of the Nay vote count needed to kill the merger).

Seventh, apart from the attention and pressure Senators Heller and Flake will receive about the OFCCP merger issue, the hunt will be on by opponents of the merger to find at least one more Republican Senator willing to break ranks with the Senate Republican leadership over the merger (46+2+2+1=51).

Eighth, it would be naïve to look at the merger issue as over with either an “up” or “down” vote. Unless the merger were to fail by a substantial margin (8 or more votes: 58 “Nay” votes vs, let’s say, 42 “Yea” votes), proponents of the merger will attempt to salvage something out of the exercise and will work to cobble together a different kind of merger which can find 51 Senate votes to support it. To get you ready for that potential counter-punch, I have catalogued a few of the more popular proposals which various Administrations have considered over the last 50 years of OFCCP’s [and its predecessor’s (OFCC’s)] history.

What Were/Are the Options?

There are potentially many ways “to skin the cat,” depending on the driver behind the architecture:

    • Do Nothing: leave things as they were with the OFCCP as a separate standalone agency within the US Department of Labor as it has been since Jimmy Carter 39 years ago consolidated 11 federal agency compliance units into one agency, renamed it and reorganized it into what was first called the Office of Federal Contract Compliance Programs beginning October 1, 1978.
    • Leave the Affirmative Action Authority at USDOL, but Transfer the Non-Discrimination Authority of Executive Order 11246 and Section 503 to the EEOC:
      • The EEOC is legally designated as the lead federal agency charged to coordinate the nation’s employment discrimination policy, investigation and prosecution. Here is how the EEOC puts it on its website:

“Federal laws concerning workplace discrimination are enforced by different Federal agencies. Unless the government speaks with one voice on matters of employment nondiscrimination, workers may be confused as to what rights they have and how to protect them and employers may be uncertain of their obligations and how to voluntarily comply with their legal duties.

The EEOC is responsible for coordinating the Federal government’s employment non-discrimination effort. The EEOC is required to review regulations and other EEO policy-related documents before they are issued to ensure consistency in the Federal government’s effort to combat workplace discrimination.

Under Executive Order 12067, EEOC has responsibility for enforcing all Federal EEO laws and the duty to coordinate and lead the Federal government’s effort to eradicate workplace discrimination.”

  • Consolidation of non-discrimination authority in one agency has always had a certain attraction to it to produce consistency of interpretation and financial efficiency.
  • The merger proposal could have been to transfer three of OFCCP’s four operational and legal authorities to the EEOC by simply determining what percent of the OFCCP’s (a) budget and (b) personnel it dedicated to non-discrimination functions and transfer that amount of OFCCP budget and OFCCP personnel to the EEOC along with (c) OFCCP’s non-discrimination authority.
    • Note: USDOL would transfer, under this scenario, ONLY its non-discrimination law authority pursuant to Executive Order 11246 and Section 503 of the Rehabilitation Act of 1973 and NOT pursuant to VEVRAA…since VEVRRA only requires “Affirmative Action” and does not make discrimination against Protected veterans unlawful. (OFCCP publicly disagrees, but sober lawyers at USDOL and the US Department of Justice (the exclusive legal adviser to the President as to legal matters affecting the Executive Branch of the federal government) would ignore OFCCP’s posturing when it comes to important matters of transferring legal authority from one agency to another. The law drives those transactions and not the here-today-gone-tomorrow “podium policy” for which the OFCCP is famous/infamous.
  • Another subset of that proposal could have been to transfer to the EEOC only the OFCCP’s non-discrimination budget and personnel, but to also withdraw and rescind all Executive Order 11246 legal authority in deference to Title VII’s greater legal prominence. Such a withdrawal and rescission of Section 503’s legal authority is even more compelling to accomplish since the ADA Amendments Act of 2012 homogenized for the first time Section 503’s substantive non-discrimination legal authority with that of Title I (Employment) of the ADA. Moreover, OFCCP has been virtually out of the disability discrimination arena since the advent of Title I of the ADA April 26, 1992 (i.e. OFCCP reported only two accommodation discrimination case resolutions (nationwide) last year in FY2016). As to “systemic discrimination,” OFCCP’s claimed forte, the EEOC’s adolescent systemic units, with which EEOC began to experiment late in the Bush Administration (the son), have proved a surprising success and have dwarfed OFCCP’s results. Here is what Candee Chambers and I reported in our November 21, 2016 Week in Review when the EEOC released its annual PAR Report (“Performance & Accountability Report”):

    “The EEOC’s systemic discrimination Charge enforcement system has been a surprising success in a very short period of time. Trying to piggy-back on the OFCCP’s signature attacks on “systemic” discrimination (which The Commission describes as “where a discriminatory pattern, practice, or policy has a broad impact on an industry, company or geographic area”), the EEOC in recent years has created and staffed “Systemic Charge Units” in selected EEOC District Offices across the country. Eclipsing prior year systemic discrimination back pay collections, the Commission this year reported it resolved 273 systemic investigations and collected $20.5M in back pay in these systemic investigations (almost 3 times OFCCP’s total back pay collections for the same Fiscal Year). Of those 273 systemic discrimination investigations, The Commission also issued “reasonable cause” determinations in 113 of them (41%: compared to OFCCP’s 1-2% alleged violation rate) and successfully conciliated 71 of them.”

  • A separation of Affirmative Action authority (leaving it at the OFCCP) from non-discrimination law authority (consolidating all of it at the EEOC) would have the effect of changing OFCCP (remaining at the Labor Department) into a pure contracting agency enforcing only affirmative action requirements. One of the fears of opponents of the merger is that rendering OFCCP an Affirmative Action-only agency would neuter it by depriving it of the “heavy hammer” of non-discrimination authority. This is the precise fear of those who favor separation of Affirmative Action authority from non-discrimination law authority: OFCCP “bullies,” it is said, contractors which do not do OFCCP’s bidding on the Affirmative Action side of the house as OFCCP wishes it with threats of unlawful discrimination findings and prolonged audits. Critics of OFCCP’s Affirmative Action enforcement efforts have been correct all along that the “Debarment” “Sanction” which OFCCP uniquely brings to the table as a “contracting agency” (not a civil rights agency) is “toothless” since a contractor may easily avoid debarment by merely agreeing to comply with OFCCP’s Rules, even after OFCCP has caught the contractor red-handed. While every OFCCP Director has worried over this issue, two OFCCP Directors in recent times addressed the issue in different and yet interesting ways. Shirley Wilcher (Clinton Administration) attempted to create a “term debarment” notion that would have kept an offending contractor from bidding on federal contracts for some stated short period of time (perhaps 6 or 12 months) so as to not reward complacent or irregular compliance and only contractor “commitments” and promises to come into compliance only when OFCCP caught them. However, Shirley was never able to get her White House to back her efforts and permit OFCCP to issue Proposed and Final Rules to install “term debarment” within Executive Order 11246. Pat Shiu (Obama Administration) went about it another way by creating what I called a “recidivism algorithm” in OFCCP’s audit selection computer for Supply and Service contractors. The “recidivism algorithm” caused a contractor to undergo more audits once OFCCP found the contractor out of compliance.

I mention these initiatives to deal with the otherwise “toothless” nature of the Debarment Sanction since President Trump could pump great energy into Affirmative Action compliance by putting “teeth” into the Debarment Sanction (and take some of the political distrust and heat off of his proposal to relocate non-discrimination authority within the federal executive branch), and thus relieve at least the major concern of the civil rights community as to the proposed merger. (It would be difficult for civil rights groups to oppose an historic and meaningful strengthening of Affirmative Action). Covered “Government” “Contractors,” however, would uniformly hate and oppose a strengthening of the Debarment Sanction. Contractors much prefer “toothless tigers:” the growl sounds fierce, but the bite is harmless.

Conclusion: We are in for a political “Battle Royale” ladies and gentlemen. The outcome is far from certain, as there are many options and much political overlay, and yet much is at stake for contractors and for the nation. Your views, as DirectEmployers Members, are important to DirectEmployers and our shared community. DE will be canvassing its Members in coming weeks in several different ways and reaching out to understand what DE Members want to see happen, especially as the merger proposal affects the jobs “listing” compliance obligation pursuant to VEVRAA’s Rules, the outreach to and employment of Protected Veterans and the outreach to and employment of disabled Protected Veterans. These are the issues core to DE’s mission and service to its Members and about which we all share a collective concern, however the politicians of all political stripes in Washington DC choose to slice up the Affirmative Action and non-discrimination “pie.”

About the Author

John C. FoxJohn C. Fox, Esq. is President and Senior Partner at Fox, Wang & Morgan P.C. where he represents companies and tries cases in state and federal courts throughout the United States. Mr. Fox has extensive trial experience, having spent more than 300 days in trial. Mr. Fox was also lead trial counsel in the first of the four wage-hour class actions known to have been tried in California and was lead trial counsel in what are believed to have been the two largest disability law suits in the United States. He is an across-the-board employment lawyer representing management nationwide.View all posts by John C. Fox »

(1) Comment

  1. OFCCP Week in Review: May 30, 2017 | DirectEmployers AssociationMay 30, 2017

    […] When: The USDOL’s FY2018 Budget (to be effective on October 1, 2017: 5 months from now if the Congress approves a budget and the President were to sign it) announced Secretary Acosta’s proposal to transfer the OFCCP to the EEOC effective as of the first day of FY2019 (begins October 1, 2018 = 16 months from now) if this transfer were to occur at all. […]