OFCCP Experiences Major Loss in Oracle Audit Case - American Society of Employers - Anthony Kaylin

OFCCP Experiences Major Loss in Oracle Audit Case

gavelIn 2014 the Office of Federal Contract Compliance Programs (OFCCP) initiated an audit of Oracle headquarters.  As the audit progressed, OFCCP contended that Oracle violated Executive Order 11246 by having discriminatory pay practices.  On March 11, 2016 OFCCP issued a Notice of Violation against Oracle which led a Show Cause Order on June 8, 2016.   OFCCP filed a lawsuit with the Office of Administrative Law Judges on January 17, 2017 after conciliation efforts broke down. 

This litigation was far from friendly.  Oracle had produced over 96,000 documents and provided over 85 million discrete fields of data.  OFCCP did not explain how Oracle violated the Executive Order in any detail and refused to do so on the basis of government privilege but was ordered to do so by the Administrative Law Judge (ALJ) in a 134-page opinion.  OFCCP also was alleged to leak details of the lawsuit to the press as well as engaging in a secret pact with plaintiff attorneys to provide them inside information to help them with other equal pay and pay discrimination lawsuits.

On September 22, 2020, the ALJ, in a 280-page decision, recommended that the case against Oracle be dismissed.  The ALJ stated the following:

1.       Oracle did not engage in intentional compensation discrimination (wage-rate, salary, or total  compensation) at its headquarters facility during the relevant time period against female employees in the Product Development, Information Technology, and Support job functions; or against Asian and African American employees in the Product Development job function.

2.       There is no plausible mechanism for systemic discrimination by the alleged wrongdoers. Lower-level managers are the primary decision makers in compensation outcomes, and the potential mechanisms of discrimination that are available to Oracle’s higher-level executives and HR personnel (budgeting, instructions, approvals) are not likely means for the sort of discrimination alleged. There is no evidence that these mechanisms were actually being used in a discriminatory manner beyond the inference urged by OFCCP.

3.       The statistical evidence does not support an inference that Oracle is engaged in the alleged intentional compensation discrimination. Dr. Madden’s analysis is highly aggregated and not attuned to potentially important differences between groups within job functions. Dr. Madden’s analysis does not similarly situate employees with respect to the work performed. The jobs at issue require particular skills, experience, and expertise. They involve work on particular products or types of product. Organization matters for compensation and for making relevant comparisons between employees. Dr. Madden’s measures of experience and education are very rough estimates and poorly capture the sort of education and experience that matters for compensation at Oracle. Dr. Madden’s analysis relies largely on assumption about aggregation and the view that it is unnecessary to control for variances between employees at a group level, but this assumes away the important question about potential explanations for the raw disparities and thus undermines the inferential power of the model.  

4.       Oracle did not engage in assignment, job classification, or steering discrimination at its headquarters facility during the relevant time period against female employees in the Product Development, Information Technology, and Support job functions; or against Asian and African American employees in the Product Development job function.

5.       The statistical evidence does not support an inference that Oracle is engaged in a pattern or practice of intentional steering discrimination against women and minorities as alleged. Dr. Madden’s model is poorly constructed to draw inferences about potential steering since it does not attempt to study steering and does not account for the major factor influencing the job an employee holds. The statistical evidence that might support an inference to discrimination could not support an inference to the systemic discrimination alleged by OFCCP.

6.       Oracle did not have a policy or practice at its headquarters facility during the relevant time period of relying on prior pay in salary setting, and OFCCP did not show a disparate impact attributable to such a policy on female employees in the Product Development, Information Technology, and Support job functions; or on Asian and African American employees in the Product Development job function.

Essentially, OFCCP failed to show any credible statistical evidence showing discrimination and any policy which would cause discrimination.  They viewed all issues in the aggregate and never identified any specific indicator to show that pay discrimination or assignment or steering was going on.  The long and short of it, OFCCP was arrogant in the handling of the case and failed to show any relevant and credible statistical evidence of discrimination.  We have been subject to years of harassment by Department of Labor employees with no evidence of discrimination whatsoever," said Dorian Daley, Oracle's General Counsel.  Daley continued, "This case never should have been brought in the first place."

In a ruling last Monday, October 5, 2020, the DOL's Administrative Review Board, which hears appeals of decisions issued by administrative law judges, issued an order that gives OFCCP until December 7th to challenge the order.


Source: PR Newswire 9/22/20, OFCCP v. Oracle America, Inc., 2017-OFC-00006 (September 22, 2020) 

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