multi-establishment & enterprise-wide compliance nilg annual conference august 29, 2012 valerie...
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![Page 1: Multi-Establishment & Enterprise-Wide Compliance NILG Annual Conference August 29, 2012 Valerie J. Hoffman, Esq. Christine Hendrickson, Esq. Seyfarth Shaw’s](https://reader035.vdocuments.net/reader035/viewer/2022062715/56649da15503460f94a8e169/html5/thumbnails/1.jpg)
Multi-Establishment & Enterprise-Wide Compliance
NILG Annual ConferenceAugust 29, 2012
Valerie J. Hoffman, Esq.
Christine Hendrickson, Esq.
Seyfarth Shaw’s OFCCP, Affirmative Action & Diversity Consulting Team
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2 | © 2012 Seyfarth Shaw LLP
Seyfarth Shaw’s Perspective
• Informed by experiences of more than 300 employment attorneys representing management
• Handling many of the most significant employment cases today
• Our practice is national in scope: 10 offices in the US• Nationally recognized leaders in understanding and
communicating affirmative action compliance and developing successful affirmative action programs (AAPs)
• Have defended hundreds of OFCCP compliance evaluations across every region in the US, including major multi-establishment reviews
• Consulting with hundreds of employers about employment policies and best practices, including selection and pay equity
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3 | © 2012 Seyfarth Shaw LLP
Overview
• OFCCP experience • Best practice enterprise-wide self-audit• Practical tips• Sample tools
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4 | © 2012 Seyfarth Shaw LLP
OFCCP Focus on Multi-establishment Contractors
• Targeted industries►Food Service ►Manufacturing ►Transportation
• Looking for issues that span all establishments under audit
►policies►practices►systems issues (applicant tracking systems)
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5 | © 2012 Seyfarth Shaw LLP
OFCCP’s FY 2013 Budget Justification: “Strategic” Selection Process
• Documents plan to implement "strategic" selection process
►to prioritize enforcement efforts &►pinpoint multi-establishment & industry-wide deficiencies &
violations►formula will find “egregious violators” ►but no specifics given
• “Renewed collaborative enforcement approach with the Office of the Solicitor (SOL) and other Departmental agencies," to increase attention
►on contractors with multiple establishments & ►within industries of specific interest
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6 | © 2012 Seyfarth Shaw LLP
Expanding Audits to Establishments Not Tapped for Audit
• Two recent trends►Asking for information about inclusions & exclusions on
workforce & job group analysis►Asking about configuration of AAPs if AAP totals don’t match
EEO-1 Report►Asking about corporate organization►Sending CSAL letters to locations other than corporate HQs
• BE ALERT! 4th Amendment Concerns►Question of OFCCP’s authority to expand routine compliance
evaluation to other locations not selected using normal FCSS system
►Expansion to other locations may only be authorized when a HQ is selected as CMCE, per 41 CFR 60-2.30
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7 | © 2012 Seyfarth Shaw LLP
Focus on Policy/ Practice Issues
• Policies• Application form review• Screening steps• Test validation• Interview notes• Personnel files• Performance evaluations• Termination documentation• Disability accommodation requests & resolution• Listing with Local Office of State Employment Service
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Focus on Systems Issues
• Still lots of issues with inadequacy of applicant tracking to defend selection decisions
• ATS is centralized so issues are likely to affect multiple establishments
• Affected class findings • Almost always at lower levels• Employers with lots of turnover in laborer, operative or
service worker positions
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Focus on Compensation
• OFCCP’s Advance Notice of Proposed Rulemaking (ANPRM) for a new Compensation Data Collection Tool, issued August 10, 2011, sought public comment on design & implementation of new compensation tool
►OFCCP is “exploring the possibility” of using collected data to “identify opportunities” for conducting compensation reviews of a contractor's various establishments nationwide
►Specifically asked for public comment on the categories by which data could be collected for the purpose of nationwide multi-establishment reviews across contractor establishments
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But What About Dukes v. Wal-Mart?
• Secretary of Labor Hilda Solis stated after the Supreme Court’s ruling in Dukes v. Wal-Mart
►“The Wal-Mart decision won't affect our ability to address pay disparities on a broad scale — even if our lawyers have to tweak some of their legal arguments based on the reasoning used in that case.”
►OFCCP not bound by Wal-Mart because specific to private plaintiff litigation
• Dukes v. Wal-Mart decision: group of 1.5 million female employees could not sue for gender discrimination as a class
►because they were unable to demonstrate that Wal-Mart’s subjective corporate POLICY drove the alleged discriminatory employment decisions
►Limiting large discrimination class actions but did not kill them
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Dukes v. Wal-Mart: Impact on HR Decision-making for Federal Contractors
• Subjective HR decisionmaking upheld► but only within an established framework that includes ► consistent corporate guidance & ► ensures legitimate, nondiscriminatory decisions
• Design subjective decisionmaking processes carefully, with these key components
► Link to position and job performance► Mangers closest to performance should make decisions► Consider appeals process for employees considered (but not
selected) for promotion or training opportunities
• Train mangers on ► processes, with emphasis on EEO/AA obligations &► on relevant applicant and performance evaluation criteria & how to
apply them consistently
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ABC Company
• Audits of multiple facilities in same year covered by same OFCCP District Office
• Employer application question: were you dishonorably discharged from the military?
• OFCCP: veterans & race-impact►EEOC concern re race impact
• Held closure of audits until all audits completed• Same violation cited in each modified Letter of
Compliance
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FedEx Settlement- March 22, 2010
• Multiple locations (23) with individual audits in 15 states• Regularly scheduled audits stretching over 7 years• Aggregated at contractor’s request• Affected class: entry-level workers
Different adverse impact findings in various audits►females►males►Blacks►Whites►Native Americans►Hispanics ►Asians
• “Hiring & selection, recordkeeping” = Applicant tracking
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14 | © 2012 Seyfarth Shaw LLP
FedEx Settlement- March 22, 2010
• $3 M• 1700 offers• Alleged affected class: 21,635• “ The allegations were based on computer statistical
analysis rather than individual complaints or investigations. We agree to pay $3 million to avoid what would have certainly been a prolonged and much more expensive resolution process. We have and will continue to review and enhance our hiring practices to promote FedEx Ground’s commitment to diversity and equal employment opportunity.”
• –FedEx spokesperson Angela Wheland as reported by www.law360.com
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Baldor Electric- June 25, 2012
• Alleged affected class: 795 women & minorities prevented from interviewing (2006 data)
• $2M• 50 offers for production & labor jobs• “It was going to be a much lengthier process to fight it
any longer. We don’t admit that we’ve done anything wrong. This was purely a statistical analysis on their (the Labor Department’s) part. But it would have been so long and so much more expensive to fight, it was just time to be done.”
• – Baldor Electric spokesperson Tracy Long as reported by www.therepublic.com
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16 | © 2012 Seyfarth Shaw LLP
Best practice: Enterprise-wide Self-audit
• Pros►detect trends►develop comprehensive strategies & tactics for resolving issues►good for the business►prevents more expensive OFCCP remedies (backpay, etc)
• Cons►discoverable unless attorney-client privileged►can you fix what you find?
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Types of Enterprise-wide Self-Audits
• Pay equity►domestic by race & gender►global by gender only
• AAP goals►aggregate current AAP goals►year over year trending
• Adverse impact►aggregate current AAP findings►year over year trending
• Retention study►reasons for termination
• Performance ratings
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Pay Equity- US Operations
• Many do this now• Different from OFCCP view • Multiple regression analysis very useful since larger
numbers of employees• Pay programs usually directed by corporate policy• Examine base, bonus, other incentive pay, stock• Variables may be fine tuned to capture
►measures of productivity, e.g. physician’s relative value units or RVU’s
►specific skills, e.g. technical micro-welding►certifications, e.g. professional software certifications
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Pay Equity- Global Operations
• By gender only• Race/ethnicity data may not be collected in certain
countries, e.g. France, Germany• Consider if there are different pay practices by country• Cost-of-living adjustments• Housing, other stipends
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AAP Goals
• Aggregate current AAP goals►Enable birds-eye view of issues►Prioritize issues, attention & resources►Outreach v. employee development
• Year over year trending►Further prioritization►Assess whether action plan is working or needs change
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Goals Comparison Sample 2009-2012
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22 | © 2012 Seyfarth Shaw LLP
Goals Comparison Sample 2009-2012
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23 | © 2012 Seyfarth Shaw LLP
Adverse Impact
• Aggregate current AAP findings• Year over year trending
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24 | © 2012 Seyfarth Shaw LLP
Adverse Impact Sample 2009-2012
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25 | © 2012 Seyfarth Shaw LLP
Adverse Impact Sample 2009-2012
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26 | © 2012 Seyfarth Shaw LLP
Detailed Adverse Impact Sample 2009-2012
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27 | © 2012 Seyfarth Shaw LLP
Detailed Adverse Impact Sample 2009-2012
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Compensation Female Sample 2009-2012
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Compensation Female Sample 2009-2012
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Compensation Minority Sample 2009-2012
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Compensation Minority Sample 2009-2012
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Retention Study
• Reasons for termination►Involuntary v. Voluntary
• Add other characteristics►Level in organization►Generation►Business unit
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Retention Study Sample- Involuntary Terminations
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Retention Study Sample-Voluntary Terminations
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Retention Study Sample- Additional Characteristics of Title & Generation
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Performance Ratings
• STRONG recommendation: conduct under attorney-client privilege
• Virtually everyone has issues►Frequently African Americans receive disproportionately lower
ratings
• Can be conducted with pay equity analysis►Useful to determine if can rely on performance as a reason for
lower or higher compensation►Frequently women of equal seniority will have equal or better
performance ratings but pay will be lower
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37 | © 2012 Seyfarth Shaw LLP
Performance Rating Study- Sample
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Performance Rating Study- Sample
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39 | © 2012 Seyfarth Shaw LLP
Questions?
Christine HendricksonSenior Counsel
Chicago Direct: (312) 460-5836
Valerie J. HoffmanPartner
Chicago Direct: (312) 460-5870
Los Angeles - Century City Direct: (310) 277-5288
Thank
you!