Merger of EEOC and OFCCP May Be in the Works

Combination of two agencies would be bad for employers, legal experts say

By Allen Smith, J.D. May 19, 2017
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​When the Office of Management and Budget (OMB) comes out with its full budget for 2019, there will be no funding for the Office of Federal Contract Compliance Programs (OFCCP), predicted David Cohen, president of DCI Consulting in Washington, D.C., a firm that specializes in equal employment opportunity and affirmative action compliance.

This development would be the result of a letter sent to the Trump administration by the Heritage Foundation, a conservative political think tank, calling for the merger of the OFCCP with the Equal Employment Opportunity Commission (EEOC), Cohen noted. He called the merger "a really bad idea" that would not benefit employers or federal contractors. Civil rights groups would oppose the merger as well, he said.

Merging the agencies would be consistent with a March 13, 2017, executive order on the reorganization of the executive branch, said Donald Livingston, an attorney with Akin Gump in Washington, D.C. The order is intended to improve the efficiency, effectiveness and accountability of the executive branch and eliminate unnecessary agencies. "Because EEOC's mandate is much broader than the OFCCP's, if a merger were to occur, I would expect that the OFCCP function would be transferred to the EEOC and not vice versa."

Livingston, a former general counsel with the EEOC, agreed with Cohen that "a merger would not benefit employers."

Merger Could Lead to Bigger Employer Penalties

The EEOC is accustomed to seeking statutory remedies such as compensatory and punitive damages, while the OFCCP seeks only contract remedies, Livingston noted. If the agencies merged, "It is reasonable to think that the EEOC would want to convert every claim of breach of contract into a Title VII [of the Civil Rights Act of 1964] violation in order to demand a larger monetary remedy," he said.

Here's a hypothetical example: The theoretical OFCCP division of the EEOC audits a federal contractor and orders the contractor to pay $10 million in back pay. The contractor disagrees. The OFCCP representative then consults with an EEOC commissioner, who files a Title VII commissioner's charge or Equal Pay Act-directed investigation, Cohen said.

While that can happen now under a memorandum of understanding between the OFCCP and the EEOC, it rarely occurs, he noted. "You'd see a lot more of this if the two agencies were one. That's not in the best interest of contractors."

Plus, the OFCCP's ultimate authority is debarment, or preventing contractors from being able to pursue future contracts. If that authority was moved to the EEOC, it would give the commission a lot of power, Cohen said.

Also, the OFCCP does not have subpoena authority but the EEOC does.

On the flip side, the OFCCP has broad authority to get access to information related to compliance, he observed. Here's another hypothetical: The EEOC investigates an employer for pay discrimination but is interested in looking more broadly at the company's hiring and testing, and selection and promotion records. Someone down the hall in the OFCCP would have access to affirmative action plans and lots of data. "So the EEOC could use its new division to get access to a lot of additional information that it may not currently have access to," he said.

Cohen noted that people in the business community have not been happy with the OFCCP over the last eight years, but this dislike should not be confused with wanting the OFCCP to be shuttered and its functions to go to the EEOC. Instead, he said the business community wants the OFCCP to change the way it conducts business.

Agencies Unlikely to Want Merger

"I can't imagine that either agency would want the merger," Livingston said. "The EEOC already has significant responsibilities, including dealing with federal-sector discrimination claims, and the OFCCP has a long history within a cabinet-level department."

In addition, Cohen noted that the EEOC is struggling to keep its backlog of charges down. Imagine what it would be like if it had to also manage another agency with all of its complexities and nuances, he said.

Plus, the EEOC and the OFCCP have separate missions: the EEOC fights discrimination while the OFCCP enforces affirmative action and fights discrimination.

[SHRM members-only toolkit: Managing Federal Contractor Affirmative Action Programs]

While cost savings would be one motive behind the merger and the Heritage Foundation sees the OFCCP as redundant, Cohen said in fact there would just be a transfer of the $100 million budgeted for the OFCCP, or at least part of that amount, from the Department of Labor (DOL) to the EEOC. "And in the meantime, you will have angered civil rights groups and the business community," he said.

Employee Advocates Oppose Idea

"As with most mergers, people lose their jobs," said Shirley Wilcher, executive director of the American Association for Access, Equity and Diversity—an association of professionals managing affirmative action, equal opportunity and diversity programs—and former deputy assistant secretary for the OFCCP. "There would be losses not only at the OFCCP but at the solicitor's office as well, both in Washington, D.C., and in the field."

"No one believes that the entire budget of the OFCCP will be transferred to the EEOC, either," she said. "So, this could simply be a more indirect way to kill an agency, by transfer."

She expressed concern that "it is the worker who stands to lose the most."

Can Secretary of Labor Redelegate His Authority?

Cohen questioned whether all of the OFCCP's functions could lawfully be transferred through changes to the budget. Section 503 of the Rehabilitation Act requires federal contractors to provide affirmative action to people with disabilities, and the Vietnam Era Veterans' Readjustment Assistance Act, as amended, prohibits federal contractors from discriminating against veterans and requires affirmative action for veterans. Both delegate enforcement authority to the secretary of labor. "I don't believe the secretary can redelegate his authority," he said. "I think Congress has to move the authority from [the Department of] Labor to the EEOC."

By contrast, Executive Order 11246, which requires affirmative action for women and minorities, comes from the president, so the DOL could transfer its enforcement authority for the executive order to the EEOC, he added.

"The last time a function was transferred to the EEOC was during the administration of Jimmy Carter when ADEA [Age Discrimination in Employment Act] enforcement was transferred from the DOL to the EEOC. It did create a problem," Livingston recalled. "The EEOC was accustomed to dealing with Title VII charges that had no firm deadline for the administrative process. The ADEA, on the other hand, had a two-year statute of limitations. After learning that the statute of limitations was lapsing on some ADEA charges while they languished at EEOC, Congress amended the ADEA in 1991 to mirror the Title VII process."

Request for Comment

The OMB invited the public to suggest improvements to the organization and functioning of the executive branch by submitting comments by June 12 to https://www.whitehouse.gov/reorganizing-the-executive-branch

The Heritage Foundation did not respond to a request for comment.

 

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