OFCCP Week In Review: October 16, 2023

The DE 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 J. Chambers and Cynthia L. Hackerott. In today’s edition, they discuss:

• OFCCP Discrimination Enforcement Statistics Hit New Lows
• Unfair Labor Practices Charges, Union Petitions Rose in FY 2023, U.S. NLRB Reported
• In Brief
• New Publications
• Looking Ahead: Upcoming Date Reminders

Sunday, October 1, 2023: OFCCP Discrimination Enforcement Statistics Hit New Lows

As federal Fiscal Year 2024 began on October 1, Fiscal Year 2023 ended on a down note for OFCCP as its enforcement statistics went even lower than the previous year’s record low-performance results:

• only 29 discrimination law settlements known as “Conciliation Agreements” (“CAs”) worth a total through today (two weeks after the close of Fiscal Year 2023 on September 30) of only $9,779,529.79 in back pay by our calculations.

Note: OFCCP has yet to update its website database tracker of audit resolutions to report its FY 2023 enforcement data. See Notes at the end of this story.

• 15 Failure-To-Hire discrimination law violation settlements (OFCCP’s “bread and butter” discrimination claim) (52% of its total discrimination settlement agreements for FY 2023) worth $6,680,379.36 in backpay collections (68% of OFCCP’s backpay collections for FY 2023) for third-party beneficiaries to the government contractor’s contract with a federal Executive Branch agency
• 6 Compensation discrimination law violation settlements (21% of OFCCP’s discrimination CAs in FY 2023) worth $2,626,258.54 (27% of OFCCP’s back pay collections for FY 2023), although OFCCP would most likely count two more settlements, noted below, as “compensation” settlements but which do not involve the comparative pay of employees
• 1 contract violation settlement (OFCCP claims as a “compensation” violation involving an office cleaning company) worth $45,000 in back pay. Due to an internal payroll misunderstanding, the employer in error did not pay the wages it intended to pay but did so wholesale across an entire job classification without regard to race, sex, or any other protected status. OFCCP lacked jurisdiction (since the pay underpayment was not based on race, sex, color, or any protected status) but nonetheless insisted this was a “compensation” violation its audit had revealed. The contractor settled since it wanted to correct its pay error at any rate and to resolve OFCCP’s claim despite the agency’s lack of jurisdiction over the claim because the pay error was not based on a protected status
• 1 violation (worth $100,000 in backpay) for allegedly terminating an employee who inquired about the employer’s (Hospitality) pay practices (which OFCCP improperly characterizes as a “compensation” pay violation despite the fact that all compensation was properly paid)
• 4 disability (Section 503 claims) failure of reasonable accommodation settlements
• 1 Protected Veteran termination settlement worth $120,462.23 (SalesForce). Note: OFCCP lacks discrimination law authority pursuant to VEVRAA. (While OFCCP quietly altered its VEVRAA Rules in 2014 to rewrite them to state that VEVRAA prohibits discrimination based on a Protected Veteran’s status, the VEVRAA statute itself makes it only an “affirmative action” statute. Basic administrative law does not permit federal agencies to expand their Rules beyond Congress’ authorizing statute which the agencies are charged to faithfully implement, as written)
• 1 Protected Veteran termination settlement worth $13,455.18 (Sier Tek). Note: OFCCP lacks discrimination law authority pursuant to VEVRAA. (While OFCCP quietly altered its VEVRAA Rules in 2014 to rewrite them to state that VEVRAA prohibits discrimination based on a Protected Veteran’s status, VEVRAA makes it only an “affirmative action” statute. Basic administrative law does not permit federal agencies to expand their Rules beyond Congress’ authorizing statute which the agencies are charged to faithfully implement, as written)

OFCCP continues to stair step down in both (1) the number of backpay resolutions and (2) the value of backpay collections, despite increasing budgets and employee headcount increases:

The Number of OFCCP Discrimination Settlements is Declining

The Value of Backpay Collections is Declining

OFCCP also continued its recent pattern of concluding most Conciliation Agreements in the first and last quarter of each Fiscal Year. The most likely time during the year to resolve difficult discrimination law claims with OFCCP continues, as has been true for the last several years, to be the end of Q4 (July, August & September) and the first two months of Q1 (October and November) of the immediately following Fiscal Year:

• Q1 FY 2023: 7 (many just narrowly missing being settled in the prior Fiscal Year)
• Q2 FY 2023: 4
• Q3 FY 2023: 5
• Q4 FY 2023: 13 (most in the last weeks of the FY)

Note 1: All OFCCP enforcement data for this report come (we use the word “data” in the plural) from OFCCP’s Website: OFCCP By The Numbers data and the OFCCP Library. OFCCP has not updated its OFCCP By The Numbers report for Q4 of FY 2023 (July, August & September). DE Week In Review staff has nonetheless been able to update, however, OFCCP’s discrimination settlements through today’s date to give our readers the benefit of the latest available data.

Note 2: OFCCP continually revises its enforcement data (often including prior year’s data, but typically not significantly “moving the needle”). Indeed, two weeks after the close of its FY 2023 on September 30, 2023, OFCCP last week reported four more discrimination Conciliation Agreements to bring its number of publicly reported CAs to 29 for the Fiscal Year. Accordingly, these data are susceptible to further change.

Unfair Labor Practices Charges, Union Petitions Rose in FY 2023, U.S. NLRB Reported

Unfair Labor Practices Charges Increased Over 10 Percent

Union Petitions Up 3 Percent

In Fiscal Year (“FY”) 2023, 22,448 cases were filed with the U.S. National Labor Relations Board (“NLRB’), which marked an increase of 10 percent over FY 2022, the NLRB reported. This number was the highest of cases filed since FY 2016, the Board noted.

The Board did not note, however, that the U.S. non-farm labor market in the United States had grown 16% since January 1, 2016 (i.e., at a substantially higher percentage rate than the growth of NLRB cases).

The number of unfair labor practice (“ULP”) charges filed in FY 2023 increased 10 percent – from 17,988 charges in FY 2022 to 19,854 charges in FY 2023, continuing the increase (19 percent) from FY 2021 to FY 2022. In FY 2023, 2,594 union representation petitions were filed, which marked a 3 percent increase over FY 2022. “This uptick in filings builds on last fiscal year’s dramatic surge in representation-related activity and represents the highest number filed since FY 2015,” the Board pointed out. Specifically, in FY 2022, 2,510 union representation petitions were filed – a 53 percent increase from the 1,638 petitions filed in FY 2021.

However, the U.S. Department of Labor Bureau of Labor Statistics reported in January 2023 in USDL Report 23-0071 a downturn in the percentage of union employees in the 2022 U.S. workforce:

“The number of wage and salary workers belonging to unions, at 14.3 million in 2022, increased by 273,000, or 1.9 percent, from 2021. However, the total number of wage and salary workers grew by 5.3 million (mostly among nonunion workers), or 3.9 percent. This disproportionately large increase in the number of total wage and salary employment compared with the increase in the number of union members led to a decrease in the union membership rate. The 2022 unionization rate (10.1 percent) is the lowest on record. In 1983, the first year where comparable union data are available, the union membership rate was 20.1 percent and there were 17.7 million union workers.”

Employer Election Petitions Increased Following Cemex Ruling

As we reported in August, the Board majority’s recent ruling in Cemex Construction Materials Pacific, LLC announced a new framework to determine when employers must bargain with unions without a representation election. The Cemex ruling not only revived the Joy Silk doctrine, which had allowed unions to bypass an official NLRB election with only a card-check count serving instead as a “vote,” but went beyond Joy Silk by further removing one option for an employer to seek an election that Joy Silk had allowed. After the Board released the Cemex decision, employers filed 28 RM petitions (petitions for an election) with the agency’s field offices after being asked to voluntarily recognize employees’ unions. Under the Cemex framework, when a union requests recognition on the basis that a majority of employees in an appropriate bargaining unit have designated the union as their representative, an employer must either recognize and bargain with the union or promptly file an RM petition, the NLRB explained.

Budget Concerns Continue

Noting that this increase in activity in its field offices resulted in a corresponding increase in workload for the adjudicative side of the agency, the Board again bemoaned its budget woes. (See our related story from last November here.) The NLRB reported that it issued 246 decisions in contested cases during FY 2023, including more than a dozen significant precedent-setting cases, an uptick from 243 decisions in FY 2022.

The Board’s increased productivity also slightly lowered the median age of cases pending before it – from 108 days in FY 2022 to 106 days in FY 2023. Yet, similar to FY 2022, a significant jump in case intake overtook the NLRB’s case processing numbers. In FY 2023, the Board received 321 ULP and representation cases, up from 308 cases in FY 2022, driven by a 10 percent rise in representation cases brought before it. Consequently, even though the agency’s staffing levels remained static, it processed more cases than last fiscal year. The rise in case intake left 191 pending before the Board at the end of FY 2023, an increase from 145 in FY 2022.

In December 2022, Congress gave the NLRB a $25 million increase in budget dollars for FY 2023, ending a hiring moratorium, preventing furloughs, and allowing the NLRB to backfill some critical staff vacancies. However, the agency says it remains understaffed after almost a decade of flat funding. In the past two decades, staffing in field offices has shrunk by 50 percent. In its statement reporting the FY 2023 statistics, the Board advocated for President Biden’s proposed FY 2024 budget increase of $376 million. Its FY 2023 allocation was $299,224,000. (See our story on the President’s FY 2024 budget proposal here.)

Monday, October 16, 2023: OSHA Extended Comment Deadline on Union-Friendly Proposal to Revise Rule Regarding Employee Representatives for Safety Inspections

Deadline Extended by Two Weeks

The U.S. Department of Labor Occupational Safety and Health Administration (“OSHA”) extended by two weeks the deadline for the public to submit comments on OSHA’s proposed changes to its “walkaround” regulations. The proposed changes would allow a union representative to accompany an OSHA inspector during a “walkaround” at a nonunion worksite, regardless of whether the union representative is an employee of the organization undergoing inspection. For more details on the proposal, see our story here.

OSHA extended the previous public comment deadline of October 30 to November 13, 2023. You may submit comments here or here.

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.