In recent weeks, the Office of Federal Contract Compliance Programs (“OFCCP”) has entered into four major settlements that are notable both for their size, and for highlighting current trends. Each case involved allegations of race and gender-based compensation discrimination, with settlements in the millions: Dell settled for $7 million to resolve the allegations, Goldman Sachs settled for just shy of $10 million, Intel Corporation settled for $5 million, and Bank of America settled for $4.2 million. These amounts represent some of the largest settlements ever reached by OFCCP.
Why technology and financial services firms?
In a carryover initiative from the Obama-era OFCCP, the Agency has continued its Centers of Excellence based in San Francisco (tech) and New York (financial services). Through this initiative OFCCP has set its sights on conducting deep and lengthy investigations of firms in these sectors. In addition to large settlements, OFCCP has pending enforcement matters against tech and financial services firms including JP Morgan Chase, Oracle and Google.
What are the novel terms of these agreements?
These settlements highlight OFCCP’s increased focus on its new Early Resolution Procedures (“ERP”) initiative, which was established in November 2018. Each of these settlements resulted from conciliation agreements negotiated through the ERP. The ERP allows for contractors with multiple establishments to resolve alleged issues across their entire corporation in exchange for an exemption from future OFCCP evaluations for five years. Given the recent track record of this new initiative, OFCCP will likely continue to focus on it in the months ahead.
What do we see in the future?
These settlements likely represent OFCCP’s push to close out many of its aged (more than two years) audits. However, they point out that the current administration is just as focused on investigating compensation discrimination as was the prior administration.
Employers, including federal contractors, should remain vigilant in pay equity practices and should undertake internal analyses to know where they stand. Stay tuned for updates on pay equity and the OFCCP.