Judge Orders OFCCP To Take Off the Blindfold From Contractors

December 1, 2017Alerts Labor & Employment Alert

Recently, an Administrative Law Judge (ALJ) issued an important decision for Oracle America, Inc. against the Office of Federal Contract Compliance Programs (OFCCP) requiring the agency to respond to Oracle’s requests for the factual and statistical information underlying the OFCCP’s allegations that the company discriminated in its pay and hiring practices, thereby rebalancing a notoriously one-sided process.

The decision arose out of a compliance review, after which the OFCCP filed a January 2017 administrative complaint against Oracle alleging pay disparities among blacks, women and Asians within three of Oracle’s business lines at its California headquarters and that the company favored Asian applicants for some jobs. Oracle denied the charges and pursued its defense though the administrative hearing process. When OFCCP denied Oracle’s reasonable discovery requests, Oracle filed a motion with the ALJ seeking an order compelling the agency to provide responsive information in its possession that formed the basis for its allegations – namely, the underlying statistical analyses and other evidence of discrimination gathered during the compliance review. The OFCCP, in accordance with its usual tactics, opposed Oracle’s motion.

In September, the ALJ granted Oracle’s motion in large part. In so doing, the ALJ rejected the OFCCP’s broad assertion of privileges and confidentiality doctrines, including those applying to attorney-client communications and attorney work product, as well as protections against disclosure of the government’s deliberative processes, its informants and its trial preparation. Citing the agency’s representation on the face of the complaint against Oracle that its factual contentions were supported by evidence – and therefore not frivolous – the ALJ ruled that such evidence was not protected by the asserted privileges and Oracle was entitled to discover it to the extent OFCCP relied upon it in filing the complaint.

This decision was significant for federal contractors because the OFCCP typically does not disclose to target contractors its internal data and evaluations formed during, and possibly before, a compliance review. This creates a heavy burden for contractors seeking to comply with their legal obligations, respond to a notice of violation or defend against a complaint alleging that their employment practices were statistically shown to have a discriminatory impact on a class or classes of individuals. Put simply, contractors are often fighting blind.

To be sure, this is only one ALJ ruling early in the litigation on an issue that ultimately could be reviewed on appeal. Nevertheless, requiring the government agency to provide, at least at the discovery stage, the factual basis for its determinations is a welcome development in ensuring a fairer process.

When contractors have questions about preparing for an OFCCP compliance review, participating in the conciliation process, or otherwise defending against discrimination allegations, they should contact experienced counsel for guidance.

For more information about this alert or other affirmative action issues, feel free to contact Kenneth A. Rosenberg at [email protected] or 973.994.7510 or Justin Schwam at [email protected] or 973.994.3313.