5. OFCCP Planning To Pivot Away From “Single Establishment” Audits. In a subsection of its Budget Justification spread over pages 14 and 15 and titled “Achieving greater strategic impact by strengthening enforcement and increasing coordination,” OFCCP re-states its desire to audit “company-wide.” This notion has been an aspiration of OFCCP Directors going back to the Reagan Administration. However, Pat Shiu (in the Obama Administration) was the only OFCCP Director who came close to realizing this pipedream. Pat realized, however, that absent a major change to both OFCCP’s audit selection protocols and the design of Affirmative Action Plans—both of which are founded on the concept of a “single establishment” architecture—that the only way to audit “company-wide” was to gang tackle a bevy of corporate establishments (30 or 40 at a time over sequential years).
This “gang tackle” methodology allowed OFCCP to get a view of many related corporate establishments simultaneously to either realize that their hiring and pay systems OFCCP investigated were benign, or the company was decentralized and NOT subject to centralized control or seek to force a change in enough establishments that the “tail would wag the dog” and force a corporate-wide epiphany. The legality of “company-wide” audit selections was never subjected to a legal test because OFCCP stopped this secret program a few years after it began.
Shirley Wilcher (Clinton Administration OFCCP Director) attacked the issue a different way. Shirley, following the lead of her predecessor Cari Dominguez in the Bush Administration (the father) who created and launched so-called “Glass Ceiling audits” of corporate headquarter and regional HQ establishments. Shirley sought to audit any centralized hiring and/or pay systems and “put a wrench” on them at the fountainhead in Headquarters from which any centralized national policies and/or practices were created and emanated outward. But OFCCP soon realized it could not evaluate from the vantage point at Headquarters how, exactly, local establishments of the company were implementing the national policy or practice, or with what result as to Protected Group members.
While announcing a “more enterprise-wide approach,” OFCCP does not yet explain how, exactly, it intends to proceed. I think it knows but does not want contractors to know for fear of lawsuits to stop OFCCP’s planned approach. Here is what OFCCP says, exactly (see page 14, bottom):
“OFCCP will work to align its traditional review of single “establishments” with the evolving reality of the workplace, including taking a more enterprise-wide approach where appropriate to evaluate contractors’ employment practices, including compensation. By hiring employees with relevant statistical, analytical, enforcement, and technical expertise, OFCCP will be better equipped to lead and support a more coordinated and cross-regional nationwide approach to identifying and investigating systemic discrimination in contractor workplaces. OFCCP will also enhance its database production, software expertise and research capabilities to support stronger coordinated enforcement.”
What this sounds like is that OFCCP is going to resurrect “gang tackles” of companies, and thus set down for audit many corporate establishments simultaneously which OFCCP hopes to manage more closely across OFCCP regional offices. If “gang tackles” return, they will be fairly apparent to the targeted companies which will see their audit counts suddenly jump higher.
And then there is this vague and amorphous promise of regulatory reform floated to the end of this same paragraph discussing “Achieving greater strategic impact by strengthening enforcement and increasing coordination” which may be tied to the enterprise-wide initiative, although it is difficult to be sure given its physical distance from the enterprise-wide discussion and the appearance of the following language:
“As indicated in its regulatory agenda, OFCCP will also undertake efforts to modernize its compliance program for federal supply and service contractors and subcontractors through proposed regulatory actions that are aligned with today’s workplace realities.” (see p. 15, top para, last sentence)
Perhaps OFCCP intends to propose a regulation to change its Rules which lay down the “establishment” structure upon which OFCCP has premised its operations for 50 years since the Nixon Administration in 1972 invented Affirmative Action Plans for Minorities and Women and created the concept of employment “Goals.”
Indeed, OFCCP has already, by mere executive fiat and without proper legal authority, changed its audits of construction contractors to force audits not by the “establishment” selected for audit (and as noted by address on OFCCP’s CSAL) but by what OFCCP describes, in error, as “Standard Metropolitan Statistical Areas (SMSAs).” (The U.S. Bureau of the Census (“BoC”) changed terminology and definitions with the 2000 Census, retired SMSAs (which had a short life span between 1970 and 2000) and in 2003 rolled out its first MSAs (Metropolitan Statistical Areas). MSAs are the geographical tool the BoC and contractors use today to define large city centers and their surrounding supporting and integrated geographical, political, and economic areas. Note, the last major adjustment of identified MSAs was in 2010.
This all becomes important as we have seen the Biden OFCCP also announce as to Supply and Service contractors that, again by executive fiat, it would audit all AAP establishments within a campus setting or those located in the same city. In the case of construction contractors, OFCCP currently calls the company under audit at the inception of the audit to ask what other establishments the contractor has in the “SMSA” (sic). Then, OFCCP insists to impasse that the construction contractor must deliver to OFCCP information for all its other establishments in the “SMSA” (sic).
So, OFCCP is already experimenting and “bending the rules” to force area-wide audits as it further contemplates “enterprise-wide audits” to come in some sort in 2023 all the while hoping contractors will “just play ball with OFCCP” and not object to this extra-legal way of proceeding. What OFCCP does not seem to grasp just yet, though, is that contractors already faced with “area-wide” audits are aghast and privately shaking their heads in disappointment that OFCCP has chosen to yet again flaunt its Rules and longstanding practices rather than to resorting to proper legal process. Perhaps the upside of this recent OFCCP activity is that it will re-inflate the local Industry Liaison Groups (”ILGs”) to discuss this newly changing landscape at OFCCP and its maverick processes to achieve change by brute force.