Government Contractors – New OFCCP Agenda

Kegler Brown E-mployment Alert

If you contract with the federal government or on a federally-funded project, or if you are a subcontractor on those contracts, you may be more likely to encounter the Office of Federal Contract Compliance Programs (“OFCCP”), a division of the U.S. Department of Labor. The OFCCP enforces the contractual commitments for equal employment opportunity and affirmative action, which are required as a privilege of doing business with the federal government under Executive Order 11246.

Just this month, the OFCCP entered into a settlement agreement with Gerber Products Co. in Arkansas. The OFCCP charged that the company discriminated against racial minorities and women in hiring. The OFCCP also challenged a pre-employment test that the company used, on the basis that it excluded a disproportionate number of minorities or women without job-related justification. The settlement mandated that the company pay almost a million dollars to applicants for jobs. Secretary of Labor Solis said that the settlement “should put all federal contractors on notice” and that the Labor Department “is serious about eliminating systemic discrimination.”

President Obama has just appointed a new director of the OFCCP (Patricia Shiu). It is anticipated that the new administration will commit more funds and greater staffing for the agency, which inevitably means stepped-up enforcement activity. While it is unknown whether the OFCCP intends to put more emphasis on affirmative action compliance or anti-discrimination enforcement, government contractors may be well-advised to review their compliance with the Executive Order requirements before the OFCCP knocks.