I do not normally blog more than once a week. You would be surprised how time-consuming writing a blog entry really is. Also, I don’t like to have blog entries that cannibalize each other. Rather, I like to have a blog entry get a chance to stand on its own for a while. That gives me a better idea as to what the interest might be in a particular subject matter. That said, with the final rules issued by the Office of Federal Contract Compliance Programs dealing with affirmative-action of persons with disabilities, I felt compelled to make an exception in this case. Also, I refer the reader again to the disclaimer on my blog site so that the reader keeps in mind that the opinions expressed here are my own and do not necessarily represent the opinions of any organization that I may be associated with or any clients that I may represent or advise.

Turning to the matter at hand, back in February 2012, I wrote a blog entry on the Office of Federal Contract Compliance Programs proposed rules dealing with affirmative-action and persons with disabilities. They have now issued the final rules.

The promise of the Americans with Disabilities Act was that it would improve the workforce participation of persons with disabilities. It hasn’t happened. Therefore, the federal government is beginning to go further. The final regulations mandate affirmative-action for persons with disabilities for every government contractor that has 50 or more employees and a contract of $50,000 or more. They also amend the nondiscrimination rules so as to be consistent with the Americans with Disabilities Act Amendments Act. The nondiscrimination rules apply to all government contracts and subcontracts in excess of $10,000 for the purchase, sale or use of personal property or nonpersonal services (including construction). Nonpersonal services include, but is not limited to: Utility, construction, transportation, research, insurance, and fund depository.

A detailed look at the final regulations would be way beyond the scope of this blog. However, we can highlight. First, the final regulations are divided into five parts, A-E plus two appendices. Part A, B, D, E , apply to everyone. Part C, the affirmative-action obligations, as noted above , only applies to government contractors with 50 or more employees in a contract of $50,000 or more. Second, the substantive changes in the regulations are really straightforward. The changes are made to be consistent with the Americans with Disabilities Act Amendments Act and will not be a surprise to anyone familiar with the regulations implementing that act issued by the Equal Employment Opportunity Commission. Third, the final regulations only apply to employment activities within the United States and not to employment activities abroad. Finally, a mandated equal opportunity for workers with disability statement must be used and must be in the form required by the Office of Federal Contract Compliance Programs. Interestingly enough, the very first paragraph of that form uses language that was in the Americans with Disabilities Act and was stricken from the Americans with Disabilities Act as amended. More specifically, the first paragraph of this statement says, “the contractor will not discriminate against any employee or applicant for employment because (emphasis added) of physical or mental disability…” However, the Americans with Disabilities Act Amendments act deleted the word, “because” in favor of, “on the basis of.” The difference is more than academic as the change to, “on the basis of” allows for the argument that a plaintiff may be able to use the mixed motive line of attack in a case. Whereas, the, “because” language has been held to prohibit a plaintiff from being able to use the mixed motive line of attack. See Serwatka v. Rockwell Automation Inc., 591 F.3d 957 (Seventh Circuit 2010).  As mentioned previously in my blog entry dealing with the proposed regulation, it seems that the office of federal contracting compliance is using “because,” and “on the basis of,” as synonyms. For reasons mentioned in a variety of blog entries that I have written on before, I am not sure that that is an argument that withstands scrutiny.

For those contractors subject to the affirmative-action rules, some of the highlights include. First, an employer can ask a person to voluntarily self identify as an individual with a disability at the pre-offer stage as well as after receiving a job offer. The pre-offer stage refers to when the employer is actually considering a job seeker for employment. The federal contractor also has to regularly invite current employees to voluntarily self identify on a regular basis, at least every five years. With respect to self identification in general, the Office of Federal Contract Compliance Programs has a prescribed form that is to be used.

Second, federal contractors subject to the affirmative-action requirements are mandated to take affirmative-action to advance in employment qualified individuals with disabilities at all levels of employment, including the executive level.

Third, the information collected for affirmative-action purposes is to be kept in the data analysis file and not in other places. While affirmative-action is mandated, the process must ensure that individuals with disabilities are not stereotyped. This is not a small concern. Back in college, I did work for the state of Illinois with respect to section 504 to Rehabilitation Act and was involved in assessing whether the affirmative-action program was working. What we found was that the program was not working because when a person saw that a person had a disability on their form, they immediately went into stereotype mode and wrote the person with a disability off. That was many years ago and society was different. While we are many years later, that issue hasn’t gone away. Accordingly, the federal contractor needs to think about an affirmative-action plan design that can get around this problem.

Fourth, organizations subject to subpart C of the regulations get a year to become compliant.

Fifth, federal contractors have a three-year recordkeeping requirements with respect to the data they collect.

Sixth, the Office of Federal Contract Compliance Programs notes that it is a best practice for electronic or online job application systems to be compatible with assistive technology (such as screen readers and voice dictation). I would argue that this would be required by title I of the ADA and § 504 of the Rehabilitation Act in any event.

Seventh, an employer subject to the affirmative-action requirements, must consider an applicant with a disability for any available position they qualify for within the company when the position that they did apply for is unavailable.

Eighth, specific data collection requirements are mandated.

Ninth, in the proposed regulations, there were elaborate reasonable accommodation procedures that needed to be followed. In the final regulation, the elaborate reasonable accommodation requirements have been dropped. Instead, those requirements so to speak are now just reference points and can be found in two different appendices that the federal contractor can look at for guidance.

Tenth, utilization goals are set. That is a percentage, 7 %, is set as a goal for the government contractor to meet with respect to persons with disabilities being in their workforce. Furthermore, it is broken down by specific jobs rather than as an aggregate. The exception to that is if the federal contractor has 100 or less employees than the 7% utilization goal becomes one that applies to the entire organization rather than to specific job groups.

Eleventh, employers subject to the affirmative-action requirements, are encourage to voluntarily develop and implement programs that provide priority consideration to individual disabilities in recruitment and/or hiring.

Twelfth, the equal employment opportunity clause, which is quite extensive, is not required in the contract but an Office of Federal Contract Compliance Programs prescribed equal employment opportunity statement is.

Thirteenth, the federal contractor is given the ability to put a person with a disability into the affirmative action statistics even where that person with a disability doesn’t volunteer or self identify as having a disability. The office of Federal contract compliance programs says that this has been done for years with respect to other protected groups and that it should be no different for persons with disabilities. That may be true, but those other protected group do not deal with the issue of whether a person is perceived as having a disability. The Office of Federal Contract Compliance Programs recognizes that problem. In their view, affirmative-action data goes into a separate file, a data analysis file, and is kept confidential and away from personnel files. Also, the office of Federal contract compliance programs notes that perceiving a person as having a disability is not enough to create a problem under the ADA as there also has to be intentional discrimination. The Office of Federal Contract Compliance Programs says that you can put such a person in the disability affirmative action statistics if you are not guessing or speculating or assuming that the person has a disability or if the disability is obvious. I understand where the Office of Federal Contract Compliance Programs is coming from. However, if a person is being put into the disability statistics without their consent, and then that person isn’t hired, it would seem that an argument could be created that there would be some linkage between being perceived as having a disability (being put in the disability affirmative-action pile), and not getting the job.

Fourteenth, the federal contractor needs to have a schedule for periodic review of all physical and mental job qualification standards.

Fifteenth, the federal contractor must do affirmative-action program audits and document actions to comply with the audit findings.

Finally, the final regulations have provisions in there for dealing with what must be in the complaint, a process of conciliation, and when a show cause order will be sought by the Solicitor of Labor with respect to any enforcement proceedings.

Again, none of this is meant to be all-inclusive (the final regulation and its commentary go on for over 200 pages). However, this is a start. Anybody needing specific advice in this area should seek competent legal counsel.

Here’s the thing. Did the Office of Federal Contract Compliance Programs slit their own throat with respect to their discussion of the 7% being a utilization goal rather than a quota? An argument can be made that they did. Consider the following.

First, the Office of Federal Contract Compliance Programs states, “an affirmative-action program is more than a paperwork exercise and includes reasonable objective quantitative analysis and internal auditing and reporting systems.” That means the imposition of a substantial burden on the employer is intended by these regulations.

Second, the Office of Federal Contract Compliance Programs states that the 7% utilization goal is not a quota and it does not require a disability-based decision making. Failure to reach the 7% utilization goal results in no fine, no penalty, and no sanctions. Rather, the goal is just a tool to measure effectiveness and only triggers a critical review of the contractor’s employment practices. It goes on to say that the 7% goal is rationally related to a legitimate governmental interest and that persons with disabilities are in the rational basis class.

Given this, how does it all play out. As regular readers of my blog know, the classification of persons with disabilities under the equal protection clause is a big interest of mine, which we have discussed many times. Further, how a person with a disability is classified under the equal protection clause may extend beyond sovereign immunity. For example, in one blog entry , I discussed how a governmental entity defended on the ground that the law went beyond the ability to enforce the equal protection clause of the 14th amendment and therefore was invalid. In my opinion, the language contained in the comments discussing why the final regulations are what they are with respect to the classification in equal protection jurisprudence of persons with disabilities sets up a constitutional challenge to affirmative-action under the Rehabilitation Act, especially in terms of how these regulations carry it out. As we have discussed previously in other blog entries, the lower the classification, the less likely a comprehensive scheme to address the problem will be upheld. Here, the Office of Federal Contract Compliance Programs is saying that persons with disabilities are in the lowest classification. The proposed regulations impose quite a substantial burden on employers, which include by the way state entities (the equal protection clause applies to States and to the federal government through the Fifth Amendment due process clause). Accordingly, since we know that persons with disabilities are in the rational basis class under title I of the ADA when it comes to employment, an argument exists under Board of Trustees of University of Alabama v. Garrett that this scheme is too comprehensive to be proportional to the harm being addressed (employment discrimination against persons with disabilities), to be consistent with enforcing the 14th amendment to the U.S. Constitution. Please note, I am not saying that the 7% quota is a good or bad idea, rather I am laying out some of the highlights of the regulations and then positing that under the law as it exists, a credible argument can be created that this entire scheme is unconstitutional as it is arguably not a proportional enforcement of the equal protection clause under the 14th amendment. The Office of Federal Contract Compliance Programs would have been better off arguing (which would be a difficult argument in light of the Board of Trustees of the University of Alabama v. Garrett decision), that persons with disabilities were not in the rational basis class. As we have discussed before, it isn’t a given that persons with disabilities are in a rational basis class to begin with, and under the case law as it currently stands, the equal protection class that persons with disabilities are in is going to vary depending upon the facts. A response that the Office of Federal Contract Compliance Programs has to this is that the affirmative-action program just a matter of data analysis and doesn’t involve disability-based decision-making. I understand that. However, one wonders how an affirmative-action program would work in terms of reaching its goal if disability-based decision-making, albeit one in favor of persons with disabilities, was not happening.

Summing up: For those contractors with the federal government that have more than 50 employees and a contract of $50,000 or more, there is a lot here. Further, I only scratched the surface and the contractor and/or their attorneys would do well to thoroughly read these final regulations to understand all of their obligations. Also, I definitely look for a constitutional challenge to these regulations saying that the affirmative-action requirements of the Rehabilitation Act, particularly when these regulations are added to it, are a response that is not proportional to the harm seeking to be redressed and therefore are unconstitutional.

3 Responses to Affirmative action and persons with disabilities part two and did OFCCP set up a constititutional challenge to torpedo all of it

On March 21st, 2014, the District Court for the District of Columbia in Associated Builders and Contractors, Inc. v. Patricia A. Shiu validated the affirmative action regulations with respect to persons with disabilities issued by the Office of Federal Contracting Compliance Programs. Their reasoning was:
1) that § 503 of the rehabilitation act specifically authorizes affirmative action; the Office of Federal Contracting Compliance Programs had the authority to issue the affirmative-action regulations because the Rehabilitation Act itself authorizes the executive agency to formulate regulations implementing section 503;

2) there isn’t any statutory definition of what taking affirmative-action means. Accordingly, the executive agency has the right to define the scope of the affirmative-action requirement and has broad authority to do so;

3) it is permissible to do data collection, data analysis and utilization goals as such things are encompassed within the plain meaning of what the term affirmative-action means;

4) within the ADA itself, the legislative history was such that Congress intended to permit covered entities to invite applicants for employment to indicate whether they have a disability as part of their affirmative-action obligations;

5) the affirmative-action regulations are a permissible construction of § 503 of the Rehabilitation Act because the text of that statute grants unqualified authority over the scope of affirmative-action requirements to the executive. Therefore, the agency’s interpretation is entitled to deference;

6) the regulations are not arbitrary and capricious because: A) applying data collection requirements to the pre-offer stage, where employers are already doing it in other stages, doesn’t meaningfully depart from past practice; B) data analysis requirements are necessary because otherwise it is nearly impossible for the contractor and the Office of Federal Contract Compliance Programs to perform even basic evaluations of the availability of individuals with disabilities or to make any sort of objective quantitative-based measurements at how effective contractor outreach and recruitment efforts are; C) the Office of Federal Contracting Compliance Programs with respect to the utilization goal consider the factors relevant to a decision and articulate a rational connection between the facts found in the choice made. In particular, the Office of Federal Contracting Compliance Programs utilized what statistics were available and using those statistics came up with a reasonable goal.

7) the final regulations do not violate the regulatory flexibility act and the Office of Federal Contracting Compliance Programs estimate as to what it would cost small businesses was reasonable.

All this may be true. However, the elephant in the room so to speak is that nothing in this decision addresses whether the final regulations are a proportional response to the harm being redressed per the equal protection and due process clauses of the U.S. Constitution. Therefore, what this decision says is that an attack on the regulations arguing that they either exceed the authority given to them under section 503 of the Rehabilitation Act or that they are arbitrary and capricious could well fail. However, it remains to be seen if given the proper plaintiff how a court will attack the equal protection/due process clause arguments, which I mentioned in the main entry.

OFCCP has now issued final rules requiring affirmative action for gays and lesbians. The rules can be found here: https://www.federalregister.gov/articles/2014/12/09/2014-28902/implementation-of-executive-order-13672-prohibiting-discrimination-based-on-sexual-orientation-and my colleague and fellow ABA top 100 blogger Jon Hyman blogs about it here: http://www.ohioemployerlawblog.com/2014/12/feds-impose-lgbt-affirmative-action-on.html .

It is pretty clear in terms of handwriting on the wall that eventually gays and lesbians will be able to marry in this country. The critical question is what will be the equal protection standard that will apply. If the equal protection standard is the same as for persons with disabilities in employment, rational basis, then I have serious reservations as to how affirmative action requirements will be upheld. Keep in mind, I have not reviewed these affirmative action requirements and compared them to the affirmative action requirement for persons with disabilities. Such review could change the calculus as to the likelihood of such regulations surviving.

The Office of Federal Contract Compliance Programs has just published a checklist, which can be found here:

http://www.dol.gov/ofccp/regs/compliance/ChecklistforCompliancewithSection503_JRF_QA_508c.pdf

A couple of thoughts.

1) Much of the checklist would be very useful with respect to conducting an ADA compliance audit focusing on employment practices;

2) The other part of the checklist focuses on specifics of an affirmative action program, and I am still waiting for a federal contractor to bring a challenge to the affirmative-action regulations, which as noted above and in my opinion, is likely to be successful.

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