Part II: Four Implications Impacting Federal Government Contractors & Employers Following the SCOTUS Decision in the Harvard & UNC Cases + “Life Preserver” Practical Next Step Suggestions

Monday, July 10, 2023: Part II: Four Implications Impacting Federal Government Contractors & Employers Following the SCOTUS Decision in the Harvard & UNC Cases + “Life Preserver” Practical Next Step Suggestions

This is Part II of a Four-Part Series (the next two parts will appear one per week in the next two Week In Review publications). If you missed it, you may find Part I here discussing the “Pipeline Problem,” and suggested Solutions.

Today’s topic is “GOALS ARE NOT UNLAWFUL QUOTAS” IF, IF, IF federal contractors do not turn them into race and gender-based preferential employment actions. If properly implemented, the Affirmative Action OFCCP’s (“Office of Federal Contract Compliance Programs”) Rules require federal contractors to undertake is NOT the “Affirmative Action” the SCOTUS struck down as unlawful discrimination violative of both Title VI of the 1964 Civil Rights Act and the Equal Protection Clause of the 14th Amendment in the Harvard and UNC case decision. See my recent Blog here discussing the SCOTUS’ Harvard/UNC case decision.

Unfortunately, some contractors convert their “Goals” into unlawful “Quotas” either (a) inadvertently (negligently), (b) because they are misinformed, or (c) intentionally do so to drive (unlawful) quota hiring and/or promotions.

Problem #1 To Avoid

Do Not Convert “Placement Goals” Into Hiring, Promotion and/or Termination “Goals” or “Quotas.”

Here is the architecture of OFCCP’s “Affirmative Action” Rules: OFCCP’s Rules at 41 CFR Section 60-2.15 require covered federal “Government” Contractors to declare in their Affirmative Action Programs (“AAPs”) for Minorities and Women whether they have fewer minorities and women than one would reasonably expect given their availabilities in the marketplace which the AAPs calculate. If they have fewer minorities and women employed than the federal contractor calculates to have been reasonably available, the contractor then has to set what is unfortunately named a “Placement Goal” pursuant to 41 CFR Section 60-2.16.

OFCCP’s “Placement Goals” are really “RECRUITMENT GOALS,” however, as we will see below. OFCCP’s Placement Goals do NOT require federal contractors to place minorities and women into jobs in proportion to the contractor’s Goals. Indeed, every OFCCP administration since 1972 when the Nixon Administration conceived of the notion of “Goals” for Minorities and Women have supplied written explanations that allow federal contractors to hire only White males, even if OFCCP’s Rules required the contractor to set a “Placement Goal” if those White males are the better-qualified candidates.

If you do turn your “Placement Goal” percentages into either numerical or percentage selection targets (for hire, promotion, and/or terminations), you are clearly “stepping over the line” and would be engaging in intentional unlawful employment discrimination. Your actions would violate:

1. both Title VII of the 1964 Civil Rights Act which the EEOC and, the U.S. Department of Justice (in certain circumstances) and/or Plaintiffs’ lawyers may enforce in the federal courts; and
2. Executive Order 11246 non-discrimination law which OFCCP alone enforces.

OFCCP’s “Placement Goals” are terribly misnamed because they imply that contractors must “place” Applicants into jobs (for hiring, promotions, and involuntary terminations) in proportion to their percentage availability in your selection pools. If you do that, however, you are creating a classic “quota” as the SCOTUS has now found unlawful in three different case decisions involving four defending institutions in the school admissions cases alone:

Bakke: roping off 16 out of 100 (16%) of the entering class to the UC Davis Medical School exclusively for “racial minorities” (with no competition with Whites for those 16 seats and rather awarding those 16 admission slots to African Americans solely because of the color of their skin); and

Gratz: awarding 20 admission points (on a 100-point scale) to only “underrepresented minorities” (meaning African Americans, Hispanics, and Native Americans) for admission to the University of Michigan undergraduate school assuring them all of admission because of their race or national origin; and

Harvard: taking race and national origin (meaning African American and Hispanic heritage) into account during the lengthy multi-part undergraduate admission process by periodically monitoring the admission percentages for African American and Hispanic candidates and thereafter trueing up the percentages of admissions being offered to each group to about the prior year’s percentage level of admissions; and

UNC: taking “race and ethnicity” (meaning African Americans, Hispanics, and Native Americans) into account during the lengthy multi-part undergraduate admission process by periodically monitoring the emerging admission percentages for each of the “race and ethnicity” groups of interest and thereafter truing up the percentages of admissions available to each group to about their percentage in the general population of the country.

Punchline

OFCCP’s poorly named Executive Order 11246 “Placement Goals” for Minorities and Women are in fact “Recruitment Goals.” Likewise, pursuant to the two other statutes OFCCP enforces [Section 503 of the Rehabilitation Act (Section 503) and 38 U.S.C. Section 4212 (“VEVRAA”)], OFCCP’s “Goals” pursuant to those two programs are also “Recruitment Goals,” although differently named. (“A rose by any other name would smell as sweet.”) The Section 503 Goal, which operates as an analog to the “Placement Goal” pursuant to Executive Order 11246, is known as a “Utilization Goal” pursuant to OFCCP’s Rule at 41 CFR Section 60-741.45. OFCCP’s analog VEVRAA Rule at 41 CFR Section 60-300.45 describes that program’s “goal” as a “Benchmark for hiring” (OFCCP published both of these Rules in March 2014 at the same time). Both Section 503’s “Utilization Goal” and VEVRAA’s “Benchmark for hiring” are “Recruitment Goals.”

Important: All three of the “Goals”/”Benchmark for hiring” OFCCP’s Rules require that when the contractor has fewer employed than are calculated available, as noted above, the contractor must then set the “Goal”/”Benchmark for hiring” to the percentage availability (of either Minorities, Women, Individuals with Disabilities or Protected Veterans depending on which of OFCCP’s three programs the contractor is setting its “Goal”/”Benchmark for hiring”).

These particular “Goals”/“Benchmark for hires” help alert corporate or institution recruiters as to what the percentages of minorities and women are in the marketplace in front of them. These “Goals”/“Benchmark for hires” therefore assist recruiters to know when they have successfully lured to the company/institution a representative sample of minimally qualified and available candidates from the marketplace to be interviewed for selection.

Note: So far, no corporate/institutional “adverse action” (in the language of Title VII) and nothing “negative” (in the language of the SCOTUS in both the Grutter and Harvard/UNC case decisions) has occurred. While continuing to recruit to achieve a more diverse applicant pool representative of the candidates in the marketplace available for selection is “race and/or gender-conscious,” it is not “race and/or gender preferential” in the absence of adverse action.

The architecture of the three “statutes” OFCCP enforces is for covered federal Government contractors (“federal contractors”) to “ensure” they are not unlawfully discriminating in employment. It is not enough for federal contractors to simply defend against claims of unlawful discrimination as Title VII commands. Rather, OFCCP’s Rules implementing all three of the statutes OFCCP enforces impose specific obligations on federal contractors to first collect and organize employment transaction data for evaluation (like a scout). Then, with employment transaction data in hand (like the percentages of Black, White, Asian, Hispanic, Native American and female “Applicants” and “Hires”), the contractor may then/must proactively evaluate those employment transactions which cause adverse action to occur to proactively prevent the contractor from unlawfully discriminating: The idea is to “stop it before it starts,” or “stop it in real-time” if the contractor happens upon it while it is occurring.

But the key point is that the Placement Goal is to help recruiters know they have properly drained the pond of available candidates for selection which the AAP for Minorities and Women has painstakingly calculated to be available to the contractor. And, by all means, the Contractor should share its availability calculations with its recruiters. Recruiters are the sole and intended beneficiaries of the availability data the AAP for Minorities and Women calculates: NOT selection managers.

Problem #2 to Avoid

Do Not Tell Your “selection” officials (for Hiring/Promotion/Termination) the race, sex, or national origin of your company/institution recruitment pools.

Note: I refer to “race” and national origin” and NOT “ethnicity.” Ethnicity is not a legal concept but rather is HR street jargon with an uncertain legal, anthropological, cultural, and/or sociological meaning. Neither Title VII nor Executive Order 11246, for example, make discrimination based on “ethnicity” unlawful. Rather, Title VII, as amended–from which the President hew Executive Order 11246, as amended–makes unlawful employment transactions “because of such individual’s race, color, religion, sex, or national origin.” Neither Title VII nor Executive Order 11246 refer to “ethnicity.”

Your selection officials do not need to know and SHOULD NOT KNOW the percentages of Black, White, Hispanic, Asian, Native American, etc. candidates in their selection pools for hiring, promotion, or termination. What is the intended benefit to the selection manager of such knowledge…other than to position that selection officer to engage in unlawful discrimination?

The percentage availabilities of candidates for selection are rather intended for different audiences within the corporation or the institution.” Those two audiences are:

1. the recruiters so they know when they can stop “fishing” for candidates to fill a requisition with candidates representative of the availability of all races and national origins the AAP for Minorities and Women has calculated to be available in the marketplace to that contractor’s establishment; and
2. the compliance/legal staff so they may undertake both required and desired compliance and legal risk evaluations.

Here is the architecture of Executive Order 11246. Once the recruiters have brought candidates to the corporation/institution for consideration for selection, the employment non-discrimination provisions of both Title VII and Executive Order 11246 then attach to judge the results of the selections to determine whether they are unlawfully discriminatory. So, it is the rejection for an employment opportunity which creates “adverse” action and the need to then judge whether the at-issue employment decision is unlawful.

Related High-Level Point of Law: It is not the hiring, promotion, involuntary termination, or compensation results that concern Title VII and/or Executive Order 11246. Rather, it is the adverse “employment decision” which is the object of proper evaluation to determine whether the at-issue adverse “decision” was unlawful. (This is one of the several reasons why, for example, all OFCCP compensation analyses (which only examine the pay results) are improperly conducted).

The BOTTOM LINE here is to build systems depriving your selection personnel from any knowledge of the race, sex and/or national origin of the candidates for selection as much as possible. Intentional unlawful discrimination cannot occur in the absence of knowledge of the race, sex, or national origin of the alleged victim of unlawful discrimination. Of course, many selection systems unavoidably cause the selection manager to know the race, sex, or gender of the candidate: Zoom interviews, in-office interviews, and educational histories often reveal race, sex, and/or gender. Nothing can be done about that discovery of the race, sex, and/or gender of the candidate.

But do control and limit the unnecessary delivery of race, national origin, and/or gender information to selection managers when you can deprive them of that information not necessary to their task of selecting candidates best suited for the jobs they have available.

So, go out there and be affirmative this week. This means you!

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.