Steering: A Case Study Matthew J. Camardella Jackson Lewis P.C. Long Island, NY camardem@jacksonlewis.com 631-247-4639
About Jackson Lewis P.C. Represents management exclusively in every aspect of employment, benefits, labor, and immigration law and related litigation 800 attorneys in 57 locations nationwide Current caseload of over 6,500 litigations approximately 650 class actions Founding member of L&E Global A leader in educating employers about the laws of equal opportunity, Jackson Lewis understands the importance of having a workforce that reflects the various communities it serves 2
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About Our Affirmative Action & OFCCP Practice Group Our practice group of approximately 40 lawyers, statisticians and data analysts prepares over 3,500 affirmative action plans ( AAPs ) annually for our federal contactor clients. Since 2011, we have defended over 350 OFCCP audits, including successful defense of Corporate Management ( Glass Ceiling ) Compliance Evaluations. As a law firm, we offer more than consulting services, we offer strategic thinking and sophisticated legal representation. 4
About Matthew J. Camardella Matt is a Shareholder in the Affirmative Action Practice Group at Jackson Lewis P.C., a national firm representing management exclusively in labor and employment matters. In this role, he regularly advises and counsels employers from all industries throughout the country about this legally specialized area of law. He directs the preparation of more than 500 AAPs each year and has defended hundreds of OFCCP audits, including Corporate Management Compliance Evaluations, for a broad range of employers across the country. As part of our Pay Equity Resources Group, Matt also spends significant time assisting clients with the design and implementation of pay equity analyses. Moreover, Matt serves as the Practice Group lead on responding to OFCCP allegations of systemic discrimination and has successfully resolved dozens of such claims. Matt serves as General Counsel to the Executive Board of the American Association for Access, Equity and Diversity. In addition, he regularly presents to Industry Liaison Groups and other employer organizations around the country on EEO, affirmative action and diversity issues, including the Philadelphia Liberty ILG, for which he serves as Counsel. Matt received his B.A. from the College of the Holy Cross in 1993 and graduated with honors from Hofstra University School of Law in 1997. While at Hofstra, he was Editor-in-Chief of the Hofstra Labor Law Journal and received the Award for Outstanding Performance in Labor and Employment Law. 5
Lawyer s Disclaimer The materials contained in this presentation were prepared by the law firm of Jackson Lewis P.C. for the participants reference in connection with education seminars presented by Jackson Lewis P.C. Attendees should consult with counsel before taking any actions and should not consider these materials or discussions about these materials to be legal or other advice. 6
Today s Agenda Define the concept of Steering Discuss OFCCP s recent focus on Steering Explore OFCCP s investigative techniques Illustrations through case studies Share strategies and best practices 7
8 Steering Defined
What Is Steering? Steering occurs when: A contractor has policy or practice of directing applicants into, or placing/keeping employees in, certain groupings resulting in areas of concentration ( AOC ) based on race or gender AND The practice affects terms and conditions of employment o o o Pay, commissions, OT, shift assignments Promotional opportunities, training Work environment 9
OFCCP Guidance OFCCP s Directive 307: Includes reference to steering in definition of systemic discrimination States that [t]he CO should examine employee access to opportunities affecting compensation, such as: higher paying positions, job classifications, work assignments, training, preferred or higher paid shift work, and other opportunities 10
OFCCP Guidance Federal Contract Compliance Manual (FCCM): Addresses steering in section dealing with corporate management compliance evaluations ( CMCEs ) States that COs should note any concentration of a particular race or gender Also states that [a]t the onsite, the CO should... review personnel files and conduct interviews to ensure that the presence of any concentrated race/gender groups in staff positions... is not resulting from steering either at or after hiring 11
Where Can Steering Occur? Hiring (and, placement) Shift assignment Location assignment (routes, sales territory) Work conditions (hot/cold/outside) Selection for training & development Assignment to certain types of clients/ projects/work opportunities 12
OFCCP s Recent Focus on Steering 13
Why Is OFCCP Interested? OFCCP and EEOC have investigated steering issues in the past, but current approach represents a more focused level of investigation/enforcement Steering has not traditionally been a pay issue, but OFCCP has recast it that way Obama Administration has emphasized reducing the gender pay gap Steering represents convergence of two recent OFCCP focal areas in systemic discrimination: Failure to hire Pay equity 14
How Does OFCCP Benefit from of this Theory? Two-for-One : Hiring and Pay Freedom to define unit of analysis EEO-1, Job Group, Department, Job Title, Type of Job ( heavy duty vs. light duty ) No rules regarding how much concentration is too much OFCCP may find steering even without underutilization, adverse impact in hiring, or regression analyses 15
Traditional Steering Red Flags Areas of concentration by race or sex. Job Group, Department, Job Title, Work Areas OFCCP observations while on-site Employee comments during an on-site Adverse impact in hiring or promotions Pay analysis reveals concentrations at the low (or high) end of the pay spectrum Availability inconsistent with incumbency 16
17 Recent Cases
Early Signs of Success from OFCCP Industrial Laundry Company (Nov. 2015) OFCCP found: 444 women were steered into light duty (lower-paying) laundry jobs Men were steered into heavy duty (higher-paying) jobs and denied opportunity to compete for lower-paying positions Race violations affecting African American and Caucasian applicants $1.8 million settlement Must extend offers to 136 employees 18
Early Signs of Success from OFCCP Laboratory (05/27/2015 - $115,000) 57 men who applied for shipping positions were discriminated against because shipping jobs stereotyped as female jobs Manufacturing Company (07/30/2015 - $235,000) 300 African American and White applicants not hired due to stereotype that Hispanics work harder Home Improvement Store (10/01/2015 - $83,000) 46 Women were funneled into cashier positions while men were assigned to more lucrative sales positions Remedy shared by unsuccessful applicants and hires 19
Understanding OFCCP s Methods 20
How Does OFCCP Investigate? No bright line rule regarding how to analyze Units of analysis Threshold to conclude the areas of concentration are a problem Similar to flexible approach OFCCP uses with Pay Analysis Groups ( PAGS ) under Directive 307 (Compensation). Potential groupings for steering analysis: EEO-1 Category Job Group Job Title Types of Jobs 21
How Does OFCCP Investigate? Deep dive into pay Starting salary Bonuses/incentive pay Opportunities for overtime Merit and promotion-based increases Employment history Closely examining job descriptions Similarly-Situated Similarly-Qualified 22
How Does OFCCP Investigate? Even Deeper Dive into Hiring Process Requests applicant flow data even where there are no statistical indicators Seeks detailed written descriptions of hiring and placement process Interviews hiring managers and recruiters Interviews successful and unsuccessful applicants Requests applications and interview notes 23
How Does OFCCP Investigate? OFCCP also focuses on Promotions/Transfers: Are employees stuck in the concentrated areas? OFCCP investigates even if there are no indicators of adverse impact in promotions Employment history for employees in concentrated areas Description of promotion process Evidence that information about promotional opportunities is widely-shared 24
How Does OFCCP Investigate? Will OFCCP examine good faith efforts to recruit women/minority applicants in underrepresented job groups in its analysis of steering issues? Potentially yes! OFCCP may seek big picture of the overall recruitment process, which may involve outreach efforts If OFCCP identifies an AOC, it may closely scrutinize the contractor s good faith efforts and posting with the state job service 25
26 Case Studies
Case Study 1: Manufacturing Compliance reviews of multiple establishments Initial issue under investigation: hiring disparity between men and women for production jobs 6 standard deviations 53 person shortfall At first glance, presented as garden variety failure-to-hire claim, but transformed into steering case because: Women and men hired into different roles Different positions paid differently Societal stereotypes emerged 27
Case Study 1 (cont d.) OFCCP investigation focused on: Understanding hiring process Applicant, new hire and managerial interviews Review of application records Company defense rested on self-selection Females less interested in more physically demanding roles Defense undermined by information collected by OFCCP during investigation: Applicants applied to generic production position No record of applicant preference Management statements regarding who is appropriate for which positions men s work vs women s work 28
Case Study 1 (Cont d.) Outcome: $500,000+ and over 100 job offers 29
Case Study 2: Information Technology Initial issue under investigation: compensation differences between men and women within the same job group (made up of two different types of customer service roles) At first glance, presented as a typical pay discrimination claim, but transformed into steering case because Both types of roles entry-level Difference in starting rates of pay 30
Case Study 2 (Cont d.) OFCCP investigation focused on: Understanding hiring process Applicant, new hire and managerial interviews Review of application records-phone screens Company defense rested on technical expertise No adverse impact overall Men more likely to have experience with technical troubleshooting 31 Defense undermined by information collected by OFCCP during investigation: Applicants applied to generic customer service position Technical skills not operationally defined Two different types of phone screens Phone screen notes incomplete and inconsistent Regression analyses did not show so-called technical skills predicted likelihood of hire in more technical roles
Case Study 2 (Cont d.) Outcome: Almost $200,000 and job offers 32
Do YOU have a Steering Problem? 33
Proactive Self-Analysis: Find the Problem before OFCCP Does During annual AAP preparation: Workforce Analysis Look for AOCs by job title, department and function Job Group Analysis Identify potential AOCs by EEO-1 category, job group, job title, full time/part time status, desirable v. non-desirable job duties, etc. Utilization Analysis Are placement goals aligned with AOCs? Impact Ratio Analyses Are statistical red flags aligned with AOCs? Compensation Analysis Are concentrations apparent? 34
Proactive Self-Analysis: Find the Problem before OFCCP Does Above and Beyond the AAP Conduct Impact Ratio Analysis by Job Title (or other relevant units of analysis) Get creative with Utilization Analyses Job Title Reverse Analyses Conduct a self-audit Interview managers regarding areas of concentration Review selection decisions - - in real-time Application Screen Disposition codes Review applicant records complete, consistent 35
36 Wrap-up and Take-aways
Wrap-up OFCCP is taking a new and more focused approach to steering issues to evaluate potential systemic discrimination in the workplace Agency has already been successful in obtaining six-figure settlements under this new approach Contractors should take proactive steps to identify potential steering issues before OFCCP does 37
Steering Do s and Don ts DON T Allow applicants to apply for any or open or production Require application for specific opening If interested in more than one opening, apply separately for each DO Document applicants self-selection, particularly if choosing lower-paid job over higher one Revisit disposition codes 38
Steering Do s and Don ts DON T Allow hiring managers to consider or hire applicants for positions for which they did not apply If during interview, manager or applicant discuss another open position, have the applicant reapply for that position DO Look beyond traditional analyses to proactively identify steering red flags Applicant-to-Hire adverse impact and utilization analyses may mask a problem if done only by Job Group Use your Workforce Analysis to identify concentrations/ underrepresentations 39
Questions? Matthew J. Camardella Jackson Lewis P.C. 58 South Service Road Suite 250 Melville, New York 11747 631-247-4639 camardem@jacksonlewis.com Visit our blog: Affirmative Action & OFCCP Law Advisor 40
Thank You! 41 WWW.JACKSONLEWIS.COM