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OFCCP Directive on Compliance Evaluation Procedures Signals Renewed Focus on Enforcement

On March 31, 2022, the Office of Federal Contract Compliance Programs (OFCCP) issued its second Directive, No. 2022-02, of the Biden Administration.  The new Directive implements both procedural and substantive changes to OFCCP compliance evaluations that signal that the agency will seek to act more aggressively in identifying and prosecuting alleged discrimination in its compliance audits.  In the Directive, OFCCP rescinds four Directives (2018-06, 2018-08, 2020-02, 2021-02) issued under the Trump administration to increase the certainty, efficiency, and transparency of the agency’s operations, a major priority of former OFCCP Director Leen.  By eliminating these safeguards, the new Directive increases the risk that federal contractors and subcontractors face from OFCCP compliance evaluations.

Some of the major changes implemented by the Directive include:

  • Reducing Time for Contractor Response to Scheduling Letter:   The new Directive expedites the early stages of an OFCCP compliance evaluation, and reduces contractors’ opportunity to prepare for an evaluation after the publication of OFCCP’s Corporate Scheduling Announcement Letter (CSAL) listing the contractor establishments selected for audit.  First, the Directive rescinds the prior 45-day delay between the publication of the CSAL and OFCCP’s issuance of scheduling letters requiring the production of documents and data.  Second, the Directive requires that all affirmative action plan data be provided within 30 days of receipt of the scheduling letter, where previously contractors were entitled to a 30-day extension of time to provide granular, employee-level data regarding personnel transactions like hiring, firing, promotions, terminations, and compensation.  Contractors will now be losing the opportunity for advance notice of a compliance evaluation and will face tight timelines to collect, review, and analyze data that often can be voluminous.

  • Coordination of Multi-Establishment Evaluations:  The Directive also provides that when a contractor has multiple establishments undergoing compliance evaluations, the agency will coordinate its reviews of “common policies and practices.”  Although this change could benefit contractors by providing certainty and streamlining multiple evaluations, it also poses the potential that OFCCP may seek to bootstrap alleged violations at one establishment into broader, multi-establishment relief by asserting the existence of a common policy or practice.

  • Broader Scope of Supplemental Requests:  The Directive also changes OFCCP’s approach to supplemental requests for documents and data outside the scope of the initial scheduling letter.  Although the Directive purports to retain the requirements that the agency “reasonably tailor” supplemental requests to areas of concern, allow a “reasonable time” to respond, and include the basis for the request, it broadens the scope of documents and information that OFCCP may request.  Although previous Directives limited the scope of supplemental requests to the types of data outlined in OFCCP’s scheduling letter at the desk audit stage, the new Directive omits this limitation and states that “supplemental requests do not limit the agency’s ability to request additional information or expand the investigation.”  OFCCP also claims the right to seek documents for a period of 2 years preceding the date of the scheduling letter, and also to seek documents post-dating the scheduling letter in order to “fully investigate and understand the scope of potential violations.”

  • Increased Interviews Outside of the Onsite Process:   The Directive signals OFCCP’s intention to request witness information and conduct more witness interviews.  In conducting these interviews, OFCCP states its plan to “directly contact these individuals without the contractor serving as an intermediary.”  OFCCP limits the contractor’s right to have an attorney or representative present at an interview to its discussions with “upper-level managers and directors,” and denies the contractor the opportunity to be present for interviews with non-management personnel.  Although employees are given the opportunity to request to have “a personal representative, such as a union representative or personal legal counsel” present, it is not clear whether non-management employees could choose to be represented by their employer’s counsel.  OFCCP also reiterates its position that the contractor is not entitled to have counsel present in the agency’s interviews with former employees in most cases.

  • Enhancements to the Neutral Selection Process for Evaluations:   The Directive indicates that OFCCP will “enhanc[e]” its methodology for scheduling compliance evaluations in order to “reach a broader universe of contractors and subcontractors” and “identify those with greater risk factors.”  The specifics of this effort are not outlined in the Directive.

  • Emphasis on Contractor Self-Auditing Obligations:  Finally, the Directive hints that OFCCP will place enforcement priority on contractor self-auditing obligations to review and analyze their workforce data for potential roadblocks to equal employment opportunity.  In the previous Biden OFCCP Directive, OFCCP declared that the requirement that contractors perform an “in-depth analysis” of the “total employment process” imposed a requirement for annual quantitative pay equity analyses to identify and resolve disparities in compensation.  The new Directive continues this approach by emphasizing the need for “a proactive approach to compliance where federal contractors actively self-audit employment systems.”  This suggests that OFCCP may review whether contractors are sufficiently analyzing their employment systems in the “in-depth” nature OFCCP requires.  Contractors should ensure they are performing and documenting these analyses as OFCCP seems to be placing emphasis on the self-audit obligation.

The new Directive is the latest indication that the Biden OFCCP intends to take a more aggressive enforcement approach than the Trump OFCCP under Director Leen.  The agency’s new approach of providing little advance warning of compliance evaluations and quick initial productions of full affirmative action plan data heightens the need for contractors to ensure they are actively maintaining their affirmative actions plans throughout the year, and not just in response to a scheduled evaluation.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume XII, Number 91
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About this Author

Jack Blum Polsinelli Employment Attorney
Associate

Jack Blum is an associate in the firm’s Employment Disputes, Litigation, and Arbitration practice, where he represents employers in connection with a wide range of employment law issues. Jack has extensive experience in defending employers against claims by their employees in federal and state courts, as well as before government agencies like the EEOC, Department of Labor, and state human rights commissions. Jack aggressively defends his client’s personnel practices and decisions while not losing sight of their underlying business goals and objectives. Jack represents clients in all...

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