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					Welcome to Compliance Day!

                  Nita Beecher
                  Workforce Opportunity Network
                  October 26, 2012
Today’s Schedule

   8:30 am Introduction
   8:45 am Regulatory update and member roundtable
   9:45 am Break
   10:00 am Elizabeth Grossman, one of two EEOC leads on
     systemic discrimination
   12:00 am Lunch
   1:00 pm Discussion on Section 503/VEVRAA and member
     roundtable continues
   2:30 pm Meeting ends

MERCER                      January 21, 2013               1
Recommendations of Panel on Measuring and Collecting Pay
Information from US Employers by Gender, Race and National Origin

On the recommendation of National Equal Pay Enforcement Task Force to
   evaluate data collection needs and capabilities the EEOC asked National
   Research Council Committee on National Statistics (CNSTAT):
   – Convene a panel of experts to review methods for measuring and
     collecting pay information from U.S. employers for the purpose of
     administering Section 709 of the Civil Rights Act of 1964, as amended.

   –  Evaluate currently available and potential data sources, methodological
     requirements, and appropriate statistical techniques for the measurement
     and collection of employer pay data.
   – Consider suitable data collection instruments, procedures for reducing
     reporting burdens on employers, and confidentiality, disclosure, and data
     access issues.
   – Issue a report with findings and recommendations on what data the
     EEOC should collect to enhance wage discrimination law enforcement
     efforts, which will assist the EEOC in formulating regulations.
MERCER                             January 21, 2013                           2
Recommendations of Panel on Measuring and Collecting Pay
Information from US Employers by Gender, Race and National Origin

The panel selected by the National Academies was:
• John M. Abowd (Chair), Department of Economics, Cornell University
• H. Juanita (Nita) Beecher, Mercer LLC
• Marc Bendick, Jr., Bendick and Egan Economic Consultants, Inc.
• Charles C. Brown, Department of Economics, University of Michigan
• Elizabeth Hirsh, Department of Sociology, University of British Columbia
• Mark R. Killingsworth, Department of Economics, Rutgers University
• Jonathan S. Leonard, Haas School of Business, University of California, Berkeley
• Janice F. Madden, Wharton School, University of Pennsylvania
• Aleksandra (Sesa) Slavkovic, Department of Statistics, Pennsylvania State
• Finis R. Welch, Welch Consulting
• Valerie Rawlston Wilson, National Urban League Policy Institute

MERCER                                 January 21, 2013                              3
Recommendations of Panel on Measuring and Collecting Pay
Information from US Employers by Gender, Race and National Origin

• Recommendation 1: In conjunction with the Office of Federal Contract
  Compliance Programs of the U.S. Department of Labor and the Civil Rights
  Division of the U.S. Department of Justice, the U.S. Equal Employment
  Opportunity Commission should prepare a comprehensive plan for use of
  earnings data before initiating any data collection.
• Recommendation 2: After the U.S. Equal Employment Opportunity
  Commission, the Office of Federal Contract Compliance Programs, and the
  U.S. Department of Justice complete the comprehensive plan for use of
  earnings data, the agencies should initiate a pilot study to test the collection
  instrument and the plan for the use of the data. The pilot study should be
  conducted by an independent contractor charged with measuring the
  resulting data quality, fitness for use in the comprehensive plan, cost, and
  respondent burden.

MERCER                               January 21, 2013                            4
Recommendations of Panel on Measuring and Collecting Pay
Information from US Employers by Gender, Race and National Origin

• Recommendation 3: The U.S. Equal Employment Opportunity Commission
  should enhance its capacity to summarize, analyze, and protect earnings
• Recommendation 4: The U.S. Equal Employment Opportunity Commission
  should collect data on rates of pay, not actual earnings or pay bands, in a
  manner that permits the calculation of measures of both central tendency
  and dispersion.

MERCER                             January 21, 2013                         5
Recommendations of Panel on Measuring and Collecting Pay
Information from US Employers by Gender, Race and National Origin

• Recommendation 5: In anticipation of increased user demand for
  microdata on pay information by demographic detail for research and
  analytical purposes if the data are collected by the U.S. Equal Employment
  Opportunity Commission, the agency should consider implementing
  appropriate data protection techniques, such as data perturbation and the
  generation of synthetic data, to protect the confidentiality of the data, and it
  should also consider supporting research for the development of these
• Recommendation 6: The U.S. Equal Employment Opportunity Commission
  should seek legislation that would increase the ability of the agency to
  protect confidential data. The legislation should specifically authorize data-
  sharing agreements with other agencies with legislative authority to enforce
  antidiscrimination laws and should extend Title VII penalties to nonagency

MERCER                                January 21, 2013                               6
Recommendations of Panel on Measuring and Collecting Pay
Information from US Employers by Gender, Race and National Origin

• “The main purpose for which the wage data would be collected, as articulated to the
  panel by EEOC and OFCCP representatives, is for targeting employers for
  investigation regarding their compliance with antidiscrimination laws. But beyond
  this general statement of purpose, the specific mechanisms by which the data
  would be assembled, assessed, compared, and used in a targeting operation are
  not well developed by either agency.”
• “The panel found no evidence of a clearly articulated plan for using the earnings
  data if they are collected. The fundamental question that would need to be
  answered is how the earnings data should be integrated into the compliance
  programs, for which the triggers have primarily been a complaint process that has
  generated relatively few complaints about pay matters.”
• “Furthermore, the panel concludes that existing studies of the cost-effectiveness of
  an instrument for collecting wage data and the resulting burden are inadequate to
  assess any new program. Unless the agencies have a comprehensive plan that
  includes the form of the data collection, it will not be possible to determine, with
  precision, the actual burden on employers and the probable costs and benefits of
  the collection. Therefore, the first recommendation is to develop such a plan.”

MERCER                                  January 21, 2013                                 7
Impact on EEOC and OFCCP Data Gathering Projects

• At NILG speakers indicated the panel’s report sets back
  agencies’ proposed compensation data gathering proposals at
  least 3-5 years
• The OFCCP’s proposed compensation tool is not likely to
  move forward
• Scheduling letter is stalled and the proposed compensation
  collection is dead
• However OFCCP still able to collect all the data it wants based
  on Frito-Lay and United Space Alliance
• But remember hiring discrimination is where OFCCP makes its
MERCER                        January 21, 2013                  8

Scope of OFCCP Audits
   Frito Lay decision
   The ARB reversed favorable ALJ decision even though agency has
     not amended regulations saying no data after date of scheduling
         The OFCCP can request data going forward, beyond the year of the
          scheduling letter.
          - ARB held that OFCCP’s request for AAP data extending forward to
            two years after OFCCP issued the Scheduling Letter, was narrow
            and motivated by an objective deficiency discovered during the audit.
            - Possible argument if OFCCP does not discover any deficiencies?
          - Contractor has an ongoing duty to comply with the OFCCP’s audit
            data requests that are reasonable and consistent with the Agency’s
            duty to safeguard compliance with federal regulations.

MERCER                                  January 21, 2013                        9

Scope of OFCCP Audits
United Space Alliance
   OFCCP’s desk audit is not required to end when OFCCP completes its
     analysis of the initially requested information.
   “The Court understands that United Space and the entire community of
     federal contractors are keenly interested in how OFCCP decides
     whether to request additional data on a contractor's compensation
     practices, but that interest does not allow those companies or this Court
     to interfere with the agency's investigatory practices. Submission to such
     lawful investigations is the price of working as a federal contractor.”

MERCER                               January 21, 2013                        10

United Space Alliance and Frito-Lay litigation have reinforced
 OFCCP’s entitlement to contractor employment information
 during routine compliance evaluations
 – Has resulted in increased OFCCP insistence for
    comprehensive employment data
 – More difficult for contractors to argue OFCCP not entitled to
    requested information
 – May require contractors to argue relevance of requested
    - Makes OFCCP’s data collection authority more like that of

MERCER                        January 21, 2013                 11

Other items—
• CSALs to be posted on OFCCP website and no longer mailed
  to contractors
  – Contractors concerned about wide access of website
• According to recent discussion with district director agency no
  longer doing cohort analysis on compensation
  – Apparently Pam Cuokos determined to do only statistical
• Agency is “fly specking” AAPs
  – Mentioned at SWARM by Melissa Spear that they are cross
    checking hires with payroll records
MERCER                        January 21, 2013                      12

More items
ARB on October 19 found OFCCP has no jurisdiction over
 Florida hospital providing hospital services for federal
 contractor that administers a network for TRICARE
 – Reversed ALJ based on Section 715 of National Defense
   Authorization Act that exempted TRICARE providers from
   OFCCP’s jurisdiction
 – TRICARE support contract may not be considered a
   contract for performance of health care services or supplies
   for determining whether network providers are
   subcontractors under FAR so not a subcontract under
   OFCCP regulations

MERCER                       January 21, 2013                     13

Additional items
• More issues around how contractors are being selected for
  – US Security Associates filed complaint with DOL ALJ
    alleging violation of 4th Amendment in selection
    - ALJ dismissed saying contractors can’t sue in DOL OALJ
  – OFCCP taking position that because get CSALs as notice
    no extension of time to submit data
  – Agency investigating more individual complaints especially
    vets and individuals with disabilities

MERCER                       January 21, 2013                    14

• What types of requests are members getting in audits?
• What are the major issues for members in OFCCP audits?
• How are members handling current audits?
• Any suggestions for other members?
• What types of compensation analysis are members doing?

MERCER                       January 21, 2013              15

Possible relief for contractors/employers--Christopher v.
 SmithKline Beecham (S. Ct.)?
  The U.S. Supreme Court ruled that no deference owed when DOL
  interpretation (or change in interpretation) of ambiguous regulations would
  impose massive liability on a party for conduct that occurred before the
  interpretation was announced.
• The Court’s decision held:
  – Regulations must provide “[f]air warning of conduct [a regulation]
    prohibits or requires.”
  – An agency cannot announce its interpretations for the first time in
    enforcement proceedings that result in unfair surprise.

MERCER                              January 21, 2013                            16

• How could Christopher apply?
• Factors that the Supreme Court cited in Christopher also apply
  to OFCCP interpretations:
  – Ambiguous regulations;
  – Massive liability;
  – DOL conspicuous inaction for lengthy period;
  – Retroactive interpretation—standards were not in effect at
     time of audit; and
  – Not based on notice and comment.

MERCER                       January 21, 2013                  17

Center for Corporate Equality determined that there have been
 very few Section 503 or VEVRAA violations.
 – Reviewed DOL’s OFCCP compliance database and
   complaint investigations from September 2004 to June 2012
 – Of the 285,390 federal contractor/subcontractor
         - 871 veterans or disability complaints
         - 60 resulted in violation, averaging 6.67 per year
           - Majority of these technical violations
         - 95% closed with no finding of discrimination
         - In compliance evaluations 3 violations out of 22,104 reviews

• Applied Economics Strategies estimated Section 503 revisions
  cost $5.9B with recurring costs of $2.68B
MERCER                                  January 21, 2013                  18

Status of Section 503 and VEVRAA regulations as of this
 – Neither set of proposed regulations have been sent to OMB
    for approval
         - OMB put hard stop on regulations in August prior to November election
   – Calculation had been that OFCCP would issue final
     VEVRAA (Section 4212) regulations in late August-early
         - Speculation at NILG was that agency would announce sending
           regulations to OMB but did not occur
   – If send to OMB after November election probably will not be
     able to issue as final prior to end of Obama term
   – Nevertheless OFCCP making data requests right now!
MERCER                                 January 21, 2013                       19
Samples of current OFCCP data requests

Veterans                                     Disabled
• State job postings during review           • Leave and accommodation policies
• 3 years VETS-100/VETS-100A                 • Job descriptions with medical and
  reports                                      physical requirements
• Self-id forms                              • Info on review of medical and
• Executed contracts/purchase orders           physical requirements
  with correct language                      • Employees or applicants denied
• Posting where employees can view             promotion or hire due to medical or
  AAP                                          physical job requirements
• Invitation to vets to self-id and          • Onllne accessibility
  posting                                    • Accommodation request list (name,
• List of employees self identifying as        date of hire, request, granted and if
  vets                                         not why not
• List of applicants id’d as vets,           • Disability leave list
  whose hired and if not why not             • Maternity leave list
                                             • Disabled applicant list
MERCER                              January 21, 2013                               20
Affirmative action

• Fisher v. University of Texas

MERCER                        January 21, 2013   21
 Confidentiality in internal investigation violates Section
 8(a)(1)—Banner Health Systems d/b/a Banner Estrella Medical
 Center, 358 N.L.R.B. No. 93
 –Hospital investigated ULP of employee
 –During investigation HR told employees interviewed not to
 discuss while investigation was under way to protect
 –Board said it was employer’s burden “to first determine
 whether in any give[n] investigation witnesses need[ed]
 protection, evidence [was] in danger of being destroyed,
 testimony [was] in danger of being fabricated, or there [was] a
 need to prevent a cover up.”
 –Blanket policy of asking for employee silence not justified as it
 “had a reasonable tendency to coerce employees”
MERCER                        January 21, 2013                    22

Social media policies need to be narrowed to avoid violating
 Section 8(a)(1)
 – Costco’s policy barred any electronic statements that
   damaged the company, defamed an individual or damage
   any person’s reputation
 – Board held “broad prohibition…clearly requires them to
   refrain from engaging in certain protected communications”
 – The rule allows employees to reasonably assume that it
   pertains to—among other things—certain protected
   concerted activities, such as communications that are critical
   of the respondent’s treatment of employees.

MERCER                        January 21, 2013                 23

• CRST Van Expedited Inc.-8th Circuit refuses to rehear case
• EEOC v. TriCore Reference Labs.—10th Cir. ordered EEOC
  to pay $140,000 in fees in failure to accommodate case for
  continuing case after clear there was no case
• EEOC v.Nestle—Ky. district court refused to require employer
  to provide information on acquisition of genetic information
  based on single employee’s charge
• EEOC v. U.S Steel Corp.—Pa. district court held pattern or
  practice lawsuit subject to 300 day statute of limitations

MERCER                       January 21, 2013                  24

• EEOC v. Randstad—4th Circuit enforced EEOC subpoena on
  literary requirements finding EEOC entitled to deference in
  determining relevance of data needed
• EEOC v. Freeman—D. Md. says in EEOC case on use of
  criminal background and credit checks defendant can depose
  commission on their use of criminal background and credit
  checks in their hiring
• EEOC v. Cognis Corp.—Ill. district court says employer can’t
  restrict ability of employees to file EEOC charges in last
  chance agreements
• EEOC v. Kronos—3rd Circuit says EEOC entitled to any info it
  needs from 3rd party test provider
MERCER                       January 21, 2013                    25

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