Municipal workers repair the pedestrian zone
By and large, employers are prohibited from discriminating against job applicants and employees based on certain traits. Differences exist concerning individual characteristics that enjoy legal protection from discrimination. But another key variable in how workplace prohibitions on discrimination work is whether a given employer is covered by a particular anti-discrimination law.
For example, certain federal contractors have special legal obligations when it comes to combating workplace discrimination. A notable example includes the steps the contractor must take to prevent disparate impact discrimination, such as implementing an affirmative action program.
What is Disparate Impact Discrimination?
When most people think of discrimination at work, they think of disparate treatment. For example, a boss tells an older employee, “We need some youthful workers to take our company to the next level. Because you’re old, I’m letting you go.”
But unlawful discrimination can sometimes occur as a consequence of a seemingly nondiscriminatory rule or policy. For instance, imagine a company had a rule that said any employee who doesn’t have 20/20 vision will be fired.
On its face, it seems like this policy is legal because it discriminates based on someone not having 20/20 vision, which isn’t a protected class. However, this policy could potentially be illegal under the Age Discrimination in Employment Act of 1967 (ADEA) because it will likely have a disparate impact on older workers.
The Office of Federal Contract Compliance Programs (OFCCP) is the agency primarily tasked with ensuring that contractors that do business with the federal government take reasonable steps to avoid disparate treatment and disparate impact discrimination.
An Overview of the OFCCP
The OFCCP focuses its enforcement efforts on the following three laws:
- Executive Order 11246 (EO 11246)
- Section 503 of the Rehabilitation Act of 1973 (Section 503)
- Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA)
Together, these laws prohibit covered contractors and subcontractors that enter into contracts with the federal government from discriminating on the basis of:
- Race
- Color
- National origin
- Religion
- Sex
- Sexual orientation
- Gender identity
- Disability
- Veteran status
In carrying out its enforcement mandate, the OFCCP will often examine statistical data about an employer’s hiring practices of protected groups. After reviewing the data, the OFCCP might believe that disparate impact discrimination exists.
The employer accused of disparate discrimination will then have had an opportunity to explain that improper discrimination is not taking place, despite what the statistical data shows. If it fails to do so, the employer could be in violation of EO 11246, Section 503 and/or VEVRAA. A recently settled case involving Cooper Health System and the OFCCP demonstrates how this process can work.
Dr. Generosa Grana, right, director of the Cooper Cancer Institute, and John P. Sheridan, Jr., ... [+]
Cooper Health System’s Alleged Discrimination
The OFCCP conducted a review of Cooper Health System’s (CHS) hiring data and found that from July 1, 2016 to December 31, 2017, there were hiring disparities against Blacks, females and Hispanics for certain nurse associate positions. And from July 1, 2016 to July 1, 2017, there were pay disparities against females for certain registered nurse, management and clerical positions. There were at least 400 employees found to be affected by this potential disparate treatment discrimination.
On February 9, 2021, the OFCCP issued a Pre-Determination Notice (PDN) to CHS outlining the OFCCP’s preliminary conclusion of unlawful discrimination in violation of EO 11246 and related regulations. However, before further investigations and legal actions could take place, CHS and OFCCP settled the matter and entered into a conciliation agreement.
Per the terms of the agreement, CHS agreed to pay $514,463.62 in back pay and $110,536.38 in interest to the affected individuals. CHS also agreed to take steps to adjust its hiring and workplace policies to prevent future cases of disparate treatment from taking place.
What Workers Can Learn From the Cooper Health System Case
The above case is an example of how disparate treatment of members of a protected class of workers could result in a finding of discrimination, even without discriminatory intent. If CHS and OFCCP didn’t settle the matter, what would have happened next is that CHS would have an opportunity to respond to the accusations in the PDN.
In other words, if CHS was to successfully counter allegations of disparate treatment discrimination, it would have needed to show that it was aware of the disparity and was taking active steps to remedy the disparity, such as operating an affirmative action program, or AAP.
CHS could have also explained why the statistical disparity was justified for legitimate, nondiscriminatory reasons. If CHS couldn’t do either of these things, then OFCCP would have issued a Notice of Violation, or NOV.
Once the NOV was issued, it would be up to CHS and OFCCP to reach some sort of settlement (which they did, although it came before the issuance of an NOV). And if no settlement could be reached, OFCCP could take further enforcement actions against the employer.
Another takeaway from this case is that monetary damages are recoverable by the affected employees and/or job applicants, although the types of damages will be relatively modest. For example, if an employee sued an employer under Title VII of the Civil Rights Act of 1964, they could potentially recover punitive damages in addition to back pay, if the employer’s actions were especially egregious. But in an OFCCP enforcement action, punitive damages are not likely recoverable.
Finally, any affirmative action requirements enforced by the OFCCP are different from affirmative action policies used by schools to enhance the diversity of their student bodies. For example, a college or university might use race as a factor in deciding whether or not to admit an applicant. But employers subject to OFCCP jurisdiction and oversight can’t do that.
Instead, eligible employers (which typically refers to contractors with 50 or more employees and at least one federal contract worth $50,000 or more) would need to see if there are any underrepresented groups in their workforce and if so, develop a plan and set of goals to increase the diversity of its workforce. For example, an employer might change its hiring policies by expanding its recruitment efforts to include schools with traditionally large numbers of minority graduates.
Bottom Line
The OFCCP doesn’t exist to ensure that employers give individuals from a protected group a special advantage. But the OFCCP does want to make sure that the employer takes steps to identify policies that may have an unintended impact on minority groups and if so, make appropriate changes so that everyone has a fair chance in the workplace.
