The Trump administration issued its first line item budget on May 23rd.  Among the items in the budget include the merger of the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP) by the end of Fiscal Year 2018.  These agencies have two separate roles and separate laws they enforce, but overlap when it comes to discrimination enforcement. The EEOC investigates worker-reported violations of federal nondiscrimination statutes and tries to reach worker settlements. The OFCCP regulations require federal contractors to audit themselves for possible discrimination and conciliates if the agency discovers issues not identified or acted on by the federal contractor.

However, in recent years, the OFCCP has moved away from compliance and affirmative action and towards traditional discrimination enforcement, in effect, the EEOC’s little brother.  At first blush, given the change of the agency’s priorities in the Obama administration, it would seem that the merger would be reasonable.

In fact, the budget recognizes the possible duplicative nature of resources:

The 2018 Budget proposes merging OFCCP into the EEOC, creating one agency to combat employment discrimination. OFCCP and EEOC will work collaboratively to coordinate this transition to the EEOC by the end of FY 2018. This builds on the existing tradition of operational coordination between the two agencies. The transition of OFCCP and integration of these two agencies will reduce operational redundancies, promote efficiencies, improve services to citizens, and strengthen civil rights enforcement.

To facilitate the consolidation and reduction of staff, the OFCCP budget justification envisions the establishment of two Skilled Regional Centers to replace its current structure. The centers would be located in the Pacific (San Francisco) and Northeast (New York) regions, staffed by “highly skilled and specialized compliance officers capable of handling various large, complex compliance evaluations in specific industries, such as financial services or information technology.  It also reduces the need for a network of field area and district offices.” These centers were previously proposed under President Obama’s FY 2017 budget and under the Bush administration; a form of this approach was run by then Midwest Regional Director Sandy Ziegler.   

Further, the budget proposes reducing OFCCP’s budget from approximately $105 million to $88 million and headcount from 571 to 440 by Fiscal YE 2018.  The budget also envisions greater technical assistance by the agency as well as a focus on mega construction ($25 million or more) and pay discrimination.  What’s interesting about this approach is that of all the pay cases that were settled during Fiscal Year 2016, none were systemic.  Presumably, that might change with this new approach.

To make this merger work legally, President Trump would have to amend EO 11246 to transfer responsibilities from the Department of Labor to the EEOC, and Congress would have to amend Section 503 of the Rehabilitation Act and Section 4212 of the Vietnam Era Veteran Readjustment Assistance Act (VEVRAA) to transfer the enforcement authority to the EEOC.  The agency is charged to create the legislation and updated EO.

This proposal has made some interesting “bedfellows.”  Both the U.S. Chamber of Commerce and the NAACP are fighting this proposal.  When asked about the proposed merger both Camille Olson, a Partner with Seyfarth Shaw, testifying on behalf of the U.S. Chamber of Commerce, and Todd Cox, Director of Policy for the NAACP Legal Defense and Education Fund, Inc., opposed the merger on the grounds that the EEOC and the OFCCP are vastly different organizations with different operational goals, missions and approaches.  "When you have the NAACP and the Chamber of Commerce criticizing the same initiative, it probably shouldn't go through," said Rep. Bobby Scott (D-Va.).

Although President Trump can easily amend an Executive Order, Congress could override it, although it is not likely. If the merger did go through, Acting Chair Lipnic knows the agency quite well.  She oversaw the agency as Assistant Secretary of Labor for the Employment Standards Administration.

So how would compliance look under the EEOC?  One approach that could be taken is to have a certification requirement for federal contractors at the time of the filing of the EEO-1 that confirms that the contractors are complying with the EO. The EEOC can then conduct compliance checks of the contractors to see if a plan is in place and possibly touch more of the contracting community than in the past.  And to audit the contractor community, it could bring back Active Case Management that was instituted under the Bush Administration to facilitate a greater number of audits.  However, the business community is understandably perturbed by the merger, since an OFCCP/EEOC audit could give rise to a Title VII investigation making for a messy situation for a contractor.  If here could be a legal guarantee of a separation between audits and EEOC investigations - a safe harbor for contractors (like there is for EEOC mediation and investigations) - it may be less likely that business groups will object to the proposal.

Source:  DCI 5/23/17, Jackson Lewis 5/23/17, Seyfarth Shaw 5/23/17, Politico 5/23/17