Many in-house counsel and human resources officials are aware that their company, as a federal contractor, is required to engage in affirmative action.  However, many are unaware of the significant risks associated with a compliance audit of their affirmative action program by the Office of Federal Contract Compliance Programs (“OFCCP”).

For example, did you know that when your company is audited by the OFCCP, it is required to provide information on all employees in your affirmative action plan being audited, including all applicants, hires, promotions, and terminations for the prior year? Did you also know that you are required to provide all compensation information, too? Can you imagine giving all of that information to the EEOC?  Well, as the last several years under the current administration has highlighted, when you give that information to the OFCCP, they are performing analysis and pursuing systemic claims based on that data, as the following string of stories from the OFCCP news wire in 2013 indicates.

• Judge orders bank to pay nearly $2.2 million for discrimination against 1,100 African American Job seekers.
• OFCCP settles wage discrimination case with company for $290,000 in back wages and interest to 78 affected Hispanic production associates.
• OFCCP resolves sex discrimination case with healthcare company on behalf of 77 men who applied for in-home care positions, each of whom will receive $92,000 in back wages and interest, and the company will make eight job offers to the class members as well as reform its hiring practices.
• OFCCP settles hiring discrimination case with a health plan company for $372,739 to be paid to one Asian, two Hispanic and nine African American employees.
• OFCCP settles sexual harassment and retaliations case with a construction company for $112,573 in back wages to 14 terminated workers and will make job offers as opportunities become available.
• OFCCP resolves hiring discrimination case with a contractor for $70,000 in back wages and interest to 14 affected workers and to extend at least six offers of employment – with retroactive seniority – as positions become available.
• OFCCP settles sex discrimination case with a non-profit charity for $130,970 to 200 men who were allegedly denied the opportunity to advance to the offer stage of the hiring process because of perceptions among some hiring managers that women are better at customer service.
• Hot dog manufacturer to pay 1,988 female applicants $439,000 to settle OFCCP suit alleging sex discrimination and will extend 700 job offers to affected women as positions become available.

Given the significant legal risk associated with this often overlooked area of compliance, we recommend that contractors carefully review their affirmative action program and hopefully avoid becoming a headline for 2014.  Stay tuned for our next two blog posts with more information on this important topic.