U.S. Department of Labor Administrative Law Judge Linda S. Chapman has ordered Bank of America Corp. to pay 1,147 African American job applicants $ 2,181,593 in back wages and interest for race-based hiring discrimination at the company’s Charlotte facility. The order highlights the high price that employers that are government contractors can face if unable to defend their hiring, promotion, recruitment or other employment practices against race or other discrimination charges brought by the Office of Federal Contracts Compliance Programs (OFCCP), Equal Employment Opportunity Commission (EEOC) or other applicable federal agencies. See Judge orders Bank of America to pay almost $2.2 million for racial discrimination against more than 1,100 African-American job seekers. With the Obama Administration’s long commitment to proactive enforcement and expansion of affirmative action and discrimination laws, government contractors and other employers should take the order as another reminder of the need to remain constantly diligent in the effort to ensure that their employment practices and programs are designed, administered and documented to position their organizations to prevent and defend against charges of discrimination, whether brought by OFCCP, the EEOC, another agency or private plaintiffs.
The ruling represents a major victory in a case that has spanned nearly two decades, during which Bank of America repeatedly challenged the authority of the OFCCP and follows an earlier ruling where the judge determined that the bank applied unfair and inconsistent selection criteria resulting in the rejection of qualified African American applicants for teller and entry-level clerical and administrative positions.
U.S. employment law generally prohibit U.S. businesses domestically or abroad from discriminating against applicants based on race, religion, national origin, sex, disability and certain other grounds. Where as was the case of Bank of America, the employer is a business that provides directly or as a subcontractor services and products, it must not only meet these generally applicable requirements, but also additional, tighter standards applicable to federal contractors under OFCCP’s regulatory requirements.
U.S. businesses are facing increased exposures to race and other employment discrimination risks as a result of changing requirements and the economic downturn. Always challenging, the Stimulus Bill amended OFCCP’s requirements to expand the scope of businesses subject to OFCCP’s requirements on federal contracts funded with Stimulus Bill monies including lowering the size of the contracts that are subject to these requirements. Meanwhile, the Obama Administration since taking office is following a proactive regulatory and enforcement agenda that facilitates the ability of the government or private plaintiff’s to identify and prove discrimination as well as proactively auditing and enforcing federal race and other discrimination prohibitions.
Enforcing federal discrimination laws is a high priority of the Obama Administration. The Departments of Labor, Health & Human Services, Education, Justice, Housing & Urban Development, and others all have both increased enforcement, audits and public outreach, as well as have sought or are proposing tighter regulations.
The expanding applicability of nondiscrimination rules coupled with the wave of new policies and regulatory and enforcement actions should alert private businesses and state and local government agencies of the need to exercise special care to prepare to defend their actions against potential disability or other Civil Rights discrimination challenges under employment and a broad range of other laws.
Government contactors and subcontractors as well as other employers should review these rules to assess their potential impact, as well as evaluate the adequacy of already existing practices and documentation with discrimination and other laws.
All organizations, public or private, government contractor or not, should act to ensure both that their organizations, their policies, and people in form and in action understand and comply with current federal nondiscrimination laws and that these compliance activities are well-documented to help defend against potential charges or other challenges. Because of changing regulatory and enforcement trends, organizations and their leaders should avoid assuming the adequacy of current compliance and risk management. Most organization should reevaluate their assessments concerning whether their organization is a federal government contractor or subcontractor to minimize the risk of overlooking critical obligations.
Many organizations need to update their understanding, policies and practices in light of tightening rules and enforcement. The scope and applicability of federal nondiscrimination and other laws have been expanded or modified in recent years by the differences in perspectives of the Obama Administration from the Bush Administration, as well as statutory, regulatory, judicial precedent and enforcement changes. In addition, all organization should conduct well-documented periodic training and take other actions to monitor and enforce compliance by staff, contractors and others with whom they do business.
For Help With Compliance & Risk Management and Defense
If you need help in auditing or assessing, updating or defending your organization’s compliance, risk manage or other internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.
Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, reengineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters. She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.
If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:
- New Final FLSA Rule Gives Home Workers Minimum Wage, Overtime, Other FLSA Protections
- HHS Share Model HIPAA Notices 1 Week Before Deadline For Updating Business Associate Agreements
- New DOL Guidance Makes Many Employers Rethink Giving FLSA 18B Exchange Notices
- Tell HHS What You Think About Obamacare & Other Rules
- Insist President & Congress Get Real About Health Care Reform
- Employers Beware! DOL-Model FLSA Section 18B Exchange Notice Requires Tailoring!
- IRS Publishes Final Health Reform Individual Shared Responsibility Rules
- Cascom Inc. Owner Must Pay Nearly $1.5 M After Company Misclassified Employees As Independent Contractors
- Government Contractors To Face Hiring “Targets” for Vets & Disabled Under Impending Rules.
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