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Steering: A Case Study
Matthew J. Camardella Jackson Lewis P.C. | Long Island, NY [email protected] | 631-247-4639
About Jackson Lewis P.C.
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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
About Jackson Lewis P.C.
Ranked in the First Tier nationally in the category of Labor and Employment Litigation, as well as in both Employment Law and Labor Law on behalf of Management, in the U.S. News - Best Lawyers® “Best Law Firms”
Recommended in U.S. Legal 500 for Labor and Employment Litigation, Labor-Management Relations and Workplace and Employment Counseling
Designated as a Powerhouse in both Complex and Routine Litigation in the BTI Litigation Outlook 2016: Changes, Trends and Opportunities for Law Firms
62 Jackson Lewis attorneys were named Leaders in Their Field by Chambers USA for 2015; 137 Jackson Lewis attorneys were selected for inclusion in the 2016 edition of Best Lawyers in America
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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.
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About Matthew J. Camardella
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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.
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.
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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
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“Steering” Defined
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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 Pay, commissions, OT, shift assignments o Promotional opportunities, training o Work environment
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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”
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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”
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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
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OFCCP’s Recent Focus on Steering
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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
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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
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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
Recent Cases
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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
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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
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Understanding OFCCP’s Methods
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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
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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”
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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
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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
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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
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Case Studies
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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
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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
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Case Study 1 (Cont’d.)
Outcome: $500,000+ and over 100 job offers
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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
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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
• 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
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Case Study 2 (Cont’d.)
Outcome: Almost $200,000 and job offers
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Do YOU have a Steering Problem?
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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?
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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
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Wrap-up and Take-aways
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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
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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
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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
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Questions?
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Matthew J. Camardella Jackson Lewis P.C. 58 South Service Road Suite 250 Melville, New York 11747 631-247-4639 [email protected]
Visit our blog: Affirmative Action & OFCCP Law Advisor
Thank You!
WWW.JACKSONLEWIS.COM
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