Merger of EEOC, Contractor Watchdog ‘Under Consideration’

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

A potential merger between the EEOC and a Labor Department subagency that enforces affirmative action and nondiscrimination requirements on government contractors is under “active consideration” by the Trump administration, according to practitioners.

“It’s in play,” David Fortney, a former acting labor solicitor during the George H.W. Bush administration, said May 10. “The likelihood isn’t great at this point, but it is a recommendation that is there.”

The recommendation comes from the Heritage Foundation, a conservative research think tank in Washington. The foundation previously called for the outright elimination of the DOL’s Office of Federal Contract Compliance Programs, arguing that the agency is “redundant” given the existence of the Equal Employment Opportunity Commission.

The idea of having the OFCCP act as the EEOC’s government contractor or systemic discrimination arm has been “periodically tossed around” for years, said Fortney, now a management attorney with FortneyScott in Washington.

“It’s not a totally wild idea if you think about it,” he said.

And it’s now no longer “just an academic question,” he said at the annual summit for the Institute of Workplace Equality, a national nonprofit employer association formerly known as the OFCCP Institute. Fortney is one of the institute’s co-chairs.

An EEOC spokeswoman May 10 told Bloomberg BNA that the agency respectfully declines to comment.

Representatives of the DOL, the Heritage Foundation and the White House’s Office of Management and Budget didn’t immediately respond to Bloomberg BNA’s May 10 requests for comment.

Trump Executive Order Paving Way?

A number of signs point to the possibility of a merger, Fortney said.

First, President Donald Trump in March signed an executive order for a government-wide review to determine where federal programs can be eliminated or modified to save costs.

Within 180 days of the order, or by Sept. 9, the head of each agency must submit a proposed plan to reorganize the agency, with preliminary reports due in June.

Labor Secretary Alexander Acosta, who was sworn in late last month, is under deadline to submit recommendations to the OMB, Fortney said. But contractor stakeholders have yet to hear Acosta’s opinion on the OFCCP, he said.

OMB Director Mick Mulvaney is a “strong proponent” of consolidating agencies, Fortney said.

Other Possible Signs Leading to Merger

Furthermore, the OMB in April directed agencies to begin the process of reorganizing along the lines of the president’s fiscal year 2018 “skinny” budget, which included a proposed 21 percent cut for the DOL.

Practitioners speculated at the time the skinny budget was released that the OFCCP might see a funding reduction that could result in office closures or workforce reductions. Depending on how steep the final cuts are, merging with the EEOC might become an option, practitioners said.

Additionally, the EEOC’s current acting chair, Victoria Lipnic, previously oversaw the OFCCP when she served as the assistant labor secretary of the Employment Standards Administration during the George W. Bush administration. The ESA was eliminated in 2009.

If Lipnic becomes the EEOC’s chair, that “adds fuel to the fire” of merger speculation, Fortney said. “She would be someone who has subject matter expertise and could manage a transition.”

Idea Not Popular Among Stakeholders

Merging the two enforcement agencies isn’t a popular idea among stakeholders, practitioners said.

“Neither of the agencies particularly want it,” as each enjoys its autonomy, Fortney said.

A merger would also give the EEOC an “incredible amount of authority over contractors,” which might not necessarily be in the best interest of employers, David Cohen said, also an institute co-chair as well as president of DCI Consulting in Washington.

Civil rights groups, such as the American Association for Access, Equity, and Diversity , have also opposed arguments that the OFCCP is redundant because of the EEOC. The AAAED is led by Shirley Wilcher, a former OFCCP director under the Clinton administration.

Differences Between EEOC, OFCCP

While the two agencies overlap in their initiative to protect workers, they also diverge on certain protections they offer workers. The EEOC enforces Title VII of the 1964 Civil Rights Act, which prohibits discrimination based on race, sex, religion, color and national origin.

By contrast, the OFCCP enforces Executive Order 11,246, which bars workplace bias based on the same categories as Title VII but also includes sexual orientation and gender identity. Although the EEOC has taken the position that Title VII’s prohibition against sex discrimination includes sexual orientation and gender identity bias, that issue remains open in the federal courts.

The OFCCP also enforces Section 503 of the Rehabilitation Act and Section 4212 of the Vietnam Era Veterans’ Readjustment Assistance Act.

In addition to prohibiting discrimination, the OFCCP enforces contractor affirmative action obligations for minorities, women, individuals with disabilities and covered military veterans.

The EEOC doesn’t similarly enforce affirmative action requirements. Nor does it provide protections specifically to veterans.

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; Christopher Opfer at copfer@bna.com

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