1. 2012 ILG National Conference Waikoloa, Hawaii August 29, 2012 2012 ILG National Conference Waikoloa, Hawaii August 29, 2012 Equal Employment Advisory Council 1501 M Street, N.W. | Suite 400 Washington, D.C. 20005 Presented by: Jeff Norris Hot Trends in OFCCP Audits

2. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 2 The Equal Employment Advisory Council (EEAC) is a nonprofit association of private sector employers dedicated exclusively to the elimination of workplace discrimination through advancement of practical and effective equal employment opportunity, affirmative action, and diversity programs. The materials developed for this program and the discussions based upon them are designed to provide accurate and authoritative information regarding the subject matter covered. They are provided with the understanding that EEAC is not engaged in rendering legal, accounting, or other professional services. For legal advice or other expert assistance, the services of a competent attorney or other professional should be sought.

3. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 3 Establishment Selection Process for Selecting Establishments for Audit Erratic Recent CSALs utilized data sources beyond traditional EEO-1 and Census information Federal Procurement Data System; usaspending.gov website; Dunn & Bradstreet CSAL letters sent to non-headquarters establishments, and targeted facilities Not owned by the company (but similar name), sold, closed, fewer than 50 employees Discuss anomalies with local, district or regional office Clearly distinguish corporate management compliance evaluations from regular headquarters audits Process for Selecting Establishments for Audit Erratic Recent CSALs utilized data sources beyond traditional EEO-1 and Census information Federal Procurement Data System; usaspending.gov website; Dunn & Bradstreet CSAL letters sent to non-headquarters establishments, and targeted facilities Not owned by the company (but similar name), sold, closed, fewer than 50 employees Discuss anomalies with local, district or regional office Clearly distinguish corporate management compliance evaluations from regular headquarters audits

4. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 4 Scheduling Compliance Evaluations Process for Scheduling Establishments for Audit Erratic –Scheduling letters being issued in bursts resulting in multiple audits being initiated in rapid succession –Corporate compliance personnel swamped –OFCCP resistant to postponing submission dates more than a few weeks –OFCCP sued by U.S. Security Associates, Inc. for unreasonable search and seizure Process for Scheduling Establishments for Audit Erratic –Scheduling letters being issued in bursts resulting in multiple audits being initiated in rapid succession –Corporate compliance personnel swamped –OFCCP resistant to postponing submission dates more than a few weeks –OFCCP sued by U.S. Security Associates, Inc. for unreasonable search and seizure

5. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 5 Expansive Data Requests Expansive (or unreasonable) data requests often combined with an unwillingness to accept contractor explanations –Contractor asked to reconcile every single employee movement over past year in absence of any substantive compliance issues –Compliance officer requests for contact information for consultants and attorneys who have assisted the company in AAP development and audit preparation, as well as programming code of consultant who ran regression analysis Expansive (or unreasonable) data requests often combined with an unwillingness to accept contractor explanations –Contractor asked to reconcile every single employee movement over past year in absence of any substantive compliance issues –Compliance officer requests for contact information for consultants and attorneys who have assisted the company in AAP development and audit preparation, as well as programming code of consultant who ran regression analysis

6. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 6 Impact of Recent Litigation United Space Alliance and Frito-Lay litigation have reinforced OFCCPs 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 need to rely more on relevance of requested data United Space Alliance and Frito-Lay litigation have reinforced OFCCPs 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 need to rely more on relevance of requested data

7. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 7 Compensation Analysis Pending issuance of new standards to replace 2006 compensation guidelines, there appears to be no consistency in OFCCPs approach to compensation analysis: –Cohort analyses used frequently –Traditional regressions –AstraZeneca predictive regressions for current employees –Claims for total workforce regressions Will new guidance be included in upcoming sex discrimination guidelines revisions? Pending issuance of new standards to replace 2006 compensation guidelines, there appears to be no consistency in OFCCPs approach to compensation analysis: –Cohort analyses used frequently –Traditional regressions –AstraZeneca predictive regressions for current employees –Claims for total workforce regressions Will new guidance be included in upcoming sex discrimination guidelines revisions?

8. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 8 Transactions Analyses Continued emphasis on minority subgroup analyses of selections (hires, promotions, terminations) –Routine request when minority/nonminority data submitted for desk audit –Used primarily for analyzing unskilled, high-turnover, entry-level positions –FedEx Ground settlement: pattern and practice discrimination against men, women, Whites, Blacks, Hispanics, American Indians, Asians, and individuals identifying as having Two or More Races Failure to use subgroup analyses in annual adverse impact analyses also occasionally cited as an affirmative action violation Continued emphasis on minority subgroup analyses of selections (hires, promotions, terminations) –Routine request when minority/nonminority data submitted for desk audit –Used primarily for analyzing unskilled, high-turnover, entry-level positions –FedEx Ground settlement: pattern and practice discrimination against men, women, Whites, Blacks, Hispanics, American Indians, Asians, and individuals identifying as having Two or More Races Failure to use subgroup analyses in annual adverse impact analyses also occasionally cited as an affirmative action violation

9. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 9 Recruitment and Outreach Good-faith efforts now require personal contacts and follow-up inquiries (particularly for veterans and individuals with disabilities) –Contacting referral agencies in writing no longer sufficient – need to show name and telephone number of individuals contacted –Third-party administration of outreach efforts may no longer be permissible –Mandatory job listing for veterans may require follow-up contact to ensure jobs have actually been posted Good-faith efforts now require personal contacts and follow-up inquiries (particularly for veterans and individuals with disabilities) –Contacting referral agencies in writing no longer sufficient – need to show name and telephone number of individuals contacted –Third-party administration of outreach efforts may no longer be permissible –Mandatory job listing for veterans may require follow-up contact to ensure jobs have actually been posted

10. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 10 Charge Investigations OFCCP more focused on investigating individual complaints of discrimination (particularly for veterans and individuals with disabilities) –Individual complaint investigations generally the province of EEOC – but EEOC has no enforcement authority over veterans –Recent OFCCP disability complaint investigations have tended to migrate into a review of compliance issues extending well beyond the corners of the complaint – sometimes including race and gender compliance OFCCP more focused on investigating individual complaints of discrimination (particularly for veterans and individuals with disabilities) –Individual complaint investigations generally the province of EEOC – but EEOC has no enforcement authority over veterans –Recent OFCCP disability complaint investigations have tended to migrate into a review of compliance issues extending well beyond the corners of the complaint – sometimes including race and gender compliance

11. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 11 Enterprise-Wide Settlements OFCCP has indicated a desire to reach enterprise-wide solutions for violations found to exist at multiple establishments –No evidence that this initiative is being aggressively pursued by the National Office –FedEx Ground case involved 23 separate compliance evaluations, but audits were initiated independently, not collaboratively –Impetus for a comprehensive settlement originated as much with the company as with OFCCP OFCCP has indicated a desire to reach enterprise-wide solutions for violations found to exist at multiple establishments –No evidence that this initiative is being aggressively pursued by the National Office –FedEx Ground case involved 23 separate compliance evaluations, but audits were initiated independently, not collaboratively –Impetus for a comprehensive settlement originated as much with the company as with OFCCP

12. © 2012 Equal Employment Advisory Council 2012 ILG National Conference | August 29, 2012 | Page 12 What Are They Thinking? Compliance Officers who believe Federal Contract Compliance Manual is current and governs compliance: –D/V AAP still requires a statement on compensation (removed in 1996) –Insistence that AAP needs to be signed One OFCCP office informs company that initial applicant submission (nearly 30,000) overly broad; company refines applicant flow as instructed; case reassigned to new compliance officer who insists on using original submission Compliance Officers who believe Federal Contract Compliance Manual is current and governs compliance: –D/V AAP still requires a statement on compensation (removed in 1996) –Insistence that AAP needs to be signed One OFCCP office informs company that initial applicant submission (nearly 30,000) overly broad; company refines applicant flow as instructed; case reassigned to new compliance officer who insists on using original submission