Tag: federal contractors

September 26, 2022

Federal Contractors Have Short Window to Object to OFCCP Data Disclosure

On August 19, 2022, the Office of Federal Contract Compliance Programs (OFCCP) received a Freedom of Information Act (FOIA) request from a journalist with the Center for Investigative Reporting. This request was for disclosure of EEO-1 Type 2 Consolidated Report data filed by federal government contractors and subcontractors between 2016-2020. The OFCCP is offering covered employers an opportunity to prevent their company’s reports from being made public. But the time available to object to the OFCCP data disclosure is limited.

Freedom of Information Act

The U.S. Freedom of Information Act allows the public to request records from federal agencies. The government must provide available records, subject to various exceptions.

FOIA Exemption 4 protects from disclosure: “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.” 5 U.S.C. § 552(b)(4).

EEO-1 Type 2 Reports

All private sector employers with 100 or more employees and federal contractors with 50 or more employees meeting certain criteria must file EEO-1 reports annually. These reports provide the federal government demographic workforce data, including data by race/ethnicity, sex, and job categories.

EEO-1 Type 2 reports pertain to employers with multiple establishments. Through these reports, employers submit annual demographic data for all U.S.-based employees across their locations. Employers with only a single establishment typically would file the EEO-1 “Type 1” report.

The pending request FOIA request is limited to Type 2 reports. Accordingly, the OFCCP is not planning to provide data for single-establishment contractors.

Objections to OFCCP Data Disclosure

To protect trade secrets and other potentially sensitive commercial and financial information, the OFCCP is permitting contractors to file an objection to the FOIA request. After an initial deadline of September 19, 2022, the OFCCP is now accepting opt-out requests through October 19, 2022. Subject contractors who don’t object within this time frame will be assumed to have no objections to disclosing their company’s demographic data.

The OFCCP suggests that contractors address the following questions in any objections:

Do you consider information from your EEO-1 Report to be a trade secret or commercial information? If yes, please explain why.
Do you customarily keep the requested information private or closely held? If yes, please explain what steps have been taken to protect data contained in your reports, and to whom it has been disclosed?
Do you contend that the government provided an express or implied assurance of confidentiality? If yes, please explain. If no, skip to the next question.
If you answered “no” to the previous question, were there expressed or implied indications at the time the information was submitted that the government would publicly disclose the information? If yes, please explain.
Do you believe that disclosure of this information could cause harm to an interest protected by Exemption 4 (such as by causing genuine harm to your economic or business interests)? If yes, please explain.

To facilitate written objections to the request, the OFCCP has created a Submitter Notice Response Portal.

Additional information for covered contractors is available through the OFCCP’s Submitter Notice Response Portal Frequently Asked Questions.

To receive updates on employment law insights and developments, sign up for our email newsletter and follow Horton Law on LinkedIn.

March 27, 2018

What Does the Drug-Free Workplace Act Require?

Many employers implement drug-free workplace policies. Often they invoke the federal Drug-Free Workplace Act in doing so. But only a subset of U.S. employers is subject to that law. Here we’ll examine what this law actually requires and consider what it doesn’t directly address.

Covered Employers

The Drug-Free Workplace Act of 1988 only applies to federal grant recipients and federal contractors with a contract for more than $100,000. To clarify, it covers any organization with an active federal grant of any size. The law only covers contractors without grants if they have at least one single contract worth more than $100,000.

Drug-Free Workplace Requirements

The Drug-Free Workplace Act does not require as much as many probably assume it does.

Generally, it requires that covered employers:

adopt a drug-free workplace policy; and
establish a drug-free awareness program.

Elements of a Drug-Free Workplace Policy

Marijuana remains a controlled substance under federal law even if legal under the law of your state.

Under this law, an organization’s policy must include a statement that the employer prohibits the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance in the workplace. It must also specify the actions that will be taken against employees who violate the policy.

The policy must also inform employees engaged in the performance of the grant or contract that they must:

abide by the above prohibitions; and
notify the employer within 5 days after the employee is convicted of violating a criminal drug statute for conduct occurring in the workplace.

Employer Obligations

If an employee notifies a covered employer that they have been convicted of a criminal drug violation occurring in the workplace, the employer must notify the granting or contracting agency within 10 days.

The employer must also impose some sanction on the employee. This can include requiring completion of a drug-abuse assistance rehabilitation program.

In addition, the organization must establish a drug-free awareness program. The program must inform employees about:

the dangers of drug abuse in the workplace;
the organization’s policy of maintaining a drug-free workplace;
available drug counseling, rehabilitation, and employee assistance programs; and
the penalties that may be imposed on employees for drug abuse violations.

The Substance Abuse and Mental Health Services Administration (SAMHSA), part of the U.S. Department of Health & Human Services, provides a comprehensive “Drug-Free Workplace Toolkit” here.

Penalties for Noncompliance

Covered entities that fail to comply with the Drug-Free Workplace Act could lose contracts/grants or related payments. They may also be barred from receiving new grants or contracts for up to five years.

What the Drug-Free Workplace Act Doesn’t Require

The Drug-Free Workplace Act only addresses drug crimes committed at work.

First of all, it doesn’t require anything of organizations that don’t have qualifying federal grants or contracts.

For covered employers, it most notably does not require them to terminate any employees for drug-related infractions. It only requires some sanction or penalty, which can include mandatory counseling.

The law itself also doesn’t require any employees to report drug use or even most drug-related criminal convictions. It only mandates reporting of convictions for incidents that occurred at work.

Moreover, the law doesn’t require employers to drug test applicants or employees.

Nonetheless, this law does not prohibit organizations from doing more than strictly required as part of its efforts to maintain a drug-free workplace.

Employer Self-Audit

A self-audit is not a requirement of the Drug-Free Workplace Act, but I suggest that employers use this as a reminder to check their current approach to this subject. First, each organization should know whether it is subject to this law. And, if so, it should review compliance with the law’s requirements.

For non-covered employers, do you currently have a drug-free workplace policy? If so, that’s okay, but it may not be necessary to ensure strict compliance.

Overall, every employer has leeway regarding their policies regarding drug use by employees. Most employers can, for example, drug test employees; but few (primarily those in the transportation industry) must do so. However, there are various legal nuances to these issues. Accordingly, employers should consult with an experienced employment attorney before changing their drug/alcohol policies or implementing them in the first place.

To get future updates and reminders about significant labor and employment law issues, sign up for Horton Law’s monthly email newsletter.

February 19, 2018

What Is Executive Order 11246?

Lyndon B. Johnson,
36th U.S. President

On September 24, 1965, President Lyndon B. Johnson signed Executive Order 11246, which continues to impose anti-discrimination and affirmative action requirements upon federal contractors.

The Executive Order came just a year after Congress enacted (and President Johnson signed into law) the Civil Rights Act of 1964. Title VII of that act created the first national employment discrimination protections based on race, sex, color, national origin, and religion.

Although Johnson’s executive order is the one still cited for its administrative action requirements, its impact isn’t all because of him. A number of U.S. Presidents have contributed to these legal obligations on federal contractors over the year.

What It Does

Executive Order 11246 covers federal contractors who do over $10,000 in government business in a year. It essentially has two basic functions (as amended):

Prohibits discrimination in employment based on race, color, religion, sex, or national origin.
Requires affirmative action to ensure that equal opportunity is provided in all aspects of employment.

In addition, contractors with over 50 employees and a contract of at least $50,000 must prepare written affirmative action plans. The Office of Federal Contract Compliance (OFCCP) may audit contractors to review compliance with the affirmative action requirements.

Covered contractors who do not satisfy the affirmative action requirements face many possible penalties. These can include pay awards, notices of violations, enhanced government oversight, loss of contracts, and negative publicity.

History Leading to Executive Order 11246

Executive Order 11246 was not the first Presidential action prohibiting employment discrimination.

On June 25, 1941, President Franklin D. Roosevelt outlawed discrimination based on race, color, creed, and national origin in the federal government and defense industries through Executive Order 8802. In 1943, FDR extended Executive Order 8802 to federal contractors in Executive Order 9346.

Later, Presidents Truman and Eisenhower created a Committee on Government Contract Compliance and then the President’s Committee on Government Contracts, respectively. These committees oversaw compliance by federal contractors with the non–discrimination provisions of Executive Order 8802.

On March 6, 1961, President John F. Kennedy signed Executive Order 10925. This Executive Order required government contractors to “take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color or national origin.” It also created the President’s Committee on Equal Employment Opportunity, which became the Equal Employment Opportunity Commission (EEOC) under the Civil Rights Act of 1964.

Johnson’s Executive Order 11246’s primary contribution was to make the U.S. Secretary of Labor responsible for administering the pre-existing non-discrimination and affirmative action provisions.

Later Modifications

On October 5, 1978, President Jimmy Carter consolidated all affirmative action enforcement actions under the U.S. Department of Labor through Executive Order 12086.

On December 12, 2002, President Bush amended Executive Order 11246 to allow religiously affiliated contractors to prefer individuals of a particular religion when making employment decisions relevant to the work connected with its activities. (Executive Order 13279)

Barack Obama,
44th U.S. President

President Obama most recently amended Executive Order 11246 in 2014.

In Executive Order 13665, he prohibited retaliation by federal contractors against employees or applicants who inquire about, discuss, or disclose details of their own or other employees’ or applicants’ compensation.

In Executive Order 13672, President Obama prohibited covered contractors from discriminating based on sexual orientation or gender identity.

Status Under the Trump Administration

With the shift from a Democratic to Republican White House, many questioned the impact on Executive Order 11246. Especially the Obama-era amendments.

On January 31, 2017, President Trump’s administration released a statement that Trump would not rescind Executive Order 13672 (which added sexual orientation and gender identity). However, he did rescind Obama’s companion Executive Order 13673. It had required companies seeking federal contracts to report violations of various federal laws. A federal judge had temporarily enjoined Executive Order 13673. Trump’s action mooted any further challenge to the injunction.

November 2020 Update: A return to a Democratic administration under Joe Biden will likely restore the sexual orientation and gender identity provisions that President Obama added.

Does Executive Order 11246 Cover Your Business?

Employers must know whether they are subject to Executive Order 11246, but many do not. It is a bad day when you receive an audit letter from the OFCCP. It’s much worse when you don’t have the necessary records or an affirmative action plan in place. Businesses with over 50 employees must especially confirm whether they have federal contracts that would trigger affirmative action requirements.

If your organization has any government contracts and hasn’t evaluated the impact on employment practices, now is the time to do so. Whether, and the extent to which, Executive Order 11246 applies is not always an easy question. Employers uncertain of coverage should consult with an attorney experienced with this executive order and other laws that impose affirmative action requirements.

Interested in affirmative action and other employer obligations? Sign up for our email newsletter or follow us on LinkedIn to stay updated about future developments.