The Trump administration’s proposed fiscal year 2018 budget includes a merger of the Office of Federal Contract Compliance Programs (OFCCP) and the Equal Employment Opportunity Commission (EEOC). If the budget is approved, the OFCCP, which has jurisdiction over federal contractors, would merge into the EEOC, which has jurisdiction over private and public employers; forming a combined super equal employment opportunity enforcement agency.
Background of the two agencies
The OFCCP enforces Executive Order 11246, the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA), and Section 503 of the Rehabilitation Act (Section 503), which together prohibit workplace discrimination, harassment and retaliation on the basis of sex, race, national origin, color, religion, sexual orientation, gender identity, disability and covered veteran status for covered federal contractors and subcontractors. Affirmative action is required on the basis of sex, race, national origin, disability, and covered veteran status in all employment decisions. The OFCCP takes a more proactive approach when enforcing nondiscrimination, requiring federal contractors to draft affirmative action plans that provide equal employment opportunities. The OFCCP audits federal contractors and subcontractors and can impose penalties and citations through the administrative process. Once OFCCP finds areas of noncompliance, it engages in conciliation with the contractor.
The EEOC enforces workplace equal employment opportunity laws on the basis of sex (including gender identity and sexual orientation), pregnancy, race, national origin, color, religion, disability, age and genetic information under several federal laws within its jurisdiction. The EEOC cannot impose fines or penalties; it must file a lawsuit in federal court to enforce the laws within its jurisdiction. The EEOC also does not audit employers, but instead relies on employee charges of discrimination, harassment or retaliation.
Criticism of the proposal comes from both sides
The way in which the two agencies differ in their respective missions and the enforcement of those missions has caused the proposed merger to be the subject of much discussion about whether the agencies could effectively merge. Both sides are against the proposal. The US Chamber of Commerce and the NAACP (and 73 other civil rights groups) separately wrote Congress in opposition to the proposal, which presently is the subject of a Congressional hearing.
If merged, the EEOC would gain access to the OFCCP’s extensive compliance information provided by contractors, potentially allowing EEOC employees to look beyond reported violations of Title VII and impose harsher penalties based on other areas of noncompliance. Additionally, federal contractors who refuse to conciliate may be subject to punitive and compensatory damages from the EEOC division for systemic discrimination in addition to the OFCCP’s noncompliance penalties. Basically, employer groups fear that the combined agency would use the broadest powers of each agency to pursue greater enforcement.
The budget also proposes a 16 percent reduction of the OFCCP’s current funding level (from $105 million to $88 million) and a reduction of 131 full-time employees from the workforce (a nearly 23 percent reduction). The EEOC is currently backlogged with cases and operates on few resources, so expanding the mission of the EEOC will likely further reduce the number of cases that get resolved in a timely manner. Those who argue against combining the agencies question whether the EEOC could handle a greater workload if it is unable to manage its current workload.
Are there any benefits to a potential merger?
The merger is ideal for some stakeholders because both agencies engage in overlapping nondiscrimination and equal employment opportunity missions. Thus, the merger could be more cost-effective, resulting in management efficiency, the sharing of enforcement data and improved customer service.
Further, if the government could assure that the enforcement arms would operate separate OFCCP audits and EEOC investigations without excessive information sharing, business groups in favor of the monetary savings may get behind the proposal. So far, too much is uncertain for business group support of the proposal.
Is this likely to ever occur? Is it even possible?
Before the merger occurs, President Trump would need to amend Executive Order 11246 to transfer the legal responsibilities of the OFCCP to the EEOC, which can easily be done through executive order. Additionally, Congress will need to amend Section 503 and VEVRAA to transfer jurisdiction for enforcement to the EEOC, which has been done in the past for the ADEA (age discrimination) and Equal Pay Act, and approve the proposed budget in its entirety.
We will continue to monitor this proposal and track any developments.
Many thanks to summer associate Kristen Lawrence for her assistance in preparing this post.