The Department of Labor Office of Federal Contract Compliance Programs (OFCCP) released three new directives on April 17, 2020 that formalize its mediation procedures, seek to further increase the efficiency of its compliance evaluations (audits) and expand the role of the agency’s Ombudsman. The OFCCP’s recent directives were designed to further reduce the burden on federal contractors, and further confirms that the agency remains operational and committed to its enforcement efforts.
Directive 2020-03 — Pre-Referral Mediation Program
Consistent with one of its four cornerstone goals of “efficiency,” the OFCCP continues to provide new procedures designed to expedite resolution of compliance violations. In November 2018, the OFCCP issued Directive 2019-02, Early Resolution Procedures, which offered contractors an opportunity to remedy compliance deficiencies for nonmaterial violations, material nondiscrimination violations and material discrimination violations. Under that directive, the OFCCP sought to resolve violations before a Pre-Determination Notice issued.
The new Pre-Referral Mediation Program, however, seeks resolution of matters later in the OFCCP’s review process. Under the Pre-Referral Mediation Program, the OFCCP offers mediation after an unsuccessful attempt to conciliate following the issuance of a Show Cause Notice, but prior to referring the case to the Office of the Solicitor.
Even though the parties’ mediator may have their own process for conducting mediations, the directive suggests (not mandates) mediation steps and procedures, such as a mediator selection process, timelines to commence and conclude the mediation, mediation submissions, confidentiality and attendance of key decision-makers, among other procedures.
Although contractors may benefit from the OFCCP’s new mediation steps and procedures, informal negotiation with the agency will likely continue to be a useful path to resolution. Moreover, the OFCCP has the discretion not to refer a case to the Pre-Referral Mediation Program and its referral rate is relatively low.
Directive 2020-02 — Efficiency in Compliance Evaluations
Directive 2020-02, Efficiency in Compliance Evaluations, is designed to further reduce the period of time between audit opening and closure, which has varied widely among administrations. The OFCCP previously acknowledged that timely completion of compliance evaluations and quick remediation of violations are beneficial to employees, applicants and contractors. Consistently, the OFCCP identified a shorter compliance evaluation duration as a significant objective in FY 2020 and beyond. Accordingly, the OFCCP set a goal to complete audits within 180 days where there are no indicators of discrimination, or to issue a Pre-Determination Notice within one year from the issuance of the scheduling letter where discrimination indicators exist.
Directive 2020-02 lists several new initiatives designed to speed up the audit process. Those initiatives include:
- The OFCCP will continue to promptly issue Show Cause Notices and refer denial of access cases for enforcement where necessary.
- After the federal contractor has generally provided all information requested by the OFCCP during the course of the compliance evaluation, the contractor may request that the OFCCP conduct a review of an open compliance evaluation to determine and address any reasons for a delay under the following circumstances:
- A compliance evaluation remains open for one year from the day the contractor received the scheduling letter, without the issuance of a Pre-Determination Notice, or
- A compliance evaluation remains open for two years and has not been referred to the Office of the Solicitor.
- If the evaluation remains open, the contractor must submit a petition to the Director (with a copy to the Ombudsman). Notably, the issue should have first been raised with the applicable Regional Director. The Ombudsman will make a determination, in consultation with other directors, as to how to proceed.
- The Director has the discretion to further shorten the deadlines, as necessary.
Directive 2020-04 — Ombuds Service Supplement
The OFCCP first announced its implementation of an Ombuds Program on September 19, 2018 in Directive 2018-09, OFCCP Ombud Service. The Ombuds Program was originally designed to ensure that the OFCCP is adequately addressing the needs of external stakeholders, including federal contractors. The new 2020-04 directive expands the role of the Ombudsman to directly engage with federal contractors to provide neutral facilitation services in conjunction with the newly announced mediation program described above.
Contractors will likely benefit from OFCCP’s three directives, as they demonstrate the agency’s commitment to resolving matters promptly and efficiently. Faegre Drinker will continue to keep you updated on further OFCCP developments.