Contracting Agency May Be More ‘Business Friendly’ Under Puzder

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Jay-Anne B. Casuga

Dec. 8 — A Labor Department subagency that enforces the affirmative action and nondiscrimination obligations of federal contractors may become more “business friendly” with fast-food executive Andrew Puzder as labor secretary.

President-elect Donald Trump selected Puzder to fill the Cabinet position, which would require Senate confirmation (see related story).

There’s no record of Puzder’s positions on the DOL’s Office of Federal Contract Compliance Programs, or on affirmative action or equal employment opportunity, Mickey Silberman, a management attorney with Jackson Lewis in Denver and chair of the firm’s Affirmative Action & OFCCP Defense Practice Group, told Bloomberg BNA Dec. 8.

“But he clearly believes DOL regulations and robust enforcement are burdens on business,” Silberman said. “So we can expect a more business friendly OFCCP leadership, likely by the second half of 2017.”

The OFCCP audits roughly 2 percent of about 200,000 federal contractor locations annually. It enforces Executive Order 11,246, which applies to federal contractors, prohibiting workplace discrimination and encouraging equal employment opportunity based on race, color, sex, religion, national origin, sexual orientation and gender identity.

The agency also provides similar protections to disabled individuals and covered military veterans under Section 503 of the Rehabilitation Act and Section 4212 of the Vietnam Era Veterans’ Readjustment Assistance Act.

Labor Secretary Will Select OFCCP Director

Puzder, if confirmed, would select the OFCCP’s new director, who potentially could also come from the private sector.

Charles James, the OFCCP director under President George W. Bush, had a business background. By contrast, President Barack Obama’s OFCCP director, Patricia Shiu, was a plaintiffs’ attorney who represented workers in both individual and class action employment discrimination cases.

“I wouldn’t be surprised if the new head of the OFCCP spent significant time in the private sector,” Valerie J. Hoffman, a partner with Seyfarth Shaw in Los Angeles and Chicago and co-chair of Seyfarth’s Employment Analytics Group and OFCCP, Affirmative Action & Diversity Team, told Bloomberg BNA. “It seems to be a trend and a theme in the choices for leadership under this new administration.”

Lawrence Z. Lorber, who was OFCCP director under President Gerald Ford and is now senior counsel at Seyfarth Shaw in Washington, told Bloomberg BNA that selecting a director with experience in the contractor community regulated by the OFCCP “could make sense.”

But the position involves an “amalgamation of government contracting and employment law,” and selecting a lawyer “might not be a bad idea” either, he said.

Michael Eastman, senior counsel and vice president for public policy at the Equal Employment Advisory Council in Washington, told Bloomberg BNA that the “universe” of good candidates for OFCCP director also includes individuals with histories in employment policy who might not have had business leadership roles.

Without naming any individuals, Eastman said those individuals may have served in prior administrations or even other regulatory agencies.

After President Obama took office in 2009, it took about eight months before Shiu was named the OFCCP’s director. She assumed the position in October 2009.

Observers said they didn’t have a sense of the incoming administration’s timeline on lower-level appointments.

But the sooner nominations are announced and confirmed, the sooner an agency like the OFCCP “could potentially shift gears,” Alissa Horvitz, an attorney with Roffman Horvitz in McLean, Va., who has practiced OFCCP law for 20 years, told Bloomberg BNA.

Rollback for OFCCP Rules?

Under the Obama administration, the OFCCP has been known for its aggressive regulatory agenda.

The agency finalized data collection and analysis rules pertaining to the outreach, recruitment and hiring of individuals with disabilities and veterans. It also added workplace bias protections based on sexual orientation and gender identity, prohibited pay secrecy policies, and updated outdated sex discrimination guidelines.

It’s also been known for its deeper dives into contractor data and records during compliance audits, especially in seeking out systemic pay discrimination.

Employee advocates have praised the OFCCP’s approach in combating and remedying workplace discrimination. Critics have countered that the OFCCP’s regulatory and enforcement efforts are overly burdensome to contractors.

“There will be a serious effort to roll back regulations and abandon executive orders” under a Puzder Labor Department, Hoffman said.

But the OFCCP’s rules may not be as high on the priority list, attorneys said. The new administration, for example, likely will focus on President Obama’s paid sick leave and Fair Pay and Safe Workplaces executive orders, or litigation over the agency’s overtime and fiduciary rules.

However, there could be a reduction in enforcement efforts for the OFCCP’s more recent rules, Hoffman said. That could include a rollback of requirements to ask applicants to self-identify as disabled at the pre-offer stage or even an elimination of hiring goals and benchmarks for disabled individuals and veterans, all of which were established during the Obama administration, she said.

Lorber agreed that the new administration will assess the impact that OFCCP regulations have on contractors, especially small to medium-sized businesses.

“It doesn’t mean you don’t enforce,” Lorber said. “I don’t sense that there’ll be a complete diminution, but they’ll look at what the agency does in terms of rational regulation and enforcement.”

Horvitz shared a similar viewpoint in that DOL subagencies like the OFCCP could turn to regulating “with a business perspective in mind.”

Perhaps a Simpler Approach to Audits

Hoffman said the OFCCP in the future also could take a “simpler” approach to audits that’s less time consuming.

The agency under Obama had implemented more comprehensive compliance reviews that took months to close with no violations found, and years, if findings of discrimination were issued.

“I can see audits focusing not on finding discrimination, but on questions as to whether appropriate affirmative action is being taken to hire minorities, women, disabled individuals, veterans,” Hoffman said.

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

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Labor & Employment on Bloomberg Law