Contractor Pays $372,000 to Settle Retaliation Claims Asserted by Employees Hired Pursuant to Conciliation Agreement

The Office of Federal Contract Compliance Programs (OFCCP) has just announced that Tufts Associated Health Plans Inc. (Tufts) will pay $372,000 to 12 minority employees. The payment is intended to settle the workers’ complaint that they were subjected to retaliation after being hired pursuant to an earlier Conciliation Agreement (CA) between Tufts and the agency. In the earlier compliance review, the OFCCP found that Tufts’ hiring practices discriminated against minorities and, in reaching a settlement of these allegations, Tufts agreed to the preferential hiring of a specified number of minority applicants. The 12 class members who were hired pursuant to the CA allege, among other things, that they were segregated from and held to stricter standards than other Tufts employees. This settlement illustrates three important facts for federal contractors to keep in mind. 

First, a CA never ends the scrutiny that the OFCCP will extend to a contractor’s employment practices, and contractors should recognize that individuals hired pursuant to a CA are already well aware of their rights under the law. Simply put, these employees know where to go to get redress for mistreatment.  

Second, the OFCCP does not just conduct audits. It will investigate complaints filed by individual employees. The agency will give high priority to any retaliation complaint filed by a person who benefited from a CA because it strikes at the heart of the agency’s ability to enforce the law. 

Third, for anyone who thought that the OFCCP’s interest in health care providers might be fading, here is another example of the push to assert jurisdiction over such entities. As the OFCCP’s news release notes:

Tufts Associated Health Plans Inc. offers a full array of health coverage options including Medicare Part D prescription benefits, which it offers under a contract with the Centers for Medicare and Medicaid Services for the operation of a Voluntary Medicare Prescription Drug Plan. The total contract amount for Part D prescriptions benefits for the period from January through May 2012 alone was $84.5 million.

In addition to the monetary relief provided to the 12 minority employees who allegedly experienced retaliation, the CA requires Tufts to provide training to managers and other personnel on how to ensure equal employment opportunity and on the prohibition against retaliation. 

There are obvious lessons to be drawn from this settlement. Contractors should make training central to their affirmative action compliance efforts. The training should focus on the role that managers play in achieving equal employment opportunity, and it should include information on the prohibition against retaliation. If a contractor is a party to a CA that involves preferential hiring for an alleged victim class, more targeted training should be provided to the managers who will work with these new employees so that it is clear that they must be treated in the same way as other employees and that retaliation is prohibited. Indeed, the discharge of any member of the victim class who is hired under the CA should be thoroughly documented and reviewed by human resources professionals and outside counsel to ensure that there is a solid defense to any subsequent claim of retaliation that the employee may assert in a complaint filed with the OFCCP.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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