Category Archives: ARB

OFCCP Concedes ALJ Ruling that “Non-Asian” Is Not a Proper Class

The Office of Federal Contract Compliance Programs (“OFCCP”) filed a notice on September 19, 2013 with the Department of Labor’s Administrative Review Board (“ARB”) indicating that it will not appeal the Administrative Law Judge’s (“ALJ’s”) ruling in OFCCP v VF Jeanswear Ltd Partnership, (ALJ Case No 2011-OFC-00006, Krantz, K), that “non-Asian” does not constitute a “race” for the purposes of Executive Order 11246 enforcement.

ALJ Ruling

On August 5, 2013, the ALJ ruled that OFCCP could not pursue a finding of discrimination against a contractor on behalf of “non-Asians.”  In that case, OFCCP alleged that VF Jeansware discriminated against 288 “non-Asian” applicants for positions in its Operative job group at its Winston-Salem, North Carolina establishment.   OFCCP alleged there was statistically significant adverse impact against “non-Asians” based on VF Jeansware hiring only sixteen percent of the incumbents for Operative positions from its non-Asian applicant pool as compared to hiring nearly forty-four percent of the Asian applicant pool for positions in that same job group. 

Upon review, the ALJ held that OFCCP could not establish a discrimination claim against “non-Asians” because “non-Asians” were not a protected class.  Although the ALJ acknowledged there was disparate impact on “non-Asians”, he found that “non-Asian” is not a term defined in the regulations and was an aggregate of three ethnic groups (i.e., Whites, African-Americans, and Hispanics).  The ALJ noted that while Whites were underrepresented, African Americans were close to the percentage of African-Americans available in the regional data and Hispanics were actually “overrepresented.”  The ALJ also explained that the only accepted “race” and “ethnic group” classifications for both EEOC and OFCCP purposes are African-American, Native American/Alaskan Native, Asian/Pacific Islander, Hispanic, and White.  Although “non-whites” can constitute a protected class of “minorities”, the regulations do not recognize other “non-” classifications for the purposes of analysis and enforcement. 

OFCCP had thirty days to appeal the ALJ’s ruling to the ARB.  OFCCP filed a notice with the ARB on September 19, 2013 waiving its right to appeal the ALJ’s ruling, and, on September 25, 2013, the ARB issued an order closing the case.

Impact of Ruling

Over the last several years, OFCCP has moved away from conducting adverse impact and disparity analyses at the aggregate level of comparing minorities to non-minorities (i.e., White).  Instead, OFCCP has increasingly been comparing sub-minority and ethnic groups to find cases of disparate impact.  In some instances, such as the VF Jeanswear case, OFCCP has been aggregating certain ethnic and minority groups to increase their odds of finding disparate impact.  Many in the contractor community believed that this type of analysis was unsound and unsupported by the Title VII principles that apply to OFCCP discrimination cases.

The ALJ’s ruling along with OFCCP’s decision not to challenge it emphasizes that OFCCP cannot base discrimination claims on these aggregate ethnic and racial groups.  Contractors, however, should still be prepared during audits for OFCCP to analyze their selection decisions by comparing the highest group selected against each sub-minority or ethnic group that was not selected.

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Filed under ALJ, ARB, Department of Labor, Discrimination, OFCCP

OFCCP Continues to Assert Jurisdiction over TRICARE Contractors

On November 13, 2012, the Office of Federal Contract Compliance Programs (“OFCCP”) filed a motion before the Department of Labor’s Administrative Review Board (“ARB”) asking it to reconsider its decision in OFCCP v. Florida Hospital of Orlando.  As we previously reported, on October 19, 2012, the ARB found that the OFCCP did not have jurisdiction over a federal contractor based solely on its participation in TRICARE, but the ARB left open whether certain TRICARE arrangements could be covered by OFCCP’s jurisdiction under the first prong of the subcontractor definition.

In its motion for reconsideration, the OFCCP argued that the ARB left unanswered the “critical issue” of whether the National Defense Administration Act (“NDAA”) precluded OFCCP from asserting jurisdiction over TRICARE subcontractors on the basis of the first prong of the subcontractor definition (i.e., whether the TRICARE subcontractor’s services were “necessary” to the performance of the contract).  The OFCCP announced in its briefing its intent to continue to serve audit notices on TRICARE subcontractors until ARB rules on this issue.  The OFCCP specifically stated that “the only way OFCCP can obtain a ruling on the [open] issue[s] is to continue to notice TRICARE network providers for compliance reviews where” the first prong of the definition of subcontractor is at issue.  It also indicated that it would be “forced to bring another enforcement action against one or more TRICARE” contractors in order to have this issue answered.

In short, if the ARB denies OFCCP’s motion, OFCCP will aggressively seek a test case that requires ARB directly to address whether TRICARE subcontractors are covered by OFCCP’s jurisdiction if their services are necessary for the performance of the prime contract.  TRICARE contractors should prepare for pending OFCCP audits of their establishments, which had been placed on hold until the resolution of the Florida Hospital case, to be reopened in the near future.

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Filed under ARB, Department of Labor, OFCCP, TRICARE