On April 17, 2020, the Office of Federal Contract Compliance Programs (OFCCP) issued three new directives it describes as further demonstrating "its strong commitment to resolving cases promptly to obtain significant remedies for affected workers, while minimizing burden and delay for federal contractors seeking to comply." Namely:
- Directive 2020-02: Efficiency in Compliance Evaluations;
- Directive 2020-03: Pre-Referral Mediation Program; and
- Directive 2020-04: Ombuds Service Supplement.
The OFCCP, the federal agency responsible for implementing federal contractor affirmative action obligations, conducts compliance reviews (or audits) of selected contractors. If the OFCCP determines during an evaluation that a contractor has engaged in unlawful discrimination, it may issue a Notice of Violation (NOV) and seek monetary damages for the victims of the alleged discrimination.
Before the Agency issues an NOV, it must issue a Predetermination Notice (PDN) to inform contractors, at the conclusion of the compliance evaluation, of OFCCP's preliminary findings of employment discrimination. A PDN provides the contractor with a clear understanding of the OFCCP's concerns and gives the contractor an opportunity to directly address them by providing additional information.
DIR 2020-02: Efficiency in Compliance Evaluations
Under the current presidential administration, the OFCCP has continued to revise its review procedures in an effort increase its efficiency and transparency in compliance evaluations.1 The agency has expressed particular concern for reducing the number of its "aged cases," those that have been open for two years or more.
Directive 2020-02 is designed to further this goal by keeping the number of aged cases below 15% of the Agency's total caseload. Specifically, the Directive establishes a goal to complete compliance evaluations within 180 days where there are no preliminary findings of discrimination, or generally to issue a PDN within one year from the scheduling letter.
The Directive also requires the agency to track more consistently the status of compliance evaluations, including through the OFCCP Compliance Management System (CMS). The OFCCP will also devise plans to expedite aged compliance evaluations, including using its previously announced early resolution procedures. Significantly, Directive 2020-02 requires compliance officers to provide contractors with (at least) monthly status updates.
Under the Directive:
- The CMS will send reminders to Compliance Officers to contact contractors at least once every 30 days after a compliance evaluation commences in order to provide a status update.
- The CMS will alert the Regional Director and the Directors of Program Operations and Enforcement when a compliance evaluation remains open for 12 months without the issuance of a PDN, and at six-month intervals thereafter.
- The OFCCP will continue to promptly issue Show Cause Notices and refer denial of access cases for enforcement where necessary.
The Directive also provides a mechanism for contractors to raise concerns about delays in their compliance evaluations, as long as they have generally complied with the Agency's prior information requests. If an audit remains open for one year without the issuance of a PDN, or if it remains open for two years without being referred to the Office of Solicitor, the contractor may request that the OFCCP conduct a review of the compliance evaluation to address those delays. However, the Directive states that "[a]s a prerequisite, the issue should have been raised with the Regional Director."
DIR 2020-03: Pre-Referral Mediation Program
Directive 2020-03 formally establishes a mediation program for federal contractors and subcontractors to come to a resolution before cases are referred to the Office of the Solicitor for enforcement. The Directive clarifies that mediation is meant for use following the issuance of a Show Cause Notice (SCN);2 however, it reserves the authority to mediate at any point during the compliance evaluation. Conversely, the OFCCP may choose not to engage in mediation where the OFCCP has issued a SCN because the contractor denied access to its facility, work site, or records, or in an "exceptional" case where it proceeds directly to an enforcement recommendation without issuing a SCN at all.
Directive 2020-03 also contains a list of rules and suggested procedures, including how to propose and select a mediator, offering parties the option of either a mediator from the Federal Mediation and Conciliation Service (FMCS) roster (or other federally approved mediators), or the OFCCP Ombudsman. Additionally, contractors may propose a mediator. If the parties are unable to agree on a mediator, the OFCCP may ask the FMCS Director to select a mediator from the FMCS roster. If the parties cannot agree on a mediator, the OFCCP may decline to engage in mediation and refer a case directly for enforcement.
The Directive states that "ideally" the mediation will commence within 30 days from the date the mediator is selected, and thereafter conclude within two business days.
DIR 2020-04: Ombuds Service Supplement and Protocol
In September 2018, the OFCCP announced its implementation of an Ombuds Service. At that time, the OFCCP anticipated the Ombud would, among other things, listen to contractors' concerns and suggestions, facilitate resolution of OFCCP matters at the district and regional office level, and accept and review certain matters referred directly by the national office. Specifically excluded from the Ombudsman's role was the responsibility for conducting compliance evaluations, complaint investigations, or participating in conciliation agreement negotiations.
Directive 2020-04 supplements the Agency's previous guidance and publishes the Ombuds Service Protocol, which is attached to the Directive. The Ombuds Service Protocol clarifies a number of issues, including the expanded role of the Ombudsman. Now, the Ombudsman will provide "neutral facilitation services" during compliance evaluations, complaint investigations, and conciliation agreement negotiations – this new role stands in some contrast to the OFCCP's 2018 explanation of the Ombuds role.
1 David Goldstein, Meredith Shoop and Brandon Haugrud, New OFCCP Directive on Predetermination Notices Makes it Easier for Contractors to Understand and Address OFCCP Audit Concerns, Littler ASAP (Mar. 14, 2018); Meredith Shoop and David Goldstein, OFCCP Reins in Compensation Analysis by Rescinding Directive 307 and Issuing New Guidance, Littler ASAP (Aug. 28, 2018); and David Goldstein and Lance Gibbons, OFCCP Continues Efforts to Maximize Efficiency and Increase Transparency with Three New Directives, Littler ASAP (Dec. 3, 2018).
2 The SCN is a letter from the OFCCP to the contractor providing that the contractor must come into compliance within 30 calendar days or it may recommend the commencement of enforcement proceedings.
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