Tyson Foods, OFCCP Pact Highlights Enterprisewide Focus

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By Jay-Anne B. Casuga

Oct. 5 — A $1.6 million hiring bias settlement involving six Tyson Foods Inc. meat processing plants and the Labor Department emphasizes that the agency continues to focus on an enterprisewide enforcement approach when auditing federal contractors.

If the DOL's Office of Federal Contract Compliance Programs finds indicators of alleged discrimination at one location during a contractor audit, it's “increasingly likely” that the agency will try to “rigorously” uncover findings of bias at the contractor's other locations, David S. Fortney, an attorney with Fortney & Scott in Washington and a former acting solicitor of labor, told Bloomberg BNA Oct. 5.

Enterprisewide enforcement, which involves identifying and investigating potential discrimination at multiple establishments of a single contractor, has been and continues to be a priority for the OFCCP.

The Tyson Foods settlement, announced Oct. 4, will be distributed to more than 5,700 male, female, white and minority applicants who sought laborer positions at plants in Arkansas, Texas and New Mexico. It's the second largest enterprisewide settlement announced by the OFCCP in the past year. In November, G&K Services Inc. agreed to pay $1.8 million to resolve hiring bias charges covering nine facilities in seven states.

The latest case also involves the second-highest number of class members in any OFCCP settlement since last October, when Fastenal Co. reached an agreement with the agency to compensate more than 8,400 black and female applicants at facilities in two states.

In addition to the monetary award, Tyson Foods will offer jobs to 474 class members when positions are available, and revise its hiring and training practices.

More Enterprisewide Settlements?

Fortney, who also serves as a co-chair of The OFCCP Institute, a national nonprofit employer association in Washington, added that the enterprisewide approach means it's more likely that the OFCCP will attempt to secure settlements involving multiple locations of a single contractor, especially in light of President Barack Obama's Fair Pay and Safe Workplaces executive order.

Final rules implementing the order were issued in August and require covered employers bidding on federal contracts to disclose whether they previously have violated any one of 14 labor and employment laws, or their state counterparts, within the past three years.

Settlements with the OFCCP don't have to be reported under the Fair Pay and Safe Workplaces order if the agency has issued only a notice of violation to a contractor, Fortney said. Contractors generally enter into conciliation agreements to settle issues identified in a notice of violation.

However, settlements must be reported if they follow an OFCCP “show cause” notice, Fortney said.

A show cause notice generally is issued if a contractor doesn't agree to correct alleged problems identified in a notice of violation. It is the precursor to the OFCCP filing an administrative complaint against the contractor.

Bias Findings Based on Statistics

According to the conciliation agreement between the OFCCP and Tyson Foods, the agency conducted scheduled audits of the six facilities at issue and analyzed hiring data from 2007 to 2010.

Depending on the facility, the OFCCP found statistical indicators of discrimination against male, female, black, white, Hispanic, Asian and American Indian/Alaska Native applicants.

This is in line with what practitioners over the years have called the OFCCP’s “follow the numbers” approach in uncovering statistical bias indicators. Generally, this means that OFCCP analyzes data for hiring disparities among all protected groups covered under Executive Order 11,246, not just females versus males or whites versus minorities.

Here, for example, the OFCCP alleged that hiring data at the Tyson Foods facility in Amarillo, Texas, showed that females were disproportionately selected at a lower rate than males, while Asians were selected at a higher rate than black, Hispanic and white applicants.

By contrast, the OFCCP claimed that its statistical analysis at a Tyson Foods facility in Houston revealed discrimination against male applicants, who were selected at a lower rate than females, as well as bias against black applicants in comparison to the hiring of Hispanic applicants.

When the agency finds statistical disparities, a contractor must explain that its hiring decisions were based on non-discriminatory reasons. If a contractor can't do so, the OFCCP can allege discrimination.

Fortney said the settlement underscores the need for contractors to collect and maintain records explaining hiring decisions.

“If your records aren't complete and accurate, it's hard to explain after the fact why people aren't hired,” he said.

Tyson Foods Denies Allegations

Tyson Foods denied the OFCCP’s allegations in an Oct. 4 statement, adding that the company chose to settle “these dated cases to avoid the cost of going to trial.”

The company contended that “there were legitimate, non-discriminatory reasons for rejecting applicants who were not hired.”

“The company also reports that through its normal hiring practices it has already hired 60 percent of the people from the affected gender and ethnic groups it is required to employ as part of the resolution with the OFCCP,” it said.

This is the fifth time in the past decade that Tyson Foods or one of its business units has settled hiring bias allegations from the OFCCP. Tyson Foods reached a $1.5 million settlement with the OFCCP in 2006 on behalf of 2,500 rejected female and minority applicants at three plants in Arkansas.

Additional settlements followed with Tyson Refrigerated Processed Meats Inc. in 2010 ($570,000 to a class of 532 white and black applicants), twowith Tyson Fresh Meats Inc. in 2011 ($2.75 million to a combined class of 1,600 female applicants) and Hillshire Brands in 2014 ($330,000 to a class of 2,500 male applicants).

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com

To contact the editor responsible for this story: Peggy Aulino at maulino@bna.com

For More Information

The conciliation agreement is available at http://src.bna.com/i93.

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