IT Firm Targeted in Labor Agency’s First Suit Under Trump

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

Advance2000 Inc., a New York information technology services firm, risks its ability to obtain future federal contracts because it violated a settlement agreement with the Labor Department, according to an administrative complaint obtained Nov. 9 by Bloomberg Law.

This is the first lawsuit filed under the Trump administration by the DOL’s Office of Federal Contract Compliance Programs, which audits government contractors to ensure workplace affirmative action and nondiscrimination compliance ( OFCCP v. Advance 2000 Inc. , Dep’t of Labor A.L.J., No. 2018-OFC-00001, complaint filed 10/10/17 ). The agency’s last administrative complaints came in the days leading up to President Donald Trump’s inauguration in January. Those actions were against Google Inc., Oracle America Inc., JPMorgan Chase & Co., Accuweather Inc., and three other contractors.

The OFCCP and Advance2000 signed a conciliation agreement in June 2015, settling agency allegations that the company violated various technical requirements placed on contractors. The agency didn’t allege any discrimination, but it did flag violations related to the company’s written affirmative action plan and other record-keeping issues, according to information in the DOL’s enforcement database.

The settlement agreement required Advance2000 to submit periodic progress reports to the agency, but the company didn’t send them and didn’t respond to the office’s November 2016 notice about the conciliation agreement violation, the OFCCP alleges. Advance2000’s federal contracts, worth more than $158,000, expired in February 2016.

In its complaint against Advance2000, the office seeks to prohibit the company from obtaining federal contracts until it complies with the settlement agreement.

That remedy is known as contractor debarment, but OFCCP enforcement actions rarely reach that point, according to a Bloomberg BNA analysis earlier this year. Some companies agree to voluntary debarment in settlements with the agency.

Company Will Fix Paperwork Issue, CEO Says

Brian Maouad, chief executive officer of Advance2000, told Bloomberg Law Nov. 9 that the company has “complied completely with affirmative action” and that the issue with the Labor Department boils down to paperwork.

“As a company, we have more minorities working for us than non-minorities, by race and gender,” Maouad said.

The company will work with the agency to fix the progress report issue, he said, but it doesn’t plan to pursue future federal contracts.

“We’re not a very big company,” Maouad said. “These were our first federal contracts, the margins were so small, and it took forever to get paid.”

Add to that the company’s lack of staff to stay on top of the OFCCP’s document-intensive requirements, and federal contracting is no longer “very attractive,” he said.

Maouad’s comments echo concerns from management-side attorneys over the years that the OFCCP’s allegedly burdensome requirements make it difficult for smaller companies to enter into the federal contracting arena.

A DOL spokesman Nov. 9 told Bloomberg Law that the agency doesn’t have comment beyond the contents of the complaint.

Bloomberg Law obtained the Oct. 10 complaint through a Freedom of Information Act request.

Acting Solicitor of Labor Nicholas C. Geale, Regional Solicitor Jeffrey Rogoff, and DOL attorney Alexander M. Kondo represent the agency. Attorney information for Advance2000 wasn’t immediately available.

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: Terence Hyland at thyland@bna.com

For More Information

The complaint is available at http://src.bna.com/t69.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Labor & Employment on Bloomberg Law