Publications

Volume 8, Number 2 — November 2004
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This Bulletin addresses recent developments affecting Design Professionals as well as business concerns as important as the specific professional and technical issues they face.

Editors: Richard J. Davies and Neil P. Clain

The Convergence Of Accessible Design Standards Continues: Access Board Releases New Minimum Guidelines Merging Requirements Under The ABA And ADA

By Richard J. Davies, Esquire

Affirmative Action Plans And Programs Is Your Company Meeting Requirements?

By Richard L. Bush, Esquire

You’re probably thinking: but my company is already an Equal Employment Opportunity (EEO) Employer and we comply with the principles of non-discrimination and diversity in our recruiting, hiring, training, salary, benefits, promotion and discipline policies and practices. What’s this requirement about affirmative action? [See prior issues of Avoiding Lawsuits posted on our firm’s website www.powelltrachtman.com for a related discussion of promoting diversity in your workplace.] Well, your company may have more than its EEO obligations here.

Today, more than 90,000 organizations are required under federal regulations and Executive Order to prepare and maintain Affirmative Actions Plans (AAPs) and Programs. Does this include your business? Executive Order 11246, signed by President Lyndon B. Johnson in 1965, prohibits discrimination in hiring or employment decisions on the basis of race, color, gender, religion, and national origin. It applies to all nonexempt government contractors and subcontractors and federally assisted construction contracts and subcontracts in excess of $10,000.

Under the Executive Order, contractors and subcontractors with a federal contract of $50,000 or more, and 50 or more employees are required to develop a written affirmative action program that is designed to ensure equal employment opportunity, and sets forth specific and action-oriented programs to which a contractor commits itself to apply every good faith effort. The Executive Order and federal regulations concerning AAPs and programs are enforced by the U.S. Department of Labor - Office of Federal Contract Compliance Programs (OFCCP).

In 2002, the OFCCP conducted 4,412 audits and management reviews. Organizations not in compliance paid penalties totaling almost $24 million. Other sanctions and penalties enforceable under the Executive Order empower the Secretary of Labor to: (i) publish the names of contractors which fail to comply with the provisions of the Executive Order, regulations and order of the Secretary of Labor; (ii) recommend to the Department of Justice that appropriate proceedings be brought to enforce provisions of the Executive Order, including the enjoining of organizations, individuals or groups who seek to prevent, directly or indirectly, compliance with the Executive Order; (iii) recommend to the Equal Employment Opportunity Commission that appropriate proceedings be instituted under Title VII of the Civil Rights Act; (iv) direct any contracting agency to cancel, terminate, suspend, or cause to be cancelled, terminated or suspended, any contract or any portions thereof, for failure of the contractor or subcontractor to comply with the equal employment opportunity provisions of the contact; and (v) provide that any contracting agency shall refrain from entering into further contracts, or extensions or other modification of existing contracts, with any noncomplying contractor, until such contractor has satisfied the Secretary of Labor that it has established and will carry out personnel and employment policies in compliance with the provisions of the Executive Order.

If your company is a supplier to a covered contractor or subcontractor, it also is subject to the requirements under the Executive Order. Thus a contractor’s or subcontractor’s violations of the Executive Order covering AAPs and programs can result in your organization’s contracts and subcontracts being declared void or voidable, and your organization being debarred from contracting with any agencies in the future.

Executive Order 11246 applies to Federally Assisted Construction Contracts

However, you counter; “I’m a design professional and my business is an architectural or engineering firm, do I really need to pay attention to these requirements?” The Executive Order includes the “Nondiscrimination Provisions in Federally Assisted Construction Contracts,” which need to be incorporated into all construction contracts paid for in whole or in part with funds obtained from the Federal Government or borrowed on the credit of the Federal Government (e.g., grant, contract, loan, insurance, or guarantee undertaken pursuant to any federal program). The term “construction contract” as used in the Executive Order means any contract for the construction, rehabilitation, alteration, conversion, extension, or repair of buildings, highways or other improvements to real property.

Affirmative Action Plan and Program Requirements

As you may suspect, OFCCP has a compliance manual which, together with federal regulations and the Executive Order, discusses the purposes and content of an AAP. The AAP is a written document discussing your organization’s commitment to equal employment opportunity and persons in your company who have responsibility in this area. It looks at the females, minorities and disabled veterans in your workforce by structure (who reports to whom?) and by job (who is in which kind of job?), then compares them to individuals who are available to work in those jobs in the labor market, utilizing government census data from states and metropolitan areas. It also shows how your employees have been affected by personnel decisions taken by your company (including applications, hires, promotions, terminations), and looks at the compensation practices. Then the AAP looks at your firm’s past and present workforce and the workforce you could have (called “availability”) and details the steps you have taken to achieve your workforce being closer  to the available workforce and the steps you will take for continued equal employment opportunity. By establishing good faith goals and timetables (not quotas), the AAP lets your company know where it is, where it has  been, and the direction in which it  needs to move.

That’s just the beginning. Federal regulations and OFCCP’s compliance manual specify the type of statistical analysis, technical outreach, documentation, letters to agencies and tables of information required to be included in AAPs. The type of documentation is lengthy, detailed, and based on intensive data obtained and analyzed from numerous sources to track applicant flow (via EEO-1 reports), promotional, disciplinary and other activity affecting your workforce. For the untrained, the area is a quagmire.

Then the OFCCP may conduct an AAP audit which could encompass management reviews, desk and field compliance reviews (involving the government visiting your facilities, reviewing your files, and interviewing selected rank and file and supervisor y/ management employees). Individual violations are addressed in a letter of commitment to be signed by a contractor or a negotiated settlement agreement, and may involve monetary relief to some individuals in your workforce. An individual employee’s complaint to OFCCP could result in a referral of that matter to the EEOC, under a memorandum of understanding between the agencies, for investigations and remedy.

OFCCP Issues New Regulations Governing the Contents of AAPs

With the announced intention to overhaul by “streamlining and simplifying” the affirmative action compliance process, OFCCP made modifications to existing AAP requirements and added new, additional reporting obligations which substantially increase the compliance burden on contractors. The new regulations were effective December 13, 2000. They require employers to perform, maintain and submit compensation analysis and to submit bi-annually the new Equal Opportunity Survey. [This document, in PDF format, can be viewed at the website: http://www.dol.gov/esa /regs/compliance/ ofccp/eosurvey/surveysample2.pdf].

The Survey captures extensive employee data, including applicant flow, new hires, promotions, terminations, workforce incumbency, compensation, and tenure data, each broken down by race, ethnicity and gender. The survey information, in the hands of the OFCCP, will be compared with subsequent information submissions. Inconsistencies will raise questions about record keeping practices and data integrity. Indeed, contractors are now faced with the daunting task of generating accurate data in a new format in a relatively short time.

So that is an overview of Affirmative Action Plan and Program requirements. Compliance is technical, time consuming and may be confusing. The cost of non-compliance could be measured in the range of individual economic damages for minor violations to debarment proceedings voiding contracts and prohibiting you from entering into contracts in the future resulting in significant lost revenues and business opportunities. The OFCCP lists those who have received notice of debarment. Even more alarming is the potential for public disclosure through Freedom of Information Act requests for some, if not all, of this information.

We are available to offer assistance in the review, preparation and revision of AAPs, and guidance during OFCCP audit and management reviews.

A Note from the Editors: This Bulletin addresses recent developments affecting Design Professionals as well as business concerns as important as the specific professional and technical issues they face.

©2004 Powell, Trachtman, Logan, Carrle & Lombardo, P.C. This bulletin is intended for general information purposes only and does not constitute legal advice. The reader should consult with legal counsel to determine how laws, suggestions and illustrations apply to specific situations.