OFCCP Week In Review: July 2020 | DirectEmployers Association

Tuesday, June 30, 2020: OFCCP’s Ambitious “Final Stretch” Regulatory Agenda

While this proposed Rules Agenda is over a month late by historical calendars, the first Trump regulatory term is now less than six months away from coming to an end. So, the White House has now released its semi-annual (Spring) “Unified Agenda of Regulatory and Deregulatory Actions for the federal Executive Branch agencies as the Trump Administration now heads down “the backstretch” of the President’s four- year term of office. The White House Agenda included, of course, the U.S. Department of Labor’s Spring 2020 Agency Rule List. USDOL’s Spring Rule List, in turn, included four pending OFCCP regulatory proposals, all but the first of which are in the “Final Rule Stage” and are thus ripe to go to final during President Trump’s current term of office:

  1. Affirmative Action Obligations of Federal Contractors and Subcontractors: Scope and Application of Programs (RIN 1250-AA11)

    This is a Rule OFCCP intends to reportedly propose this month (July) to codify the practice of OFCCP’s acceptance of Functional Affirmative Action Plans (FAAPs). Significant to the timing issues of the Trump Administration first term soon ending, FAAPs have been operational since Ellen Shong Bergman (first term Reagan OFCCP Director – and first female OFCCP Director) created them and put them into widespread use almost 40 years ago.

    While USDOL just published its Rule List, and it is thus very fresh, do not be surprised if OFCCP does not publish the FAAP Proposed Rule until later this summer. Historically, all OFCCP Administrations have unsuccessfully predicted their Rule publication dates, even missing some by years. Such is the life of Rules in a political environment also fraught with lengthy, sequential, and complex administrative” (i.e., “red tape”) processes. The FAAP Rule is also not a high priority among OFCCP’s regulatory concerns. This is true for several reasons. Not only have FAAPs persisted without Rulemaking or controversy for almost four decades, but also fewer than 300 federal Government contractors have historically participated in the FAAP program despite OFCCP’s passion for FAAPs. Moreover, while possible, it is unlikely the Trump Administration could or would expend the effort necessary to publish a proposed FAAP Rule and then take it to a Final Rule on or before December 20, 2020 (the last date the Trump Administration may safely publish a Rule in Final form and have it become legally effective 30 full days later BEFORE the next President is sworn in and who could stop the Rule from becoming legally effective. And, of course, if the President were to win re-election on November 3, the pressure to publish the Rule in Final form in the weeks following the election would immediately evaporate as the President would then look forward to four more years to get his policies forward.

  2. Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors: TRICARE and Certain Other Health Care Providers (RIN 1250-AA08) See below WIR story.
  3. Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption (RIN 1250-AA09) OFCCP’s Spring 2020 Rule List reports that OFCCP is readying its August 15, 2019, Proposed religious discrimination exemption Rule as a Final Rule to be published in August 2020 (only 4 to 8 weeks from now). OFCCP published its Proposed Rule almost a year ago at 84 FR 41677 to clarify how OFCCP would apply the religious exemption found in the EEO Clause of Executive Order 11246 to employers signatory to federal Government contracts/subcontracts in light of the SCOTUS’ 2014 decision in Hobby Lobby. This Final Rule announcement is a surprise to the Government contractor community since most thought this Rule was dead on arrival after many Government contractors joined the many outright opponents of the Rule from the civil rights community to write public Comments highly critical of the Rule.However, most Government Contractor criticisms of OFCCP’s Proposed Rule revolved around concern that the Proposed Rule, if implemented, would cause OFCCP to exalt religious freedom to allow discrimination against gay, lesbian, and transgender Applicants and employees to be lawful. That concern is now energized given the SCOTUS’ recent triumvirate consolidated case decision in Bostock v. Clayton, County, Georgia. That highly publicized decision held that Title VII made “sexual orientation” discrimination unlawful (against gay and lesbian Applicants and employees) and also made “gender identity” discrimination unlawful (against transgender Applicants and employees).

Note: Executive Order 11246 substantive law follows Title VII substantive law. Moreover, OFCCP has already (in the Obama Administration) published a Final OFCCP Rule making sexual orientation and gender identity unlawful bases of discrimination pursuant to Executive Order 11246. As a result, it is now possible OFCCP could entertain in investigations of Government contractors a clash between two protected rights: sexual orientation/gender identity protections vs religious freedom protections (the first two of which are (now) statutorily protected rights) vs a bedrock right long protected in the U.S. Constitution (religion).

Note: At the National Employment Law Institute’s annual Affirmative Action Briefing last October 2019, OFCCP Director Craig Leen told Briefing Co-Chairs John Fox and Candee Chambers point-blank, and emphatically, and repeatedly, that OFCCP would investigate Applicant and employee Complaints of employment discrimination on the basis of sexual orientation and gender identity in the face of adverse action from a contractor relying on Executive Order 11246’s religious exemption contained in it (See Sec. 204, para 3) and in OFCCP’s EEO Clauses Rule (41 CFR Section 60-1.5(a)(5)). What Director Leen did not say, and could not say without a specific fact pattern, was how OFCCP would balance the competing rights of the parties, or how OFCCP would resolve this collision of competing rights. So, game on! Perhaps OFCCP’s Final Rule will address how OFCCP must weigh and balance the Executive Order’s two competing regulatory provisions potentially in conflict with each other.

Note: John Fox and Jay Wang, from Fox, Wang & Morgan will address this question (among many others) in their upcoming July 14, 2020, webinar discussing the implications of the SCOTUS’ Bostock case decision as it impacts Executive Order 11246 and its implementing Rules.

  1. Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures to Resolve Potential Employment Discrimination (1250-AA10)

OFCCP also has this Proposed Rule slated to go to Final in August 2020. This Rule will be a disappointment to Contractors absent substantial OFCCP changes to the Rule, or its withdrawal in its entirety, in response to the Government contractor community’s harsh criticisms of OFCCP’s proposal. Those criticisms centered on both the wisdom of OFCCP trying to write a Rule seeking to summarize all of Title VII discrimination law (the fluidity of which the SCOTUS’ recent Bostock decision drives home, for example) and the erroneous interpretations of Title VII law OFCCP is proposing to adopt and implement in OFCCP investigations of Government contractors. While many contractor comments sought changed language, others recommended a complete withdrawal of the Rule for fear that OFCCP would be compelled to follow the new Rule, if it were finalized. Contractors feared such a new Rule would then set up contractors for constant friction in audits with OFCCP applying its unique Rule while contractors sought to abide by Title VII law.

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