OFCCP Week In Review: December 7, 2020

• Controversial Contract Language for EO 13950 Released
• WHD Issued Two New FLSA-related Opinion Letters
• Transgender Now Protected Under Title VII
• EEOC Released a Savvy New Employment Data Tool
• New TAG for Small Contractors
• OFCCP Concedes to Oracle
• November Employment Situation Shows Steady Improvement As Unemployment Drops To 6.7%
• Remembering Pearl Harbor

(Late Report) Friday, November 20, 2020: Controversial Contract Language for EO 13950 Released

The Principal Director of Defense Pricing and Contracting issued Class Deviation 2021-O0001 – Combating Race and Sex Stereotyping requiring all Department of Defense Contracting Officers to immediately begin to insert into all DoD contracts they execute a three-page “clause” largely regurgitating the controversial core elements of Executive Order 13950 (regarding limits on D&I training). The three-page clause appears in the form of an Attachment to the November 20, 2020 Deviation Notice. DoD will eventually codify the clause in the Federal Acquisition Regulations at FAR 52.222-26.

Inclusion of the clause in all DoD contracts not otherwise exempted from Executive Order 11246 and Executive Order 13950 means that violations not only violate one or both of those Executive Orders, but also now violate the contract the company signed with DoD and may be used in contract award challenges. Read your contract for breach remedies.

Class Deviation?

A class deviation is issued when necessary to allow organizations to deviate from the Federal Acquisition Regulation (FAR) and DFARS (Defense Federal Acquisition Regulation Supplement). In this case, FAR 52.222-26 Equal Opportunity. This class deviation was effective on November 20, 2020, and will remain in effect until either added to the FAR or rescinded.

Back Story

President Trump issued Executive Order 13950 on September 22, 2020. See our blog by John Fox titled, “Trump Issues Executive Order 13950 to Combat Race and Sex Stereotyping Imposing New Requirements on Government Contractors.” Section 4 of the Order, “Requirements for Government Contractors,” requires covered Contractors to include a clause in new solicitations and resultant contracts that prohibits contractors from using any workplace training that instills in its employees any form of race or sex-stereotyping or any form of race or sex scapegoating.

Exemptions

Section 4 provides an exception for contracts exempted under EO 11246. FAR 22.807 includes a list of these exemptions and instructions for requesting the exemptions described at FAR 22.807(a)(2) and (b)(5). These Rules are parallel to OFCCP’s Executive Order 11246 Rules at 41 CFR Section 60-1.5.

Editor’s Note

There is a strong possibility that the new Biden Administration will rescind this Executive Order. (The heavy betting is whether the rescission will come on day 1 or day 2 of President Elect Biden’s presidency.) However, as stated in an earlier OFCCP press release, “training programs prohibited by the new Executive Order may also violate a contractor’s obligations under the existing Executive Order 11246, which prohibits discrimination based on race, color, religion, sex, sexual orientation, gender identity, national origin, and for inquiring about, discussing, or disclosing your compensation or the compensation of others.” So, although EO 13950 may go away, do not forget the prohibitions on unlawful discrimination which OFCCP may pursue via EO 11246.

Monday, November 30, 2020: WHD Issued Two New FLSA-related Opinion Letters

The U.S. Department of Labor announced two new opinion letters that address compliance issues related to the Fair Labor Standards Act (FLSA).

The new opinion letters are:

• FLSA2020-17: Addresses when the regular rate of pay of an employee paid on a piece-rate basis may be calculated by dividing total earnings by the number of productive and nonproductive hours worked during the workweek in the absence of a specific agreement with the employee to use such a calculation. This particular example refers to truck unloaders, and given the facts presented, the conclusion was that the truck unloaders understood that the piece-rate was intended to cover all hours worked, including nonproductive hours.
• FLSA2020-18: Addresses whether insect farming qualifies as “agriculture” under Section 3(f) of the FLSA and whether certain workers employed by an insect farming operation may be exempt from overtime pay requirements under Section 13(b)(12). Given the facts in this situation, insect farming falls under “agriculture.” Therefore, the individuals described are exempt from the overtime provision.

“The opinion letters issued today demonstrate the Wage and Hour Division’s commitment to providing clear guidance and compliance assistance to workers and employers,” said Wage and Hour Division Administrator Cheryl Stanton. “As the economy continues to recover, it may be more important than ever that we provide clarity to ensure workers are paid all the wages they have legally earned, and that employers compete on a level playing field.”

Notes

• Opinion Letter: An official, written opinion by the Department’s Wage and Hour Division (WHD) on how a particular law applies in specific circumstances presented by the person or entity that requested the letter.
• Opinion Letters to Date: The Wage and Hour Division has now issued 69 opinion letters since Jan. 20, 2017.
• Editor’s Note: The Biden Administration is expected to stop the issuance of Opinion Letters as almost all preceding Democrat controlled Wage-Hour Divisions have done. Democrats typically explain that Opinion Letters serve only to clarify the FLSA in ways favorable to employers. This position has historically been controversial since it then casts the WHD as a partisan agency favoring only workers as opposed to operating as a neutral enforcement agency interpreting and applying the FLSA with a blind eye as to who benefits or loses.

Tuesday, December 1, 2020: Reminder: Transgender Now Protected Under Title VII

The Equal Employment Opportunity Commission (EEOC) announced a $250,000 settlement with R.G. & G.R. Harris Funeral Homes Inc. This was the case that went to the SCOTUS. The case involved a transgender female, employed as a funeral director, who claimed that her employer terminated her after informing them that she would be transitioning from a biological male to a female.

The settlement is particularly significant since the EEOC’s case on behalf of Ms. Stephens was one of the three before the SCOTUS which interpreted LGBT status under Title VII’s protection of “sex.” The case had been in limbo since 2018 when the Sixth Circuit reversed the District Courts’ opinion in favor of Ms. Stephens

See our previous story on Monday, June 15, 2020: BREAKING NEWS: Supreme Court Rules LGBT Employees are Protected from Discrimination on the Basis of Sex Under Title VII.

Wednesday, December 2, 2020: EEOC Released a Savvy New Employment Data Tool

The EEOC announced a new interactive tool that allows users to explore and compare EEO-1 employment data trends across several categories, including location, sex, race and ethnicity, and industry sector. Currently, data from 2017 and 2018 are available. The EEOC has historically made these data available on its website. This tool is intended to make access easier, allow data aggregations at smaller levels of resolution (counties, for example), and allow for graphics depicting data tabulations.

“EEOC Explore” is a data query and mapping tool that gives users access to the most current, granular, and privacy protected aggregated EEO-1 data publicly available. It allows users to analyze aggregate data associated with more than 56 million employees and 73,000 employers nationwide. The tool also allows users to dive down to county-level details, surpassing the previously available static tabular format available on the EEOC’s public website.

“The new mapping tool makes tracking employment trends as simple as a few clicks, particularly for those analyzing job patterns for minorities and women in private industry,” said Dr. Chris Haffer, EEOC’s Chief Data Officer. “Through its convenient filters, users now have access to privacy protected aggregate data at multiple layers of geography and can download the data for their own analyses.”

EEOC collaborated with NORC at the University of Chicago as part of the EEOC’s Data and Analytics Modernization Program led by the EEOC’s Office of Enterprise Data and Analytics (OEDA) to create “EEOC Explore.”

Thursday, December 3, 2020: New TAG for Small Contractors

OFCCP announced its latest Technical Assistance Guide (TAG). This 44-page TAG is for “small contractors.” Although the Agency does not have a threshold that defines a “small contractor,” it states that it has considered a contractor’s size when developing many of its requirements. It is important to note that this Guide serves BOTH supply and service and construction contractors (unless otherwise indicated in the Guide).

In essence, this Guide is a combined and abridged version of the 158-page Supply and Service TAG and the 157-page Construction Contractors TAG, issued November 3, 2020, and November 13, 2019, respectively.

Thursday, December 3, 2020: OFCCP Concedes to Oracle

OFCCP Director Craig Leen issued a statement to announce that OFCCP was not appealing its loss in the Oracle compensation case. The statement is important, however, because Director Leen reported that OFCCP has also decided to change is compensation investigation practices to conform to the Title VII law principals that OFCCP had violated or ignored in the Oracle audit and in the ensuing litigation. While Director Leen’s statement is not binding on OFCCP, contractors facing OFCCP audits which vary from the Title VII principals the Court enunciated in the Oracle case will nonetheless certainly want to point out to OFCCP that it must cease any further such departures from Title VII in deference to the instructions of Director Leen. Here are the critical outtakes from Director Leen’s short announcement:

“After nearly four years of litigation and investing extensive resources, the Department of Labor has determined not to appeal the 278-page Recommended Decision and Order of the Administrative Law Judge in OFCCP v. Oracle America.”

 

“The ALJ held a nine-day trial and based much of his opinion on credibility findings and a lack of supporting qualitative evidence. The Solicitor of Labor and I have decided not to pursue the case further because we believe the likelihood of prevailing on appeal is low and because OFCCP no longer evaluates compensation in the manner rejected by the ALJ in this case. Instead, OFCCP will learn from the decision in an effort to continue improving the efficacy of its critically important compensation program.”

 

“In conjunction with the Department’s decision not to appeal, Oracle has agreed to dismiss Oracle America, Inc. v. U.S. Department of Labor, a civil action in the U.S. District Court for the District of Columbia that challenged OFCCP’s enforcement authority.”

 

“OFCCP will also administratively close the pending audits for Oracle establishments started before the OFCCP v. Oracle America case but will continue other existing audits.”

Friday, December 4, 2020: November Employment Situation Shows Steady Improvement As Unemployment Drops To 6.7%

As stated by U.S. Secretary of Labor Eugene Scalia, “The economy continued to add jobs in November, with a 344,000 increase in private-sector payrolls and labor demand continuing to grow in most sectors. However, jobs were lost in retail and food and beverage establishments in November, and a number of workers pulled away from the labor force amid rising coronavirus cases. We know from State-by-State data released two weeks ago that the employment situation varies significantly by State: in October, half the States were at 6% unemployment or lower, but two states—California and New York—were substantially above 9% that month. At 6.7%, the unemployment rate is lower than it was for the first five years of the last Administration following the Great Recession.”

Blacks and women showed the greatest improvement in employment, with women again enjoying the lowest percentage of unemployment among all groups reported. The employment of Veterans and Individuals with Disabilities went backwards in November as their percentages of unemployment increased significantly.

Monday, December 7, 2020: Remembering Pearl Harbor

Each year in the United States, National Pearl Harbor Remembrance Day honors all those who lost their lives when Japan attacked Pearl Harbor on December 7, 1941. It was a Sunday morning, and many military personnel had been given passes to attend religious services off base. At 7:02 a.m., two radar operators spotted large groups of aircraft in flight toward the island from the north, but, with a flight of B-17s expected from the United States at that time, officials told the operators not to sound an alarm. More than 3,500 Americans lost their lives or were wounded on that solemn day.

The day marked a turn in the United States’ position regarding involvement in World War II. The Japanese attack damaged several battleships, permanently sinking both the USS Arizona and USS Oklahoma. Still, others capsized, taking crew members with them. One noted ship was the USS Utah. Along with naval vessels, the attack destroyed aircraft, too. As a result, the attack forced the U.S. into a war that had been raging for two years.

On August 23, 1994, the United States Congress by Public Law 103-308, designated December 7th, of each year, as National Pearl Harbor Remembrance Day.

Today, Pearl Harbor offers several sites in memory of those who served during the bombing. The Pearl Harbor National Memorial dedicates sites in memory of the crews lost on December 7th, 1941. For many of the USS Utah, USS Arizona, and USS Oklahoma crew, Pearl Harbor is their final resting place. The memorials serve as a place of honor to those service members lost during the attack. They also provide a moving reminder of the loss war causes.

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.