Q&A: Affirmative action ruling won’t affect federal contractors

Question: I understand the U.S. Supreme Court is considering a legal challenge to two universities’ race-based student admissions practices. If the Court strikes down these practices, how will it affect our affirmative action obligations as a federal contractor?

Answer: It won’t, for many reasons. The universities’ alleged practices of considering race/ethnicity when selecting students for admission were developed on their own initiative, not under any legal obligation, so the Court hasn’t been presented with any affirmative action laws to evaluate. Also, the universities were making decisions about admitting students, not hiring employees (Students for Fair Admissions, Inc. v. University of North Carolina (No. 21-707) and Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (No. 20-1199)).

In contrast, federal contractors’ affirmative action obligations come from three legal sources: Executive Order 11246 (related to race/ethnicity and gender, originally issued by President Lyndon Johnson in 1965 and later amended), Section 503 of the Rehabilitation Act (related to disability status, originally passed by Congress in 1973 and later amended), and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) (related to protected veteran status, originally passed by Congress in 1974 and later amended). Together, these laws and their accompanying regulations require employers with covered federal contracts to track race/ethnicity, gender, disability status, and protected veteran status and evaluate at the end of their annual 12-month recordkeeping periods whether their numbers meet established benchmarks. If the figures fall short, it doesn’t mean the companies did anything wrong; it means that they must evaluate the cause and develop strategies for outreach, education, mentoring, etc. to improve in the next recordkeeping period. Note that the use of these statistics is always after the fact—looking backward at past decisions, never using race/ethnicity or any other protected status as a basis for making employment decisions.

The Office of Federal Contract Compliance Programs (OFCCP) enforces these affirmative action requirements for federal contractors. For many years now, the OFCCP has (correctly) taken the position that using race/ethnicity or gender in employment decisions is illegal. Most of the time, when the OFCCP alleges racial discrimination or gender discrimination, the individuals who have been negatively affected are non-white or female. But sometimes the agency finds that a company has discriminated against white workers or male workers. There is no legal difference in the analysis of these cases, because making race-based or gender-based decisions in hiring, promotion, compensation, or any other employment practice is illegal, plain and simple. In both types of cases, the OFCCP will require the federal contractor to make the negatively affected workers whole, with back pay.

One way that companies can go astray in their nondiscrimination obligations is if they establish financial incentives for managers to employ and promote non-white or non-male employees. Usually, these programs are founded on good motives, such as a sincere desire to correct past discrimination, support a more equitable work environment, or gather a broader range of perspectives in running the business. However, any time a manager uses race/ethnicity or gender to make an employment decision, they are violating Title VII of the Civil Rights Act and similar state laws. There are other ways to promote diversity, equity, and inclusion, without crossing the line into illegal discrimination. If you have questions or need help evaluating your current practices, contact your Vigilant Law Group employment attorney.