OFCCP Issues FAQs for “Campus-Like Settings”

The Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) provided guidance on how an “establishment” should be determined in a campus-like setting, such as a higher education institution or an office park.

Understanding what constitutes an “establishment” is the cornerstone of federal contractors’ EEO and affirmative action compliance obligations. Federal contractors, generally, are required to develop Affirmative Action Plans (“AAPs”) for each “establishment.” AAPs are proactive tools that monitor most personnel activity (e.g., hiring, promotions, compensation and terminations) to determine areas of potential discrimination and areas in which additional diversity efforts need to be focused. OFCCP conducts compliance evaluations and related enforcement activity based on individual “establishments” by reviewing the AAP and related supporting materials. When multiple buildings in a campus-like setting are combined in a single AAP, contractors risk including a larger number of dissimilar employees into a single AAP. This could reduce the effectiveness of the proactive analyses as well as create additional challenges during OFCCP audits.

Key Takeaways: Federal contractors with campus-like settings, including clustered office buildings and higher education campuses, should evaluate whether their AAP structures comport with the factors included in OFCCP’s guidance to minimize the risk of a challenge to the AAP structure and coverage by OFCCP. In particular, higher education federal contractors need to carefully evaluate whether to use a campus-wide approach for developing an AAP, or whether grouping buildings by departments or other related organizational units or functions is appropriate for AAPs. The development of AAPs is a critical component in a federal contractor’s compliance strategy, and federal contractors should secure legal advice on how their AAPs should be structured based on their specific facts and with appropriate consideration of OFCCP’s new guidance.

Additional Information for Higher Education Federal Contractors: OFCCP, in particular, focuses on assessing compliance by higher education federal contractors which began during the Obama Administration. Many reviews of the higher education contractors still are pending. Why? Because OFCCP and the higher education community cannot agree on a fundamental compliance point – the definition of an “establishment.”

“Establishment” is not defined in OFCCP’s regulations. Case law, OFCCP’s compliance manual, trial testimony of a Regional Director, and the agency’s long-standing practice, however, define an “establishment” as a brick and mortar building. Curiously, OFCCP has repeatedly, but not consistently, taken a different position when it comes to higher education contractors. According to OFCCP practice, typically an “establishment” in the context of a college or university is the entire campus.

Last Spring, OFCCP Director Craig Leen promised to issue technical assistance guidance (TAG) for colleges and universities covering a range of issues, including the scope of a higher education AAP. It appears, OFCCP has abandoned – or at least delayed – its promise of a comprehensive TAG in favor of FAQs for Campus-Like Settings generally. These FAQs apply more broadly than just higher education. The FAQs apply to any contractor with multiple buildings in a campus-type setting.

While the sub-regulatory guidance provided in the FAQs is generally phrased in the permissive – “OFCCP may consider” or “Contractors may determine,” the guidance sets forth several factors contractors “should” consider when determining whether multiple buildings “should” be in a single AAP (FAQ 4). Such factors include:

  • What is the function of the building, and how do the employees in the building interact with employees in other buildings?
  • Are employees across different buildings part of the same organizational unit, such as department, division, section, branch, group, job family, or project team?
  • Are the hiring, compensation, and other personnel decisions handled separately at each building or are those functions consolidated across the entire contractor or across multiple buildings on one campus?
  • Does each building handle its own recruitment or is that function consolidated across multiple buildings?
  • Do the buildings recruit from the same labor market or recruiting area?
  • To what extent are other human resources and Equal Employment Opportunity compliance functions operationally distinct for each building or group of buildings?
  • To what extent do certain employees perform work functions across various buildings?

OFCCP does not cite to any authority, legal or otherwise, to support these factors or the definition of an “establishment” as a group of buildings located in the same area. These FAQs are sub-regulatory guidance and, as such, it does not bind the contractor community or OFCCP. The structure and scope of an AAP is a critically important compliance decision. Contractors should certainly consider the various options available for structuring their AAPs – grouping multiple buildings in a single AAP per these FAQs; an AAP per building based on OFCCP’s long standing practice; or a Functional AAP per the regulations (41 CFR 60-2.1(d)(4)).  Specifically, in our experience involving higher education institutions, there have been limited instances in which OFCCP has accepted AAPs based on sub-campus groupings by departments or functions. OFCCP, however, generally expects that a single, campus-wide AAP will be prepared for colleges and universities, notwithstanding the lack of specific legal authority compelling such an AAP structure.

Please contact your FortneyScott attorney or email us at info@fortneyscott.com for more information about how the new OFCCP guidance applies to your AAP design and related matters.

 

EEOC to Begin Contacting Employers Regarding EEO-1 Component 2 Submissions

With only three weeks remaining for employers to submit their EEO-1 Component 2 compensation data, the EEOC will begin reaching out to employers to remind them of their filing obligations. To date, only 13.4% of employers have provided the required information through the EEOC’s online portal, meaning approximately 37,000 employers are yet to submit their data. As a result, the contractor responsible for the agency’s data collection will begin calling any employers which have not yet submitted data, registered with the online portal, or requested assistance from the agency to ensure that these businesses are aware of the approaching September 30th deadline.

As the Component 2 filing date approaches, we will continue to update you.

Employers Face Issues Submitting EEO-1 Component 2 Reports

As you are likely aware, employers with 100 or more employees are required to submit EEO-1 Component 2 W-2 pay and hours worked data for 2017 and 2018 by September 30, 2019.  Employers must submit their Component 2 Reports through the Component 2 EEO-1 Online Filing System which is separate from the EEO-1 Component 1 portal.  The Component 2 Portal run by the EEOC’s contractor, NORC, provides two methods to report 2017 and 2018 pay and hours worked data either by: (1) manually entering data into an online form, or (2) uploading data via a CSV data file consistent with the EEOC’s specifications.  However, with the submission deadline quickly approaching, some employers are reporting issues with the Online Filing System.

First, we have received reports that uploading data through the Online Filing System is taking significantly longer than expected.  We anticipate that this issue will only be exacerbated by increased traffic in the days leading up to the September 30th deadline.  Accordingly, employers should plan ahead when submitting their data, and make sure that they allow sufficient time for the data upload to be completed.

Second, employers are not receiving confirmation that their data was submitted.  As a result, we recommend that employers take a screenshot of the submission page with the date and time.  Furthermore, as employers will also be unable to view or download draft or final Component 2 Reports once they are uploaded to the Online Filing System, employers should retain an exact copy of the uploaded data for their records.

As the Component 2 filing date approaches, we will continue to update you.

New DOL Opinion Letter on Compensability of Sleep Time for Truck Drivers

The U.S. Department of Labor issued an opinion letter, FLSA2019-10, that provides new guidance on the compensability of time that a driver spends in a truck’s sleeper berth while otherwise relieved from duty. In FLSA2019-10, DOL’s Wage and Hour Division (“WHD”) follows a straightforward reading of the plain language of the applicable regulation, concluding that the time during which drivers are relieved of all duties and permitted to sleep in a sleeper berth is presumptively non-working time that is not compensable.

However, where a driver who retires to a sleeping berth is unable to use the time effectively for his or her own purposes, time spent in the sleeper berth will be compensable. For example, a driver who is required to remain on-call or do paperwork in the sleeping berth may be unable to effectively sleep or engage in personal activities; in such cases, the time is compensable for hours worked.

This new opinion letter effectively repeals WHD’s prior opinion letters on this issue. Previously, WHD concluded that while sleeping time may be excluded from hours worked where “adequate facilities” were furnished, only up to 8 hours of sleeping time could be excluded on a trip that is 24 hours or longer, and no sleeping time may be excluded for trips under 24 hours.

Please contact David Fortney (dfortney@fortneyscott.com), or the FortneyScott attorney with whom you work, for additional information.

Labor Secretary Resigns

Secretary of Labor, Alex Acosta resigned from his post amid pressure from the public due to the plea deal he negotiated with Jeffery Epstein while U.S. Attorney in the Southern District of Florida. In a press conference in the White House Rose Garden, President Trump announced that the Deputy Secretary of Labor, Patrick Pizzella will assume the role of Acting Secretary of Labor starting July 19, 2019. Pizzella was confirmed by the Senate in a 50-48 vote.

FortneyScott will continue to monitor any leadership changes within the DOL.

Supreme Court Limits Public Access to Private-Sector Records

The U.S. Supreme Court, in a 6-3 decision, reined in the ability of the media and other members of the public to access commercial and financial records provided to the government by private-sector businesses.  Under the Freedom of Information Act’s (“FOIA’s”) Exemption 4, the government is not required to disclose “commercial or financial information obtained from a person and privileged or confidential.”  Although seemingly straightforward, this language has been the source of much dispute and confusion, as many courts have held that information should only be deemed confidential under Exemption 4 if it can be shown that its disclosure would cause “substantial competitive harm.”  However, on June 24, the Supreme Court provided clarity on this issue through its opinion in Food Marketing Institute v. Argus Leader Media, d/b/a Argus Leader.  The majority opinion, written by Justice Gorsuch, overruled the “substantial competitive harm” standard, and held that information provided to the government is “confidential” under FOIA Exemption 4 – and, as a result, not subject to public disclosure – if the information is “both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy.”  As a result of this ruling, private companies which are required to provide sensitive data to the government, such as the pending EEO-1 Component 2 pay data submissions, can do so with more confidence that such information will not be made public.

Case History

In 2011, Argus Leader Media (“Argus”), a South Dakota newspaper, submitted a FOIA request to the U.S. Department of Agriculture (“USDA”) seeking information provided to the agency by retail stores regarding benefit payouts for food stamps under the Supplemental Nutrition Assistance Program (“SNAP”).  The USDA refused to disclose the requested information citing Exemption 4, and Argus filed suit.  The district court found in favor of Argus, holding that the USDA had not shown a likelihood of substantial competitive harm resulting from the disclosure of the requested information, and on appeal the Eight Circuit affirmed the district court’s decision.

Following the lower court decisions, the Food Marketing Institute (“FMI”) intervened in the case and petitioned the Supreme Court for review arguing that the “substantial competitive harm” standard applied by the Eighth Circuit improperly narrows Exemption 4 which requires only that information be confidential.  FMI asserted that the term confidential should be afforded its ordinary meaning – “something that is private and not publicly disclosed.”  In addition, the Department of Justice appeared in support of FMI arguing that data should be deemed confidential and not subject to disclosure under FOIA where it was reasonably understood to have been communicated to the government in confidence.

The Supreme Court’s Decision

Justice Gorsuch, writing for the majority, agreed with FMI and the Department of Justice, and noted that the language of Exemption 4 provided no basis for the “substantial competitive harm” standard which had been adopted by the lower courts.  In reaching this decision, Justice Gorsuch noted that the “ordinary, contemporary, common meaning” of the word “confidential” at the time FOIA was enacted simply required that in order for information to be deemed confidential it must be “customarily kept private” and, in the event information is disclosed to another party, assurances are provided that it will remain secret.  The majority found that here, the information at issue easily satisfied these conditions and fell under Exemption 4.

In addressing the “substantial competitive harm” standard, the Court held that in developing this interpretation the lower courts had ignored the plain language of the statute, and chose instead to apply their own interpretation of FOIA’s purpose.  By inferring that Exemption 4 only applied to information which would cause substantial competitive harm, lower courts had improperly narrowed the plain meaning of the statute as it was enacted.

In dissent, Justice Breyer pointed to the purpose of FOIA – to “permit access to official information long shielded unnecessarily from public view.”  With this purpose in mind, Justice Breyer noted that FOIA’s exemptions must be narrowly construed.  He further cautioned that as businesses tend to treat “as secret all information which need not be disclosed” the majority’s ruling would provide a great deal of leeway to deprive the public of information.

Looking Ahead

Moving forward, this ruling should have far reaching implications, as it provides the government with far more discretion to block the release of information that contains private-sector commercial or financial information.  Importantly, this decision should have an immediate impact as companies which are preparing to submit their EEO-1 Component 2 pay data, can now do so with confidence that their non-public information will be exempt from FOIA requests.

Supreme Court Adds Burden to Title VII Defense

On June 3, 2019, the U.S. Supreme Court decided that if employers wish to challenge a claim brought by a plaintiff alleging a violation of Title VII that was not part of the EEOC charge, they must act promptly to assert the defense that the claim is invalid. If the employer fails to challenge the claim at the outset for failing to exhaust administrative remedies by not observing the charge-filing requirement, an accused employer will waive this defense.

The High Court resolved a split among the Circuit Courts by ruling that the charge-filing requirement is not “jurisdictional,” but merely “procedural.” Failure to follow a “jurisdictional” requirement would permit an accused party to successfully challenge a claim at any time.

To read this case, Fort Bend County v. Davis, click here.

 

Eric H. Oppenheim, SHRM-SCP, SPHR Joins WorkPlace HR, LLC

An HR Consulting Firm Affiliated with Fortney & Scott, LLC,

A Leading Management Employment Law Firm in Washington, DC

Experienced business owner and Human Resources professional Eric H. Oppenheim, SHRM-SCP, SPHR has joined WorkPlace HR, LLC as the Executive Director. WorkPlace HR provides premium Human Resources consulting services which exceed client’s expectations through creative, efficient, and solution-oriented support.

Mr. Oppenheim formerly served as the Chief Executive Officer and Franchise owner of Republic Foods, Inc., a family business where he managed the operations and Human Resources for 17 restaurants in the Washington, DC metropolitan area. He is an experienced entrepreneur and leader with over 20 years of responsibility for strategic planning in managing day-to-day operations and Human Resource functions, including the development of policy and directing and coordinating Human Resources activities such as: recruitment, hiring, orientation, training, compensation, employee benefits, security, consumer issues, and employee services.

Mr. Oppenheim brings his wide-ranging experience and expertise in identifying, analyzing, and evaluating new business segments to support corporate diversification. Mr. Oppenheim’s successes have been recognized by Brand Leadership Awards for outstanding operational results.

In announcing that Mr. Oppenheim has joined WorkPlace HR, Jacqueline Scott, Vice President of WorkPlace HR, stated: “We are very fortunate to add Eric’s skill and talents to WorkPlace HR as WorkPlace HR continues to expertly address the rapidly expanding range of Human Resources issues employers are facing today.” David Fortney, President of WorkPlace HR, further noted, “With Eric leading WorkPlace HR, we are able to offer our clients top level Human Resources expertise and support in a highly efficient and cost-effective manner.”

Since the sale of Republic Foods, Inc. in 2017, Mr. Oppenheim has been a consultant in the manufacturing and food service industries; providing leadership training; developing and implementing marketing initiatives to drive profitability; and aligning cultural initiatives with organizational strategies to drive growth for his clients.

As a Human Resources professional, he has been involved with numerous advocacy efforts on Capitol Hill in his representation of small businesses. Mr. Oppenheim has actively participated with the U.S. Chamber of Commerce, the Society of Human Resource Management, and the National Franchisee Association have in the legislative process in support of and Human Resource professionals and the business community.

Mr. Oppenheim is certified as a professional trainer by the National Franchisee Association for their CORE Leadership Program. This program is designed to elevate the engagement, performance, and results of hospitality/restaurant teams by improving how management coaches, motivates, and communicates.

Mr. Oppenheim received his undergraduate degree in International Business from Ithaca College and his Master’s Degree in Human Resources and Organizational Development from Johns Hopkins University. He holds an SHRM-SPC as well as an SPHR Certification; has served on the Labor Expertise Panel for the Society for Human Resource Management since 2012, served on the Human Capital Measurement/HR Metrics Expertise Panel for the Society for Human Resource Management; holds a certificate in Strategic Decision Making and Human Resources from The Wharton School; and is the former chairman of the Government Relations Committee for Burger King Corporation. Additionally, Mr. Oppenheim has served on the Legislative Committee of the Maryland Chamber of Commerce, and he is an active member of the Society for Human Resource Management, the Human Resource Leadership Forum, and the Washington Area Compensation and Benefits Association.

WorkPlace HR, LLC and Fortney & Scott, LLC
WorkPlace HR provides premium human resources consulting services which exceed clients’ expectations through creative, efficient and solution-oriented support. WorkPlace HR offers a unique business approach premised on understanding and integrating each client’s strategic, operations, and human resources objectives. Additional information is available at www.workplacehr.com or by contacting Eric Oppenheim at eoppenheim@workplacehr.com or 202.689.1203.

FortneyScott is a Washington, DC-based law firm counseling and advising clients on the full spectrum of workplace-related matters. The firm has been recognized as one of the leading management employment law firms in the highly prestigious “Best Law Firms” for since 2011 by U.S. News & World Report and Best Lawyers. The firm offers clients the unparalleled experience and expertise of its attorneys, who formerly held senior positions at the U.S. Department of Labor, the Equal Employment Opportunity Commission, and other government agencies, in corporate legal staffs, in major law firms, and who served as a judge on an international tribunal.

Additional information is available at www.fortneyscott.com or by contacting David Fortney at dfortney@fortneyscott.com or 202.689.1201.

Colorado Passes Onerous Pay Equity Law, Expanding the State Law Patchwork

Colorado Governor Jared Polis (D) signed the Equal Pay for Equal Work Act on May 22, 2019, resulting in Colorado becoming the most recent state to join the patchwork of state pay equity laws that employers must navigate. The Colorado pay equity law becomes effective January 1, 2021, giving employers time to prepare and come into compliance.

The Colorado equal pay law provisions The Colorado law prohibits employers from discriminating between employees on the basis of sex, or on the basis of sex in combination with another protected status, for “substantially similar work.”  The Colorado law includes specific affirmative defenses, but the defenses under the new law are narrower than those provided under the federal Equal Pay Act and other state pay equity laws and the Colorado defenses likely will be more difficult for employers to meet. Specifically, a difference in pay can be justified if the employer can demonstrate that the wage differential is based upon a seniority or merit system or a system that measures earnings by quantity or quality of production or the employer can demonstrate:

  • All factors are applied reasonably;
  • Each factor accounts for the entire wage differential; and
  • Prior wage history was not relied on to justify a disparity in current wage rates.

The Colorado law also has an explicit ban on asking for salary history or relying on the salary history of prospective employees to determine their wage rate.

Employees claiming wage discrimination have expanded litigation rights, including that claimants may circumvent the administrative process and allowing for two years to file a lawsuit, instead of the usual 300 days to file an EEOC charge. There also are expanded remedies, including back pay for the entire time the violation continues, not to exceed six years. Additionally, an employer may be liable for economic damages in an amount equal to the difference between the amount that the employer paid to the employee and the amount the employee would have received had there been no violation, plus liquidated damages.

There is a good-faith exception, however. The additional payments are not permitted if the salary disparity was unintentional. The burden is on the employer to demonstrate that the act or omission giving rise to the violation was done in good faith.

Additional challenges for multi-state employers operating in Colorado.  Colorado joins a number of other states in passing comprehensive equal pay legislation, and more states are likely to continue the trend in the near future.  It is critical that employers, particularly those operating in multiple states, quickly get up to speed on their varying obligations.  Moreover, proactive pay audits under the protection of attorney-client privilege and, where appropriate, pay adjustments, will put employers in the best possible position to defend against what we expect will be an increase in complaints of compensation discrimination.

FortneyScott’s Pay Equity practice is dedicated to guiding employers through the changing and challenging world of pay equity. FortneyScott’s attorneys in Denver, Colorado and Washington, DC advise employers on compliance with the new Colorado pay equity law and additional workplace matters. Please contact FortneyScott for legal counsel and advice on complying with the Colorado fair pay law and the additional federal and state fair pay laws, and to enable your company to “get pay equity right.”

Update on EEO-1 Part 2 Pay and Work Hours Data Collection

On April 25, the Federal District Court in Washington DC ruled that the EEOC shall collect employer compensation and work hours data for all U.S. employers with 100 or more employees.  The Court has ordered that two years of compensation and work hours data be submitted.  It is certain that employers must submit 2018 data.  The Court ordered EEOC to soon decide whether employers will submit either 2017 or 2019 data.  Although all details have not been fully determined, the Court’s ruling included the following specifics:

  1. April 29, 2019 – EEOC will announce on its website that employers are to undertake preparations for filing their 2018 compensation and work hours data by September 30, 2019.
  2. May 3, 2019 – EEOC will communicate to the Court and to the Plaintiffs a second year of data that will be collected.  Specifically, the Court has ruled that EOOC can either collect 2017 compensation and work hours data or 2019 compensation and work hours data.
  3. September 30, 2019 – This is the date that employers’ 2018 compensation data must be submitted.  Additionally, in the event that the EEOC requires 2017 data to be filed, it also must be filed by this same date.
  4. March 31, 2020 – If the EEOC elects to require 2019 compensation data to be filed, instead of 2017 data, the compensation and work hours data must be filed by this date.
  5. April 5, 2021 – The Court has extended the authorization to collect compensation and work hours data to April 5, 2021.  The Court has relied on “tolling” principles for the time that the original EEO-1 data collection form was stayed by OMB.
  6. Rolling 20-day reports – the EEOC is to provide the Court with status updates every 20 days and the court is retaining jurisdiction to oversee and supervise implementation.  Additionally, the Court specifically stated that if there was a shortfall in the expected participation rate by employers in providing compensation data, that the EEOC was to extend the filing period until the historical reporting percentages are achieved.

For the District Court’s decision, click here.

A special webinar hosted by FortneyScott and DCI has been scheduled on Tuesday, April 30th  from 12-1 pm ET to provide employers in understanding what this means for them.  Please reach out to your FortneyScott attorney with whom you work to assist with compliance with these requirements.

To register for this timely webinar, click here.