Employment Law Blog

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Oct 23, 2017

OFCCP secures significant settlements from federal contractors

Affirmative ActionHarassment & Discrimination 

The Office of Federal Contract Compliance Programs (OFCCP) hustled to wrap up major financial settlements from federal contractors as the federal government’s fiscal year drew to a close on September 30, 2017. The settlements were the result of the OFCCP’s focus on hiring, placement (“steering”), and compensation practices during random affirmative action audits. Below are summaries of four audits that were resolved by the end of FY 2017 and two that are kicking off FY 2018 for the agency. In all cases, the companies signed conciliation agreements and agreed to pay six-figure or even seven-figure dollar amounts to resolve the OFCCP’s allegations, but didn’t admit to violating the law:

  • State Street Corporation, a financial services company, agreed to pay $5 million in back pay and interest after an audit of its headquarters office in Boston, Massachusetts. The OFCCP claimed the company underpaid 305 women compared to men in Senior Vice President, Managing Director, and Vice President positions and underpaid 15 black employees compared to white employees in Vice President positions. This is the OFCCP’s largest compensation settlement since 2004. The company also agreed to conduct its own internal compensation audits every year for three years and adjust salaries as needed (conciliation agreement signed 9/29/17).
     
  • Kulite Semiconductor Products, Inc., in Leonia, New Jersey, agreed to pay $195,000 to settle allegations that the hiring process for its Assembler I position unfairly discriminated against men. The money will be shared by 85 rejected male applicants. The company will offer jobs to 13 of them as jobs become available. It also agreed to review its job descriptions and hiring process and to train everyone involved in recruiting, selecting, or tracking applicants (conciliation agreement signed 9/28/17).
     
  • CoreCivic, Inc., which operates a correctional facility in Nicholls, Georgia, agreed to pay $313,346.74 in back pay and interest to settle allegations that it discriminated against 22 black applicants and 141 female applicants for Correctional Officer positions. The company will offer jobs to 25 of the rejected applicants as positions come open. The company will also conduct supplemental training for those involved in the selection process for Correctional Officer positions (conciliation agreement signed 9/26/17).
     
  • International Paper in Shelbyville, Illinois, agreed to pay $347,642.20 to settle allegations that when placing new hires into production positions, the company disproportionately assigned females to lower-paying positions in Labor Grade 1, and males to higher-paying positions in Labor Grades 3 and 6. This practice is what the agency refers to as “steering.” The money will be shared among 82 of the women, and 30 of them will be given preferential hiring or promotional opportunities into Labor Grade 3 positions. Among other things, the company agreed to create a new selection process for hourly production positions and ensure that it is nondiscriminatory (conciliation agreement signed 9/26/17).
     
  • CB&I, a company that provides technology and infrastructure for the energy industry, agreed to pay $1.95 million after the OFCCP audited three facilities in Louisiana and one in Texas. The OFCCP claimed that one facility discriminated against female applicants as well as against white, black, Asian, and Native American applicants (compared to Hispanic applicants) for Craft Worker positions, affecting 140 applicants. It found that another facility discriminated against white applicants for Carpenter positions; white, black, and Hispanic applicants for Pipefitter positions; and white and Hispanic applicants for Welder positions, affecting a total of 20 applicants. It claimed that another facility discriminated against female and black applicants for Industrial Laborer positions and black applicants for Shop Welder positions, affecting a total of 32 applicants. It claimed that a fourth facility discriminated against black applicants for Administrative Assistant 1 and Shop Painter positions, affecting a total of 11 applicants. The company agreed to revamp its hiring process and to extend job offers to affected class members at the three facilities that are still in business (conciliation agreement signed 10/10/17).
     
  • Intertek U.S.A., Inc., a total quality assurance provider to industries worldwide, agreed to pay $465,000 in back pay and interest after an affirmative action audit of its facility in St. Rose, Louisiana. The OFCCP alleged that the company discriminated against female and black applicants for Inspector positions, affecting a total of 15 people. The company agreed to revise and document its hiring procedure, and to train individuals involved in recruitment, selection, or tracking of applicants for Inspector positions. The company will also offer jobs to the 15 individuals as positions come open (conciliation agreement signed 10/11/17).

Tips: The OFCCP is conducting fewer audits these days, but the Acting Director of the agency, Tom Dowd, recently stated that their aim right now is quality over quantity. Federal contractors are finding that these audits can be long and drawn-out, and the agency may analyze two or more years of data at a time. Vigilant prepares written affirmative action plans for a reasonable annual fee. For Vigilant members, that fee includes all email and telephone support during OFCCP audits. Questions about how Vigilant can help? Contact your Vigilant affirmative action representative. Or learn more about Vigilant's Affirmative Action Services.

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