DOL’s Pacific Region Got Most Dollars in Contractor Bias Audits

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By Jay-Anne B. Casuga and Jasmine Ye Han

Federal contractors in eight Pacific states and Guam shelled out the most money over the last two fiscal years to settle actions brought by the Department of Labor alleging discrimination against job applicants and employees.

The Pacific Region of the Labor Department’s Office of Federal Contract Compliance Programs collected about one-fifth of total settlement money from companies that do business with the federal government, according to a Bloomberg BNA analysis of government data available as of Aug. 23.

The OFCCP has six regional offices in charge of auditing federal government contractors for workplace nondiscrimination compliance: the Mid-Atlantic, Midwest, Northeast, Pacific, Southeast, and Southwest and Rocky Mountain regions.

The Pacific Region is considered by some management-side stakeholders to be one of the OFCCP’s more aggressive regions during audits. It has secured several million-dollar settlements with large contractors, including Palantir Technologies and Splunk Inc.

Its monetary collections are followed by the Midwest and the Southwest and Rocky Mountain regions, which both collected roughly $5.6 million in the same time period.

The agency nationwide has collected at least $29.4 million in back pay and interest from contractors through audits and complaint investigations closed between fiscal year 2015 and the third quarter of fiscal 2017, according to government data.

The Pacific Region accounts for more than $6.2 million of monetary recoveries from fiscal 2015 to present, according to a Bloomberg BNA analysis of financial settlement agreements posted to the OFCCP’s website as of Aug. 23.

That figure doesn’t include an administrative settlement the region negotiated with Qualcomm Inc. in April that was tied to a $19.5 million private pay discrimination class action settlement. It does, however, reflect a portion of a global $1.8 million hiring and pay discrimination settlement with G&K Services Inc. that it shared with three other regions. In Bloomberg BNA’s calculation, the $1.8 million was split evenly between the amounts collected in the Midwest, Pacific, Southeast, and Southwest regions.

The Northeast Region so far boasts the single largest settlement since fiscal 2015, collecting about $3.2 million earlier this month from B&H Foto & Electronics Corp. The agency alleged that the retailer discriminated against more than 1,300 Hispanic employees and female, black, and Asian job applicants.

The amounts are calculated based on financial settlements posted on the DOL’s public Freedom of Information Act reading room. These data do not reflect all agreements. The site lists 45, 26, and 28 settlements from audits and complaint investigations combined in fiscal 2015, 2016, and 2017, but the DOL’s statistics table shows 46, 46, and 35 cases were completed with monetary relief, respectively.

The Labor Department site includes conciliation agreements, which settle discrimination claims made during audits but before the state of legal action in the DOL’s administrative tribunals, and consent decrees, which are settlements that occur after the initiation of administrative action. The reading room also includes some settlements that stemmed from agency investigations of discrimination complaints filed by individual applicants or employees.

Midwest Region Closes Most Audits

Nationwide, the OFCCP has closed more than 13,000 audits from fiscal 2013 through mid-July 2017, according to a Bloomberg BNA analysis of government enforcement data.

The Midwest Region closed approximately 3,029 audits in that time period, followed by the Southeast Region with about 2,475. The Northeast Region clocked in at roughly 1,581 audits during the same time period.

California in the Pacific Region closed 1,357 audits from fiscal 2013 through part of fiscal 2017, the most audits among states. Alaska had the least at nine.

The total number of closed audits has steadily dropped across all regions since fiscal 2013, which is in line with the agency’s decision during the Obama administration to conduct more thorough compliance reviews.

More thorough reviews, however, also meant lengthier audits. In 2015, for example, it took the agency an average of 247 days to close an audit where no violations were found, according to a September 2016 Government Accountability Office report.

That time frame grew to an average of 402 days for audits with nondiscrimination violations, such as a record-keeping violation. It ballooned to an average of 1,487 days, or more than four years, for audits with discrimination allegations.

As for complaint investigations, the Mid-Atlantic Region leads the way with 179 closed investigations from fiscal 2013 through mid-July 2017. The Southwest and Rocky Mountain Region had the least amount of closed investigations at 61.

Southeast Region Secures Most Financial Agreements

The OFCCP doesn’t find discrimination often. It makes such allegations in about 2 percent of all audits annually, according to the GAO report.

The agency reached 96 financial agreements nationwide in fiscal 2013, according to the public enforcement data.

That number has steadily decreased over the years. It’s signed about 27 so far in the current fiscal year.

The Southeast Region so far has the most financial agreements since fiscal 2013 at 70. The Mid-Atlantic Region had the least amount at 31.

To contact the reporters on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com; Jasmine Ye Han in Washington at yhan@bna.com

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

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