Wednesday, June 21, 2017

The Unpopularity of the Proposed EEOC and OFCCP Merger

The Trump administration’s proposed budget for the upcoming federal fiscal year contains a streamlining proposal that is evoking strong opposition from both employer and employee groups. Namely, the administration has proposed merging the federal Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP).

Employers and employee rights groups are rarely on the same side of regulatory matters, but in this case, there is almost unanimous opposition to the proposed agency merger. Presumably, the Trump administration believes an EEOC and OFCCP merger is a plausible streamlining approach, because both organizations focus on enforcing federal laws focused on employment discrimination. Employee groups, however, worry that a merger will result in decreased enforcement efforts due to a lack of adequate agency funding, staff, and resources. The Trump administration’s merger proposal provides for the EEOC to absorb the OFCCP with no new financial resources to address merger logistics.

In turn, employers are concerned that a merger could result in new enforcement hammers for the EEOC. While the EEOC and OFCCP both enforce discrimination laws, their focus and enforcement models differ. The primary focus of the EEOC is to enforce federal anti-discrimination laws (e.g. Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Equal Pay Act). The OFCCP focuses on the other side of the discrimination coin – namely, affirmative action laws (e.g. Executive Order 11246, the Vietnam Era Veterans Readjustment Assistance Act, and Section 503 of the Rehabilitation Act) that require federal contractors to seek a diverse employee base through non-discrimination and proactive goal setting and recruiting measures. Under the current enforcement model, the EEOC has no inherent authority to impose monetary sanctions on employers, but can negotiate settlements with employers or litigate to a potential judgment. The OFCCP has more leeway, however, to conduct random audits of government contractors and, upon a finding of a violation, to negotiate a resolution that includes monetary sanctions given its authority to disqualify an employer from being a federal contractor. Despite funding and resource challenges, an agency merger might allow the EEOC to expand its enforcement efforts with respect to federal contractors through new audit and enforcement mechanisms.

It remains unclear, though, whether the Trump administration’s proposed budget will be approved and whether the proposed EEOC-OFCCP merger will occur. This same agency merger has been suggested by previous presidential administrations, but it has never happened. In addition, the EEOC’s and OFCCP’s authority stems from legal requirements that may need to be amended, requiring congressional action, in order for enforcement authority to be merged into one agency. As such, there are significant hurdles that must be overcome before a merger could occur. For now, employers should stay tuned, and we will update our readers if the proposed merger gains traction.

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