Pros and cons of the proposed EEOC-OFCCP merger
June 09, 2017
President Donald Trump has proposed to merge two of the primary government agencies focused on equal employment in the workplace – the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance Programs. Robin has discussed this proposed merger here, here, and here.
She’s asked for input from the Affirmative Action team, so here it is.
The President’s proposed line-item budget calls for the merging of these two agencies by the end of fiscal year 2018.
The EEOC. The EEOC is charged with investigating alleged violations of Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Genetic Information Nondiscrimination Act, and the Equal Pay Act. “Protected categories” within the scope of the EEOC’s authority are race, sex (including pregnancy), national origin, religion, color, age, disability, and genetic status. The EEO laws typically apply to employers with a minimum number of employees, regardless of their federal contractor status. The EEOC does not have the authority to issue fines or citations, and can enforce violations only through the court system. The EEOC’s current budget is approximately $364 million.
The OFCCP. The OFCCP, on the other hand, seeks to enforce Executive Order 11246, the Vietnam Era Veterans Readjustment Assistance Act, and Section 503 of the Rehabilitation Act. The protected categories for which affirmative action is required include race, color, national origin, sex, disability, and protected veteran status. The OFCCP also enforces anti-discrimination prohibitions based on all of those protected categories plus religion, sexual orientation and gender identity. The affirmative action laws apply to certain federal contractors and subcontractors, most typically those with at least 50 employees. The OFCCP can penalize non-compliance through the use of fines and other measures. The OFCCP’s current budget is approximately $105 million.
Is a merger possible? Back in March, the President signed an Executive Order intended to improve the efficiency, effectiveness and accountability of the executive branch of government, and to eliminate or consolidate unnecessary agencies. In that same vein, the proposed budget submitted by President Trump suggests a merger in which the OFCCP would be subsumed into the EEOC, with the result being one agency and one budget. But it’s not a matter of simply combining the budgets of the two agencies. In order for a merger to happen, Congress would have to transfer enforcement authority under the Rehabilitation Act and the VEVRAA from the Secretary of Labor to the EEOC. (This has happened before. During the Carter Administration, Congress passed legislation authorizing the Administration to move enforcement of the ADEA and the EPA from Labor’s Wage and Hour Division to the EEOC.)
Almost unanimous opposition. In a rare show of solidarity, virtually every employee and business group has expressed opposition to the suggested merger of these two agencies.
One of the primary objections is that the agencies have different missions, deal with different employer populations, and enforce (some) different laws. Although these arguments certainly have merit, the real concern from the employer standpoint is that the two “divisions” of the new EEOC would work together to impose more monetary sanctions on employers. For example, if a compensation disparity were found during an OFCCP audit but the contractor refused to conciliate, the EEOC’s “OFCCP division” could collaborate with the “EEOC division,” which could turn around and bring a systemic discrimination charge under Title VII or the Equal Pay Act. Of course, such collaboration is possible now and even approved by the existing structure because the EEOC and OFCCP operate under a Memorandum of Understanding. A related concern is that the merged agency would encompass the “best (or worst) of both worlds,” taking the broadest powers from the EEOC and the broadest powers from the OFCCP, and giving all of those powers to both.
Perhaps the strongest argument against consolidation is the fact that the EEOC is currently unable to manage its existing workload. The EEOC has a backlog of more than 70,000 pending charges. As most employers know, it can take years for a charge to be resolved, which is often detrimental to both parties, as witnesses leave and memories fade.
Is there any benefit to a merger? Although most groups have voiced opposition to the suggested merger, there could be some advantages if the merger were to succeed.
First, combining the administrative and leadership functions of the two agencies could make economic sense. Although the OFCCP is under the purview of the Department of Labor, the OFCCP operates in large part as a separate entity, with a large budget. Combining offices and administrative functions would result in substantial monetary savings.
Second, given President Trump’s position on government regulation, there is an equal chance that the “new EEOC” could operate using more employer-friendly policies and procedures, which would therefore benefit all employers. If reasonable enforcement policies and procedures were determined in advance, the proposed merger would be likely to receive additional support from the business community. Moreover, any concerns about excessive “collaboration” could be lessened by a guarantee of a separation between OFCCP audits and EEOC investigations.
Third, given that a majority of the OFCCP’s enforcement efforts over the past eight years have focused on discrimination, versus compliance with the affirmative action mandates, the merger of the two agencies would not necessarily shift the focus of the OFCCP.
Is a merger likely? It is too early to tell, given the long and arduous process involved in finalizing the budget. However, based on the widespread opposition to a merger and the fact that Congressional action would be necessary to effectuate the change, there are significant hurdles that will have to be crossed before it is a reality — if ever.