Legal Alert: US DOL Judges Require Production of AAP Data Beyond Date of OFCCP Scheduling Letter

by FordHarrison
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[authors: Bennet Alsher, Linda Cavanna-Wilk, Karen Tyner]

Executive Summary:  The U.S. Department of Labor's (DOL) Administrative Review Board (ARB) recently issued a decision requiring an employer to produce OFCCP data well beyond the date of an OFCCP scheduling letter.  See OFCCP v. Frito-Lay Inc., DOL ARB, No. 10-132, 5/8/12 [released 5/10/12]).

In Frito-Lay, the ARB unanimously held that the company was required to provide to the OFCCP data from its 2008 and 2009 Affirmative Action Plans (AAPs).  The ARB's decision reversed a DOL administrative law judge's July 2010 Recommended Decision and Order dismissing OFCCP's complaint against Frito-Lay.  The ALJ held that Frito-Lay was not required to provide to OFCCP information related to its 2008 and 2009 AAPs.  The ALJ reasoned that the scope of the OFCCP's 2007 desk audit of Frito-Lay precluded OFCCP from requesting data for 2008 and 2009.  Following that decision, OFCCP petitioned for review[1]

Background: 

On July 13, 2007, the OFCCP sent Frito-Lay a Scheduling Letter stating that its Dallas Baked Snack facility had been selected for a compliance review. In the letter, the OFCCP asked Frito-Lay to submit applicant and hire data for the 2006 Affirmative Action Plan year.  It also asked for data for the first half of 2007 if Frito-Lay received the letter six months or more into its current AAP year.  The Frito-Lay AAP was effective January 1, 2007; thus, the Company sent the OFCCP hire and applicant data for 2006 and the first six months of 2007.  The OFCCP later requested data for the second half of 2007 and for data dating back to July 13, 2005.  Frito-Lay complied with the OFCCP's request.

The OFCCP analyzed hiring at the Dallas Baked Snack facility and alleged the analysis showed an adverse impact in Frito-Lay's hiring of women from June 13, 2006 to December 31, 2007.  The OFCCP then alleged it was necessary to determine whether the adverse impact continued after December 31, 2007. The OFCCP sent Frito-Lay a request on November 10, 2009, for applicant and hire data from January 1, 2008 to October 31, 2009.  Frito-Lay refused to comply with the OFCCP's request and the OFCCP subsequently filed an administrative complaint.

In Frito-Lay's case, the compliance review was still in the desk audit phase.  Frito-Lay argued that the OFCCP's regulatory framework establishes the temporal scope of a compliance review during the desk audit as the contractor's previous affirmative action plan year at the time the contractor received the Scheduling Letter.  The scope extends to the date the contractor received the Scheduling Letter if the contractor was more than six months into its current AAP plan year when it received the Scheduling Letter.  If the OFCCP is investigating discrimination, the regulatory framework allows it to investigate the two-year period prior to the date the contractor received its Scheduling Letter.  Frito-Lay argued that OFCCP's regulatory framework does not allow the OFCCP to lengthen the review period to data regarding employment activity that occurred beyond the date it received the Scheduling Letter.  The OFCCP, however, argued that the 2008 and 2009 applicant and hire data was relevant to its investigation and was appropriate under its implementing regulations.  The ALJ sided with Frito-Lay and dismissed OFCCP's complaint. 

The ARB's Decision

On review, however, the ARB held that Frito-Lay was required to comply with the OFCCP's data request for the 2008 and 2009 plans.  The ARB reasoned that the OFCCP "clearly has discretion to request AAP data covering activity occurring after the scheduling letter in the specific circumstances of this case."  The ARB found that Frito- Lay had an ongoing duty from 2007 to 2009 to comply with E.O. 11246 and the implementing regulations.  Because OFCCP found a statistically significant disparity in hiring women in Frito-Lay's case, OFCCP's request for two additional years of data was consistent with a proper disparate impact analysis.  Consequently, according to the ARB, OFCCP's request for the additional two years of data was reasonable and consistent with OFCCP's duty to ensure Frito-Lay's compliance with E.O. 11246. 

In a footnote, the ARB stated that its focus in Frito-Lay is narrow.  The ARB did not address whether OFCCP has the ability to ask for post-scheduling letter data in all desk audits or where OFCCP has not objectively identified a concern about compliance.  The ARB also noted that OFCCP's guidelines provide that a new desk audit could have been performed in 2009, which presumably would have resulted in Frito-Lay's producing the same data that it had withheld in this case.

Employers' Bottom Line:

Although the ARB's holding in Frito-Lay is narrow, and driven in large part by the fact that Frito-Lay's records showed a statistically significant disparity in hiring women, federal contractors should nevertheless continue to monitor their hiring, promotion, pay, and termination practices during and after an OFCCP desk audit.  In addition, federal contractors may be required to produce data well beyond the date of an OFCCP Scheduling Letter if the ARB ruling is upheld by a reviewing court. 

If you have any questions regarding this Alert, please contact the Ford & Harrison attorney with whom you usually work or Bennet Alsher, balsher@fordharrison.com, Karen Tyner, ktyner@fordharrison.com, or Linda Cavanna-Wilk, lcavanna-wilk@fordharrison.com, all of whom are members of Ford & Harrison's Affirmative Action Compliance and Plan Development practice group.


[1] For more information, please see our August 5, 2010 Legal Alert, "Administrative Law Judge Rules in Favor of Company in OFCCP Compliance Review Dispute," available at:  http://www.fordharrison.com/shownews.aspx?show=6439.

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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