Vigilant Blog

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Oct 18, 2016

OFCCP wrings significant settlements from employers

Affirmative ActionHarassment & DiscriminationWage and Hour 

The Office of Federal Contract Compliance Programs (OFCCP) has announced a string of recent settlements with federal contractors over alleged employment discrimination.

The OFCCP uncovered the issues while conducting routine affirmative action audits, resulting in the following settlements:

  • Chemonics International Inc., a company that supports economic development projects around the world, agreed to pay $418,243 in back wages and interest to 124 unsuccessful African-American applicants. The OFCCP examined the employer’s entry-level hiring process for professionals, and found disparities in the pre-screen, phone screen, and panel interview stages. The employer will also offer jobs to 8 of the applicants and pay each an $8,000 signing bonus, bringing the total monetary settlement to $482,243 (OFCCP press release 10/5/2016).
  • Tyson Foods, Inc. agreed to pay $1.6 million to 5,716 applicants rejected for laborer jobs from 2007 to 2010 at facilities in Texas, Arkansas, and New Mexico. The company supplies meat products to the U.S. Department of Agriculture. Interestingly, the agency alleged different types of discrimination at different facilities. For example, in Amarillo, Texas, the OFCCP said the company favored men over women, and Asians over black, Hispanic, and white applicants. But in Houston, Texas, the OFCCP found the company favored women over men, and Hispanic over black applicants. The company agreed to offer jobs to 474 of the disappointed applicants as positions come open (OFCCP press release 10/4/2016).
  • Genlyte Thomas Group, LLC agreed to pay $275,000 in back wages and interest to 51 female managers and sales professionals in Massachusetts who the OFCCP alleged were underpaid compared to males in similar positions. Apparently differences in starting salaries contributed to the disparity, because the employer agreed to evaluate and improve its methods of setting starting salaries. The company manufactures “Lightolier” brand indoor and outdoor lighting fixtures (OFCCP press release 10/4/2016).
  • Hewlett-Packard Company agreed to pay $750,000 in back wages and interest to 504 minority applicants for inside sales positions at a facility in Arkansas. The company will also offer jobs to 33 of the affected applicants, with retroactive seniority, as positions come open. The OFCCP alleged that the company’s hiring process discriminated against 349 African Americans, 1 American Indian/Alaskan Native, 109 Asians, 44 Hispanics and 1 Native Hawaiian/Pacific Islander (OFCCP press release 9/21/2016).

Tips: These settlements underscore the importance of using defensible, job-related hiring processes and regularly monitoring for adverse impact. Your method for setting starting salaries is another area to examine. Relying on wage history or applicant negotiation skills can tend to have an adverse impact on women, resulting in wage disparities that compound over time. If you need help reviewing your hiring process, talk with your Vigilant employment attorney.

This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.