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Federal Contractors Quarterly Briefing: The Latest on OFCCP Rules,

EEO-1 Pay Equity Reporting, Overtime and Minimum Wage, and More

Wednesday, January 25, 2017 1:30 p.m. to 3:00 p.m. Eastern

12:30 p.m. to 2:00 p.m. Central 11:30 a.m. to 1:00 p.m. Mountain 10:30 a.m. to 12:00 p.m. Pacific

Presented by:

David S. Fortney H. Juanita Beecher Fortney & Scott, LLC

This program has been approved for 1.5 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI). For more information about certification or recertification, please visit the HRCI website at www.hrci.org.

Federal Contractors Quarterly Briefing: The Latest on OFCCP Rules, EEO-1 Pay Equity Reporting,

Overtime and Minimum Wage, and More Presented by:

David S. FortneyH. Juanita BeecherFortney & Scott, LLC

January 25, 2017

2© 2017

Agenda

• The Trump Administration• Regulatory freeze• Status of Obama Executive Orders under President Trump• Hearing for Secretary of Labor Nominee• Latest predictions for DOL, EEOC & NLRB• Supreme Court to hear NLRB case

• Agencies still operating under Obama rules• OFCCP has last gasp on pay • EEOC issues details on FY2016 results

• States starting to fill the gap• New York Executive Orders • Movement to increase overtime state by state• Fair pay and other state laws

© 2017

Trump Administration

4© 2017

Day 1 Trump Administration

• On Friday January 20th, Trump Chief of Staff ReincePriebus issued memo to heads of Executive Dept. and Agencies:• No new regulations until new head has reviewed and

approved• Regulations sent to OMB but not published to be

withdrawn• Published regulations not yet taken effect “as far as

permitted by applicable law” to have their effective date postponed 60 days from date of memo

• Impact on “blacklisting,” overtime rules, EEO-1 unclear

5© 2017

Status of Obama Executive Orders

EO Number

EO Title Date of Issuance

Date of Rescission

1 13494 Economy in Government Contracting 1/30/2009

2 13495 Nondisplacement of Qualified Workers under Service Contracts

1/30/2009

3 13496 Notification of Employee Rights under Federal Labor Laws

1/30/2009

4 13627 Strengthening Protections Against Trafficking in Persons in Federal Contracts

9/25/2012

5 13658 Establishing a Minimum Wage for Contractors 2/12/2014

6 13665 Non-Retaliation for Disclosure of Compensation Information

4/8/2014

7 13672 Amendment of EO 11246 (adding sexual orientation and gender identity)

7/21/2014

8 13673 Fair Pay and Safe Workplaces 7/ 31/20149 13706 Establishing Paid Sick Leave for Federal

Contractors9/10/2015

6© 2017

Labor Secretary Nominee

• Andrew Puzder, CEO of CKE Restaurants• Hearing has been rescheduled twice

• Most recent date being discussed in February 2• Opposition is growing

7© 2017

DOL Predictions

• Key leadership appointments yet to be made:• Deputy Secretary• Solicitor of Labor• Heads of key DOL Agencies:

• OFCCP• Wage & Hour• OSHA • Pensions and Benefits and • Employment Training

8© 2017

DOL Predictions (cont.)

• In addition to regulations covered by Executive Orders other regulations/directives to watch are:• Overtime Rule

• Enjoined and on appeal• Directive 307• ACE approach to audits• Joint employment theory

9© 2017

EEOC Predictions

• Current composition is 1 Republicans and 3 Democrats

• New Chair and new appointment coming• New General Counsel• Rescind or revise key recent initiatives?

• EEO-1 Compensation Reporting• EEOC Final Rules on Wellness

• Could depend on Obamacare• Strategic Enforcement Plan changes

10© 2017

NLRB Predictions

• President-Elect Trump will fill two seats• Once appointments done, Republicans will control

the majority• General Counsel Richard F. Griffin, Jr.’s term expires

November 4, 2017• Reverse course

• Ambush elections: Quickie election rule• Joint-Employer: Browning-Ferris Ind. Of CA• Class action waivers: D.R. Horton/Murphy Oil• Expansion of Section 7 rights to non-union

workplaces

11© 2017

Supreme Court to hear Murphy Oil

• Supreme Court agrees to consider whether arbitration agreements that prohibit employees from pursuing class or collective actions are unlawful under NLRA and unenforceable under the Federal Arbitration Act

• Board argues that barring class/collective actions unlawfully interfere with employees’ NLRA rights to engage in concerted activity for mutual aid and protection• Board asks Court to reverse 5th Circuit decision• 2nd and 8th also rejected Board’s position while 7th and 9th

support Board

© 2017

Agencies Still Operating under Obama Rules

13© 2017

OFCCP

Agency appears to be going after tech/financial companies, filing complaints against • Palantir—alleging discrimination against Asian

Americans• Google—alleging failure to provide access to

compensation data• JP Morgan Chase—alleging systemic pay discrimination

against women • Oracle—alleging systemic pay discrimination against

women, African Americans, Asian Americans (in favor of South Asian Americans) and failure to provide proof of in-depth compensation review

14© 2017

OFCCP

Agency appears to be going after tech/financial companies with recent settlements by:• LexisNexis Risk Solutions—agreed to pay $1.2M in back

pay to resolve systemic pay discrimination against women

• HP—agreed to pay $750K to resolve hiring discrimination claims

• Ameriprise Financial—pay $128,200 in back wages to 20 black employees

15© 2017

EEOCEEOC announced its FY2016 resultsCharge filings and processing time up, backlog down. The EEOC received 91,503 charges of discrimination in FY 2016 • Retaliation: 42,018 (45.9 percent of all charges filed)• Race: 32,309 (35.3 percent)• Disability: 28,073 (30.7 percent)• Sex: 26,934 (29.4 percent)• Age: 20,857 (22.8 percent)• National Origin: 9,840 (10.8 percent)• Religion: 3,825 (4.2 percent)• Color: 3,102 (3.4 percent)• Equal Pay Act: 1,075 (1.2 percent)• Genetic Information Non-Discrimination Act: 238 (.3 percent)

16© 2017

EEOC

EEOC announced its FY2016 results (cont.)• Prelitigation resolution recoveries outflank litigation

program. The EEOC obtained $482 million for victims of discrimination in FY 2016

• EEOC resolved 97,443 charges • EEOC resolved 1,650 charges and recovered $4.4 million for

LGBT individuals• EEOC resolved 139 lawsuits and filed 86 lawsuits

alleging discrimination• EEOC had 168 cases on its active docket, of which 48 (28.6

percent) were systemic discrimination and 32 (19 percent) are multiple-victim cases

17© 2017

EEOC

Harassment Guidance• EEOC released 75-page draft guidance on workplace

harassment. The Commission describes its new guidance as "a companion piece" to the Report issued by EEOC Harassment Task Force Co-Chairs' Victoria Lipnic and Chai Feldblum this past June

Hearing on Big Data• On October 13, 2016, the agency convened a public

meeting on the use of big data in the workplace and the implications for equal employment opportunity law

18© 2017

Wage and Hour

• Cintas Fire Protection Services will pay $1.3 million in unpaid wages and damages to 81 workers and an additional $44,500 in civil penalties to resolve claims it violated the FLSA

• Hersha Hospitality Management LP, Labor for Hire and related companies were considered to have jointly employed the workers supplied by Labor for Hire for the nine HHM-managed hotels and agreed to ensure future FLSA compliance including paying $275,000 in back wages and an equal amount in liquidated damages to more than 600 employees

© 2017

Recommendations on OFCCP to Trump Transition

20© 2017

Issues with OFCCP

1. OFCCP has ceased being an investigatory agency devoted to enabling compliance and has become a prosecutorial body dedicated to “gotcha” statistics.2. OFCCP’s change of its audit process in 2013 from Active Case Management (“ACM”) to Active Case Enforcement (“ACE”), effectuated the switch from investigation to prosecution. The important difference between ACE and ACM is that ACE essentially presumes that the contractor is in violation—which it, in fact, seldom is. Because of this presumption, OFCCP invests tremendous time and effort in every audit, trying to uncover evidence of presumed violations, evidence that often is not there to be found. 3. To make unearthing “violations” involving compensation less difficult for the agency, OFCCP has replaced known, articulated standards for contractors with vague, ambiguous guidelines (Directive 307), so that no contractor can know the standard it should aim to achieve or the criteria by which it will be evaluated.

21© 2017

Issues with OFCCP (cont.)

4. The implementation of Directive 307, addressing investigations of contractor compensation practices, has resulted in OFCCP policies and practices that are ineffective, expensive, and do not result in Notices of Violation (“NOV”) that can survive legal scrutiny.5. As a result of shifting the agency’s focus to compensation disparities, OFCCP has been compelled to seek more complex and ambiguous data (such as that to be collected by the controversial expanded EEO-1 Report5) and base its enforcement on unstable statistical “violations.”6. The narrow focus of OFCCP on isolated issues ignores the core mission of identifying systemic discrimination.7. OFCCP personnel lack the training needed to effectively and fairly perform their jobs.

22© 2017

Recommendations for Change

1. Return to a focus on effective compliance evaluations by restoring the Active Case Management process2. Rescind Directive 307 and re-implement the 2006 Compensation Standards and Self- Audit Guidelines or similar guidance based on controlling judicial decisions that includes “safe harbor” provisions3. Have federal contractors certify in a summary format that they are in compliance and focus audits on contractors that do not certify their compliance4. Rescind or revise the recent changes to the EEO-1 collection of compensation data

23© 2017

Recommendations for Change (cont.)

5. Focus on systemic discrimination rather than looking for isolated issues based solely on statistical significance6. Increase OFCCP transparency during audits so that the goal is to arrive at the concrete evidence rather than embarking on “fishing expeditions”7. Provide increased training to OFCCP personnel so that they become experts in the areas in which they are asked to perform

© 2017

States Starting to Fill the Gap

25© 2017

New York Executive Orders

New York Governor Andrew Cuomo signed two Executive Orders on January 9, 2017 • Executive Order No. 162, Ensuring Pay Equity by State Contractors, requires that the contractor report the job titles and salaries for its entire workforce if the contractor cannot identity which employees are working directly on the state contract• These reports must be made quarterly if the prime contract is in

excess of $25,000 and monthly for prime construction contracts in excess of $100,000

26© 2017

New York Executive Orders

Executive Order No. 161, Ensuring Pay Equity by State Employers, which forbids state entities from asking about a job applicant’s compensation history • However, once a conditional offer of employment has been extended—

with compensation—a state entity may request and verify compensation• If a state entity is already in possession of an applicant’s prior

compensation, it may not be relied upon in determining the applicant’s salary, unless required by law or collective bargaining agreement

• While an applicant can volunteer their compensation information, the Executive Order provides that an applicant’s refusal to provide their compensation information may not be considered in making a hiring decision

27© 2017

Push to Change State Overtime Laws

• Democrats in Rhode Island, Connecticut, Maryland, Wisconsin, Michigan plan to introduce bills like President Obama’s overtime rule

• Currently 29 states and District of Columbia have minimum wage rate set higher than federal minimum wage• 14 states have minimum wage requirements equal to

federal minimum wage• Five states have no minimum wage law

28© 2017

Fair Pay and Paid Leave Statutes

• California, Maryland, New York and Massachusetts all have passed various fair pay laws• New Jersey legislature already working to pass another

law to close pay gap• Philadelphia just passed law barring employers from

asking about salary history• Five states and the District of Columbia have paid

family/medical leave • California, Hawaii, New Jersey, New York, Rhode Island and the

District of Columbia• Seven states, 29 cities, two counties and the District of

Columbia have paid sick leave

29© 2017

Workplace solutions. Legal excellence.

Fortney & Scott, LLC1750 K Street, NW, Suite 325Washington, DC 20006Phone: 202-689-1200 / Fax: 202-689-1209

www.fortneyscott.com

30© 2017

Mr. Fortney is a co-founder of Fortney & Scott, LLC, a Washington, D.C.-based law firm counseling and advising clients onthe full spectrum of work-place related matters, including employment discrimination and labor matters, compliance programs,government contracting, international dispute resolution and counseling matters, and developing strategies for avoiding orresponding to workplace-related crises. Fortney & Scott, LLC has been recognized as a leading management employmentlaw firm in the prestigious Best Law Firms survey for 2011-2017 by U.S. News & World Report and Best Lawyers forWashington, D.C.

Mr. Fortney has a broad-based practice representing and counseling employers and executives in employment and labormatters, including equal employment opportunity requirements, wage and hour matters, federal contractor's affirmative actionand non-discrimination obligations, collective bargaining, workplace health and safety, and pension and welfare benefits. Hebrings experience from the public and private sectors in advising clients on these issues, and he frequently represents clientsbefore the U.S. Department of Labor's agencies, the Equal Employment Opportunity Commission, and the National LaborRelations Board. Mr. Fortney's litigation experience includes obtaining defense verdicts for employers in extended jury trials,as well as designing and implementing Alternative Dispute Resolution procedures to help resolve employment claims in anefficient and fair manner.

Mr. Fortney has been widely recognized for his professional accomplishments, including being named one of the leadingemployment lawyers in Washington, D.C. by the Chambers USA survey of America’s Leading Lawyers for Business in allyears from 2005 through present. He was selected for inclusion in the 2009 through present editions of The Best Lawyers inAmerica, Washington D.C.’s, Washington D.C.’s Best Lawyers and Super Lawyers. Mr. Fortney was also awarded an AVrating (the highest level) by Martindale-Hubbell.

Before co-founding the firm, Mr. Fortney previously served as the chief legal officer of the U.S. Department of Labor inWashington, D.C. during the term of President George H.W. Bush. As Acting Solicitor of Labor, he was responsible forenforcing over 140 laws regulating the nation’s workplaces and managing an agency with 800 attorneys and support staff. Headvised Secretaries of Labor Elizabeth Dole and Lynn Martin and the Department of Labor agencies on a broad range oflegal, policy, legislative, regulatory and enforcement issues. The major Department of Labor agencies Mr. Fortneyrepresented included the Wage and Hour Division, Office of Federal Contract Compliance Programs, Employee BenefitsSecurity Administration, Occupational Safety and Health Administration, and Mine Safety and Health Administration.

David S. Fortney

31© 2017

Nita Beecher is a nationally recognized expert on OFCCP and EEOC. She is Of Counsel to Fortney & Scott, LLC with a focus on OFCCP regulatory affairs. Ms. Beecher’s primary focus is labor and employment law with substantial experience with class investigations by the EEOC and OFCCP. She has more than 30 years of experience in labor and employment law particularly with class investigations by the U.S. Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP).

From 2000 to 2015, she led networks of senior diversity, EEO and affirmative action corporate practitioners as well as senior in-house labor and employment lawyers.

Ms. Beecher served as an in-house counsel in major corporations for more than 20 years where she advised in-house clients on labor and employment law issues including, among other matters, OFCCP “Glass Ceiling” audits, EEOC class age investigations, implementation of the ADA, and FLSA Wage and Hour audits, and developed a self-audit tool for McDonnell Douglas Corporation and The Boeing Company. Ms. Beecher also worked as in-house counsel for E. I. duPont de Nemours & Co., Consolidation Coal Company and Arch Coal Company.

In 2011 Ms. Beecher was selected by the National Research Council of the National Academies to participate in the Expert Study on Measuring and Collecting Pay Information from U.S. Employers by Gender, Race, and National Origin. Requested by the EEOC, the report by the panel was issued in 2012.

Ms. Beecher has been a regular speaker at the ILG National Conference since 2004 and she moderated the opening panel for the 2015 conference in New York City.

H. Juanita “Nita” Beecher

Disclaimers

*This webinar is designed to provide accurate and authoritative information about the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. *This webinar provides general information only and does not constitute legal advice. No attorney-client relationship has been created. If legal advice or other expert assistance is required, the services of a competent professional should be sought. We recommend that you consult with qualified local counsel familiar with your specific situation before taking any action.

David S. Fortney is a co-founder of Fortney & Scott, LLC, a Washington, D.C.-based law firm that focuses on workplace related matters. Mr. Fortney’s OFCCP practice includes representing and counseling federal

contractors on complying with contractors’ nondiscrimination and affirmative action obligations enforced by OFCCP. Mr. Fortney is also a co-founder of The OFCCP Institute, a Washington, DC-based nonprofit employer association (not affiliated with the U.S. Department of Labor’s OFCCP) that serves to educate federal contractors. Mr. Fortney has testified before Congress and the EEOC addressing federal contractors’ interests, and he frequently lectures and writes on OFCCP matters.

H. Juanita (Nita) Beecher is a nationally recognized expert on Office of Federal Contract Compliance Programs (OFCCP) and U.S. Equal Employment Opportunity Commission (EEOC) matters. She is Counsel

to Fortney & Scott, LLC with a focus on OFCCP regulatory affairs. Ms. Beecher's primary focus is labor and employment law with substantial experience with class investigations by the EEOC and OFCCP. She has more than 30 years of experience in labor and employment law particularly with class investigations by the OFCCP and the EEOC. From 2000 to 2015, she led networks of senior diversity, EEO and affirmative action corporate practitioners as well as senior in-house labor and employment lawyers.

David S. Fortney

H. Juanita Beecher