Season 4 • Episode 6

After months of quiet, government agencies are gearing up for budgetary and policy changes affecting EEO, DEI, and OFCCP efforts. Tune in to this episode as Candee Chambers and employment law expert John C. Fox share their HR guide for 2023, outlining everything federal contractors need to be mindful of in the coming year.

Subscribe

AppleSpotifyGoogleStitcheriHeartRadioStitcherTuneInOvercastPocket CastsCastroCastboxPodchaserRSS Feed

…or your preferred Podcast provider

About DE Talk

For DirectEmployers, it’s all about valuable connections and meaningful conversations. This monthly podcast features honest and open dialogue between powerhouse industry experts on a variety of HR topics ranging from OFCCP compliance advice to emerging recruitment marketing trends, diversity and inclusion initiatives, and insightful solutions that help infuse new life into your HR strategies.

Hosted by Candee Chambers, Executive Director of DirectEmployers Association.

Episode Guest

John C. Fox

President and Partner at Fox, Wang & Morgan P.C. 

John C. Fox, Esq. is President and 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 six 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.

Episode Transcript

Candee Chambers:

Get ready, the DE Talk Podcast starts now. Insightful conversations and dialogue, helping you put the human factor back in HR.

After months of quiet, government agencies have advanced many policies federal government contractors need to be aware of and, in some cases, even move timelines forward instead of delays. As federal contractors grapple with what’s to come, the adjustments that need to be made and how to tackle these new challenges internally, we’ll discuss practical policies and practices to adopt in 2023 as you tiptoe through the minefield of regulations and laws.

Welcome to the DE Talk Podcast. I’m Candee Chambers with DirectEmployers Association and I have the pleasure today of welcoming employment law expert John C. Fox of Fox, Wang & Morgan back to the podcast. We’ll be covering a lot of ground today as we discuss what EEO, DENI and OFCCP policy initiatives well-intentioned federal government contractors should implement for 2023 given the push-pull of anti-discrimination laws that protect Whites, Asians and men in addition to traditionally underrepresented African-Americans, Hispanics, Native Americans, Hawaiians, Pacific Islanders and women. So, let’s dive in. Where would you like to start, John? Wow, we’ve got a whole litany of things we could talk about today.

John C. Fox:

Oh, we certainly do, Candee, and glad to be here. I suggest we start off with the new challenges that the Biden administration faces with a split Congress, although a little bit more power for the President in the Senate, but with a sure blocker in the House, the House of Representatives. It seems like it’s getting more and more extreme all the time and there’s going to be just nothing but fights.

Candee Chambers:

Oh, exactly and there’s bipartisan issues in some of the agencies as well. But the one thing that I’ve noticed during 2022, and I think we’re going to see in 2023 is, and I’ve learned a lot from you, they seem to have forgotten all about the Administrator Procedure Act. They seem to ignore it and just slam their ideas forward and then end up getting caught in the background.

John C. Fox:

Well, what happened in 2022 was that the president was able to pass fewer than half of the total number of statutes through the Congress that went through in the Trump administration. Now, with the House having absolute veto power of any legislation, it’s going to be much, much tougher. And so, what that does, as you saw last year and what you’re commenting on, is that the president will now drive his policy agenda necessarily through the federal agencies and they’re going to be stealing first base as I call it.

Candee Chambers:

Oh, yeah.

John C. Fox:

I hate the dreaded sports analogy but, in baseball, you can’t steal first base. But if the batter were to drop his bat and run down to first base and stand on it, what you are left to do if you’re the other team is to oppose that goal for the umpire to throw that batter off of first base and that’s what the agencies are doing beginning last year, pretty noticeably, and I predict will be the tenor of 2023. They’re going to say, “We’re doing this, you sue us to stop it, federal contractors, employers.”

Candee Chambers:

Exactly. Yeah, that’s what I think is happening. By the way, kind of interesting, what do you think about Secretary of Labor Walsh implementing Scalia’s order in the Department of Labor and basically reversing ARB decisions? What do you think about that?

John C. Fox:

Well, I think it’s perfectly lawful to do. The administrative review board was set up in 1996 by Secretary Reich in the Clinton administration because the secretary, for decades, had been the administrative court of last resort for all of the many hundreds of statutes that roll up with appellate rights to the Secretary of Labor and they were about a decade behind. And so, he set up this board with three members that have quickly expanded to five to deal with the workload and so the secretary is the one that actually has the authority, he has delegated it to the ARB.

So, with great controversy, the Democrats attacked Scalia, the community interest groups attacked Scalia for reserving the right to overrule what was then a Democrat dominated ARB and Secretary Scalia never used that authority, interestingly enough.

Candee Chambers:

I was just going to say … No, Secretary Walsh has done it twice.

John C. Fox:

But Walsh has done it twice. And as to OFCCP cases, including one where the administrative law judge had found sweeping evidence of unlawful discrimination but he wanted an even further remedy that the ALJ had ordered and the ARB had affirmed. So, you basically have lots of layers of review and the takeaway for contractors is you have to factor that into your budget and into your risk analysis and then timeline of what’s going to happen with your case.

Candee Chambers:

And if you go to litigation, maybe not a good idea.

John C. Fox:

Well, you’re going to have to go through another layer to get to the federal district court. A lot of times I relish the opportunity to get out of the administrative forum and get to real Article III judges that are much more focused on the law and less on the equities. And we know in the administrative law judge ranks, they come of three stripes. There are those who are OFCCP lovers and the OFCCP is always going to win a hundred times out of a hundred and then there’s the three of them that are contractor lovers and then there’s three of them that are neutral Switzerland. So, boy, getting the right judge makes the difference in the decision administratively.

And you hate to say that, you hate to think that that’s the way the world works but that’s, unfortunately, the way the world works. When you get to a federal court, it’s much, much more attentive to the law Republican-appointed or Democrat-appointed judges.

Candee Chambers:

Which is the way the justice system should be. And for people who are not part of that area of life or introduced into that situation, even if they’re a government contractor and you’ve never been through litigation, that’s what we all expect is to have justice served.

John C. Fox:

Well, the rule of law is a big issue with lots of different tentacles on it and that’s what we were really just talking about as to the deviation away from the Administrative Procedure Act. Because the Administrative Procedure Act was written by the Congress to compel the federal agencies to go through a formal process that would allow transparency to the public and allow public comment to make these rules better and not have holes or gaps or confusions that don’t apply crisply to the private sector. So, avoiding the APA process is, not only unlawful, but it usually makes for poor rulemaking or practices.

Candee Chambers:

So, interesting, you made the comment about the House of Representatives but now the Senate has a lot easier time to push things through but there, again, is going to be a division for political nominees, that should be easy and we’ll talk about that in a minute. But what do you think, we just talked about this in our weekend review yesterday, what do you think about Title VII in religion and the LGBTQ demographic? What’s going to happen there?

John C. Fox:

Well, one of the places you will see rulemaking is where the Biden administration wants to reverse a Trump rule because they have no other choice but to remove that rule through a formal rulemaking. And that’s what you saw our report yesterday talk about nine agencies led by the Department of Labor interpreting Title VII or those statutes that these other agencies enforced that borrow and apply Title VII standards like OFCCP as to executive order 11246, for example, and recognizing that, since the Bostock decision in the Supreme Court, now almost three years ago, where Title VII now protects sexual orientation and gender identity, that Title VII became a statute divided against itself.

Candee Chambers:

Yeah, and that’s going to be interesting to see what happens.

John C. Fox:

It both protects sexual orientation and gender identity but it also protects the rights of companies and employees to not be discriminated against because of their religion. So, now, where you have a religious, sincerely held belief that sexual orientation or gender identity offends their religion, now which one trumps?

Candee Chambers:

Exactly. And as we’ve seen with McCarthy becoming the speaker of the house with the far right even arguing that point and then you see the Democrats and the left basically arguing that religion and LGBT demographic, that’s going to be, I think, big news this year, don’t you?

John C. Fox:

Oh, absolutely. And in the Trump administration, they resolved this issue by issuing rules, formal APA rules that said that Title VII was going to exalt religious freedoms over sexual orientation and gender identity. So, what the proposed Biden administration rule is to flip that and to have sexual orientation and gender identity trump the religious objection because several statute, excuse me, several courts have interpreted Title VII statute to say that, where there’s a statutory protection, then the religious right embodied in the statute does not apply and the statutory protection for SO and GI prevails.

Candee Chambers:

Well, I think you remember me saying a few years ago, when Bostock went to the Supreme Court, just on a personal level, I don’t think that it’s appropriate for anyone to be discriminated against it. I don’t think that they can say that it’s okay for anyone to be discriminated against, that’s a better way of saying it. I think that’s a problem.

John C. Fox:

Well, the Congress really needs to straighten out Title VII on this.

Candee Chambers:

I wholeheartedly agree.

John C. Fox:

I’m not sure that the EEOC or the OFCCP or the nine agencies that have formulated this rule have legal authority to decide how the Congress wants to balance this issue. Now, the other thing to keep in mind, Candee, as you look at this issue holistically, and it’s very complex legally and it’s very socially and culturally charged, of course, as well and difficult for everybody on all sides of the table, is that there are two other sources of law that intersect this issue. One is the Religious Reformation Act of 1990 that gave statutory rights to religious entities passed by a Democratic house, passed by a Democrat Senate and passed by and signed into law by President Clinton. So, you see that this is not so much a political issue as much as it is a social and cultural issue.

Candee Chambers:

Yeah, I-

John C. Fox:

And then the other thing is the Constitution. The First Amendment has a constitutional right and one of the difficulties for everybody with this issue is that constitutional rights trump statutory rights. The courts will always try to not get to the constitutional issues if they can decide the case on these lesser grounds of statutory entitlement. But ultimately, if it comes to a clash between a constitutional right and a statutory right, the constitutional right is always paramount, it’s always number one.

Candee Chambers:

Well, I think though that we’ve seen, over the last couple of years, there are a lot of things that do need to be updated too. My point previously, there were a lot of situations in our past where it was, quote, and I’m doing air quotes for people that have no idea, it was okay to discriminate, look at women. Obviously, African-Americans over the years but even women were discriminated against and, quote, that was lawful. So, I think there’s a lot of things that need to be updated but we could talk for two hours about that so I’m going to move on.

But one of the things that I know you and I talked about and we even commented in our weekend review with the Democrat controlled Senate now, with the midterm elections, President Biden’s political nominees or political appointees will now go through without any trouble. I think Kalpana Kotagal is one that kept the EEOC from having a democratic majority. The Republican commissioners could actually block some of the things that the Democrats wanted to move forward and now they’re going to be the underdog. Now they’re only going to have two Republicans and three Democrats and so a lot of things will be moving forward, i.e. component two.

John C. Fox:

So, let me go back and set the stage on this nomination issue. For nominees, whether they’re judges or federal political appointees, the Senate only needs to pass it by a majority vote, so 50 plus one. They now have 48 Democrat senators, they have three independents-

Candee Chambers:

Independents that caucus with the-

John C. Fox:

… who caucus with the Democrats so that counts as 51 Democrat votes, although two of those Democrats have voted more often with Trump than with-

Candee Chambers:

It’s going to be interesting though.

John C. Fox:

… the Democrats.

Candee Chambers:

But vice president-

John C. Fox:

So, that’s a very weak issue for a lot of the president’s policy initiatives. You’ve got some liberal Republicans though who, from time to time, vote with the Democrats depending on the issue. But as to nominees, this should slide through much, much more easily because this change in the Senate also affected the committees.

Candee Chambers:

Oh, yeah.

John C. Fox:

And so, the committees are now eight Democrats and seven Republicans so they can-

Candee Chambers:

So, they’ll more easily get through a committee, yeah.

John C. Fox:

They can get them out of committee, they can get them into the Senate and, with 51 total Democrat votes, the President can afford to lose one Democrat.

Candee Chambers:

Exactly.

John C. Fox:

So, to have 50 and then Kamala Harris, as the president of the Senate, can cast the tiebreaker vote and get the 51 needed to move through. That’s not to say, however, that the Republicans cannot stall the nominees as you saw the Democrats very successfully do in the Trump administration-

Candee Chambers:

Exactly.

John C. Fox:

… and Trump ended up with only about half of his nominees. He put his emphasis on getting judges through and ignored a lot of his nominees and so a lot of agency senior political officials jobs were left vacant.

Candee Chambers:

Well, was it Karla Gilbride and, I think, Jessica Looman, they’ve already been renominated and I think Kalpana Kotagal has been renominated as well.

John C. Fox:

Correct, yeah.

Candee Chambers:

And so, they were sitting there for at least a year, if not longer, and now they’re already moved through or-

John C. Fox:

Well, Senate Majority Leader Chuck Schumer did not have the Democrat votes, he had Democrat senator opponents of those particular nominees. Had he had the votes, he would’ve moved them. The lack of votes stops the candidate. If he does have his 50 votes, he’s still going to face a lot of timing and procedural opposition from Republicans that they can deploy under Senate rules but it’s going to take about three days on average per nominee as opposed to just having a unanimous vote of the Senate to approve as it used to happen routinely.

Candee Chambers:

Oh, yeah.

John C. Fox:

Ronald Reagan had his entire political appointee apparatus, 2,500 people approved in the first 30 days.

Candee Chambers:

So, how long did it take you to get through a committee? You were a political appointee.

John C. Fox:

But I didn’t have to go with a committee.

Candee Chambers:

Oh, that’s right.

John C. Fox:

We put me into a-

Candee Chambers:

Because of that Employment Standards Board. Is that what it is?

John C. Fox:

We had the Employment Standards Administration in between. They still don’t think that OFCCP has to go through advice and consent of the Senate, I believe that is wrong. Since they abolished the Employment Standards Administration in the Obama administration, I now think that the OFCCP director-

Candee Chambers:

They should, yeah.

John C. Fox:

… is a direct report of the Secretary of Labor and should be subject to advice and consent of the Senate.

Candee Chambers:

We didn’t have that as part of our notes, I just decided I’d throw that in.

John C. Fox:

Right. Well, the other part of this though is that, as to Ms. Kotagal, her nomination is very important to the EEOC.

Candee Chambers:

Oh, I know.

John C. Fox:

Because when she gets over there, and she will, unless there are two Democrat senators who are going to stand up and oppose her, then the EEOC, a bipartisan commission, will have three Democrats and two Republicans as you were just saying. And so, now, you will see, for the first time, somewhere, I predict, around March or April of this year, when I think that timing would allow Kotagal to get through the process, you will see for the first time in the Biden administration policy coming out of the EOC. Previously, when the Republicans controlled three but the president got to appoint the chair that runs everything administratively, comma, including the important right to administratively call a vote of the commission and you noticed that Chair Burrows did not do so.

Candee Chambers:

Oh, I know.

John C. Fox:

Because if she had called for a commission meeting, they could move things through that three, two that she wouldn’t want so they were stuck. You have to think about it like volleyball. In volleyball, you only score points when you’re serving.

Candee Chambers:

When you’re serving, right.

John C. Fox:

So, the Democrats were serving but they didn’t have the number of bodies to win, they didn’t have three. The Republicans had three but they could only block, they weren’t serving.

Candee Chambers:

Yeah, they couldn’t serving.

John C. Fox:

So, they couldn’t get any policy through. Now, unfortunately, there was a lot of places that the commission could have had bipartisan support. Bipartisan activity is not unknown. In the legislature in 2022, 95% of the bills that were passed were totally bipartisan.

Candee Chambers:

Well, and I think that’s what the constituency wants. There really aren’t that many people that are far right or far left, they want people to play well in the same sandbox. But to that point, I mentioned the EEO-1 component two and Jocelyn Samuels, the vice chair, I remember saying at one point, I think, last year is that, if that comes out, you need to make sure that you get some comments out there immediately and you know that DirectEmployers does that on behalf of our members and I think that’s something that every organization needs to comment about. Because I think even the California pay reporting has been proven to not really provide the information that they were hoping to gather from that and it’s a lot of additional work for nothing.

John C. Fox:

Well, two things. We are going to see component two wage and paid data reporting come back to life again, the horror of the employer community. The timing of that I think is in part administrative to get Kotagal through, the EEOC is locked and loaded, ready to issue the policy, they know what the mechanics and details are. They will seek comment and that process has to go forward but there’s also a political component to it because this is about the women’s vote. Politicians don’t care about equity, women, men, pay, it means nothing to them but what means to them, something is power and-

Candee Chambers:

And where the votes are going to come from.

John C. Fox:

The President has signaled very strongly in the last three weeks that he is running again in 2024. Number two, as part of that, he has signaled very forcefully in the semi-annual regulatory agenda that he wants the agencies to move up into 2023 all of their rule making and he has expedited, which you almost never see in the last 30 years, the issuance dates of federal regulations because he doesn’t want these to be spilling over into 2024.

Candee Chambers:

When they’re preparing for the elections, yup.

John C. Fox:

For the November 2024 presidential election. Usually, there’s a shutdown period when the agencies are instructed to go silent in every administration, Republican or Democrat. Usually, that was around April, May you saw it. In the Trump administration, shut down around April. I believe that the Biden White House will shut things down as early as March of 2024 because the election, the last two rounds, have been the tightest in history, both his presidential election and in these midterms and, as a result, they don’t want to risk anything. But this issue of component two is one that they may want to have come out closer to the election because they think it’s a vote that will attract women.

Candee Chambers:

Women. I just have to throw this out there though. I’ve done affirmative action for years and, when I first started doing, we would send in aggregate compensation data and then they switched it to individualized compensation data because the aggregated data didn’t show them anything. Then they wanted individual data and now they’re going back to let’s do this EEO-1 component two in aggregate form.

John C. Fox:

Well, that was my second comment about this component two. The entire employer community unanimously, I don’t think there was a single dissenting voice, thought that the component two hours worked and pay data we turned in was, A, worthless, it wasn’t going to help advance the cause of pay equity one little bit.

Candee Chambers:

No.

John C. Fox:

And two, it was extremely expensive, extremely burdensome so why do this useless thing. We have found that with the California Pay Initiative, it hasn’t told us anything, it’s not useful for the enforcement agencies because it was heavily modeled on the federal model.

Candee Chambers:

Yeah, exactly.

John C. Fox:

So, now the question is going to be, are they going to come up with something useful? Oh, and by the way, in the first round of component two, most of the OFCCP senior career officials agreed it was a worthless exercise. It was politically motivated, had great political mileage around it but it didn’t help them at all. In fact, this administration has gone back and pulled out those data to see what it might tell them and, of course, what you’ve seen is silence.

Candee Chambers:

Nothing, yeah.

John C. Fox:

Because there is nothing to be gained from those data.

Candee Chambers:

I’m all for figuring out how we can have greater similarity in pay but we need to stop comparing apples to oranges. And don’t get me started but I think that there’s got to be a better way for that to move forward and to get people to feel good about trying to come up with a solution and I think it is a long way from that point right now. So, anyway, let’s talk about the budget. I noticed on the news this morning the debt limit, that’s the latest news and I think tomorrow’s the 19th and so they’re going to run out of money tomorrow, right?

John C. Fox:

Technically.

Candee Chambers:

They’ve raised the date limit or debt limit, I can talk, the debt limit. I forget how many times they said, I wanted to remember and I was doing several different things, 73 times or something, some ridiculous number. What’s going to happen? What do you think?

John C. Fox:

Well, we technically run out of money as a government tomorrow says Secretary of the Treasury Yellen.

Candee Chambers:

So, we just print more?

John C. Fox:

But last Friday, when she testified before Congress, she invoked something called emergency measures and that has many different tentacles but she will start delaying the expenditure of federal resources and can probably get to June, is the Treasury Department’s estimate, before they run out of money in fact and default on paying back bonds and debts. But they can furlough federal employees and that will probably happen if the Republicans and the Democrats don’t get here. They will start, by the way, in order of the least important to the security and safety of the nation. So, the armed services are going to be the last to be furloughed, they will probably never, ever be furloughed given the tensions in the world. Then Department of Health and… or excuse me-

Candee Chambers:

Or Homeland Security.

John C. Fox:

… Homeland Security, then HSS because it goes to the security of our health system. But EEOC and OFCCP are agencies that, among many others, will be vulnerable to furloughs if it comes to that but I think everybody’s going to work very hard on both sides of the aisle to delay that. And the treasury secretary can delay payment of government contractors, which would be a bad thing, it could be a byproduct of this.

Candee Chambers:

Oh, yeah, exactly.

John C. Fox:

And it’s probably something that the Democrats will think about as a way to get the business community behind raising that net ceiling to allow the spending that has already gone forward-

Candee Chambers:

I never even thought about that.

John C. Fox:

… and to allow more spending. One of the oddities is, bad for Republicans, is that prior presidents Trump and Obama and now President Biden, they’ve authorized and signed bills into law that will cause more spending than there is available money to pay. So, they’ve got to raise the debt ceiling or they’ve got to do a tremendous budget cut. Of course, the House Republicans say cut the budget way back, find the money that you need for the future through savings on the budget, don’t authorize just a never ending printing press.

Candee Chambers:

Well, isn’t that what we’re all supposed to do is balance our budget? For a company, for our own individual expenditures, I don’t spend more than I make.

John C. Fox:

Well, I remember when we had a crisis in Washington in 1981 when we hit for the first time a trillion dollars and people were catatonic. It’s what led, by the way, to the passage of the ADA. The ADA was not something that anybody wanted to pass to help the disabled community. If you go back and read the legislative history, they were very blunt, it’s unfortunate to look back in retrospect and see this candor. But the stated purpose, and this is why Republicans passed the bill when no other labor bills had passed for the prior three years, was because it was a debt reduction act to move off of the federal payrolls and the federal cost centers about $286 million the GAO estimated at the time. A fourth of a trillion dollars would be pushed onto the shoulders of employers, it was thought, and onto the shoulders of the states and relieve the federal government of a fourth of their debt.

Candee Chambers:

I don’t know how you just whipped those numbers out of your head, what, 40 some years later?

John C. Fox:

Well, it was pretty startling, yeah, when I read the ADA and I was very active in it at that point. But the point of the story is, now that we hit 20 trillion in 2017 and caused President Trump to just go catatonic, and now here we are, six years later, hitting up against $31.3 trillion.

Candee Chambers:

That’s insane, that’s insane.

John C. Fox:

That’s the second highest debt we’ve ever had. You have to go back to World War II and equalize the dollars from then to now to see that we have more debt then. But we are now about a year and a half of our annual gross domestic product in debt.

Candee Chambers:

Oh, I know. When I heard that, I about went catatonic myself. So, what do you going to happen with the OFCCP? They’re not doing many audits, although they put out a compensation directive that, I have to admit, doesn’t really make a whole lot of sense to me. They cite 41 CFR 60-2.17(b)(3) but they say that they are allowed to or that contractors are required to do extensive evaluations of compensation. Well, I’m not reading that. And then they say that you have to provide the documentation based on 210 and that’s basically a record type keeping issue and it’s the very last sentence in 210 or 2.10 and it blows my mind.

And I consider myself somewhat intelligent and they started asking for different types of compensation analyses that I can guarantee you the average contractor isn’t doing. Comp ratio, I’m familiar with that, cohort analysis, obviously, regression analyses but some of the stuff they were talking about is Greek to a lot of people, I guarantee it.

John C. Fox:

So, let me start at 30,000 feet here. Because you notice that the EEOC publishes every five years its strategic business plan, it publishes annually its strategic enforcement plan, a separate document. The OFCCP does not publish its strategic plan. Senior officers at OFCCP know what they’re doing, they have a plan that they amend from time to time in their minds and their discussions but it has changed dramatically and it’s driven by two forces, there’s two drivers.

The first is budget considerations that form increasingly, in the last 10 years, the strategic plan for OFCCP. They have not been treated well by the Congress, Democrats and Republicans, they have stair stepped down since the first year of the Obama administration through a 100% Democrat Congress, House, Senate, White House and they stepped down further in the Trump administration, they stepped down in the Biden administration. They are now stable with this year’s big, big, big budget that landed but that means that they just don’t have to fire anybody, they don’t have to lose any heads. They’re going to be stable at about four, two, zero, 420 employees are authorized. They are routinely higher than that because they have about a 25% turnover, unfortunately, of their new hires these days. So, you got to hire a lot more just to stay even, you need to be around 450-

Candee Chambers:

Right, exactly, yeah.

John C. Fox:

… just to hold 420. By the end of the year, you’ve lost a hundred people. But the second thing that drives is their policy considerations. And what you’ve seen, because of the budget constriction and their difficulty driving forward, the OFCCP just day in and day out operationally, audits have dropped to record lows for the third year in a row. Collections are falling from back pay dramatically from prior years.

Candee Chambers:

Oh, I just heard yesterday a couple of our members saying that they submitted information last May and have not heard the first thing from a compliance officer.

John C. Fox:

Well, part of that’s budget driven, part of that is the morale problem. It’s always had a morale problem.

Candee Chambers:

Maybe the compliance officer isn’t even there any longer. That could be it too.

John C. Fox:

You’re seeing offices shrink, you’re going to see offices disappear this year. They are slowly, quietly, this is part of a strategic plan that’s not announced or publicized, they are shrinking this agency down from the 72 offices that used to be there when I was helping to run OFCCP to what is now fewer than 40, four, zero, depending on how you account offices. And a lot of them don’t have managers, they have remote managers beyond just the field stations which is a place that never had managers. Alaska, Guam, that kind of thing. But the point of this is that they’re migrating, I believe, intelligently to a point where they will be working remote.

Four years ago, I gave a major presentation at a national convention of federal contractors suggesting that OFCCP should really be one or two locations. There’s no reason to have brick and mortar stores anymore since they can audit remote, they have proved that in the COVID-19 pandemic where they all went remote for the better part of two years. So, that’s where they’re going but they’re not announcing that because it’s very politically sensitive.

Candee Chambers:

Oh, yeah, yeah.

John C. Fox:

The union fights at every step of the way, Congressmen don’t like to see brick and mortar federal establishments disappearing from their tax base. They don’t like any of that but that’s where it’s going. You’re going to see a lot of disruption, contractors are going to see a lot of delays in the audits. The running time on audits is sometimes six, eight years now.

Candee Chambers:

So, you mentioned an interesting point when you talked about budgets and furloughs and things like that and the EEOC and OFCCP might be likely contenders for furloughs and that sort of thing. What is your opinion on the similarities and the work that they’re doing together? The OFCCP I saw on the federal register just yesterday so we’ll have it in our weekend review next week but information about what they’ll do with complaints in the OFCCP. We’ve talked about them not normally being ones that focused on complaints but that’s normally an EEOC thing and I’ve seen, last year, the regional EEOC offices putting together webinars on how to develop an affirmative action plan. There’s so much overlap. And over the last five or so many years, they had talked about the OFCCP and EEOC combining. You don’t hear that anymore but you see all of these things that they’re doing together.

John C. Fox:

They’re just running in parallel.

Candee Chambers:

Yeah, why?

John C. Fox:

It’s like teamsters hooked to a wagon pulling the wagon together. President Carter laid down the rule set in 1978 when he created the currently known OFCCP, previously to that, known as OFCC.

Candee Chambers:

OFCC, right.

John C. Fox:

But he consolidated all these agencies and he designed the mission of OFCCP to be systemic discrimination and working with federal contractors to ensure against discrimination through the vehicle of affirmative action plans. By the way, a lot of people think affirmative action is different from discrimination, they’re two different beasts to a Harvard case that we’re going to see because what really you need to think about it is that affirmative action is to, as the executive order says in its second sentence, to ensure-

Candee Chambers:

Ensure.

John C. Fox:

… E-N-S-U-R-E non-discrimination to make the federal contractor be proactive. That’s what’s different than being a Title VII employer where you just receive inbound complaints. But in so stating, what he did was to remove all of the complaint jurisdiction from OFCCP and send it over to the EEOC other than the VEVRAA complaints because the EEOC doesn’t handle VEVRAA authority.

Candee Chambers:

Doesn’t handle responsibility, exactly.

John C. Fox:

But the 503 complaint could come in-

Candee Chambers:

EEOC, yeah.

John C. Fox:

… but most of them were pushed over to the ADA within federal resources.

Candee Chambers:

And the OFCCP and the EEOC have an MOU and, yeah, so I just don’t get all this.

John C. Fox:

So, the Trump administration-

Candee Chambers:

And I’m not the only one, by the way.

John C. Fox:

… issued a new MOU to formalize what the Obama administration had been doing secretly and quietly in violation of the MOU from 2011 by taking in individual complaints because the Obama guys wanted to have those sexual orientation and transgender complaints that their regulations authorized them to prosecute even though the EEOC could not intake those under their Title VII authority, not until years later with the Bostock decision.

So, we now see with Jenny Yang, a former EEOC chair and former EEOC commissioner, further homogenizing the two and having the two run parallel and she’s now homogenizing the complaint process at OFCCP which used to be 300 a year under VEVRAA. It’s now swollen to over 2,000 a year since they’ve begun to open the door and, by the way, that’s why audits are going to continue to shrink as that complaint inventory goes up. The EEOC routinely gets 60 to 90,000 complaints a year depending on the economy.

Candee Chambers:

Oh, I know.

John C. Fox:

If OFCCP started getting into the complaint business, it could swamp the boat and just take all the resources because their regs say that they must investigate.

Candee Chambers:

Exactly.

John C. Fox:

The EEOC doesn’t have to but the OFCCP must-

Candee Chambers:

They must.

John C. Fox:

… investigate every complaint that is jurisdictional to them.

Candee Chambers:

So, maybe they’ll limit their work, not limit, but focus their work on complaints. And they’ve been talking about targeting contractors so maybe they’re going to focus on compensation. They want to focus on the bad actors in the contractor community and maybe that’s why they’re really focusing their-

John C. Fox:

Complaints are a bad way to go though, Candee. Historically and currently, at the EEOC and the OFCCP, over 80%, it’s usually around 81, 82% of all complaints, the charges at the EEOC, complaints that the OFCCP receive are found to lack probable cause to believe a violation of the statute existed.

Candee Chambers:

Right. No, well, where I was going though was they’re going to focus and target contractors with compensation because they’re really livening up their compensation focus. And now, with the order that Secretary of Labor Walsh is freely using, if a contractor argues back, they’re really not going to have much of an opportunity to win.

John C. Fox:

Yeah, there’ll be a political response at the time.

Candee Chambers:

Yeah, exactly.

John C. Fox:

Well, I agree with you, Candee, that the business plan for OFCCP has also changed away from enforcement, in part because of the budget, but also because Democrats like to leave legacy architecture behind. Republicans just like to be good stewards when they’re running the OFCCP, they don’t like to change things too much, typically. That was a little bit different with the Trump administration where they got a little bit more aggressive on a number of issues. But typically, the Democrats want to leave architecture, they want to leave rules for their successors to have to be bound by.

And so, they have changed their emphasis and their focus away from enforcement to building rules. It’s going to be a very active spring, for example, for federal contractors because major rules on 60-2, affirmative action plans, what they look like, the first time we’ve looked at those issues since 1999 when it became-

Candee Chambers:

And they’re going to firm up information on 2.17(b)(3). You know they’re going to-

John C. Fox:

Yeah, that’s part of the affirmative action plan.

Candee Chambers:

Exactly, yup.

John C. Fox:

Other things you got to do, that’s where your-

Candee Chambers:

They’re going to firm that up a lot.

John C. Fox:

… action-oriented programs, your self-audits, self-evaluations. We haven’t looked at any of this since 2000.

Candee Chambers:

And a lot of it, like I said, a lot of things do need to be updated, I think that’s where government contractors really do need to make sure their voice is heard. So, all right. Well, given that all we’ve reported in the OFCCP weekend review, we, as you just said, John, have identified numerous proposed changes coming down the pipeline in 2023 and especially as politicians gear up for the elections in 2024.

So, if you aren’t a current subscriber of the Weekend Review, we welcome you to subscribe to gain regulatory insights that you need to be aware of in the coming months. To do so, you can visit directemployers.org/subscribe and we’ll add you to our mailing list. It’s perfectly free and we have thousands of people from, I think, every country in the world is reading this. I always scratch my head and go, how did you hear about it but they did-

John C. Fox:

Yeah, I heard we had a 17% growth on what was already the number one blog in the EEO government contractor space.

Candee Chambers:

Yeah, yeah, it’s fun and it’s free. It’s not free to us, we kill ourselves each week but, anyway. So, John, thanks again for your insights, it’s always fun to talk with you about regulatory information. With so much transpiring in the contracting space, you’re obviously going to be really busy this year. DirectEmployers is here to assist. If you do have questions or need any assistance, don’t hesitate to contact either John or me and you can reach me by emailing compliance@directemployers.org or just Candee, C-A-N-D-E-E @directemployers.org. And John, what’s the best way for listeners to get in touch with you?

John C. Fox:

Oh, they can just put Fox, Wang & Morgan in their browser and it’ll find it. Wang is spelled W, A as in apple, N as in Nancy, G as in go, that’s always the hard one. Foxwangmorgan.com and there you are.

Candee Chambers:

All right. Well, John, thanks again. This is always a lot of fun. Really appreciate having you today.

John C. Fox:

Lovely to be here.

Candee Chambers:

Thank you for tuning in for another episode of the DE Talk Podcast. Stay connected with DirectEmployers on Facebook, Twitter and LinkedIn and subscribe to our emails by visiting DirectEmployers.org/subscribe to receive notifications of new episodes, webinars, events, and more.

Candee Chambers
Share This