The strained relationship between OFCCP and US federal contractors

Coming out of the 2011 Industrial Liaison Groups’ (ILG) National Conference, I had the distinct feeling that the relationship between the OFCCP and federal contractors has reached a low ebb. The agency is talking about tougher enforcement and new requirements, and the contractors are feeling frustrated by what they perceive as the agency’s lack of openness. Although OFCCP Director Pat Shiu’s keynote address was more conciliatory than last year’s, she made no bones about her intention to subject contractors to more demanding standards, underscoring her point with the game-changing comment that “affirmative action can no longer be defined by ‘good faith’ efforts.”

The problem is that, in order for federal contractors to comply with OFCCP’s requirements, they’ve got to know what those standards are, and the agency has not been forthcoming with much clarification in the last 18 months. The contractor community’s frustration erupted in applause for a management lawyer’s diatribe against the agency’s current compensation standards during the presentation by the new OFCCP Senior Program Advisor, Pamela Coukos. Coukos was speaking on the changes OFCCP is making to its compensation program, including proposals for new requirements to the Scheduling Letter and a new compensation data collection tool.The discussion became so heated that William Smitherman, the Pacific Regional Director, had to step in. Those listening carefully heard Coukos admit what the contractors have claimed all along: that there is no single way to analyze contractor compensation. It will be interesting to see if this view informs the upcoming rulemaking on the agency’s compensation data tool.

This conference’s unsettled tone reflects the changing nature of the relationship between the OFCCP and its federal contractors. Many long-time OFCCP employees have been replaced by new ones selected by Shiu, often coming out of Shiu’s old world of civil rights advocacy groups and the plaintiffs’ employment bar - neither of which are known for their cordial relationships with employers. It was interesting that in her keynote address, Shiu commented that the reason the Industrial Liaison Groups were created was to encourage open communication between contractors and OFCCP. Only time will tell whether the ILGs can continue to provide that opportunity for contractors and the agency in light of the current tense relationship.

Nita Beecher is a principal in Mercer’s global EDI group and leads its legal compliance networks, the Employment Law & Litigation Group and the Workforce Opportunity Network.