OFCCP Week in Review: July 17, 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, Candee Chambers and Jennifer Polcer. In today’s edition they discuss:
- NLRB holds “Student Assistants” to be common law employees
- House Appropriations Committee takes its turn to now hammer OFCCP’s proposed budget
- USDOL’s Veterans Employment & Training Services (VETS) received nod of approval from House Appropriations Committee
- ALJ in Google case decision “splits the baby” in Google’s direction and planted a time bomb for all government contractors
NLRB Holds “Student Assistants” to be Common Law Employees
|Thursday, July 6, 2017|
|The Case: The New School and Student Employees at The New School-SENS UAW, 02-RC-143009
The Significance: Universities and schools should care about this issue beyond its ramifications for the unionization of student “employees”.
The New School will undoubtedly appeal into the federal appellate courts, especially since this is the NLRB’s third flip-flop decision on the issue of NLRA coverage of student “employees” in the last 20 years. At the same time, the issue of student “employees” will become an immediate agenda item for the two new Republican NLRB Board Members Nominees (William Emmanuel and Marvin Kaplan) who underwent confirmation hearings on Thursday July 13, 2017 and now await favorable votes of the Senate Health, Education, Labor and Pensions Committee to forward their nominations on to the Senate for a full floor vote.
Bottom Line: The final resolution of the student “employee” coverage issue is likely about 2 years away in either the federal appellate court or at the NLRB.
Additional Support: Contact Jennifer Polcer if you are further interested in PowerPoints Candee Chambers presented in October 2015 at the NELI Affirmative Action Briefing discussing the “Who is an Employee” subject to OFCCP’s jurisdiction and discussing the long running gun battle over coverage of student “employees”.
House Appropriations Committee Takes It’s Turn to Now Hammer OFCCP’s Proposed Budget
|Wednesday, July 12, 2017|
|The Proposal: FY2018 BUDGET (scroll down to page 17, lines 5-9)
The Highlights: While not the $17M (~16%) reduction to budget (from ~$105M to $88M) The White House had earlier proposed for OFCCP (see OFCCP Week in Review from May 30, 2017), the House budget proposal for OFCCP for upcoming Fiscal Year 2018 (begins October 1, 2017) is nonetheless a $10M reduction (~10.2%) from ~$105M to $94.5M.
The House is not, however, singling OFCCP out for attack since the proposal for OFCCP’s budget treats OFCCP slightly better than the budget for the Labor Department as a whole. The House wants to cut USDOL’s budget by $1.3B, or about 12% (to $10.8B). House Republicans explained the cuts as an effort to “cut spending” in Washington D.C. and “cut funding to lower priority programs.”
The Significance: This budget proposal would have a devastating effect on the OFCCP, if enacted, and would force the agency to greatly re-shape itself. For example, OFCCP would lose approximately 120 Compliance Officer positions (between its reduced budget and expected increased expenses), a drop in headcount of approximately 21% from the currently budgeted 571 employees to approximately 450 employees. OFCCP’s annual employee attrition rate is unfortunately large, but is rarely 21%. Accordingly, OFCCP would likely have to order a Reduction in Force early in FY2018 or hope for many early retirements (with consequent implications for loss of institutional knowledge and experience).
Also, were the House proposal to go into effect, the OFCCP would have dropped over 40% of its staff over the last 9 years (i.e. from 785 to ~450…or only about 57% of the 2009 staffing level). With almost half of its office space empty, OFCCP would almost undoubtedly be forced to close 8-10 of its 60 offices. Moreover, such a precipitous loss of employee headcount would again bring on more forceful discussion of the GAO’s 2015 suggestion that OFCCP consider whether it even needs any brick and mortar offices scattered across the country given advances in communications technology and the reduction of on-site OFCCP audits to fewer than 1% of OFCCP Compliance Officer time spent at work.
Meanwhile, the Democrats’ plan is to continue to resist and attempt to stall President’s Trump all-out assault on the administrative state, which half of the country thinks has sprawled out of control and the other half wants to keep steady state or expand. So, the political battle lines are set and many expect a very contentious FY2018 budget debate in coming months.
FYI: the new budget is supposed to be in place in 2 1/2 months.
House Appropriations Committee Gives USDOL’s Veterans Employment & Training Service (VETS) A Nod of Approval
|Wednesday, July 12, 2017|
|The Proposal: An increased budget (Scroll down to pages 28-31)
The Highlights: “The bill provides $284 million for VETS, which is $5M above the fiscal year 2017 level [~1.7%]. This includes a $2.5M increase to expand the Homeless Veterans Reintegration Program.”
ALJ in Google Case Decision “Splits the Baby” in Google’s Direction & Planted a Time Bomb for all Government Contractors
|Friday, July 14, 2017|
|The Case: Is a denial of access to compensation-related documents case, not a claim of unlawful compensation discrimination.
The Opinion: After a two-day administrative trial (known as a “Hearing”) USDOL Administrative Law Judge Steven B. Berlin—sitting in San Francisco and one of the best in the system–has issued a detailed and thoughtful 42-page opinion. (View OFCCP vs. Google case)
(Editor’s Note: This is an exotic Administrative Law issue which we find few civil judges easily understand. It is abundantly clear, as a matter of administrative law, however, that the Lilly Ledbetter decision in the U.S. Supreme Court applies to Executive Order 11246, but NOT the Lilly Ledbetter Fair Pair amendment to Title VII–and three other statutes none of them the Executive Order.
The application of The Lilly Ledbetter Fair Pay Act to OFCCP compensation audits could be another large flash point in the Government Contractor community because of the ENORMOUS expense and time distraction it will represent if Lilly Ledbetter compensation data claims become the norm in OFCCP audits. So far, this expensive issue has not erupted except aberrational to date in OFCCP audits across the country.)
Bottom Line: So, in the end, the Google case is thus far about whether OFCCP’s requests were “unreasonably burdensome.” Reasonable minds will of course differ on this “lawyers’ line-drawing” challenge. OFCCP has now obtained the legal right to access those specific and particular documents which Judge Berlin found not “unreasonably” burdensome for Google to produce to OFCCP (although most of us would pale at the document production challenge which lies ahead for Google, let alone the ½ million-dollar journey it has already traveled) in an audit which is still just beginning.
However, OFCCP did not obtain the right to access other Google documents Judge Berlin decided were “unreasonably burdensome.” And, either or both parties have the right to appeal Judge Berlin’s “Recommended Decision and Recommended Order.” There are plenty of pain points for both parties in Judge Berlin’s Recommended Order, especially since it punts to another day bigger and more expensive document requests OFCCP will surely demand of Google in coming months. If this were a football game, the location on the field would be that OFCCP now has the ball, first and ten on the 10-yard line, 90 yards to go: plenty of time left in this game to go to the concession stand, get a hotdog and chips and settle in for a good tussle…
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 Jennifer at email@example.com with your ideas.