A Huntsville manufacturer, who did more than $2 million in business with the federal government during 2014, has been investigated and sanctioned by the Office of Federal Contract Compliance Programs (OFCCP).

The OFCCP is a division of the U.S. Department of Labor charged with enforcing Executive Order 11246 originally issued in 1969 to prohibit employment discrimination by federal government contractors. In addition, the OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA).

  1. Executive Order 11246 prohibits federal government contractors from discriminating on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin.
  2. Section 503 prohibits contractors from discriminating on the basis of disabilities.

  3. VEVRAA prohibits contractors from discriminating against protected veterans. Protected veterans are veterans who are disabled, who have recently separated from military service, or who have received an active-duty wartime or campaign badge or an Armed Forces service medal. (Definitions of these terms can be a little more involved, but this limited explanation explains the act doesn’t apply to all veterans, but only to certain “qualifying” veterans. For more information, see 41 C.F.R. § 60-300.2.)

All three laws require federal contractors to adopt affirmative action programs to hire minorities, the disabled, and protected veterans. Furthermore, government contractors must keep records about employment, and the OFCCP may audit or investigate contractors from time to time.

As a result of such an investigation, the Huntsville manufacturer agreed to pay $115,000 to resolve allegations of systematic hiring discrimination on the basis of sex and race. Under the agreement, the manufacturer will offer 19 people jobs when those jobs become available.

In addition, the OFCCP found that the manufacturer had administered a dexterity test that had not been validated under the Uniform Guidelines on Employee Selection Procedures. The Equal Employment Opportunity Commission (EEOC), OFCCP, and other government agencies apply these regulations in enforcing various federal antidiscrimination laws. See 41 C.F.R. § 60-3.2. In particular, the regulations require that an employer demonstrate that tests (like the dexterity test used by the manufacturer) don’t have an adverse effect on hiring of any race, sex, or ethnic group. If such a test eliminates more than 20% of a race, sex, or ethnic group from consideration for employment, that fact will be considered evidence of the test having an adverse effect. Under the regulations, the employer must keep records of such tests and their affects on hiring practices. 41 C.F.R. § 60-3.4(D).

What does this mean for government contractors?

  1. Paraphrasing the director of the OFCCP (Patricia A. Shiu), we emphasize that federal contractors should closely examine their employment policies and practices to identify and eliminate unfair barriers to equal opportunity.
  2. Most government contractors must have written affirmative action plans in place.
  3. Employers contracting with the federal government face the risk of more scrutiny of their employment practices than “regular” employers (those without government contracts). As a generality, disgruntled employees or potential hires must actively complain (or file a lawsuit) before regular employers become involved in employment investigation or litigation. However, for a government contractor, the OFCCP doesn’t have to wait for a complaint before it investigates. Therefore, government contractors should be proactive—adopting written employment policies and practices if they have not done so already, or dusting off the ones they have before the OFCCP comes calling.

Items on this web page are general in nature. They cannot—and should not—replace consultation with a competent legal professional. Nothing on this web page should be considered rendering legal advice.