OFCCP Week In Review: January 2, 2024

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:

• Embracing Generational Differences at Work Discussed in New DE Talk Podcast
• President Biden Intends to Renominate Julie Su to be the Next U.S. Secretary of Labor
• Federal Acquisition Regulatory Council Issued Final Rule Requiring Unionized Workforces on Large Federal Construction Projects
• EEOC Commissioner Sonderling Continued Advocating for Increased EEOC Involvement in Regulating AI in the Workplace
• In Brief
• New Publications
• Looking Ahead: Upcoming Date Reminders

Tuesday, December 19, 2023: Embracing Generational Differences at Work Discussed in New DE Talk Podcast

Also, New Minisode Covered Navigating the AI Landscape in Recruitment Marketing

For the first time in history, five generations are working simultaneously in the workplace. As a result, tensions arise as work trends shift in ways older generations have never seen, and fear-based differences create gaps among employees that may seem impossible to close. In this episode, we sit down with certified coach and trained speaker Lindsay Boccardo to discuss the four factors of employee engagement, and how humanizing your workforce and learning to manage emotional labor through self-awareness and regulation are the first steps to bridging the generational gap. In addition, we discuss the value of mentorship in preventing the retirement brain drain and how authenticity may be the key to attracting younger generations. Click here to listen now!

Bonus Minisode on Navigating the AI Landscape in Recruitment Marketing. With the emergence of artificial intelligence automation like machine learning and ChatGPT, AI is rapidly permeating the human resources/talent acquisition world, in hopes of making work life easier for HR professionals while simultaneously creating faster, more streamlined processes for job seekers.

As exciting as it is, the information on this technology can be overwhelming and fraught with some difficulties and unforeseen pitfalls. Join Elliott Obermaier and Ruth Toombs from Recruit Rooster as they discuss what AI in the HR space is, how it works, and some current obstacles. Click here to listen now!

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Thursday, December 21, 2023: President Biden Intends to Renominate Julie Su to be the Next U.S. Secretary of Labor

Following the U.S. Senate’s return to President Biden of his previous nomination of  Acting Secretary of Labor Julie Su to be the next U.S. Secretary of Labor, the White House has now confirmed its intent to nonetheless resubmit Ms. Su’s name for the Secretary’s job. President Biden’s prior nomination of Ms. Su (which the President announced February 28, 2023: See our WIR story here) to become the next Secretary of Labor had failed in the U.S. Senate (on July 13, 2023: See our WIR story here) for want of a majority vote to confirm her nomination as at least two Democrat Senators (Manchin (WV) and Sinema (AZ)) publicly refused to support her controversial nomination.

Acting Secretary Su has been serving as Acting Secretary of Labor since the prior Secretary of Labor, Marty Walsh, resigned summarily in a huff over The President’s failure to appoint Walsh to be his Chief of Staff when that job became available. Ms. Su has now served as the Acting Secretary of Labor for 297 days (since March 11, 2023, when Secretary of Labor Walsh formally exited the Labor Department) and the date of this publication (and counting).

Readers may review all of our prior stories related to the saga of Acting Secretary Su’s previous nomination here, here, here, and here.

Friday, December 22, 2023: Federal Acquisition Regulatory Council Issued Final Rule Requiring Unionized Workforces on Large Federal Construction Projects

On December 22, 2023, the Federal Acquisition Regulatory Council (“FAR Council”) published in the Federal Register its long awaited Final Rule mandating construction contractors, absent an exception, to use Project Labor Agreements (“PLAs”) for large-scale federal construction projects. The Final Rule, scheduled to go into effect on January 22, 2024, is yet another effort undertaken by the Biden Administration to strengthen labor unions in the face of years of declining membership.

Substantial legal issues loom, however, including as to whether this Rule would force non-unionized construction employers to violate Section 7 (Section 157) of the National Labor Relations Act which guarantees employees free choice to form or reject unions in their workplaces:

§157. Right of employees as to organization, collective bargaining, etc.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities (emphasis added) except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.”

The Final Rule stems from President Biden’s issuance of Executive Order 14063 in February 2022. As we noted in reporting on the Executive Order, the opportunity to mandate the use of PLAs with one or more appropriate labor organizations provided the Administration the opportunity to “reward” its main arm of political support through an expansive reading of the President’s powers under the Federal Procurement Act (“FPA”). The Proposed Rule issued on August 19, 2022 clarified that federal procurement agencies would no longer have discretion in determining when to require a unionized construction workforce on large construction projects. Instead, as we reported at the time, the Proposed Rule made four substantial changes:

• required federal Government construction contractors to negotiate a PLA with one or more appropriate labor organizations (i.e., unions) or become party to an existing PLA for any “large-scale” federal construction project;
• raised the threshold for a project to count as a “large-scale” federal construction project from $25 million to $35 million;
• expanded the definition of “construction” to mean “construction, reconstruction, rehabilitation, modernization, alteration, conversion, extension, repair, or improvement of buildings, structures, highways, or other real property;” and
• created three exceptions to the PLA requirement: (1) where a PLA would not achieve economy and efficiency in Federal procurement; (2) where a PLA would substantially reduce the number of potential bidders so as to frustrate full and open competition; or (3) where requiring a PLA would be inconsistent with other statutes, regulations, Executive Orders, or Presidential Memoranda.

In response to 8,334 comments to the Proposed Rule, the Final Rule underwent only the following two changes:

• the Final Rule removed language specifying processes when a PLA has multiple signatory labor organizations representing the same trade since there are not multiple PLAs on a federal construction project; and
• the Final Rule removed language preventing federal Government construction contractors from requiring subcontractors to enter a PLA with any particular labor organization, as subcontractors are required to become a party to the PLA negotiated by the prime construction contractor.

Despite numerous comments critical of the potential negative impact on an agency’s ability to use competition to achieve best value with the requirement of unionized workforces, the FAR Council rested on the exceptions to the PLA requirement to address such concerns. Furthermore, the FAR Council did not take as persuasive arguments about the potential increase in the costs of construction projects since the Final Rule secures structure and stability in construction projects, permits PLAs to contain terms that guarantee against job disruptions, and allows non-union contractors the ability to negotiate provisions in PLAs to accommodate potential increases in payroll costs for compensation and fringe benefits. Finally, the FAR Council disputed the characterization of some commenters that the Final Rule violated the Administrative Procedure Act (“APA”) or exceeded the authority of the Executive Branch in implementing the PLA.

In furtherance of the Final Rule, the Office of Management and Budget (“OMB”) issued guidance to agencies on implementing the provisions of the Executive Order and Final Rule. The guidance requires agencies to: (1) conduct and document inclusive market research for all large-scale construction projects and require PLAs unless an exception applies, (2) ensure that any exception is approved by the Senior Procurement Executive (SPE), and (3) report PLA activity and exceptions with supporting explanation of exceptions to OMB. Important for construction contractors is the documentation OMB directs agencies to provide in support of the use of exceptions to the requirement for PLAs on large-scale federal construction projects. Specifically, in relation to exercising an exception, OMB guidance directs the agency to provide specific facts and details that construction contractors should use as guidance in attempting to obtain an exception to any PLA requirement in their own bids for large-scale construction contracts.

Thus, beginning January 22, 2024, federal construction contractors looking to bid on large-scale federal construction projects should work towards providing the evidence and arguments described in the guidance as to why an exception to the Final Rule applies to hopefully convince the SPE to create an exception to the PLA requirement. Otherwise, bidders on large-scale federal construction projects must face the potential of incorporating into its costs the required agreement to a PLA unionizing the construction workforce on the project.

Tuesday, December 26, 2023: EEOC Commissioner Sonderling Continued Advocating for Increased EEOC Involvement in Regulating AI in the Workplace

As attendees at DEAMcon22 and DEAMcon23 may recall, EEOC Commissioner Keith Sonderling (R-term expires July 2024) has over the course of the last couple of years taken a lead position at the EEOC to discuss the impact of artificial intelligence (“AI”) on hiring and recruitment of workforces. Recently, in an interview with Politico published on December 26^th, Commissioner Sonderling re-emphasized the need for the EEOC to take a leading role to ensure employer compliance with anti-discrimination laws while using AI tools for hiring and recruiting purposes.

In the interview, EEOC Commissioner Sonderling emphasized the importance of ensuring compliance given the “scalability of AI” and its impact on potentially millions of applicants. As such, it is necessary for employers to be aware of the laws that apply to its use in hiring and recruiting. EEOC Commissioner Sonderling discussed the importance of the design and use of AI systems to ensure non-discrimination, which could require increased funding for investigators or a new agency to investigate the technology and algorithms involved. Finally, EEOC Commissioner Sonderling discussed certain tools being debated for inclusion in laws directed towards regulating AI, including applicant consent or notice as to the use of AI and AI vendor liability under discrimination laws.

Given that three Democrats currently control the five-member policy-setting Equal Employment Opportunity Commission along with Commissioner Sonderling’s strong views on compliance as good for business, employers may anticipate future EEOC guidance directed at the emerging use of AI in hiring and recruitment. This is especially anticipated given President Biden’s recent Executive Order requiring reports as to labor-market effects of AI and best practices to mitigate potential harms to employee well-being and private data. We previously summarized President Biden’s directive here. However, Commissioner Sonderling joins a large chorus of voices who have noted that existing civil rights laws already on the books are sufficient to address any unlawfully discriminatory employer use of AI in employment transactions.

Thursday, December 21, 2023: President Biden Raised Pay for Federal Civilian & Military Workforce by an Average of 5.2%

Because this event may have a “slop-over” effect into private sector wage-setting, we report that beginning the first full pay period in January 2024, federal civilian and military employees will get an average 5.2 percent pay raise, under President Biden’s Executive Order 14113. The 5.2 percent raise is an increase over the 4.6 percent average pay boost federal workers received in 2023 (see our story here). Both Government Executive and the Federal News Network noted that the 2024 increase is the largest in over four decades (going back to the Carter Administration).

Thursday, December 21, 2023: US DOL ETA Formally Sought Public Input Whether to Revise “Schedule A” Labor Certifications in Light of AI Development Needs

The Employment and Training Administration (“ETA”) of the U.S. Department of Labor (“DOL”) formally published in the Federal Register a Notice of its Request for Information (“RFI”) seeking public input on whether to revise the list of Schedule A job classifications that do not require permanent labor certifications to include occupations in Science, Technology, Engineering and Mathematics (“STEM”) and other non-STEM occupations. The DOL published the RFI pursuant to the directive contained in Section 5 (e) of Executive Order 14110: “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.” The ETA first announced this RFI on December 15, 2023. (For more information, see our story here.)

Comments are due on or before February 20, 2024. You may submit them here or here.

Friday, December 29, 2023: Newest Defense Funding Bill Increases Contracting Dollar Goal for Veteran-Owned Small Businesses, Changes Process for Certification as Veteran-Owned Small Business

Congress recently passed the National Defense Authorization Act (“NDAA”) funding the Department of Defense for Fiscal Year 2024. The bill’s text includes two items of potential interest to federal contractors:

• Section 849 of the bill provides that each prime contract award and subcontract award made with Service-Disabled Veteran-Owned Small Businesses (“SDVOSBs”) or Veteran-Owned Small Businesses (“VOSBs”) should be with businesses the Administrator of the Small Business Administration (“SBA”) has certified. This change was added to incentivize federal agencies to award contracts only to those businesses the SBA has certified. The White House intends to eventually phase out self-certification of VOSBs and SDVOSBs.
• Additionally, the bill increases the Department of Defense’s current 3% goal of contracting dollars going to Veteran-owed small businesses to 5%.

Also, the U.S. Department of Veterans Affairs transferred to the SBA all the Veterans Affairs certifications it had previously approved. Those Veterans Affairs certifications will remain active until the end of the contractor’s current certification period. Subsequently, contractors will need to seek re-certification through the SBA Veteran Small Business Certification process.

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.