Google Settles Long Running OFCCP Audit - American Society of Employers - Anthony Kaylin

Google Settles Long Running OFCCP Audit

In a long running audit of Google by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), the two sides came to a settlement agreement just before the administration switched over.  It is an interesting agreement and may hold some implications for future audit settlements.

In 2015 Google headquarters was selected for a compliance evaluation by OFCCP.  In the course of the review, extensive compensation data was requested by OFCCP for the audit.   The data request required Google to collect, organize, and produce data requested in the scheduling letter for each of the approximately 21,000 employees at its headquarters on the snapshot date of September 1, 2015. In June 2016, OFCCP requested that Google submit additional, more extensive and greatly more detailed data, relating to compensation.  And then in September 2016 OFCCP asked for more information including citizenship information.   Google produced all these requests for data.

However, OFCCP also requested a salary and job history of each employee going back to the founding of the corporation in 1998 for any long-term employees as well as the name, address, telephone number, and personal email of every employee listed in either the 2014 or 2015 snapshot data. OFCCP Regional Director at the time, and now California General Counsel for the Department of Fair Employment and Housing, Janet Wipper, explained that OFCCP needed to go back as far as 19 years “because OFCCP must look at every decision that impacted pay.” 

These overbearing and overbroad data requests were too much for Google, who refused to abide by the demand.  OFCCP then filed a lawsuit in the U.S. Department of Labor’s Office of Administrative Law Judges (ALJ), to require Google Inc. to provide requested data under a denial of access claim.  Google won when the ALJ ruled in its favor stating that the demand for data about Google employees made by OFCCP is “over-broad, intrusive on employee privacy, unduly burdensome, and insufficiently focused on obtaining the relevant information.” The ALJ also noted that “[d]espite having several investigators interview more than 20 Google executives and managers over two days and having reviewed over a million compensation-related data points and many hundreds of thousands of documents, OFCCP offered nothing credible or reliable to show that its theory about negotiating starting salaries is based in the Google context on anything more than speculation.”

Although the data requests were denied by the ALJ, the audit was still pending.  Just before the change of administrations, on January 15, 2021, Google and OFCCP settled the audit with some curious findings.  In the first two of three findings OFCCP alleged that “preliminary indicators . . . that, if proven, could result in a violation of Executive Order 11246.” In the last finding “OFCCP alleges Google may have failed to develop . . . action-oriented programs designed to correct the pay disparities . . . and an auditing system that periodically measures the effectiveness of the total affirmative action program.”  No where in the findings did either party agree that there was any violation at all. 

Yet there is a settlement of $2,585,052 to resolve backpay issues, if any, that may have been identified and a reserve fund of $250,000 per year for five years to pay for any pay disparity issues in a self-audit.  Any leftover monies from the reserve fund in a year are to be allocated to DEI programs.   The total value of the settlement is $3.8 million.

What was the incentive for Google to settle?  39 facilities are covered under this agreement and all have a Five-Year Exemption Period from any OFCCP audit.  The reporting requirements are not extensive.  Google’s reporting over the five years include a certification that it has updated its current year AAPs for Executive Order 11246 for all establishments required to have such AAPs and certify that pay equity analyses have been conducted in all covered establishments. At the end of Year 3 Google must also report on its hiring and salary policy/process review, including recommended actions or revisions to the compensation policies, procedures, and practices.  Finally, Google does have to report on the self-audit, and in Year Four Google agreed to give the OFCCP the actual pay analysis along with the individualized data so OFCCP can replicate.  OFCCP still has a compensation case settlement that arose from initial findings from the audit. 

It is unlikely that under the new administration settlements like these will continue. 

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