Pre-Enforcement Notice and Conciliation Procedures
| Published date | 22 March 2022 |
| Citation | 87 FR 16138 |
| Record Number | 2022-05696 |
| Section | Proposed rules |
| Court | Federal Contract Compliance Programs Office |
Federal Register, Volume 87 Issue 55 (Tuesday, March 22, 2022)
[Federal Register Volume 87, Number 55 (Tuesday, March 22, 2022)]
[Proposed Rules]
[Pages 16138-16155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-05696]
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DEPARTMENT OF LABOR
Office of Federal Contract Compliance Programs
41 CFR Parts 60-1, 60-2, 60-4, 60-20, 60-30, 60-40, 60-50, 60-300,
and 60-741
RIN 1250-AA14
Pre-Enforcement Notice and Conciliation Procedures
AGENCY: Office of Federal Contract Compliance Programs, Labor.
ACTION: Notice of proposed rulemaking; request for comments.
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SUMMARY: To promote the efficient and effective enforcement of laws and
regulations applicable to Federal contractors and subcontractors, the
Office of Federal Contract Compliance Programs (OFCCP) proposes to
modify regulations that delineate procedures and standards the agency
follows when issuing pre-enforcement notices and securing compliance
through conciliation. This proposal would support OFCCP in fulfilling
its mission to ensure equal employment opportunity.
DATES: To be assured of consideration, comments must be received on or
before April 21, 2022.
ADDRESSES: You may submit comments, identified by Regulation Identifier
Number (RIN) 1250-AA14, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Fax: (202) 693-1304 (for comments of six pages or less).
Mail: Tina T. Williams, Director, Division of Policy and
Program Development, OFCCP, Room C-3325, 200 Constitution Avenue NW,
Washington, DC 20210.
Instructions: Please submit only one copy of your comments by only
one method. Commenters submitting file attachments on http://www.regulations.gov are advised that uploading text-recognized
documents, i.e., documents in a native file format or documents that
have undergone optical character recognition (OCR), enable staff at the
Department to more easily search and retrieve specific content included
in your comment for consideration. Please be advised that comments
received will become a matter of public record and will be posted
without change to http://www.regulations.gov, including any personal
information provided. Commenters submitting comments by mail should
transmit comments early to ensure timely receipt prior to the close of
the comment period, as the Department continues to experience delays in
the receipt of mail.
Docket: For access to the docket to read background documents or
comments, go to the Federal eRulemaking Portal at http://www.regulations.gov. Copies of this notice of proposed rulemaking will
be made available, upon request, in the following formats: Large print,
Braille, audiotape, and disc. To obtain this notice of proposed
rulemaking in an alternate format, contact OFCCP at the telephone
numbers or address listed below.
FOR FURTHER INFORMATION CONTACT: Tina T. Williams, Director, Division
of Policy and Program Development, OFCCP, 200 Constitution Avenue NW,
Room C-3325, Washington, DC 20210. Telephone: (202) 693-0103.
SUPPLEMENTARY INFORMATION:
[[Page 16139]]
Overview
OFCCP administers and enforces Executive Order 11246, as amended
(E.O. 11246); Section 503 of the Rehabilitation Act of 1973, as
amended, 29 U.S.C. 793 (Section 503); and the Vietnam Era Veterans'
Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 4212
(VEVRAA); and their implementing regulations, 41 CFR chapter 60.
Collectively, these laws require Federal contractors and subcontractors
\1\ to take affirmative action to ensure equal employment opportunity,
and not discriminate on the basis of race, color, religion, sex, sexual
orientation, gender identity, national origin, disability, or status as
a protected veteran. Additionally, E.O. 11246 prohibits a contractor
from discharging or otherwise discriminating against applicants or
employees who inquire about, discuss, or disclose their compensation or
that of others, subject to certain limitations.
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\1\ Hereinafter, the term ``contractor'' is used to refer
collectively to Federal contractors and subcontractors that fall
under OFCCP's authority, unless otherwise expressly stated. This
approach is consistent with OFCCP's regulations, which define
``contract'' to include subcontracts and ``contractor'' to include
subcontractors.
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In November 2020, OFCCP published a final rule, ``Nondiscrimination
Obligations of Federal Contractors and Subcontractors: Procedures to
Resolve Potential Employment Discrimination'' (the ``2020 rule''),\2\
amending its regulations to codify the required use of two notification
procedures, the Predetermination Notice and the Notice of Violation.
The 2020 rule requires OFCCP to issue a Predetermination Notice that
provides contractors with an initial written notice of preliminary
indicators of discrimination and requests that contractors respond. If
after providing contractors an opportunity to respond, OFCCP finds a
violation of an equal opportunity clause,\3\ OFCCP will issue a Notice
of Violation to the contractor requiring corrective action and inviting
conciliation through a written agreement. The contractor then has an
additional opportunity to respond and resolve the matter. Where OFCCP
and the contractor have been unable to resolve these findings, and
OFCCP has reasonable cause to believe that a contractor has violated an
equal opportunity clause, the Director may issue a Show Cause Notice
requiring the contractor to show cause for why monitoring, enforcement
proceedings, or other appropriate action to ensure compliance should
not be instituted. The 2020 rule also provided for an early
conciliation option for contractors that wish to bypass these notice
procedures and resolve preliminary indicators of discrimination
directly through a conciliation agreement.
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\2\ Nondiscrimination Obligations of Federal Contractors and
Subcontractors: Procedures to Resolve Potential Employment
Discrimination, 85 FR 71553 (Nov. 10, 2020). The final rule, which
took effect on December 10, 2020, was published after OFCCP
considered comments it received on a notice of proposed rulemaking,
Nondiscrimination Obligations of Federal Contractors and
Subcontractors: Procedures To Resolve Potential Employment
Discrimination, 84 FR 71875 (Dec. 30, 2019).
\3\ See 41 CFR 60-1.4, 60-4.3, 60-300.5, 60-741.5.
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In addition to requiring the use of the Predetermination Notice and
Notice of Violation, the 2020 rule established enforcement standards
that, as explained in the preamble to the final rule, were not
``compelled. . . by [Title VII of the Civil Rights Act of 1964] and
OFCCP case law'' but rather were promulgated ``as an exercise of
[OFCCP's] enforcement discretion to focus OFCCP's resources on those
cases with the strongest evidence,'' ``increase the number of
contractors the agency evaluates,'' and to provide ``guardrails on the
agency's issuance of pre-enforcement notices.'' \4\
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\4\ 85 FR 71553, 71554.
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Upon further review and assessment of the impact of the 2020 rule
on OFCCP enforcement, OFCCP believes that the 2020 rule's inflexible
evidentiary requirements mandate overly particularized and confusing
evidentiary definitions that impede OFCCP's ability to tailor the pre-
enforcement process to the specific facts and circumstances of each
case, delay information exchange with contractors, and create obstacles
to remedying discrimination. The 2020 rule's rigid requirements for
issuing a Predetermination Notice and Notice of Violation in some
instances exceed what courts have required for proof at trial and run
counter to the general principle that the evidentiary standard pursuant
to Title VII of the Civil Rights Act of 1964 (``Title VII'') is a
flexible one dependent on the unique facts at issue. These heightened
and overly formulaic evidentiary standards are particularly unsuitable
at the Predetermination Notice stage of a compliance evaluation, where
OFCCP provides contractors with preliminary notice of indicators of
discrimination so that contractors may provide a response to clarify
and resolve areas of dispute.
In addition, mandating the same heightened and inflexible
evidentiary requirements for both the Predetermination Notice and the
Notice of Violation creates inefficient and duplicative processes,
which hinders OFCCP's ability to provide contractors with early
notification of indicators of discrimination found by the agency.
Moreover, the 2020 rule attempted to codify complex evidentiary issues,
many of which are inherently open to debate, thus encouraging
contractors to raise collateral challenges to OFCCP's pre-enforcement
notice procedures, rather than providing a substantive response to the
indicators and findings of discrimination.
Further, the 2020 rule requires that OFCCP disclose to the
contractor at the pre-enforcement stage the quantitative and
qualitative evidence relied upon by OFCCP to support indicators or
findings of discriminatory intent ``in sufficient detail to allow
contractors to investigate allegations and meaningfully respond.'' \5\
While the 2020 rule provided that OFCCP may withhold personally
identifiable information in certain circumstances, the disclosure of
qualitative evidence creates a risk that an employer will uncover
identities of those who experience or report discrimination at this
investigatory stage of the proceeding, which may have a chilling effect
on the willingness of victims and witnesses to participate in OFCCP's
investigation and also potentially lead to retaliation against those
who report discrimination. Upon careful consideration, OFCCP believes
that the 2020 regulations negatively impact America's workers by
delaying the resolution of discrimination findings and constraining
OFCCP's ability to effectively enforce the full scope of the
protections that the President and Congress have entrusted to the
agency.
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\5\ The 2020 rule also requires OFCCP to demonstrate that the
unexplained disparity is practically significant and, for disparate
impact cases, OFCCP must identify the specific policy or practice of
the contractor causing the adverse impact, unless OFCCP can
demonstrate that the elements of the contractor's selection
procedures are incapable of separation for analysis. See 41 CFR 60-
1.33.
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In this rulemaking, OFCCP proposes to modify the 2020 rule to
rescind the rigid evidentiary standards and definitions, while
retaining and refining the required pre-enforcement procedures for
issuing the Predetermination Notice and the Notice of Violation.
OFCCP's regulations have included use of the Show Cause Notice since
the agency's inception.\6\ This proposal will clarify OFCCP's use of
the Predetermination Notice and the Notice of Violation as pre-
enforcement procedures, similar to the Show Cause Notice regulation,
which has never
[[Page 16140]]
included the specific type of evidentiary standards the 2020 rule
introduced. The proposed modifications would allow OFCCP to tailor the
pre-enforcement process to the specific facts and circumstances of each
case, consistent with judicial interpretations of the applicable legal
authorities, which will in turn allow OFCCP to more effectively redress
unlawful discrimination.
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\6\ 41 CFR 60-1.28; see also Compliance Responsibility for Equal
Employment Opportunity, 43 FR 49240, 49247 (Oct. 20, 1978); Revision
of Chapter, 33 FR 7804, 7810 (May 28, 1968).
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In addition, to promote greater efficiency in resolving cases,
OFCCP proposes to modify the 2020 rule's provision that required a
contractor to provide a response within 30 calendar days of receiving a
Predetermination Notice.\7\ The proposal returns the Predetermination
Notice response period to the 15 calendar day period in effect prior to
the 2020 rule (which OFCCP may extend for good cause).\8\ In the
proposal, OFCCP also clarifies this provision to state that any
response must be received by OFCCP within 15 calendar days (absent a
deadline extension).
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\7\ 85 FR 71553, 71571-71574, codified at 41 CFR 60-1.33(a)(5),
60-300.62(a)(5), 60-741.62(a)(5).
\8\ See Directive 2018-01, Use of Predetermination Notices (Feb.
27, 2018), available at https://www.dol.gov/agencies/ofccp/directives/2018-01 (last accessed Dec. 5, 2021).
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OFCCP also proposes to retain the regulatory language regarding
early resolution, which provides that contractors may waive these
notice procedures if they enter directly into a conciliation agreement.
Finally, the proposal would delete the severability clause that applied
just to certain sections of OFCCP's regulations and replace it with
severability clauses covering the entirety of each part of OFCCP's
regulatory scheme.
The 2020 final rule was the first time OFCCP sought to codify the
specific forms of evidence that the agency must rely upon during its
pre-enforcement process. Through this proposal, OFCCP would promote
consistency by codifying the required use of the Predetermination
Notice and Notice of Violation when the agency identifies preliminary
indicators or findings of discrimination, while allowing the agency the
flexibility to issue appropriate guidance to field staff on the use of
the procedures. OFCCP would continue to ensure transparency by sharing
this guidance with the public.
This proposed rulemaking aims to create a streamlined, efficient,
and flexible pre-enforcement and conciliation process to ensure OFCCP
utilizes its resources strategically to advance the agency's mission
through effective enforcement. OFCCP remains committed to providing
contractors notice when the agency sees preliminary indicators of
discrimination during a compliance evaluation, as such notice is
mutually beneficial for OFCCP and the contractor under review because
it provides the contractor an opportunity to respond and work to
resolve the issues.
Purpose of the 2020 Rule
In its 2020 final rule, OFCCP stated an intent to increase clarity
and transparency for Federal contractors, establish clear parameters
for OFCCP enforcement proceedings, and enhance the efficient
enforcement of the law. The 2020 rule identified two primary
objectives: (1) Increase the number of contractors the agency evaluates
and (2) focus on resolving stronger cases through the strategic
allocation of limited agency resources.\9\ As detailed further below in
this proposed rulemaking, OFCCP reconsidered the 2020 rule and assessed
its impact on OFCCP enforcement processes and has found that the 2020
rule's formulaic and inflexible evidentiary standards for pre-
enforcement notices neither assist the agency in strategically
allocating its limited resources nor enable the agency to evaluate more
contractors. Instead, the 2020 rule's evidentiary mandates diminish
OFCCP's ability to provide contractors with early notification of
indicators of discrimination and unnecessarily divert agency and
contractor resources away from addressing discrimination by spawning
time-consuming collateral disputes about the implementation of these
heightened evidentiary standards. This decreases rather than increases
the number of contractors that OFCCP can evaluate for compliance with
equal opportunity laws. OFCCP thus proposes to modify the 2020 rule to
ensure that OFCCP utilizes its resources strategically to provide
contractors with an early opportunity to understand and resolve
indicators or findings of discrimination and to enable the agency to
protect America's workers by enforcing the full scope of the equal
opportunity authorities with which it has been entrusted.
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\9\ 85 FR 71553, 71554.
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Pre-Enforcement Notices
Historically, OFCCP has issued pre-enforcement notices in
compliance evaluations (i.e., the Predetermination Notice, Notice of
Violation, and Show Cause Notice) when the agency is seeking to remedy
findings of discrimination.\10\ Prior to 2018, the use of the
Predetermination Notice varied by region and by the type of case. In
2018, OFCCP issued a directive, requiring the consistent issuance of
Predetermination Notices for preliminary discrimination findings
identified during the course of compliance evaluations.\11\
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\10\ The notices are used at different pre-enforcement stages.
See FCCM, Chapter 8, Resolution of Noncompliance (last updated Jan.
7, 2021), available at https://www.dol.gov/agencies/ofccp/manual/fccm/chapter-8-resolution-noncompliance (last accessed Dec. 3,
2021). OFCCP also uses the Notice of Violation and Show Cause Notice
to identify other types of potential violations of law, such as
denial of access or other types of nondiscrimination violations like
recordkeeping deficiencies.
\11\ See Directive 2018-01, Use of Predetermination Notices
(Feb. 27, 2018), available at https://www.dol.gov/agencies/ofccp/directives/2018-01 (last accessed Dec. 5, 2021).
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A stated goal of the 2020 rule was to provide contractors with
greater certainty by codifying the historical, then-existing procedures
for issuing the Predetermination Notice and the Notice of
Violation.\12\ The preamble to the 2020 rule stated that the
Predetermination Notice is intended to encourage communication with
contractors and provide them an opportunity to respond to preliminary
indicators of discrimination prior to OFCCP deciding to issue a Notice
of Violation. As set forth in the 2020 rule, if the contractor did not
respond to the Predetermination Notice or sufficiently rebut the
preliminary indicators in the Predetermination Notice, OFCCP would
issue the Notice of Violation to inform the contractor that the agency
found violations of one or more of the laws it enforces. The Notice of
Violation also informed the contractor that corrective action would be
required and invited conciliation through a written agreement.\13\
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\12\ See 84 FR 71875. Show Cause Notices were already codified
in OFCCP's regulations prior to the 2020 rule, at 41 CFR 60-1.28,
60-300.64, 60-741.64.
\13\ Conciliation agreements were also already codified in
OFCCP's regulations prior to the 2020 rule, at 41 CFR 60-1.33, 60-
300.62, and 60-741.62--the same sections that the 2020 rule amended
to include the Predetermination Notice, the Notice of Violation, the
early conciliation option, and a severability clause specific only
to that section.
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Rather than simply codify OFCCP's then-existing procedures for
issuing the Predetermination Notice and Notice of Violation, the 2020
rule instead exercised the agency's enforcement discretion to adopt
rigid standards that the agency had not historically followed for
issuing these two notices, necessitating that OFCCP alter the content
of the Predetermination Notice and Notice of Violation from what had
previously been included in the notices. As detailed further below,
this rulemaking proposes to retain the
[[Page 16141]]
agency's consistent use of the two pre-enforcement notices while
rescinding the 2020 rule's rigid evidentiary mandates.
Prior to the issuance of the 2020 final rule, OFCCP had issued
subregulatory guidance and internal procedures on the use of the
Predetermination Notice, as well as the Notice of Violation, through
the Federal Contract Compliance Manual (FCCM) and agency directives.
The agency has utilized this guidance to promote transparency and
consistency, while ensuring the agency has the flexibility to update
these guidance documents to improve procedures and align with OFCCP's
strategic enforcement measures. The 2020 rule also codified a new pre-
enforcement procedure available for OFCCP and contractors to expedite
conciliation by bypassing the Predetermination Notice and Notice of
Violation procedures and entering directly into a conciliation
agreement. In this rulemaking, OFCCP retains this expedited
conciliation process and only proposes changes to that subsection of
the 2020 rule to clarify the agency's role in pursuing the expedited
conciliation option.
Evidentiary Standards
The 2020 rule codified evidentiary standards that OFCCP must meet
in order to issue a Predetermination Notice and a Notice of Violation.
Under the 2020 rule, OFCCP's authority to issue a Predetermination
Notice or Notice of Violation for discrimination cases is limited to
those situations where OFCCP demonstrates that it has specific forms of
evidence conforming to the regulatory thresholds requiring quantitative
(i.e., statistical or other numerical) evidence, practical
significance, and qualitative evidence of discrimination.\14\ The 2020
rule differentiates the procedures followed for disparate treatment and
disparate impact theories of discrimination and provides the
evidentiary standards OFCCP must meet to issue pre-enforcement notices
under each legal theory.\15\ The 2020 rule mandates that, upon the
contractor's request, OFCCP must provide the model and variables used
in the agency's statistical analysis and an explanation for any
variable that was excluded from the statistical analysis. The 2020 rule
also requires OFCCP to explain in detail the basis for its findings in
pre-enforcement notices.\16\ For the reasons discussed below, this
rulemaking proposes to rescind these formal evidentiary standards and
disclosure requirements in the 2020 rule.
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\14\ 85 FR 71553, 71562-71565.
\15\ For all cases proceeding under a disparate treatment
theory, subject to certain enumerated exceptions, the 2020 rule
establishes that OFCCP is required to provide qualitative evidence
supporting a finding of discriminatory intent. For all cases
proceeding under a disparate impact theory, the 2020 rule requires
OFCCP to identify the policy or practice of the contractor causing
the adverse impact with factual support demonstrating why such
policy or practice has a discriminatory effect. 85 FR 71553, 71562-
71565.
\16\ 85 FR 71553, 71562.
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Definitions
Finally, the 2020 rule added definitions for ``quantitative
evidence'' and ``qualitative evidence'' to OFCCP's regulations
purporting to add greater clarity and certainty as to the types of
evidence the agency uses to support the issuance of pre-enforcement
notices.\17\ The term ``qualitative evidence'' is defined to include
the various types of documents, testimony, and interview statements
that OFCCP collects during its compliance evaluations relevant to a
finding of discrimination, and clarified the purposes for which it will
be used. The term ``quantitative evidence'' establishes the support
needed for OFCCP to determine that there is a statistically significant
disparity in a contractor's employment selection or compensation
outcomes affecting a group protected under OFCCP's laws. The definition
sets a standard for what OFCCP considers statistically significant.\18\
The definition also includes quantitative analyses, such as cohort
analyses, which are comparisons of similarly situated individuals or
small groups of applicants or employees that are numerical in nature
but do not use hypothesis testing techniques. Pursuant to the 2020
rule, the term ``qualitative evidence'' gives an affirmative,
descriptive label to the types of evidence that fall into that category
while the term ``quantitative evidence'' better encapsulates OFCCP's
analytical evidence given the agency's use of descriptive statistics
and non-parametric and cohort analyses, in addition to a variety of
statistical tests based on hypothesis testing.\19\ OFCCP declined to
add a specific definition for practical significance in the 2020 rule
because it concluded there is not a settled definition in relevant
academic literature and a variety of measures may be appropriate to use
in any given case, instead describing the common types of practical
significance measures and explaining the metrics the agency would
customarily use.\20\ In this proposed rulemaking, OFCCP proposes to
eliminate the definitions for the reasons discussed below.
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\17\ 85 FR 71553, 71555. The definitions are now codified at 41
CFR 60-1.3, 60-300.2(t)-(u), and 60-741.2(s)-(t).
\18\ The definition of quantitative evidence includes this
standard for statistical significance: ``. . . a disparity in
employment selection rates or rates of compensation is statistically
significant by reference to any one of these statements: (1) The
disparity is two or more times larger than its standard error (i.e.,
a standard deviation of two or more); (2) The Z statistic has a
value greater than two; or (3) The probability value is less than
0.05. It also includes numerical analysis of similarly situated
individuals, small groups, or other characteristics, demographics or
outcomes where hypothesis-testing techniques are not used.'' 41 CFR
60-1.3, 60-300.2(t)-(u), 60-741.2(s)-(t); see also 85 FR 71553,
71571-71574.
\19\ 85 FR 71553, 71556.
\20\ Id. at 71559-71560.
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Modifications To Promote Effective Enforcement
Rescinding Evidentiary Standards Codified by the 2020 Rule
The 2020 rule codifies specific evidentiary standards that OFCCP
must meet in order to issue a Predetermination Notice and a Notice of
Violation. The preamble to the 2020 rule concedes, however, that these
standards, applicable to both the Predetermination Notice and the
Notice of Violation, are not compelled by Title VII or OFCCP case law.
Indeed, as discussed below, the 2020 rule places certain obligations on
OFCCP that go beyond what is required by E.O. 11246 to state or prove a
claim of discrimination or by Title VII for proof of discrimination
after the completion of the discovery process upon a full evidentiary
record in litigation.
The pre-enforcement notice process is intended to place the
employer on notice of OFCCP's concerns of discrimination. The
information available to OFCCP during the pre-enforcement notice stage
of a compliance evaluation is necessarily limited compared to a full
evidentiary record available to support proof of a violation at trial.
Thus, imposing proof standards for the agency's initial pre-enforcement
proceedings that essentially require the agency to be trial ready--and,
as discussed in more detail below, are even more onerous than are
required in court to prove a violation under Title VII--is incompatible
with the investigatory stage of a compliance evaluation.\21\ As set
forth in OFCCP's
[[Page 16142]]
longstanding regulations in effect since OFCCP's inception, the agency
will issue a Show Cause Notice to proceed with an enforcement action
where it has reasonable cause to believe discrimination occurred based
on the information available through its investigation.\22\ This means
that, based upon the evidence obtained in the investigation, the agency
believes discrimination did occur.\23\ This does not require developing
a full evidentiary record to support proof at trial, but rather
providing notice of the agency's findings supporting its belief that
violations occurred and giving the contractor the opportunity to show
why agency action to ensure compliance should not be instituted.\24\
Thus, even this final stage in the pre-enforcement process does not
impose specific evidentiary regulations or trial-level proof prior to
the institution of an enforcement action.
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\21\ See OFCCP v. Oracle, 2017-OFC-00006, 19 (Order Denying
Cross Motions for Summary Judgment Granting in Part Defendant's
Alternative Motion for Partial Summary Judgment & Order for
Additional Briefing on Show Cause Notice & Conciliation, Nov. 25,
2019) (```Reasonable cause' is something that the [Director of
OFCCP] is given the discretion to determine[.]''); see also OFCCP v.
Oracle, 2017-OFC-00006, 8 (Order Granting OFCCP Summary Judgment as
to Oracle's Affirmative Defenses Related to the Show Cause Notice &
Conciliation, Dec. 3, 2019) (denying Oracle's argument that if OFCCP
did not meet the reasonable cause standard for issuing the show
cause notice, then all of the evidence gathered was gathered in
violation of the Fourth Amendment stating ``[this argument] presumes
that the Show Cause Notice has a much more important place than can
be fairly read into the regulatory scheme'').
\22\ 41 CFR 60-1.28, 60-300.64, 60-741.64.
\23\ See, e.g., 42 U.S.C. 2000e-5(b); cf. OFCCP v. Honeywell,
77-OFC-3, 8-9 (Sec'y of Labor Dec. & Order on Mediation, June 2,
1993) (comparing the show cause procedure to the reasonable cause
determination made by the Equal Employment Opportunity Commission
(EEOC), the ALJ found that the government letter explaining the
deficiencies found and recommended remedial actions was comparable
to a reasonable cause determination); U.S. Equal Employment
Opportunity Commission, ``Definition of Terms,'' available at
https://www.eeoc.gov/statistics/definitions-terms (last visited Nov.
8, 2021).
\24\ 41 CFR 60-1.28, 60-300.64, 60-741.64; cf EEOC v. Keco
Indus., Inc., 748 F.2d 1097, 1100 (6th Cir. 1984) (EEOC's cause
determination ``does not adjudicate rights and liabilities; it
merely places the defendant on notice of the charges'') (citing EEOC
v. E.I. Dupont de Nemours & Co., 373 F. Supp. 1321, 1338 (D. Del.
1974)).
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The Predetermination Notice is the initial written notice in a
multi-stage notification and information exchange process provided to
contractors to promote a mutual understanding of the issues and
facilitate voluntary resolution. Prior to the 2020 regulation, the
Predetermination Notice served to foster communication with contractors
about preliminary indicators of discrimination, providing the
contractor with an early opportunity to understand and respond to
OFCCP's preliminary findings. This process enables the sharing of
additional information that may assist OFCCP in resolving the
preliminary findings or conducting a more refined analysis of the data
before determining whether to issue a Notice of Violation.
In order to issue a Predetermination Notice under the 2020 rule,
OFCCP must meet the same evidentiary standards as required to issue a
Notice of Violation. As a result, the 2020 rule has created
inefficiencies and delay in OFCCP's pre-enforcement process. In
addition, the 2020 rule has in certain respects created higher
evidentiary requirements for E.O. 11246 matters than Title VII matters,
which unduly circumscribes OFCCP's ability to prosecute discriminatory
practices and is contrary to the approach generally followed by OFCCP
and recognized in relevant case law.\25\
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\25\ Cf. OFCCP v. Greenwood Mills, Inc., Nos. 00-044, 01-089,
2002 WL 31932547, at *4 (ARB Final Decision & Order Dec. 20, 2002)
(``The legal standards developed under Title VII of the Civil Rights
Act of 1964 apply to cases brought under [E.O. 11246].'').
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While the 2020 rule purported to ``focus OFCCP's resources on those
cases with the strongest evidence,'' \26\ upon further reconsideration
OFCCP believes the rule hindered the agency's ability to focus on those
cases with the strongest evidence by adopting a formulaic approach to
evidentiary standards rather than viewing the strength of the evidence
in light of the particular facts and circumstances at issue in each
case. OFCCP has concluded that rigid evidentiary standards are
unnecessary and unduly constrain the agency's broad enforcement
discretion as to the cases it decides to litigate and those it does
not.\27\ OFCCP has been diligent in managing its limited resources for
decades to focus on the strongest cases without the need for blanket
evidentiary standards. To promote more effective enforcement, OFCCP
proposes to return to its long-standing practice of focusing agency
resources without imposing blanket evidentiary standards, pursuing
those cases supported by strong evidence tailored to the facts of each
case. Further, OFCCP believes that the 2020 rule has failed to meet its
objectives of providing clarity and promoting efficiency. As described
in more detail below, these strict evidentiary standards have instead
led to delays in resolutions by increasing disagreements between OFCCP
and contractors about the requirements for Predetermination Notices.
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\26\ 85 FR 71553, 7155.
\27\ See generally Heckler v. Chaney, 470 U.S. 821 (1985);
Andrews v. Consolidated Rail Corporation, 831 F.2d 678, 684 (3rd
Cir. 1987) (applying Chaney to OFCCP decision to decline enforcement
under Section 503); Clementson v. Brock, 806 F.2d 1402, 1404 (9th
Cir. 1986) (applying Chaney to OFCCP decision to decline enforcement
under VEVRAA).
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With this proposal, OFCCP would apply Title VII standards to the
facts and circumstances of each compliance evaluation to provide
contractors with notice of the nature of OFCCP's concerns.\28\ OFCCP
proposes to adopt this approach to advance a policy of promoting
consistency between Title VII and E.O. 11246 and to remove unnecessary
constraints on the agency's ability to pursue meritorious cases. Taking
this approach will help OFCCP advance the overriding policy goal of
promoting nondiscrimination by strengthening the enforcement of federal
protections under E.O. 11246. OFCCP also would promote transparency and
consistency by continuing to codify the required use of the
Predetermination Notice when the agency identifies preliminary
indicators of discrimination.
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\28\ Similarly, for claims related to disability discrimination,
OFCCP would continue to apply the nondiscrimination standards of the
Americans with Disabilities Act of 1990 (ADA), as amended, to
compliance evaluations pertaining to Section 503. See, e.g., 41 CFR
60-741.1(c)(1), 60-742.4.
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1. ``Quantitative'' and ``Qualitative'' Evidence
The 2020 rule requires that OFCCP, with only narrow exceptions,
provide both ``quantitative'' and ``qualitative'' evidence before
issuing a Predetermination Notice or a Notice of Violation, and
provides definitions for what constitutes ``quantitative'' and
``qualitative'' evidence.\29\ These provisions of the 2020 rule depart
from traditional Title VII standards in two respects. First, Title VII
does not prescribe the different and specific forms of evidence
described in the 2020 rule in order to establish a prima facie case of
discrimination, much less investigatory findings of violation.\30\
Interpretive Title VII case law demonstrates that there are multiple
ways to establish a prima facie case of discrimination, including
through statistical evidence alone, as long as the
[[Page 16143]]
plaintiff ultimately satisfies its burden of proof.\31\
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\29\ The 2020 rule definitions are codified at 41 CFR 60-1.3,
60-300.2(t)-(u), 60-741.2(s)-(t).
\30\ See Int'l Bhd. of Teamsters v. United States, 431 U.S. 324,
358 (1977) (``[T]he facts necessarily will vary in Title VII cases,
and the specification . . . of the prima facie proof required from
(a plaintiff) is not necessarily applicable in every respect to
differing factual situations.'' (alterations omitted) (quoting
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 n. 13(1973));
Adams v. Ameritech Servs., Inc., 231 F.3d 414, 425 (7th Cir. 2000)
(``No one piece of evidence has to prove every element of the
plaintiff's case[.]'') (internal citations omitted); Anderson v.
Douglas & Lomason Co., Inc., 26 F.3d 1277, 1285 (5th Cir. 1994)
(``If statistical evidence is insufficient to establish
discriminatory intent, the plaintiffs may bolster their case by
introducing historical, individual, or circumstantial evidence.'')
(citing Bernard v. Gulf Oil Corp., 841 F.2d 547, 568 (5th Cir.
1988)).
\31\ See Bazemore v. Friday, 478 U.S. 385, 400 (1986) (``Whether
. . . [statistics] . . . carry the plaintiffs' ultimate burden will
depend in a given case on the factual context of each case in light
of all the evidence presented by both the plaintiff and the
defendant.''); Int'l Bhd. of Teamsters, 431 U.S. at 339 (finding
that statistics may be used to establish a prima facie case, but
cautioning that the ``usefulness [of statistics] depends on all of
the surrounding facts and circumstances'') (internal citations
omitted); see also Isabel v. City of Memphis, 404 F.3d 404, 412 (6th
Cir. 2005) (``[W]hen the Supreme Court stated that a plaintiff may
rely solely on statistical evidence to establish a prima facie case
of disparate impact . . . it did not say what kind of statistical
evidence should be relied on. Neither the Supreme Court nor this
Court has ever limited a plaintiff's choices in Title VII cases
involving statistical analysis in any way.'') (citing Wards Cove
Packing Co. v. Atonio, 490 U.S. 642, 656-57 (1989)).
---------------------------------------------------------------------------
As the U.S. Supreme Court and lower courts have long recognized,
Title VII requires a case-by-case evaluation of the facts and
circumstances.\32\ There is no one-size-fits-all blanket formula for
establishing discrimination. Yet, the 2020 rule circumscribes OFCCP's
authority to pursue only those cases that meet bright line statistical
thresholds or rely on specific types of evidence. To be sure, OFCCP
recognizes the utility of anecdotal evidence in support of
discrimination cases generally and will continue to make efforts to
gather such evidence during its compliance evaluations.\33\ However, to
require as a baseline rule that the agency proffer evidence falling
within multiple and different categories regardless of the factual
circumstances of a case--especially at the investigative stage--goes
beyond well-established Title VII principles. In addition, a number of
the regulatory requirements impose a standard that is inherently fact
specific, open to dispute, and ultimately unnecessary to adjudicate at
this initial stage of the proceeding, including the requirement that
OFCCP provide ``qualitative evidence supporting a finding of
discriminatory intent for all cases proceeding under a disparate
treatment theory'' (emphasis added), subject to certain enumerated
exceptions. Such disputes created protracted delays in remedying
violations of the law. Moreover, the 2020 rule requires that OFCCP
disclose to the contractor at this preliminary stage the quantitative
and qualitative evidence relied upon by OFCCP to support findings of
discriminatory intent ``in sufficient detail to allow contractors to
investigate allegations and meaningfully respond.'' \34\ Mandating the
disclosure of anecdotal evidence at this pre-determination stage may
have a chilling effect on the willingness of victims and witnesses to
participate in OFCCP's investigation due to concerns that an employer
may uncover their identities, which could lead to retaliation. The
preamble to the 2020 rule acknowledges that OFCCP may withhold
``personal identifying information from the description of the
qualitative evidence if the information is protected from disclosure
under recognized governmental privileges, or if providing that
information would otherwise violate confidentiality or privacy
protections afforded by law;'' yet, even in those circumstances where
OFCCP may withhold an individual's identity, witnesses may remain
concerned about the employer's ability to ascertain their identity from
the anecdotal information provided at this pre-determination stage.
---------------------------------------------------------------------------
\32\ See Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 995
n.3 (1988) (noting that the Supreme Court has ``not suggested that
any particular number of `standard deviations' can determine whether
a plaintiff has made out a prima facie case in the complex area of
employment discrimination''); Gay v. Waiters' & Dairy Lunchmen's
Union, Local No. 30, 694 F.2d 531, 551 (9th Cir. 1982) (``It would
be improper to posit a quantitative threshold above which
statistical evidence of disparate racial impact is sufficient as a
matter of law to infer discriminatory intent, and below which it is
insufficient as a matter of law.'').
\33\ See FCCM, Chapter 2E00, Types of Evidence, available at
https://www.dol.gov/agencies/ofccp/manual/fccm/2e-collecting-information-analysis/2e00-types-evidence (last accessed Dec. 3,
2021) (explaining that during its compliance evaluations, OFCCP
seeks a variety of other types of nonstatistical evidence, including
anecdotal evidence).
\34\ 85 FR 71564.
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As such, OFCCP proposes to rescind the 2020 rule requirement to
provide both ``quantitative'' and ``qualitative'' evidence before
issuing a Predetermination Notice or Notice of Violation. As described
above, disputes over this requirement resulted in protracted delays for
remedying violations. Eliminating this unnecessary, rigid requirement
allows the agency more flexibility, better ensures prompt resolutions,
and strengthens its ability to protect workers and enforce the law.
Eliminating this requirement also allows OFCCP to better align its
enforcement with Title VII evidentiary standards.
Because OFCCP is proposing to rescind this requirement, the
definitions of ``quantitative evidence'' and ``qualitative evidence''
included in the 2020 rule to support the evidentiary scheme would no
longer be necessary. Even when evaluated outside of the 2020 rule's
evidentiary framework, upon further consideration, OFCCP now believes
these definitions, and particularly the definition for ``qualitative
evidence,'' to be confusing, overly particularized, and inconsistent
with the general principle that the Title VII evidentiary standard is a
flexible one dependent on the unique facts at issue.\35\ First, the
2020 rule's definition of ``qualitative evidence'' begins with a series
of lengthy, highly specific examples that may not be present in many
systemic discrimination cases. Although the 2020 rule stated that
qualitative evidence ``includes but is not limited to'' these examples,
some contractors now assert that OFCCP must present evidence of these
highly specific examples in its cases, creating delays to OFCCP's pre-
enforcement conciliation procedures. However, the 2020 rule's first
example--``biased statements, remarks, attitudes, or acts based upon
membership in a protected class, particularly when made by a decision
maker involved in the action under investigation''--includes the sort
of direct, ``smoking gun'' evidence that, while certainly probative of
discrimination, is ``rarely found in today's sophisticated employment
world.'' \36\ The next example--evidence about ``misleading or
contradictory information'' given by an employer to an employee or
applicant ``in circumstances suggesting discriminatory treatment''--
also describes narrow factual scenarios that may not be present in many
cases, substantially limiting the utility of the definition. The
``qualitative evidence'' definition is also overly focused on evidence
of discriminatory intent in disparate treatment cases. Even though it
includes one example related to disparate impact cases--evidence
related to ``the business necessity (or lack thereof) of a challenged
policy or practice''--that example is problematic because it is: (1) A
category of evidence that is the employer's burden to demonstrate,
after the agency establishes a prima facie case; \37\ and (2) not the
only sort of ``qualitative'' evidence that plaintiffs typically
introduce or rely upon in the course of a disparate impact case.\38\
[[Page 16144]]
Finally, the definition includes ``whether the contractor has otherwise
complied with its non-discrimination obligations'' as a type of
permissible qualitative evidence. Upon reconsideration, OFCCP has
concerns that this provision could easily be misinterpreted to mean
that when a contractor complies with some of its nondiscrimination
obligations, it somehow lessens the weight of evidence of noncompliance
with other nondiscrimination obligations. Accordingly, OFCCP proposes
to remove the two definitions added in the 2020 rule. OFCCP will
continue to evaluate its cases in line with well-established Title VII
evidentiary standards and will continue to provide compliance
assistance and other guidance materials on these standards as
appropriate.\39\
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\35\ Int'l Bhd. of Teamsters, 431 U.S. at 358.
\36\ Thomas v. Eastman Kodak Co., 183 F. 3d 38, 58 n.12 (1st
Cir. 1999) (citing Hodgens v. Gen. Dynamics Corp., 144 F.3d 151, 171
n. 13 (1st Cir. 1998)).
\37\ 42 U.S.C. 2000e-2(k)(1)(A)(i); see also Ricci v. DeStefano,
557 U.S. 557, 578 (2009) (``An employer may defend against liability
[for disparate impact discrimination] by demonstrating that the
practice is `job-related for the position in question and consistent
with business necessity.' ''); Wards Cove Packing Co., 490 U.S. at
659 (``[T]he employer carries the burden of producing evidence of a
business justification for his employment practice.'').
\38\ By way of example, because a plaintiff in disparate impact
cases must, where possible, identify the particular employment
practice that is causing the adverse impact, see 42 U.S.C. 2000e-
2(k)(1)(B)(i), it is commonplace for a plaintiff to introduce
testimony or interview statements from expert witnesses or company
officials regarding its selection or compensation system that would
provide necessary context and help to identify the particular
employment practice at issue. Similarly, evidence regarding less
discriminatory alternative employment practices is a common feature
in disparate impact cases. 42 U.S.C. 2000e-2(k)(1)(A)(ii).
\39\ OFCCP applies ADA standards to compliance evaluations
pertaining to Section 503. See supra at n. 28.
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2. Practical Significance
Practical significance refers to whether an observed disparity in
employment opportunities or outcomes reflects meaningful harm to the
disfavored group, focusing on the contextual impact or importance of
the disparity rather than its likelihood of occurring by chance.\40\
For allegations included in a Predetermination Notice and Notice of
Violation, the 2020 rule requires that OFCCP demonstrate practical
significance, and the preamble includes quantitative ranges for various
measures indicating whether it is ``likely'' or ``unlikely'' that
practical significance is present.\41\
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\40\ Practical Significance in EEO Analysis Frequently Asked
Questions, Question #1 (last updated Jan. 15, 2021), available at
www.dol.gov/agencies/ofccp/faqs/practicalsignificance (last accessed
Dec. 5. 2021). See also 85 FR 71553, 71559.
\41\ 85 FR 71556.
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Whether Title VII specifically requires a finding of practical
significance is an unsettled question. The text of Title VII contains
no specific requirement that practical significance must be
demonstrated.\42\ Of the circuit courts that have expressly addressed
the issue, three have concluded that Title VII does not require a
showing of practical significance.\43\ For example, in Jones v. City of
Boston, the First Circuit explicitly held that a plaintiff's failure to
demonstrate practical significance could not preclude that plaintiff
from relying on evidence of statistical significance to establish a
prima facie case of disparate impact.\44\ In doing so, the Court noted
that the requirements a plaintiff must otherwise meet under Title VII
``secure most of the advantages that might be gained'' from a test of
practical significance.\45\ First, the ``need to show statistical
significance will eliminate small impacts as fodder for litigation . .
. because proving that a small impact is statistically significant
generally requires large samples sizes, which are often unavailable.''
\46\ Second, the subsequent steps required for a plaintiff to
successfully recover under Title VII provide an additional safeguard in
that the employer may rebut the prima facie case.\47\ Similarly, in
Stagi v. National Railroad Passenger Corp., the Third Circuit
explicitly declined to require a showing of practical significance, and
instead required only that the plaintiffs meet the well-established
thresholds for statistical significance in order to meet their prima
facie case.\48\
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\42\ See Elliot Ko, Big Enough to Matter: Whether Statistical
Significance or Practical Significance Should Be the Test for Title
VII Disparate Impact Claims, 101 Minn. L.R. 869, 889 (2016) (``Title
VII does not require plaintiffs to prove that an employment practice
had a `large' impact on a protected class. Title VII just requires
plaintiffs to prove that `a particular employment practice' had a
disparate impact on a protected class.... Title VII only requires
proof of a `disparate impact,' not proof of a `very' disparate
impact that is large enough to warrant societal or moral
condemnation.'').
\43\ Jones v. City of Boston, 752 F.3d 38 (1st Cir. 2014);
Apsley v. Boeing Co., 691 F.3d 1184 (10th Cir. 2012); Stagi v. Nat'l
R.R. Passenger Corp., 2010 WL 3273173 (3d Cir. Aug. 16, 2010).
\44\ Jones, 752 F.3d at 53.
\45\ Id.
\46\ Id. (internal citations omitted).
\47\ Id. (internal citations omitted).
\48\ Stagi, 2010 WL 3273173 at *5 (citing Castaneda v. Partida,
430 U.S. 482, 496 n.17 (1977)); see also Meditz v. City of Newark,
658 F.3d 364, 372 (3d Cir. 2011) (using only a measure of
statistical significance to determine whether plaintiff established
a prima facie case of disparate impact).
---------------------------------------------------------------------------
Other circuit courts have considered measures of practical
significance in determining whether a plaintiff in a disparate impact
case has satisfied a prima facie case.\49\ These cases have generally
adopted a holistic approach to the evidence required in a given case
depending on the facts at issue.\50\ However, unlike with statistical
significance, courts have not similarly coalesced around uniform
quantitative measures for what constitutes sufficient practical
significance. Consequently, the 2020 rule did not specify which measure
of many available options OFCCP should utilize as a threshold for
practical significance during its compliance evaluations of selection
and compensation procedures. As OFCCP has stated in its Frequently
Asked Questions published even prior to the 2020 rule, the agency
utilizes a variety of measures for evaluating practical significance as
appropriate to the employment issue under review and the specific facts
of each case.\51\
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\49\ Brown v. Nucor Corp., 785 F.3d 895, 908, 935 (4th Cir.
2015); Isabel v. City of Memphis, 404 F.3d 404, 412, 418 (6th Cir.
2005); Ensley Branch of NAACP v. Seibels, 31 F.3d 1548, 1555 (11th
Cir. 1994); Waisome v. Port Auth. of N.Y. & N.J., 948 F.2d 1370,
1376 (2d Cir. 1991); Clady v. County of Los Angeles, 770 F.2d 1421,
1428-29 (9th Cir. 1985); Fisher v. Procter & Gamble Mfg. Co., 613
F.2d 527, 545 (5th Cir. 1980).
\50\ Ko, supra n. 42, at 881-84.
\51\ See Practical Significance in EEO Analysis Frequently Asked
Questions (last updated Jan. 15, 2021), at https://www.dol.gov/agencies/ofccp/faqs/practical-significance (last accessed Dec. 5,
2021).
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As part of its enforcement discretion, OFCCP has historically
utilized practical significance measures where appropriate in
compliance evaluations based on the specific facts of the case without
the need for regulations. In addition, the particular ranges that were
discussed in the preamble of the 2020 rule may not be appropriate in
all cases depending on the other evidence that exists. It also remains
unsettled whether Title VII requires a finding of practical
significance, and, if so, what level of practical significance is
sufficient and appropriate to the process under review. Accordingly,
OFCCP believes it is not advisable to attempt to regulate the standards
for practical significance, and proposes to remove the requirement to
demonstrate practical significance before issuing a Predetermination
Notice or Notice of Violation. Moving forward, however, OFCCP would
still consider practical significance measures where appropriate as
part of a holistic evaluation of the cases it investigates along with
statistical significance and all other evidence gathered in the course
of the investigation.
Addressing Barriers to Enforcement Created by the 2020 Rule
OFCCP believes that rescinding the inflexible evidentiary standards
would also advance OFCCP's policy goal of alleviating duplicative and
inefficient processes created by the 2020 rule that undermine effective
enforcement of equal employment opportunity laws. For instance, the
Predetermination Notice originally served to foster communication with
contractors about preliminary indicators of discrimination. However, at
the preliminary stage, these rigid evidentiary standards also invite
[[Page 16145]]
additional delay by engendering disputes about the scope of evidence
contractors must provide and whether OFCCP has satisfied the rule's
heightened requirements. The 2020 rule's regulatory standards thus
serve to prevent OFCCP from providing early communication of
preliminary indicators of discrimination and delays the prompt
resolution of these preliminary indicators and the exchange of more
information to perform additional analysis. Pursuant to the 2020 rule,
to issue the Predetermination Notice, OFCCP must meet the same
evidentiary standards that the agency must meet to issue a Notice of
Violation. As a result, the 2020 rule conflates a notice that is
intended to convey preliminary indicators of discrimination (the
Predetermination Notice) with a notice intended to inform the
contractor that corrective action is required and to invite
conciliation through a written agreement (the Notice of Violation).
OFCCP believes that conflating these two notices by requiring
duplicative evidentiary standards unnecessarily consumes resources and
delays OFCCP's ability to timely raise preliminary indicators of
discrimination. As the two notices were originally meant to serve
separate, unique purposes, this rulemaking proposes to restore the
function of the Predetermination Notice to convey preliminary
indicators of discrimination and foster the exchange of information and
communication toward efficient resolution.
To retain the Predetermination Notice and distinguish it from the
Notice of Violation, OFCCP proposes to modify the 2020 rule to enable
the agency to streamline the compliance evaluation process and issue
the Predetermination Notice earlier where appropriate. OFCCP will issue
a Predetermination Notice describing the preliminary indicators of
discrimination and any other potential violations OFCCP has identified,
asking the contractor to respond. In some circumstances, this may be
after the agency has completed the desk audit and prior to the on-site
review,\52\ while in other cases, depending on the facts and
circumstances, the agency will issue the Predetermination Notice after
OFCCP has begun an on-site review and obtained the information
necessary to identify preliminary indicators of discrimination.
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\52\ OFCCP compliance reviews proceed in three stages: Desk
audit, on-site review, and off-site analysis. See 41 CFR 60-
1.20(a)(1), 60-300.60(a), 60-741.60(a).
---------------------------------------------------------------------------
To promote greater efficiency in resolving cases, OFCCP proposes to
modify the 2020 rule's provision which required a contractor to provide
a response within 30 calendar days of receiving a Predetermination
Notice. The proposal will return the Predetermination Notice response
period to the 15-calendar-day period in effect prior to the 2020 rule
(which OFCCP may extend for good cause).\53\ In the proposal, OFCCP
also clarifies this provision to state that any response must be
received by OFCCP within 15 calendar days (absent a deadline
extension).
---------------------------------------------------------------------------
\53\ See Directive 2018-01, Use of Predetermination Notices
(Feb. 27, 2018), available at https://www.dol.gov/agencies/ofccp/directives/2018-01 (last accessed Dec. 5, 2021).
---------------------------------------------------------------------------
After OFCCP issues a Predetermination Notice, where the contractor
does not sufficiently rebut the preliminary indicators of
discrimination, and OFCCP finds a violation of one or more of its equal
opportunity clauses,\54\ OFCCP will issue a Notice of Violation to the
contractor identifying the violations, describing the recommended
corrective actions, and inviting conciliation through a written
agreement. OFCCP proposes changes to the Notice of Violation regulation
similar to the changes proposed for the Predetermination Notice, to
remove barriers to resolution. For the Notice of Violation regulatory
provision, the proposed changes make clear that OFCCP can include
additional violations in a subsequent Show Cause Notice without
amendment to the Notice of Violation to prevent enforcement delays. The
proposed changes to the Notice of Violation regulation also clearly
state that OFCCP will provide contractors an opportunity to conciliate
additional violations identified in the Show Cause Notice. The proposal
contains similar changes in the Predetermination Notice provision,
allowing OFCCP to add additional violations in a subsequent Notice of
Violation or Show Cause Notice without amending the Predetermination
Notice. The proposed changes provide that OFCCP may issue a Show Cause
Notice where OFCCP has reasonable cause to believe that a contractor
has violated the equal opportunity clause. The proposed changes also
clarify that the agency may issue a Show Cause Notice without first
issuing a Predetermination Notice or Notice of Violation when the
contractor has failed to provide access to its premises for an on-site
review, or refuses to provide access to witnesses, records, or other
information.
---------------------------------------------------------------------------
\54\ 41 CFR 60-1.4, 60-4.3, 60-300.5, 60-741.5.
---------------------------------------------------------------------------
These proposed changes stem from OFCCP's experience implementing
the 2020 rule as well as its policy judgment on how OFCCP can
strengthen enforcement of its requirements and promote consistency with
Title VII. The 2020 rule stated that key objectives included promoting
more effective enforcement, increasing the number of contractors that
the agency evaluates, and increasing fairness for contractors by
providing more transparency and certainty on the agency's resolution
procedures.\55\ However, the 2020 rule has not met these objectives.
The 2020 rule instead resulted in time-consuming disputes with
contractors over the application of the new requirements. For example,
upon receipt of the Predetermination Notice, contractors have disputed
the application of the 2020 rule's evidentiary requirements, causing
additional delay that diverts resources from the central issue of
resolving indicators and findings of discrimination. Additionally,
several contractors have argued that the anecdotal evidence that OFCCP
shared to support its case failed to meet the ``qualitative evidence''
definition included in the 2020 rule. Other contractors have argued
that the qualitative evidence that OFCCP provided was insufficient
because the agency failed to disclose the identity of the interviewees
who provided relevant statements at the Predetermination Notice stage.
Contractors have also disputed whether OFCCP met the required threshold
for practical significance under the 2020 rule, arguing that the agency
has failed to meet the threshold or even disagreeing with the 2020
rule's standard altogether. In each of these cases, the disputes raised
by contractors have delayed OFCCP's completion of compliance
evaluations. These delays would not have occurred but for the 2020 rule
and its rigid evidentiary requirements for a Predetermination Notice
that are prone to dispute and in some respects go beyond what is
required for proof of discrimination under Title VII. OFCCP proposes
modifications to these pre-enforcement notice and conciliation
procedures to streamline the issuance of these notices by removing
inefficiency and delay caused by the 2020 rule.
---------------------------------------------------------------------------
\55\ 85 FR 71553, 71554-71569.
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Restoring Flexibility to OFCCP's Procedures
This proposed rulemaking also seeks to restore flexibility to
OFCCP's pre-enforcement notice and conciliation
[[Page 16146]]
procedures. OFCCP needs flexibility in its investigatory and
conciliation procedures to effectively resolve employment
discrimination. In January of 2021, the Equal Employment Opportunity
Commission (EEOC) published a final rule concerning its conciliation
procedures.\56\ The U.S. Congress subsequently passed a law \57\ to
disapprove and annul the EEOC rule, based on concerns similar to those
underlying this proposed rulemaking, such as the increase in employer
litigation about the process, the delay of resolution of discrimination
claims, and mandated disclosures unfairly weighting the process in
favor of employers and subjecting workers to heightened risk of
retaliation, as reflected in the Congressional Record.\58\ The
Congressional Record also includes a statement from President Biden's
administration \59\ and a letter submitted by the Leadership Conference
on Civil and Human Rights signed by 24 civil rights organizations.\60\
The supportive statements and letter all cited to a unanimous decision
by the Supreme Court in Mach Mining, LLC v. EEOC that described the
wide latitude that Title VII gives EEOC to conciliate in pursuit of
voluntary compliance with the law.\61\ EEOC's experience with the
conciliation process is instructive. Before the Court's decision in
Mach Mining, employers routinely raised time-consuming challenges to
whether EEOC satisfied its discretionary conciliation requirements. For
example, the workers in Mach Mining--women alleged to have been
excluded from coal mining jobs on the basis of sex--were forced to wait
nine years after the first charge was filed for relief after years of
litigation over procedural challenges to the conciliation process.
EEOC's now-rescinded January 2021 conciliation rulemaking sought to
codify rigid standards that would enable employers to shift the focus
away from the core issue of whether discrimination occurred and instead
attempt to avoid liability by pursuing resource intensive satellite
proceedings over whether discretionary conciliation processes had been
satisfied. As stated by Representative Scott in support of overturning
this EEOC rule, EEOC ``must have discretion to use whatever informal
means of settlement are appropriate'' instead of applying a rigid
conciliation process ``across the board, one-size-fits-all, in every
case of workplace discrimination.'' \62\ This authority to have
administrative discretion in conciliation was directly granted to EEOC
by Congress,\63\ confirmed by a unanimous opinion from the U.S. Supreme
Court,\64\ re-affirmed by Congress through the annulment of EEOC's
conciliation procedures rule,\65\ and recognized by the current
President of the United States.\66\
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\56\ Update of Commission's Conciliation Procedures, 86 FR 2974
(Jan. 14, 2021), annulled. Before it was annulled, the rule amended
the EEOC's procedures governing its conciliation process for charges
alleging violations of Title VII, the ADA, the Genetic Information
Nondiscrimination Act, and/or the Age Discrimination in Employment
Act. The EEOC rule implemented requirements regarding the
information EEOC must provide in preparation for and during
conciliation about the factual and legal bases for the Commission's
position and findings for charges where it has found reasonable
cause.
\57\ President Biden signed the joint resolution of Congress
into law on June 30, 2021. See Commission's Conciliation Procedures,
Public Law 117-22, June 30, 2021, 135 Stat 294.
\58\ See 167 Cong. Rec. H3110-H3111 (daily ed. June 24, 2021).
(``[T]he rule incentivizes employers to focus litigation on whether
the EEOC failed to satisfy the rule's new requirements instead of
whether the employer engaged in unlawful discrimination'' (statement
of Rep. Scott); also, the ``. . . [EEOC rule] threatens to delay or
potentially deny justice for individuals who face workplace
discrimination'' (statement of Rep. Bonamici).
\59\ 167 Cong. Rec. H3110, 3111 (daily ed. June 24, 2021)
(noting that repealing the conciliation rule would, inter alia,
remove ``onerous and rigid new procedures;'' nullify ``unnecessary
and burdensome standards that would likely result in increased
charge backlogs, and lengthier charge investigation, resolution and
litigation times;'' give EEOC ``the flexibility to tailor
settlements to the facts and circumstances of each case;'' and
``ensure that justice for workers subject to discrimination is not
delayed, or potentially denied, due to costly and time-consuming
collateral litigation'') (Statement of Administration Policy).
\60\ 167 Cong. Rec. H3110, 3112 (daily ed. June 24, 2021)
(``Instead of ensuring that discrimination charges are resolved
fairly, the EEOC's final rule imposes several new obligations and
disclosures that: significantly weight the conciliation process in
favor of employers; delay justice and increase the likelihood of
harm to working people; divert scarce EEOC staff time and resources
away from investigating discrimination; and contravene controlling
U.S. Supreme Court precedent.'') (Letter from the Leadership
Conference on Civil and Human Rights).
\61\ Mach Mining, LLC v. EEOC, 575 U.S. 480, 492 (2015) (``Every
aspect of Title VII's conciliation provision smacks of flexibility.
To begin with, the EEOC need only `endeavor' to conciliate a claim,
without having to devote a set amount of time or resources to that
project. [42 U.S.C.] Sec. 2000e-5(b). Further, the attempt need not
involve any specific steps or measures; rather, the Commission may
use in each case whatever `informal' means of `conference,
conciliation, and persuasion' it deems appropriate.'').
\62\ See 167 Cong. Rec. H3110-H3111 (daily ed. June 24, 2021)
(statement of Rep. Scott).
\63\ 42 U.S.C. 2000e-5(b) (``If the Commission determines after
such investigation that there is reasonable cause to believe that
the charge is true, the Commission shall endeavor to eliminate any
such alleged unlawful employment practice by informal methods of
conference, conciliation, and persuasion.'').
\64\ Mach Mining, LLC, 575 U.S. at 480.
\65\ Joint Resolution Providing for congressional disapproval
under chapter 8 of title 5, United States Code, of the rule
submitted by the Equal Employment Opportunity Commission relating to
``Update of Commission's Conciliation Procedures''. COMMISSION'S
CONCILIATION PROCEDURES, PL 117-22, June 30, 2021, 135 Stat 294.
\66\ 167 Cong. Rec. H3110, 3111 (daily ed. June 24, 2021)
(Statement of Administration Policy).
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OFCCP has similar discretion to conciliate compliance under E.O.
11246, Section 503, and VEVRAA \67\--to right the wrong of employment
discrimination. When OFCCP determines that a Federal contractor is
deficient in its compliance with E.O. 11246, Section 503, or VEVRAA,
OFCCP must make ``reasonable efforts'' to secure compliance through
conciliation and persuasion,\68\ under the procedures set forth in
Chapter 60 of the U.S. Code of Federal Regulations,\69\ the FCCM,\70\
and subregulatory guidance.\71\ OFCCP views the Title VII flexibility
principle cited by Congress as similarly vital to OFCCP's work in
securing compliance with E.O. 11246, Section 503, and VEVRAA. As such,
OFCCP proposes to clarify that the ``reasonable efforts'' standard it
must satisfy when attempting to secure compliance with its laws should
be interpreted consistently with the Title VII language requiring EEOC
to ``endeavor to eliminate any such alleged unlawful employment
practice by informal methods of conference, conciliation, and
persuasion,'' to ensure OFCCP has the same flexibility in the
administration of its laws as that recognized under Title VII by
Congress and the U.S. Supreme Court for EEOC.
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\67\ 41 CFR 60-1.20(b) (noting that if ``deficiencies are found
to exist, OFCCP shall make reasonable efforts to secure compliance
through conciliation and persuasion''). OFCCP has identical
discretion under VEVRAA and Section 503. See 41 CFR 60-300.60(b),
60-741.60(b).
\68\ See 41 CFR 60-1.20(b), 60-300.60(b), 60-741.60(b).
\69\ 41 CFR 60-1.33, 60-300.62, 60-741.62.
\70\ See FCCM, Chapter 8, Resolution of Noncompliance, available
at https://www.dol.gov/agencies/ofccp/manual/fccm/chapter-8-resolution-noncompliance (last accessed Dec. 3, 2021).
\71\ See, e.g., Directive 2018-01, Use of Predetermination
Notices, (Feb. 27, 2018), available at https://www.dol.gov/agencies/ofccp/directives/2018-01 (last accessed Dec. 5, 2021); ``Practical
Significance in EEO Analysis Frequently Asked Questions'' (last
updated Jan. 15, 2021), available at https://www.dol.gov/agencies/ofccp/faqs/practical-significance (last accessed Dec. 5, 2021).
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The 2020 rule's codification of OFCCP's resolution procedures \72\
imposes hurdles to the effective exercise of OFCCP's enforcement
discretion. With this proposed rule, OFCCP seeks to restore the
flexibility it had prior to December 10, 2020, applying Title VII
standards to the facts and circumstances of each compliance evaluation,
while preserving certainty and transparency for Federal contractors by
requiring the
[[Page 16147]]
use of a Predetermination Notice and Notice of Violation.\73\
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\72\ 41 CFR 60-1.33, 60-300.62, 60-741.62.
\73\ As noted previously, supra at n. 28, OFCCP would continue
to apply ADA standards to compliance evaluations pertaining to
Section 503.
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Statement of Legal Authority
Issued in 1965, and amended several times in the intervening years,
E.O. 11246 has two principal purposes. First, it prohibits covered
Federal contractors and subcontractors from discriminating against
employees and applicants because of race, color, religion, sex, sexual
orientation, gender identity, national origin, or because they inquire
about, discuss, or disclose their compensation or that of others,
subject to certain limitations. Second, it requires covered Federal
contractors and subcontractors to take affirmative action to ensure
equal employment opportunity.
The requirements in E.O. 11246 generally apply to any business or
organization that (1) holds a single Federal contract, subcontract, or
federally assisted construction contract in excess of $10,000; (2) has
Federal contracts or subcontracts that combined total in excess of
$10,000 in any 12-month period; or (3) holds Government bills of
lading, serves as a depository of Federal funds, or is an issuing and
paying agency for U.S. savings bonds and notes in any amount. Supply
and service contractors with 50 or more employees and a single Federal
contract or subcontract of $50,000 or more also must develop and
maintain an affirmative action program that complies with 41 CFR part
60-2. Construction contractors have different affirmative action
requirements under E.O. 11246 at 41 CFR part 60-4.
Enacted in 1973, and amended since, the purpose of Section 503 of
the Rehabilitation Act of 1973 is twofold. First, Section 503 prohibits
employment discrimination on the basis of disability by Federal
contractors. Second, it requires each covered Federal contractor to
take affirmative action to employ and advance in employment qualified
individuals with disabilities. The requirements in Section 503
generally apply to any business or organization that holds a single
Federal contract or subcontract in excess of $15,000.\74\ Contractors
with 50 or more employees and a single Federal contract or subcontract
of $50,000 or more also must develop and maintain an affirmative action
program that complies with 41 CFR part 60-741, subpart C.
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\74\ Effective October 1, 2010, the coverage threshold under
Section 503 increased from $10,000 to $15,000, in accordance with
the inflationary adjustment requirements in 41 U.S.C. 1908. See
Federal Acquisition Regulation; Inflation Adjustment of Acquisition-
Related Thresholds, 75 FR 53129 (Aug. 30, 2010).
---------------------------------------------------------------------------
Enacted in 1974 and amended in the intervening years, VEVRAA
prohibits Federal contractors and subcontractors from discriminating
against employees and applicants because of status as a protected
veteran (defined by the statute to include disabled veterans, recently
separated veterans, Armed Forces Service Medal Veterans, and active
duty wartime or campaign badge veterans). It also requires each covered
Federal contractor and subcontractor to take affirmative action to
employ and advance in employment these veterans. The requirements in
VEVRAA generally apply to any business or organization that holds a
single Federal contract or subcontract in excess of $150,000.\75\
Contractors with 50 or more employees and a single Federal contract or
subcontract of $150,000 or more also must develop and maintain an
affirmative action program that complies with 41 CFR part 60-300,
subpart C.
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\75\ Effective October 1, 2015, the coverage threshold under
VEVRAA increased from $100,000 to $150,000, in accordance with the
inflationary adjustment requirements in 41 U.S.C. 1908. See Federal
Acquisition Regulation; Inflation Adjustment of Acquisition-Related
Thresholds, 80 FR 38293 (July 2, 2015).
---------------------------------------------------------------------------
Pursuant to these laws, receiving a Federal contract comes with a
number of responsibilities. Contractors are required to comply with all
provisions of these laws as well as the rules, regulations, and
relevant orders of the Secretary of Labor. Where OFCCP finds
noncompliance under any of the three laws or their implementing
regulations, it utilizes established procedures to either facilitate
resolution or proceed to administrative enforcement as necessary to
secure compliance. A contractor found in violation who fails to correct
violations of OFCCP's regulations may, after the opportunity for a
hearing, have its contracts canceled, terminated, or suspended and/or
may be subject to debarment.
Proposed Revisions
This rulemaking proposes to amend 41 CFR parts 60-1, 60-300, and
60-741 by removing unnecessary and confusing evidentiary standards and
definitions that the 2020 rule requires, while retaining and refining
the pre-enforcement procedures for issuing the Predetermination Notice
and the Notice of Violation. The proposed revisions would enable OFCCP
to apply Title VII standards to the facts and circumstances of each
compliance evaluation and clarify that OFCCP's conciliation standards
align with the flexibility and enforcement discretion afforded under
Title VII for endeavoring to secure compliance through conciliation.
The rulemaking would also amend each part's regulatory provision on
Show Cause Notices, relocating the provision to the same section as the
other codified pre-enforcement notices and codifying when OFCCP will
amend the Show Cause Notice consistent with current practice.
The rulemaking further proposes to amend 41 CFR parts 60-1, 60-2,
60-4, 60-20, 60-30, 60-40, 60-50, 60-300, and 60-741. The 2020 rule
added the first severability clause to OFCCP's regulations, but it only
applies to the resolution procedures sections for each of OFCCP's legal
authorities (i.e., 41 CFR 60-1.33, 60-300.62, and 60-741.42).\76\ OFCCP
has determined that, if there is a severability clause in any part of
its regulations, it should apply to all of its regulations, rather than
just certain specific sections. Thus, OFCCP proposes to include a
severability clause in each part of its regulations, such that if a
court of competent jurisdiction found any provision(s) of the part to
be invalid, it would not affect any other provision of the part or
chapter. The severability clauses currently only applicable to 41 CFR
60-1.33, 60-300.62, and 60-741.42 would be removed.
---------------------------------------------------------------------------
\76\ In addition, OFCCP's 2020 final rule relating to the E.O.
11246 religious exemption included a severability clause that
applied only to provisions within 41 CFR 60-1.5. Implementing Legal
Requirements Regarding the Equal Opportunity Clause's Religious
Exemption, 85 FR 79324, 79372 (Dec. 9, 2020), codified at 41 CFR 60-
1.5(f). OFCCP has proposed to rescind that rule, including the
severability clause. 86 FR 62115 (Nov. 9, 2021).
---------------------------------------------------------------------------
Revised Sections
41 CFR PART 60-1--OBLIGATIONS OF CONTRACTORS AND SUBCONTRACTORS
Subpart A--Preliminary Matters; Equal Opportunity Clause; Compliance
Reports
Section 60-1.3 Definitions
The NPRM proposes to amend Sec. 60-1.3 by removing the definitions
for ``Qualitative evidence'' and ``Quantitative evidence.'' These
definitions operate in tandem with the evidentiary standards that are
currently creating hurdles to the effective enforcement of OFCCP laws
and would be rendered unnecessary by other proposed changes to this
part.
[[Page 16148]]
Subpart B--General Enforcement; Compliance Review and Complaint
Procedure
Section 1.20 Compliance Evaluations
The NPRM proposes to clarify the ``reasonable efforts'' standard in
Sec. 60-1.20(b) that OFCCP must satisfy when attempting to secure
compliance through conciliation, to make clear that OFCCP's
conciliation standards align with Title VII.
Section 1.28 Show Cause Notices
The NPRM proposes to remove and reserve Sec. 60-1.28, to relocate
``Show cause notices'' to Sec. 60-1.33 with the other pre-enforcement
notices in this part.
Section 60-1.33 Resolution Procedures
The NPRM proposes to revise Sec. 60-1.33 by changing the title to
``Pre-enforcement notice and conciliation procedures''; removing
unnecessary regulatory standards impeding OFCCP's ability to resolve
preliminary indicators and findings of discrimination; incorporating a
relocated subsection on Show Cause Notices to improve regulatory
organization; clarifying OFCCP's use of the Show Cause Notice including
when a contractor denies access to its premises, to witnesses, or to
records; making general clarifying edits to improve procedural efficacy
including OFCCP's role in the early conciliation option; and removing
the severability clause specific to this section.
Subpart C--Ancillary Matters
Section 60-1.48 Severability
The NPRM proposes to add Sec. 60-1.48, a severability clause.
41 CFR PART 60-2--AFFIRMATIVE ACTION PROGRAMS
Subpart C--Miscellaneous
Section 60-2.36 Severability
The NPRM proposes to add Sec. 60-2.36, a severability clause.
41 CFR PART 60-4--CONSTRUCTION CONTRACTORS--AFFIRMATIVE ACTION
REQUIREMENTS
Section 60-4.10 Severability
The NPRM proposes to add Sec. 60-4.10, a severability clause.
41 CFR PART 60-20--DISCRIMINATION ON THE BASIS OF SEX
Section 60-20.9 Severability
The NPRM proposes to add Sec. 60-20.9, a severability clause.
41 CFR PART 60-30--RULES OF PRACTICE FOR ADMINISTRATIVE PROCEEDINGS TO
ENFORCE EQUAL OPPORTUNITY UNDER EXECUTIVE ORDER 11246
GENERAL PROVISIONS
Section 60-30.38 Severability
The NPRM proposes to add Sec. 60-30.38, a severability clause.
41 CFR PART 60-40--EXAMINATION AND COPYING OF OFCCP DOCUMENTS
Subpart A--General
Section 60-40.9 Severability
The NPRM proposes to add Sec. 60-40.9, a severability clause.
41 CFR PART 60-50--GUIDELINES ON DISCRIMINATION BECAUSE OF RELIGION OR
NATIONAL ORIGIN
Section 60-50.6 Severability
The NPRM proposes to add Sec. 60-50.6, a severability clause.
41 CFR PART 60-300--AFFIRMATIVE ACTION AND NONDISCRIMINATION
OBLIGATIONS OF FEDERAL CONTRACTORS AND SUBCONTRACTORS REGARDING
DISABLED VETERANS, RECENTLY SEPARATED VETERANS, ACTIVE DUTY WARTIME OR
CAMPAIGN BADGE VETERANS, AND ARMED FORCES SERVICE MEDAL VETERANS
Subpart A--Preliminary Matters; Equal Opportunity Clause
Section 60-300.2 Definitions
The NPRM proposes to amend Sec. 60-300.2 by removing the
definitions for ``Qualitative evidence'' and ``Quantitative evidence.''
These definitions would be rendered unnecessary by other proposed
changes to this part.
Subpart D--General Enforcement and Complaint Procedures
Section 60-300.60 Compliance Evaluations
The NPRM proposes to clarify the ``reasonable efforts'' standard in
Sec. 60-300.60 (b) that OFCCP must satisfy when attempting to secure
compliance through conciliation, to make clear that OFCCP's
conciliation standards align with Title VII.
Section 60-300.62 Resolution Procedures
The NPRM proposes to revise Sec. 60-300.62 by changing the title
to ``Pre-enforcement notice and conciliation procedures''; removing
unnecessary regulatory standards impeding OFCCP's ability to resolve
preliminary indicators and findings of discrimination; incorporating a
relocated subsection on Show Cause Notices to improve regulatory
organization; clarifying OFCCP's use of the Show Cause Notice including
when a contractor denies access to its premises, to witnesses, or to
records; making general clarifying edits to improve procedural efficacy
including OFCCP's role in the early conciliation option; and removing
the severability clause specific to this section.
Section 60-300.64 Show Cause Notices
The NPRM proposes to remove and reserve Sec. 60-300.64, to
relocate ``Show cause notices'' to Sec. 60-300.62 with the other pre-
enforcement notices in this part.
Subpart E--Ancillary Matters
Section 60-300.85 Severability
The NPRM proposes to add Sec. 60-300.85, a severability clause.
41 CFR PART 60-741--AFFIRMATIVE ACTION AND NONDISCRIMINATION
OBLIGATIONS OF FEDERAL CONTRACTORS AND SUBCONTRACTORS REGARDING
INDIVIDUALS WITH DISABILITIES
Subpart A--Preliminary Matters; Equal Opportunity Clause
Section 60-741.2 Definitions
The NPRM proposes to amend Sec. 60-741.2 by removing the
definitions for ``Qualitative evidence'' and ``Quantitative evidence.''
These definitions would be rendered unnecessary by other proposed
changes to this part.
Subpart D--General Enforcement and Complaint Procedures
Section 60-741.60 Compliance Evaluations
The NPRM proposes to clarify the ``reasonable efforts'' standard in
Sec. 60-741.60 (b) that OFCCP must satisfy when attempting to secure
compliance through conciliation, to make clear that OFCCP's
conciliation standards align with Title VII.
Section 60-741.62 Resolution Procedures
The NPRM proposes to revise Sec. 60-741.62 by changing the title
to ``Pre-enforcement notice and conciliation procedures''; removing
unnecessary regulatory standards impeding OFCCP's ability to resolve
preliminary indicators and findings of discrimination; incorporating a
relocated subsection on
[[Page 16149]]
Show Cause Notices to improve regulatory organization; clarifying
OFCCP's use of the Show Cause Notice including when a contractor denies
access to its premises, to witnesses, or to records; making general
clarifying edits to improve procedural efficacy including OFCCP's role
in the early conciliation option; and removing the severability clause
specific to this section.
Section 60-741.64 Show Cause Notices
The NPRM proposes to remove and reserve Sec. 60-741.64, to
relocate ``Show cause notices'' to Sec. 60-741.62 with the other pre-
enforcement notices in this part.
Subpart E--Ancillary Matters
Section 60-741.84 Severability
The NPRM proposes to add Sec. 60-741.84, a severability clause.
Regulatory Procedures
Executive Order 12866 (Regulatory Planning and Review) and Executive
Order 13563 (Improving Regulation and Regulatory Review)
Under Executive Order 12866 (E.O. 12866), the Office of Management
and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA)
determines whether a regulatory action is significant and, therefore,
subject to the requirements of E.O. 12866 and OMB review. Section 3(f)
of E.O. 12866 defines a ``significant regulatory action'' as an action
that is likely to result in a rule that: (1) Has an annual effect on
the economy of $100 million or more, or adversely affects in a material
way a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities (also referred to as economically
significant); (2) creates serious inconsistency or otherwise interferes
with an action taken or planned by another agency; (3) materially
alters the budgetary impacts of entitlement grants, user fees, or loan
programs, or the rights and obligations of recipients thereof; or (4)
raises novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in E.O. 12866. This
proposed rulemaking has been designated a ``significant regulatory
action,'' although not economically significant, under section 3(f) of
E.O. 12866. OMB has reviewed this proposal.
Executive Order 13563 (E.O. 13563) directs agencies to adopt a
regulation only upon a reasoned determination that its benefits justify
its costs; tailor the regulation to impose the least burden on society,
consistent with obtaining the regulatory objectives; and in choosing
among alternative regulatory approaches, select those approaches that
maximize net benefits. E.O. 13563 recognizes that some benefits are
difficult to quantify and provides that, where appropriate and
permitted by law, agencies may consider and discuss qualitatively
values that are difficult or impossible to quantify, including equity,
human dignity, fairness, and distributive impacts.
A. Need for Rulemaking
OFCCP believes that the 2020 rule created rigid constraints that
are not required by Title VII and/or impede the agency's effective
enforcement of E.O. 11246, Section 503, and VEVRAA. This has delayed
information exchange with contractors and created obstacles to a timely
resolution of preliminary indicators and findings of discrimination and
greater compliance. The 2020 rule has also resulted in time-consuming
collateral disputes over the implementation of the rule's regulatory
standards--diverting limited agency and contractor resources away from
resolving concerns of discrimination. This diversion of resources and
delay in the pre-enforcement process will reduce rather than increase
the number of contractors that OFCCP is able to evaluate for
compliance.
This NPRM aims to create a streamlined, efficient, and flexible
process to ensure OFCCP utilizes its limited resources as strategically
as possible to advance the agency's mission. In a return to prior
agency policy, OFCCP will apply Title VII standards to the facts and
circumstances of each compliance evaluation, including during the pre-
enforcement notice and conciliation stages. Doing so will remove
unnecessary constraints that impede effective enforcement by limiting
the agency's enforcement discretion, and prevent delays in case
resolutions due to the 2020 rule. Removing the blanket regulatory
requirements will also allow OFCCP to pursue enforcement in cases that,
albeit actionable under Title VII, are more difficult to pursue under
the 2020 rule. OFCCP remains committed to providing contractors early
notice when the agency identifies preliminary indicators of systemic
discrimination during a compliance evaluation. Such notice is mutually
beneficial for OFCCP and the contractor under review because it
provides the contractor with an earlier opportunity to respond to
potential issues before OFCCP makes a determination on violations.
Providing earlier notice to contractors can result in the prompt and
mutually satisfactory resolution of cases, which minimizes unnecessary
burdens on contractors and agency staff. Going forward, OFCCP would
provide updated guidance to its compliance officers on the pre-
enforcement procedures. This guidance would reflect current case law,
provide OFCCP needed flexibility, and be available to the public to
promote transparency.
B. Discussion of Impacts
In this section, OFCCP presents a summary of the costs associated
with the modifications in this proposed rulemaking. OFCCP utilizes the
Employment Information Report (EEO-1) data, which identifies the number
of supply and service contractors that could be scheduled for a
compliance evaluation and thus impacted by the proposed modification.
The EEO-1 Report must be filed by covered Federal contractors who: (1)
Have 50 or more employees; (2) are prime contractors or first-tier
subcontractors; and (3) have a contract, subcontract, or purchase order
amounting to $50,000 or more. OFCCP schedules only contractors who meet
those thresholds for compliance evaluations. The number of supply and
service contractors possibly impacted by the proposed modification is
24,251.\77\
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\77\ OFCCP obtained the total number of supply and service
contractors from the most recent EEO-1 Report data available, which
is from fiscal year (FY) 2018.
---------------------------------------------------------------------------
OFCCP also utilizes USASpending data, which identifies the number
of construction contractors that could be scheduled for a compliance
evaluation and thus impacted by the proposed modification. The
USASpending data accounts for all construction contractors with
contracts greater than $10,000 who meet the thresholds for compliance
evaluations. The number of construction contractors possibly impacted
by the proposed modification is 12,362.\78\
---------------------------------------------------------------------------
\78\ OFCCP obtained the total number of construction
establishments (12,609) from FY 2019 USASpending data, available at
https://www.usaspending.gov/#/download_center/award_data_archive
(last accessed Dec. 8, 2021). The agency then used the ratio of
contractor establishments to contractor firms (1.02) from US Census
Bureau data, available at https://www.census.gov/data/tables/2017/econ/economic-census/naics-sector-23.html (last accessed Dec. 8,
2021). 12,609/1.02 = 12,362 construction contractors.
---------------------------------------------------------------------------
While OFCCP acknowledges that all Federal contractors may learn
their EEO requirements in order to comply with the laws that OFCCP
enforces, only those contractors scheduled for a compliance evaluation
are directly impacted by the proposed modification.
[[Page 16150]]
Scheduled contractors are likely to have a need to know the pre-
enforcement procedures because they may need to interact with OFCCP.
The total number of contractors possibly impacted by the proposed
modification is 36,613.\79\
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\79\ 24,251 supply and service contractors + 12,362 construction
contractors = 36,613 contractors.
---------------------------------------------------------------------------
OFCCP has determined that either a Human Resources Manager (SOC 11-
3121) or a Lawyer (SOC 23-1011) would review the proposed modification.
OFCCP estimates that 50 percent of the reviewers would be human
resources managers and 50 percent would be in-house counsel. Thus, the
mean hourly wage rate reflects a 50/50 split between human resources
managers and lawyers. The mean hourly wage of a human resources manager
is $64.70 and the mean hourly wage of a lawyer is $71.59.\80\
Therefore, the average hourly wage rate is $68.15 (($64.70 + $71.59)/
2). OFCCP adjusted this wage rate to reflect fringe benefits such as
health insurance and retirement benefits, as well as overhead costs
such as rent, utilities, and office equipment. OFCCP uses a fringe
benefits rate of 46 percent \81\ and an overhead rate of 17
percent,\82\ resulting in a fully loaded hourly compensation rate of
$111.08 ($68.15 + ($68.15 x 46 percent) + ($68.15 x 17 percent)). The
estimated labor cost to contractors is reflected in Table 1, below.
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\80\ BLS, Occupational Employment Statistics, Occupational
Employment and Wages, May 2020, available at www.bls.gov/oes/current/oes_nat.htm (last accessed Dec. 8, 2021).
\81\ BLS, Employer Costs for Employee Compensation, available at
www.bls.gov/ncs/data.htm (last accessed Dec. 8, 2021). Wages and
salaries averaged $26.53 per hour worked in December 2020, while
benefit costs averaged $12.07, which is a benefits rate of 46
percent.
\82\ Cody Rice, U.S. Environmental Protection Agency, ``Wage
Rates for Economic Analyses of the Toxics Release Inventory
Program,'' (June 10, 2002), available at www.regulations.gov/document?D=EPA-HQ-OPPT-2014-0650-0005 (last accessed Dec. 8, 2021).
Table 1--Labor Cost
----------------------------------------------------------------------------------------------------------------
Fully loaded
Major occupational groups Average hourly Fringe benefit Overhead rate hourly
wage rate rate compensation
----------------------------------------------------------------------------------------------------------------
Human Resources Managers and Lawyers........ $68.15 46% 17% $111.08
----------------------------------------------------------------------------------------------------------------
1. Cost of Rule Familiarization
OFCCP acknowledges that 5 CFR 1320.3(b)(1)(i) requires agencies to
include in the burden analysis for a proposed rulemaking the estimated
time it takes for contractors to review and understand the instructions
for compliance. To minimize the burden, OFCCP will publish compliance
assistance materials regarding the proposed rule, once final.
OFCCP believes that a human resources manager or lawyer will take a
minimum of 30 minutes (\1/2\ hour) to read the proposed rule or read
the compliance assistance materials provided by OFCCP. Consequently,
the estimated burden for rule familiarization is 18,307 hours (36,613
contractor firms x \1/2\ hour). OFCCP calculates the total estimated
cost of rule familiarization as $2,033,542 (18,307 hours x $111.08/
hour) in the first year, which amounts to a 10-year annualized cost of
$231,450 at a discount rate of 3 percent (which is $6.32 per contractor
firm) or $270,589 at a discount rate of 7 percent (which is $7.39 per
contractor firm). Table 2, below, reflects the estimated regulatory
familiarization costs for the proposed rule.
Table 2--Regulatory Familiarization Cost
------------------------------------------------------------------------
------------------------------------------------------------------------
Total number of contractors............... 36,613.
Time to review rule....................... 30 minutes.
Human Resources Managers fully loaded $111.08.
hourly compensation.
Regulatory familiarization cost in the $2,033,542.
first year.
Annualized cost with 3 percent discounting $231,450.
Annualized cost per contractor with 3 $6.32.
percent discounting.
Annualized cost with 7 percent discounting $270,589.
Annualized cost per contractor with 7 $7.39.
percent discounting.
------------------------------------------------------------------------
2. Benefits
E.O. 13563 recognizes that some rules have benefits that are
difficult to quantify or monetize but are nevertheless important and
states that agencies may consider such benefits. This proposed rule has
equity and fairness benefits, which are explicitly recognized in E.O.
13563. The proposal is designed to achieve these benefits by:
Supporting more effective enforcement of OFCCP's equal
opportunity laws by eliminating procedural inefficiencies and
heightened evidentiary standards created by the 2020 rule;
Facilitating earlier and more efficient resolutions;
Ensuring greater certainty and consistency in case
resolutions by maintaining adherence to Title VII and OFCCP case law
standards;
Promoting transparency by codifying the required use of
the Predetermination Notice when the agency identifies preliminary
indicators of discrimination;
Allowing OFCCP to tailor the pre-enforcement process to
the specific facts and circumstances of each case, consistent with
judicial interpretations of the applicable legal authorities, which
will in turn allow OFCCP to more effectively redress unlawful
discrimination;
Advancing a policy of promoting consistency between Title
VII and E.O. 11246 and removing unnecessary constraints on the agency's
ability to pursue meritorious cases. This approach will help OFCCP
advance the overriding policy goal of promoting nondiscrimination by
strengthening the enforcement of federal protections under E.O. 11246;
[[Page 16151]]
Reducing time-consuming disputes over unnecessary
standards; and
Furthering the strategic allocation of agency resources.
C. Alternatives
In addition to the approach proposed, OFCCP also considered
alternative approaches. OFCCP considered modifying the 2020 rule to
rescind the entirety of the rule except the correction to OFCCP's
agency head title. OFCCP also considered modifying the 2020 rule by
eliminating the Predetermination Notice entirely since it currently
functions as a procedural redundancy. However, OFCCP determined that
retaining both pre-enforcement notices in the regulatory text while
rescinding the inflexible evidentiary requirements for the
Predetermination Notice and Notice of Violation allows the contractor
and OFCCP to engage in earlier discussions that can lead to more
efficient resolutions.
OFCCP also considered maintaining the current regulations
established in the 2020 rule. However, as discussed earlier in this
preamble, OFCCP determined that creating a rigid regulatory process to
govern its pre-enforcement compliance evaluation process is
incompatible with the flexibility needed for effective enforcement.
Moreover, the 2020 rule places certain obligations on OFCCP at this
preliminary stage that go beyond the substantive legal requirements
that E.O. 11246, Title VII, and interpretive case law require to state
a claim and prove discrimination at a much later stage, upon a full
evidentiary record. OFCCP has determined that imposing such rigid and
heightened standards early in its pre-enforcement proceedings unduly
constrains its ability to pursue claims of discrimination. The 2020
rule also created an inefficient process where OFCCP's Predetermination
Notice (intended to convey preliminary indicators of discrimination)
and the Notice of Violation (intended to inform the contractor that
corrective action is required and to invite conciliation through a
written agreement) were largely duplicative. Further, the mandating of
regulatory requirements for making inherently fact specific
determinations, invites time-consuming disputes over the application of
the rule's requirements. Modifying the 2020 regulations would help
restore the enforcement discretion and flexibility OFCCP needs to
facilitate compliance through conciliation by providing pre-enforcement
notice of preliminary discrimination indicators and findings, and
applying Title VII to the facts and circumstances of each compliance
evaluation. OFCCP is proposing modification of the regulatory text to
create a more streamlined and effective process for the agency to
communicate preliminary indicators to contractors, provide contractors
an opportunity to respond, notify contractors of violations, and
ultimately facilitate greater understanding to obtain resolution
through conciliation.
Regulatory Flexibility Act and Executive Order 13272 (Consideration of
Small Entities)
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq.,
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and applicable
statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions
subject to regulation.'' Public Law 96-354, 2(b). The RFA requires
agencies to consider the impact of a regulatory action on a wide range
of small entities, including small businesses, nonprofit organizations,
and small governmental jurisdictions.
Agencies must review whether a regulatory action would have a
significant economic impact on a substantial number of small entities.
See 5 U.S.C. 603. If the regulatory action would, then the agency must
prepare a regulatory flexibility analysis as described in the RFA. See
id. However, if the agency determines that the regulatory action would
not be expected to have a significant economic impact on a substantial
number of small entities, then the head of the agency may so certify
and the RFA does not require a regulatory flexibility analysis. See 5
U.S.C. 605. The certification must provide the factual basis for this
determination.
The proposed rule will not have a significant economic impact on a
substantial number of small entities. The first year cost for small
entities at a discount rate of 7 percent for rule familiarization is
$51.91 per entity which is far less than 1 percent of the annual
revenue of the smallest of the small entities affected by the proposal.
Accordingly, OFCCP certifies that the proposed modification will not
have a significant economic impact on a substantial number of small
entities.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 requires that OFCCP consider
the impact of paperwork and other information collection burdens
imposed on the public. See 44 U.S.C. 3507(d). An agency may not collect
or sponsor the collection of information or impose an information
collection requirement unless the information collection instrument
displays a currently valid OMB control number. See 5 CFR 1320.5(b)(1).
OFCCP has determined that there would be no new requirement for
information collection associated with this proposed rulemaking. The
information collections contained in the existing E.O. 11246, Section
503, and VEVRAA regulations are currently approved under OMB Control
Number 1250-0001 (Construction Recordkeeping and Reporting
Requirements), OMB Control Number 1250-0003 (Recordkeeping and
Reporting Requirements--Supply and Service), OMB Control Number 1250-
0004 (Office of Federal Contract Compliance Programs Recordkeeping and
Reporting Requirements Under the Vietnam Era Veterans' Readjustment
Assistance Act of 1974, as Amended), and OMB Control Number 1250-0005
(Office of Federal Contract Compliance Programs Recordkeeping and
Reporting Requirements Under Rehabilitation Act of 1973, as Amended
Section 503). Consequently, this proposal does not require review by
OMB under the authority of the Paperwork Reduction Act.
Unfunded Mandates Reform Act of 1995
For purposes of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.
1532, this proposed rule would not include any federal mandate that may
result in excess of $100 million in expenditures by state, local, and
tribal governments in the aggregate or by the private sector.
Executive Order 13132 (Federalism)
OFCCP has reviewed this proposed rule in accordance with Executive
Order 13132 regarding federalism and has determined that it would not
have ``federalism implications.'' The proposed regulatory action would
not ``have substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.''
Executive Order 13175 (Consultation and Coordination With Indian Tribal
Governments)
This proposed rule would not have tribal implications under
Executive Order 13175 that would require a tribal summary impact
statement. The proposal would not ``have substantial direct effects on
one or more Indian
[[Page 16152]]
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes.''
List of Subjects
41 CFR Part 60-1
Administrative practice and procedure, Civil rights, Employment,
Equal employment opportunity, Government contracts, Government
procurement, Investigations, Labor, Reporting and recordkeeping
requirements.
41 CFR Part 60-2
Equal employment opportunity, Government procurement, Reporting and
recordkeeping requirements.
41 CFR Part 60-4
Construction industry, Equal employment opportunity, Government
procurement, Reporting and recordkeeping requirements.
41 CFR Part 60-20
Civil rights, Equal employment opportunity, Government procurement,
Labor, Sex discrimination, Women.
41 CFR Part 60-30
Administrative practice and procedure, Civil rights, Equal
employment opportunity, Government contracts, Government procurement,
Government property management, Individuals with Disabilities,
Reporting and recordkeeping requirements, Veterans.
41 CFR Part 60-40
Freedom of information, Reporting and recordkeeping requirements.
41 CFR Part 60-50
Equal employment opportunity, Government procurement, Religious
discrimination, Reporting and recordkeeping requirements.
41 CFR Parts 60-300 and 60-741
Administrative practice and procedure, Civil rights, Employment,
Equal employment opportunity, Government contracts, Government
procurement, Individuals with disabilities, Investigations, Labor,
Reporting and recordkeeping requirements, Veterans.
Jenny R. Yang,
Director, Office of Federal Contract Compliance Programs.
For the reasons stated in the preamble, the OFCCP proposes to amend
41 CFR parts 60-1, 60-2, 60-4, 60-20, 60-30, 60-40, 60-50, 60-300, and
60-741 as follows:
PART 60-1--OBLIGATIONS OF CONTRACTORS AND SUBCONTRACTORS
0
1. The authority citation for part 60-1 continues to read as follows:
Authority: Sec. 201, E.O. 11246, 30 FR 12319, 3 CFR, 1964-1965
Comp., p. 339, as amended by E.O. 11375, 32 FR 14303, 3 CFR, 1966-
1970 Comp., p. 684, E.O. 12086, 43 FR 46501, 3 CFR, 1978 Comp., p.
230, E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258 and E.O.
13672, 79 FR 42971.
Sec. 60-1.3 [Amended]
0
2. Amend Sec. 60-1.3 by removing the definitions for ``Qualitative
evidence'' and ``Quantitative evidence''.
0
3. Amend Sec. 60-1.20 by revising paragraph (b) to read as follows:
Sec. 60-1.20 Compliance evaluations.
* * * * *
(b) Where deficiencies are found to exist, OFCCP will make
reasonable efforts to secure compliance through conciliation and
persuasion, pursuant to Sec. 60-1.33. The ``reasonable efforts''
standard shall be interpreted consistently with title VII of the Civil
Rights Act of 1964 and its requirement that the Equal Employment
Opportunity Commission ``endeavor to eliminate any such alleged
unlawful employment practice by informal methods of conference,
conciliation, and persuasion.'' Before the contractor can be found to
be in compliance with the order, it must make a specific commitment, in
writing, to correct any such deficiencies. The commitment must include
the precise action to be taken and dates for completion. The time
period allotted shall be no longer than the minimum period necessary to
effect such changes. Upon approval of the commitment, the contractor
may be considered in compliance, on condition that the commitments are
faithfully kept. The contractor shall be notified that making such
commitments does not preclude future determinations of noncompliance
based on a finding that the commitments are not sufficient to achieve
compliance.
* * * * *
Sec. 60-1.28 [Removed and Reserved]
0
4. Remove and reserve Sec. 60-1.28.
0
5. Revise Sec. 60-1.33 to read as follows:
Sec. 60-1.33 Pre-enforcement notice and conciliation procedures.
(a) Predetermination Notice. If a compliance evaluation by OFCCP
indicates preliminary indicators of discrimination, OFCCP will issue a
Predetermination Notice describing the indicators and providing the
contractor an opportunity to respond. The Predetermination Notice may
also include other potential violations that OFCCP has identified at
that stage of the review. After OFCCP issues the Predetermination
Notice, the agency may identify additional violations and include them
in a subsequent Notice of Violation or Show Cause Notice without
amending the Predetermination Notice. OFCCP will provide the contractor
an opportunity to conciliate additional violations identified in the
Notice of Violation or Show Cause Notice. Any response to a
Predetermination Notice must be received by OFCCP within 15 calendar
days of receipt of the Notice, which deadline OFCCP may extend for good
cause. If the contractor does not respond or OFCCP determines that the
contractor's response did not resolve the indicators of discrimination
in the Predetermination Notice, OFCCP will proceed with the review.
(b) Notice of Violation. If a compliance evaluation by OFCCP
indicates a violation of the equal opportunity clause, OFCCP will issue
a Notice of Violation to the contractor requiring corrective action and
inviting conciliation through a written agreement. The Notice of
Violation will identify the violations and describe the recommended
corrective actions. After the Notice of Violation is issued, OFCCP may
include additional violations in a subsequent Show Cause Notice without
amendment to the Notice of Violation. OFCCP will provide the contractor
an opportunity to conciliate additional violations identified in the
Show Cause Notice.
(c) Conciliation agreement. If a compliance review, complaint
investigation, or other review by OFCCP or its representative indicates
a material violation of the equal opportunity clause, and:
(1) If the contractor, subcontractor, or bidder is willing to
correct the violations and/or deficiencies; and
(2) If OFCCP or its representative determines that settlement
(rather than referral for consideration of formal enforcement) is
appropriate, a written conciliation agreement shall be required. The
agreement shall provide for such remedial action as may be necessary to
correct the violations and/or deficiencies identified, including, where
appropriate (but not limited to), remedies such as back pay, salary
adjustments, and retroactive seniority.
(d) Show cause notices. When the Director has reasonable cause to
believe that a contractor has violated the equal opportunity clause the
Director may
[[Page 16153]]
issue a notice requiring the contractor to show cause, within 30 days,
why monitoring, enforcement proceedings, or other appropriate action to
ensure compliance should not be instituted. OFCCP may issue a Show
Cause Notice without first issuing a Predetermination Notice or Notice
of Violation when the contractor has failed to provide access to its
premises for an on-site review or refused to provide access to
witnesses, records, or other information. The Show Cause Notice will
include each violation that OFCCP has identified at the time of
issuance. Where OFCCP identifies additional violations after issuing a
Show Cause Notice, OFCCP will modify or amend the Show Cause Notice.
(e) Expedited conciliation option. OFCCP may agree to waive the
procedures set forth in paragraphs (a) and/or (b) of this section to
enter directly into a conciliation agreement with a contractor. OFCCP
may offer the contractor this expedited conciliation option, but may
not require or insist that the contractor avail itself of the expedited
conciliation option.
0
6. Add Sec. 60-1.48 to read as follows:
Sec. 60-1.48 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this part to be invalid, such action will not affect any other
provision of this part.
PART 60-2--AFFIRMATIVE ACTION PROGRAMS
0
7. The authority citation for part 60-2 continues to read as follows:
Authority: Sec. 201, E.O. 11246, 30 FR 12319, E.O. 11375, 32 FR
14303, as amended by E.O. 12086, 43 FR 46501, and E.O. 13672, 79 FR
42971.
0
8. Add Sec. 60-2.36 to read as follows:
Sec. 60-2.36 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this part to be invalid, such action will not affect any other
provision of this part.
PART 60-4--CONSTRUCTION CONTRACTORS--AFFIRMATIVE ACTION
REQUIREMENTS
0
9. The authority citation for part 60-4 continues to read as follows:
Authority: Secs. 201, 202, 205, 211, 301, 302, and 303 of E.O.
11246, as amended, 30 FR 12319; 32 FR 14303, as amended by E.O.
12086; and E.O. 13672, 79 FR 42971.
0
10. Add Sec. 60-4.10 to read as follows:
Sec. 60-4.10 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this part to be invalid, such action will not affect any other
provision of this part.
PART 60-20--DISCRIMINATION ON THE BASIS OF SEX
0
11. The authority citation for part 60-20 continues to read as follows:
Authority: Sec. 201, E.O. 11246, 30 FR 12319, 3 CFR, 1964-1965
Comp., p. 339 as amended by E.O. 11375, 32 FR 14303, 3 CFR 1966-1970
Comp., p. 684; E.O. 12086, 43 FR 46501, 3 CFR 1978 Comp., p. 230;
E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; and E.O. 13672,
79 FR 42971.
0
12. Add Sec. 60-20.9 to read as follows:
Sec. 60-20.9 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this part to be invalid, such action will not affect any other
provision of this part.
PART 60-30--RULES OF PRACTICE FOR ADMINISTRATIVE PROCEEDINGS TO
ENFORCE EQUAL OPPORTUNITY UNDER EXECUTIVE ORDER 11246
0
13. The authority citation for part 60-30 continues to read as follows:
Authority: Executive Order 11246, as amended, 30 FR 12319, 32
FR 14303, as amended by E.O. 12086; 29 U.S.C. 793, as amended, and
38 U.S.C. 4212, as amended.
0
14. Add Sec. 60-30.38 to read as follows:
Sec. 60-30.38 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this part to be invalid, such action will not affect any other
provision of this part.
PART 60-40--EXAMINATION AND COPYING OF OFCCP DOCUMENTS
0
15. The authority citation for part 60-40 continues to read as follows:
Authority: E.O. 11246, as amended by E.O. 11375, and as amended
by E.O. 12086; 5 U.S.C. 552.
0
16. Add Sec. 60-40.9 to read as follows:
Sec. 60-40.9 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this part to be invalid, such action will not affect any other
provision of this part or chapter.
PART 60-50--GUIDELINES ON DISCRIMINATION BECAUSE OF RELIGION OR
NATIONAL ORIGIN
0
17. The authority citation for part 60-50 continues to read as follows:
Authority: Sec. 201 of E.O. 11246, as amended, 30 FR 12319; 32
FR 14303, as amended by E.O. 12086; and E.O. 13672, 79 FR 42971.
0
18. Add Sec. 60-50.6 to read as follows:
Sec. 60-50.6 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this part to be invalid, such action will not affect any other
provision of this part.
PART 60-300--AFFIRMATIVE ACTION AND NONDISCRIMINATION OBLIGATIONS
OF FEDERAL CONTRACTORS AND SUBCONTRACTORS REGARDING DISABLED
VETERANS, RECENTLY SEPARATED VETERANS, ACTIVE DUTY WARTIME OR
CAMPAIGN BADGE VETERANS, AND ARMED FORCES SERVICE MEDAL VETERANS
0
19. The authority citation for part 60-300 continues to read as
follows:
Authority: 29 U.S.C. 793; 38 U.S.C. 4211 and 4212; E.O. 11758
(3 CFR, 1971-1975 Comp., p. 841).
Sec. 60-300.2 [Amended]
0
20. Amend Sec. 60-300.2 by removing the definitions for ``Qualitative
evidence'' and ``Quantitative evidence.
0
21. Amend Sec. 60-300.60 by revising paragraph (b) to read as follows:
Sec. 60-300.60 Compliance evaluations.
* * * * *
(b) Where deficiencies are found to exist, OFCCP will make
reasonable efforts to secure compliance through conciliation and
persuasion, pursuant to Sec. 60-300.62. The ``reasonable efforts''
standard shall be interpreted consistently with title VII of the Civil
Rights Act of 1964 and its requirement that the Equal Employment
Opportunity Commission ``endeavor to eliminate any such alleged
unlawful employment practice by informal methods of conference,
conciliation, and persuasion.''
* * * * *
0
22. Revise Sec. 60-300.62 to read as follows:
Sec. 60-300.6 2 Pre-enforcement notice and conciliation procedures.
(a) Predetermination Notice. If a compliance evaluation by OFCCP
indicates preliminary indicators of discrimination, OFCCP will issue a
Predetermination Notice describing the indicators and providing the
contractor an opportunity to respond. The Predetermination Notice may
also include other potential violations that OFCCP has identified at
that stage of the review. After OFCCP issues the Predetermination
Notice, the agency may identify additional violations and include them
in a subsequent Notice of Violation or Show Cause Notice without
amending the Predetermination Notice. OFCCP will provide the contractor
an opportunity to conciliate additional violations identified in the
Notice of Violation or Show Cause Notice. Any response to a
Predetermination Notice
[[Page 16154]]
must be received by OFCCP within 15 calendar days of receipt of the
Notice, which deadline OFCCP may extend for good cause. If the
contractor does not respond or OFCCP determines that the contractor's
response did not resolve the indicators of discrimination in the
Predetermination Notice, OFCCP will proceed with the review.
(b) Notice of Violation. If a compliance evaluation by OFCCP
indicates a violation of the equal opportunity clause, OFCCP will issue
a Notice of Violation to the contractor requiring corrective action and
inviting conciliation through a written agreement. The Notice of
Violation will identify the violations and describe the recommended
corrective actions. After the Notice of Violation is issued, OFCCP may
include additional violations in a subsequent Show Cause Notice without
amendment to the Notice of Violation. OFCCP will provide the contractor
an opportunity to conciliate additional violations identified in the
Show Cause Notice.
(c) Conciliation agreement. If a compliance review, complaint
investigation, or other review by OFCCP or its representative indicates
a material violation of the equal opportunity clause, and:
(1) If the contractor, subcontractor, or bidder is willing to
correct the violations and/or deficiencies; and
(2) If OFCCP or its representative determines that settlement
(rather than referral for consideration of formal enforcement) is
appropriate, a written conciliation agreement shall be required. The
agreement shall provide for such remedial action as may be necessary to
correct the violations and/or deficiencies identified, including, where
appropriate (but not limited to), remedies such as back pay, salary
adjustments, and retroactive seniority.
(d) Show cause notices. When the Director has reasonable cause to
believe that a contractor has violated the equal opportunity clause the
Director may issue a notice requiring the contractor to show cause,
within 30 days, why monitoring, enforcement proceedings, or other
appropriate action to ensure compliance should not be instituted. OFCCP
may issue a Show Cause Notice without first issuing a Predetermination
Notice or Notice of Violation when the contractor has failed to provide
access to its premises for an on-site review or refused to provide
access to witnesses, records, or other information. The Show Cause
Notice will include each violation that OFCCP has identified at the
time of issuance. Where OFCCP identifies additional violations after
issuing a Show Cause Notice, OFCCP will modify or amend the Show Cause
Notice.
(e) Expedited conciliation option. OFCCP may agree to waive the
procedures set forth in paragraphs (a) and/or (b) of this section to
enter directly into a conciliation agreement with a contractor. OFCCP
may offer the contractor this expedited conciliation option, but may
not require or insist that the contractor avail itself of the expedited
conciliation option.
Sec. 60-300.64 [Removed and Reserved]
0
23. Remove and reserve Sec. 60-300.64.
0
24. Add Sec. 60-300.85 to read as follows:
Sec. 60-300.85 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this part to be invalid, such action will not affect any other
provision of this part.
PART 60-741--AFFIRMATIVE ACTION AND NONDISCRIMINATION OBLIGATIONS
OF FEDERAL CONTRACTORS AND SUBCONTRACTORS REGARDING INDIVIDUALS
WITH DISABILITIES
0
25. The authority citation for part 60-741 continues to read as
follows:
Authority: 29 U.S.C. 705 and 793; E.O. 11758 (3 CFR, 1971-1975
Comp., p. 841).
Sec. 60-741.2 April 20, 2022 [Amended]
0
26. Amend Sec. 60-741.2 by removing the definitions for ``Qualitative
evidence'' and ``Quantitative evidence.''
0
27. Amend Sec. 60-741.60 by revising paragraph (b) to read as follows:
Sec. 60-741.6 0 Compliance evaluations.
* * * * *
(b) Where deficiencies are found to exist, OFCCP will make
reasonable efforts to secure compliance through conciliation and
persuasion, pursuant to Sec. 60-741.62. The ``reasonable efforts''
standard shall be interpreted consistently with title VII of the Civil
Rights Act of 1964 and its requirement that the Equal Employment
Opportunity Commission ``endeavor to eliminate any such alleged
unlawful employment practice by informal methods of conference,
conciliation, and persuasion.''
* * * * *
0
28. Revise Sec. 60-741.62 to read as follows:
Sec. 60-741.62 Pre-enforcement notice and conciliation procedures.
(a) Predetermination Notice. If a compliance evaluation by OFCCP
indicates preliminary indicators of discrimination, OFCCP will issue a
Predetermination Notice describing the indicators and providing the
contractor an opportunity to respond. The Predetermination Notice may
also include other potential violations that OFCCP has identified at
that stage of the review. After OFCCP issues the Predetermination
Notice, the agency may identify additional violations and include them
in a subsequent Notice of Violation or Show Cause Notice without
amending the Predetermination Notice. OFCCP will provide the contractor
an opportunity to conciliate additional violations identified in the
Notice of Violation or Show Cause Notice. Any response to a
Predetermination Notice must be received by OFCCP within 15 calendar
days of receipt of the Notice, which deadline OFCCP may extend for good
cause. If the contractor does not respond or OFCCP determines that the
contractor's response did not resolve the indicators of discrimination
in the Predetermination Notice, OFCCP will proceed with the review.
(b) Notice of Violation. If a compliance evaluation by OFCCP
indicates a violation of the equal opportunity clause, OFCCP will issue
a Notice of Violation to the contractor requiring corrective action and
inviting conciliation through a written agreement. The Notice of
Violation will identify the violations and describe the recommended
corrective actions. After the Notice of Violation is issued, OFCCP may
include additional violations in a subsequent Show Cause Notice without
amendment to the Notice of Violation. OFCCP will provide the contractor
an opportunity to conciliate additional violations identified in the
Show Cause Notice.
(c) Conciliation agreement. If a compliance review, complaint
investigation, or other review by OFCCP or its representative indicates
a material violation of the equal opportunity clause, and:
(1) If the contractor, subcontractor, or bidder is willing to
correct the violations and/or deficiencies; and
(2) If OFCCP or its representative determines that settlement
(rather than referral for consideration of formal enforcement) is
appropriate, a written conciliation agreement shall be required. The
agreement shall provide for such remedial action as may be necessary to
correct the violations and/or deficiencies identified, including, where
appropriate (but not limited to), remedies such as back pay, salary
adjustments, and retroactive seniority.
(d) Remedial benchmarks. The remedial action referenced in
paragraph (c) of this section may include the establishment of
benchmarks for the contractor's outreach, recruitment,
[[Page 16155]]
hiring, or other employment activities. The purpose of such benchmarks
is to create a quantifiable method by which the contractor's progress
in correcting identified violations and/or deficiencies can be
measured.
(e) Show cause notices. When the Director has reasonable cause to
believe that a contractor has violated the equal opportunity clause the
Director may issue a notice requiring the contractor to show cause,
within 30 days, why monitoring, enforcement proceedings, or other
appropriate action to ensure compliance should not be instituted. OFCCP
may issue a Show Cause Notice without first issuing a Predetermination
Notice or Notice of Violation when the contractor has failed to provide
access to its premises for an on-site review or refused to provide
access to witnesses, records, or other information. The Show Cause
Notice will include each violation that OFCCP has identified at the
time of issuance. Where OFCCP identifies additional violations after
issuing a Show Cause Notice, OFCCP will modify or amend the Show Cause
Notice.
(f) Expedited conciliation option. OFCCP may agree to waive the
procedures set forth in paragraphs (a) and/or (b) of this section to
enter directly into a conciliation agreement with a contractor. OFCCP
may offer the contractor this expedited conciliation option, but may
not require or insist that the contractor avail itself of the expedited
conciliation option.
Sec. 60-741.64 [Removed and Reserved]
0
29. Remove and reserve Sec. 60-741.64.
0
30. Add Sec. 60-741.84 to read as follows:
Sec. 60-741.84 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this part to be invalid, such action will not affect any other
provision of this part.
[FR Doc. 2022-05696 Filed 3-21-22; 8:45 am]
BILLING CODE 4510-CM-P
