by Sophie E. Zdatny
At a recent Employers Counsel Network (ECN) conference in Alexandria, Virginia, several notable speakers stopped by to provide their insights on current developments in the employment arena at the national level and to share their predictions for President Barack Obama’s second term. Highlights include increased regulatory activity from the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP), greater focus on the classification of employees and compensation practices, continued activity at the National Labor Relations Board (NLRB) despite the Noel Canning decision, and growing public support for an increase in the federal minimum wage. 
As the first of a three-part series, this post will look at the recent personnel turnover at federal agencies, the extensive reach of the Occupational Safety and Health Administration’s Directorate of Whistleblower Protection Programs (DWPP), and enhanced enforcement efforts from the OFCCP.
Agency shuffle
Hilda Solis, secretary of the U.S. Department of Labor (DOL), resigned earlier this year, and President Obama’s nominee, Thomas Perez of the U.S. Department of Justice’s (DOJ) Civil Rights Division (CRD), is awaiting confirmation by the Senate. Perez’s background is in litigating practice-and-pattern cases, and it’s anticipated that if he’s confirmed, he’ll focus on wage and hour issues, including misclassification of employees.
On April 26, the Senate confirmed Jenny Yang to serve as an EEOC commissioner. Yang was among the lawyers who represented 1.5 million women in the Wal-Mart Stores Inc. v. Dukes sex discrimination class action. She also represented more than 28,000 female employees who alleged sex discrimination in a pay and promotion lawsuit against Boeing Company in Washington state. Before entering private practice in 2003, Yang was a senior trial attorney at the CRD. The EEOC has been operating with only four members since last year.
Whistleblower protection programs
Did you know that the DWPP isn’t limited to enforcing the Occupational Safety and Health Act (OSH Act)? The DWPP enforces more than 20 statutes, protecting employees who report violations of various workplace laws, including the Sarbanes Oxley Act (SOX), the Federal Railroad Safety Act (FRSA), the Consumer Product Safety Improvement Act (CPSIA), the Affordable Care Act (ACA), the Consumer Financial Protection Act (CFPA), the Clean Air Act (CAA), and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Each statute has its own provisions governing the number of days to file suit, whom it covers, the allowable remedies, the burden of proof, and so on.
Historically, the DWPP has been hampered by a lack of resources for enforcement, leading to a significant backlog in whistleblower claims. However, the agency is scheduled to receive an additional $5.9 million in fiscal year (FY) 2014.
The DWPP has 10 regional offices. Whistleblower complaints can be filed with any area, regional, or national office, in any language, and orally or in writing. The DWPP is currently developing an online complaint form.
Focus on ‘disincentive’ policies
Section 11(c) of the OSH Act prohibits employers from discriminating against employees because they report an injury or illness. Reporting a work-related injury or illness is a core employee right, and retaliating against a worker for reporting an injury or illness is illegal discrimination under Section 11(c). The DWPP is currently focusing on the use of so-called disincentive policies in particular industries, including railroads, airlines, and communications.
Disincentive policies are programs that unintentionally or intentionally provide employees with an incentive to not report injuries. For example, an employer might enter all employees who haven’t been injured in the previous year into a drawing to win a prize, or a team of employees might be awarded a bonus if no one from the team is injured over some period of time. Such programs might be intended to encourage workers to use safe practices, but they nevertheless can run afoul of Section 11(c).
The DWPP states that there are better ways to encourage safe work practices. For example, you may want to consider providing T-shirts to workers serving on safety and health committees, offering modest rewards for suggesting ways to strengthen safety and health, or throwing a recognition party at the successful completion of companywide safety and health training.
OFCCP’s ramped-up enforcement efforts
OFCCP regulates government contractors, including some healthcare providers. The government contractors regulated by the OFCCP include prime contractors, subcontractors, and some healthcare providers. Hospitals or other healthcare providers are not covered under the laws enforced by the OFCCP if their only relationship with the federal government is as a participating provider under Medicare Parts A and B and Medicaid. If, however, a hospital or other healthcare entity provides care to active or retired military servicemembers under a contract with the U.S. Department of Veterans Affairs (VA) or the U.S. Department of Defense (DOD), it may fall under the OFCCP’s jurisdiction. Teaching hospitals doing research for a university that has a contract with the federal government may also be covered.
On March 30, the U.S. District Court for the District of Columbia held that the OFCCP has jurisdiction over three University of Pittsburgh Medical Center (UPMC) hospitals. The court held that the UPMC hospitals qualified as federal subcontractors because they provided medical services to federal employees who are members of an HMO called the UPMC Health Plan. None of the hospitals held a federal contract, but the HMO held a prime contract with the Office of Personnel Management (OPM).
Focus on pay equity. The OFCCP enforces Executive Order 11246, which directs the DOL to ensure that federal contractors comply with their equal employment opportunity and affirmative action obligations. It also enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). Those three legal authorities require federal contractors to be proactive in ensuring equal opportunity on the bases of gender, race, color, religion, national origin, disability, or status as a protected veteran. The OFCCP is currently taking a lead on pay equity.
On March 1, the OFCCP issued Directive 307 on pay discrimination. Under the directive, the agency isn’t limited to reviewing employee pay. It also can examine other employment practices and opportunities that may affect compensation, including work assignments, training, preferred or higher-paid shift work, desired sales territories, promotions, and other opportunities for advancement.
The newly announced OFCCP compensation “methodology” effectively removes any standardized method for reviewing compensation and possibly substitutes a results examination for a consistent analytical framework. The OFCCP now proposes using “pay analysis groups,” and it’s unclear whether the agency will combine disparate jobs that might fall into different job groups or locations to justify conclusions about pay practices. If so, it will be a dramatic change in the accepted methodology of reviewing compensation under current law.
Game-changing disability regulations. In December 2012, the OFCCP released its proposed rules for Section 503 of the Rehabilitation Act. The proposed rules provide for specific actions federal contractors and subcontractors must undertake in the areas of recruitment, training, record keeping, and policy dissemination. Most significant, the rules would require federal contractors to set a hiring goal of 7% of their workforce being people with disabilities and 2% being people with severe disabilities, which include mental health issues, blindness, deafness, and missing limbs.
The Census Bureau has added data fields to the census to obtain information for the DOL on the number of available employees with disabilities. The record-keeping provisions in the proposed rules have been criticized as being unduly burdensome, requiring, for example, individualized reports on each applicant with a disability who wasn’t hired and anonymous surveys of the workforce to identify potential accommodations. The final rule was scheduled to be released in April, but we were still waiting on the rule when we went to press.
The next post in this three-part series will focus on how the NLRB keeps pushing forward with its agenda despite questions about the legitimacy of the current Board as well as recent operational changes at the EEOC.
Sophie E. Zdatny is an attorney with Dinse, Knapp & McAndrew, P.C. in Burlington, Vermont. She has a general litigation practice in both state and federal court, with a concentration in insurance coverage and employment law. She may be contacted at szdatny@dinse.com.