In this podcast, shareholders Chris Near (Columbia) and Lauren Hicks (Indianapolis, Atlanta) discuss federal contractors' and subcontractors' obligations in unwinding Executive Order (EO) 11246, which mandates affirmative action programs for women and minorities. Lauren and Chris focus on the new administration's EO 14173, the ongoing requirements for affirmative action programs for veterans and individuals with disabilities, and the necessary adjustments contractors must make to their policies, self-identification processes, and internal communications.
Transcript
Announcer: Welcome to the Ogletree Deakins podcast, where we provide listeners with brief discussions about important workplace legal issues. Our podcasts are for informational purposes only and should not be construed as legal advice. You can subscribe through your favorite podcast service. Please consider rating this podcast so we can get your feedback and improve our programs. Please enjoy the podcast.
Lauren Hicks: Thank you for joining us today. My name is Lauren
Hicks. I'm a shareholder at Ogletree's Indianapolis
office. And I'm joined by my colleague Chris Near, a
shareholder in our Columbia office. And we want to cover some of
the steps that federal contractors and subcontractors ought to be
thinking about with their obligation to unwind Executive Order
11246. We'll probably be spitting out a lot of numbers here
today, Chris. So Executive Order 11246, for those who are not
aware, was the executive order that had been in place for a number
of decades that required affirmative action programs for women and
minorities.
When Donald Trump issued his Executive Order 14173, which
I'll call the Trump executive order so we don't have
too many numbers flowing out there. It said Executive Order 11246
of September 24th, 1965, equal employment opportunity is hereby
revoked. For 90 days from the date of this order, federal
contractors may continue to comply with the regulatory scheme in
effect on January 20th, 2025. Chris, that leaves us with a deadline
approaching on April 21st to have the 11246 obligations unwound.
That is very specific to the federal contractor race and sex
affirmative action program. It does not include other diversity and
inclusion initiatives, which are a separate issue also discussed in
the same Trump executive order, but this is specific to those
affirmative action obligations. Chris, can you also help us
understand what else are we not talking about here?
Chris Near: Yeah, so making sure we understand that with 11246 and what's been revoked, like you said, we're dealing with sex and race and ethnicity, so women and minorities. What we're not talking about today and the things that we're talking about unwinding under 11246 are not things related to individuals with disabilities under Section 503 of the Rehabilitation Act or protected veterans under VEVRAA. So, when we're talking today about things that need to go away or maybe be revised, just keep in mind we are not talking about changing the things related to disability and veterans regulations. So, how about let's start by talking about those 11246 obligations that contractors will want to first stop. Want to talk to us about that, Lauren?
Lauren Hicks: Chris, contractors are going to continue doing
their veteran AAP, they're going to continue doing their
individuals with disabilities AAP, but they are not going to do an
AAP for what might be called women and minorities or race and sex.
Those AAPs are no longer required. That's something that was
created on an annual basis that had affirmative action programs and
some other action-oriented programs, so that obligation no longer
exists. One other framework that federal contractors have gotten
used to, along with those race and sex AAPs, is using the concept
of job groups. So, regulatory job groups that were required to
bucket employees by content, opportunity, and wages no longer exist
either. That's not to say the term job group couldn't
theoretically be used by an employer. You would want to proceed
with caution, I guess, if you were going to continue using the old
regulatory scheme because, again, federal contractors have been
instructed to stop using the old regulatory scheme.
And then, if you have an AAP that expires… Let's say
you have an AAP that runs July 1, 2024, through June 30th, 2025,
Chris, that AAP would still be active come April 22nd. And so, I
would recommend that employers with a date like that strongly
consider taking an affirmative step and adding some language to the
AAP to make clear that it's void, something to the effect of
effective April 20th, 2025, the race and sex AAP under Executive
Order 11246 is void, and no further action is required. You stamp
that on it somewhere, add that language just to make clear that
this is no longer a live AAP. If you have old AAPs that are
expired, maybe you had a calendar year 2024 AAP, for instance, it
might not hurt to go ahead and do the same thing. Additionally, one
thing that I think employers will want to think about is their
messaging to internal stakeholders regarding the rescission of
these obligations.
So, you probably want your executive team to be keenly aware that
we're no longer preparing affirmative action programs for
race and sex so that they don't get confused, and
you'll want to explain that the affirmative action
obligations for disability and status do continue. The other
stakeholder crest that I think you would want to make keenly aware
would be the recruiting team, and that's because they are
used to implementing those affirmative action goals for race and
sex. Sometimes, they would get a report once a year, and
they'd be aware of particular goals for women or minorities.
A lot of applicant tracking systems had functionality built in
where you could integrate the goal, and every time an applicable
job would pop up you would automatically see and be aware of and
have requirements for certain recruiting elements under that
goal.
Contractors are going to want to be clear with the recruiting team:
“We no longer have affirmative action goals based on race or
sex. Now, again, we are going to still have some outreach
obligations related to disabilities and veterans, but no longer for
women or minorities.” Chris, contractors who've been
complying with 11246 for any period of time likely have things
posted or incorporated into various company documents that might
need to be removed. What should they think about?
Chris Near: It's important to consider this point because
all of the things that have been happening with the administration,
things we've seen with the EEOC, DOJ, even just individuals,
a lot of that is going to be based on what is being seen
externally. Obviously, we need to be aware of what we have
internally and externally, but the easiest thing to be seen is all
of these things that we have externally. And some of the things
we're talking about are, for example, on our careers webpage.
For example, on our careers webpage, we likely have posters up so
that applicants who come to that site and are able to submit an
application. To this point, under 11246, there have been certain
posting requirements. One of those, for example, is the pay
transparency non-discrimination provision. And so that poster would
be on a career website, it would be in a handbook, it may be in
other places up on bulletin boards.
Since that was a product of 11246, that is something now that needs
to be looked at coming down. There are other things, for example,
if you have on your website a EEO affirmative action policy. Now,
EEO policies are still good to have when we're talking about
all of these different protected groups, but the references to
affirmative action, particularly with respect to 11246, is
something that needs to be looked at to be revised and probably
pulled out of those policies. And so, again, those are things that
you probably have really in a couple of different spots, so you
need to make sure that you inventory exactly what you've got.
Along the same lines, there too are things like taglines, things
that you may have on your job postings, or just generally on other
places that are listing EEO-related stuff. Again, some of those
will have references to 11246 or affirmative action, and you need
to make sure that those are also taken care of.
Another thing is with respect to flow-down clauses. Before the
revocation of 11246, there were a number of provisions that would
need to be included in flow-down clauses. Again, not with respect
to section 503 in VEVRAA. Again, those must still be included in
flow downs, but you need to make sure that if those flow downs
haven't been looked at and possibly revised in the last
couple of months, then that very well may include things that have
now been revoked under 11246. So, very important to take a look at
that as well.
Some other things to potentially remove. A lot of times,
contractors will be sending out certain notifications or
communications to workforce agencies about their government
contractor status, and so there very often are references to
Executive Order 11246 in those communications, and contractors need
to be aware of that again. I mentioned taglines, those could be
obviously in job postings that are on a career web page, but think
about also too solicitations that might go out externally as well.
A lot of times taglines get put on a posting or some kind of a
social media site, things like that.
Lauren Hicks: What is a tagline, Chris?
Chris Near: A tagline is typically a small statement that we have at the bottom of a solicitation, at the bottom of a job posting, or even at the top, I keep saying bottom, it's often at the bottom, but it can be at the top or somewhere else, of a job description. But typically, what you'll see is you'll see something that references equal-opportunity employers. A lot of times before you would have seen, before 11246 was revoked, a reference to minorities or women, and even now we'll continue need to make sure we have references to disabled and veterans.
Lauren Hicks: And then, Chris, you talked about the EEO policy, what is that different and distinct from the EEO tagline? Can you help our listeners understand the distinction?
Chris Near: Very often, an EEO policy is a much longer statement. It includes more information about which protected groups are included. It'll cover what types of employment actions need to be covered within those protections. There often will be references to non-discrimination, to harassment, to prohibitions of retaliation. There'll be references in an EEO policy for who to contact if there's ever any of those issues may arise. Again, we're talking about veterans and disabled, I realize that's not an unwind, but in an EEO policy, you'll also have reference to who to contact if certain narrative portions want to be reviewed, versus a tagline, which, again, is a much smaller, typically less than a sentence long explanation.
Lauren Hicks: That's really helpful, Chris. Can I ask one more question that I've been getting asked on almost daily basis, the EEO policy, the one that we had to have endorsed by the top ranking U.S. official, can we do away with that now? It seems like maybe that could be eliminated. Or do I still need that on my website?
Chris Near: You still ought to have that on the website. And that's, again, something you need to look at revising because what is listed on there, the protected groups, the references to laws, things like that, you need to take a look and see if that is still applicable, if it's still relevant. Again, some of this in the last couple of months has gone away, some of it has continued, so certainly it's something that you probably want to take a look at. But that is still something good to have on your website. Lauren, tell us a little bit about self-identification of applicants. I know that's been a hot-button topic recently. We still need to have self-identification of race and of sex for our reporting obligations once folks become employees, but there's been a little bit of discussion and debate and maybe even a little bit of confusion about what to do at the applicant stage. Can you walk us through and clarify that for us?
Lauren Hicks: Absolutely. And one other issue to address right
off the bat, Chris, is that the obligation to solicit applicant
information for disability status and for veteran status, remember
we talked about this at the very beginning, but those laws are
unchanged by the Trump executive order, and so you will absolutely
continue collecting your veteran and disability status for both
applicants and at the point of onboarding and hire. So, this is
probably the issue, the self-ID for race and sex is probably the
issue that most requires a really quick affirmative decision on the
part of the entity. And there really unfortunately are not going to
be a lot of clear, easy answers. Since it's no longer
federally required for federal contractors as it has been for such
a long time, federal contractors do not have to solicit that
information to meet your federal contractor obligations. But one
thing that's really important, Chris, for all employers to
think about that they got to ignore before, because we had the
federal preemption, but there are actually several states that have
obligations.
It might be by virtue of having operations in the state, it could
be having remote employees in the state, or maybe it's
because you are doing contracting with the state. But either way,
there are several avenues that an employer can be subject to a
state law that might require or prohibit soliciting race and sex or
some combination thereof for applicants. So, you might want to
consider state obligations, which is a little bit of a complicated
patchwork. Setting aside those state law obligations, you might
consider how can you meet monitoring requirements, some employers
want to monitor from a non-discrimination standpoint their
applicant and hiring process and see if they're complying
with Title VII. So that's one consideration. There might be
uniform guidelines considerations.
But we know that the EEOC has taken a particular interest in this
area, and they seem concerned to say, “Look, if you are
soliciting this information of race and sex from applicants, we
might make the presumption that it's being unlawfully used as
a basis for hiring. In other words, a basis to discriminate.”
So, employers who continue soliciting this information want to
think about a couple of things, Chris. They're going to want
to check their introductory statement that proceeds the self-ID.
And the reason for that is oftentimes it might say something like,
“We solicit the race and sex data to comply with our federal
contractor obligations.” So, if you elect to continue
soliciting that information, you'll really want to review
your introductory language and make sure to update it
accordingly.
Chris Near: What we're talking about, is it more of a legal thought or is it more of a risk assessment, or is it maybe a little bit of both?
Lauren Hicks: That's a really good question, Chris. I
think it's both. There certainly could be state law
considerations proceeding with solicitation of the self-ID or not
soliciting the self-ID. And then on top of that, now you have other
considerations. Maybe there's compliance issues. As a federal
contractor, you want to maybe monitor your nondiscrimination or
maybe under Title VII you would want to do that monitoring. So, I
don't think there are a lot of clear answers. I do think a
significant portion of this comes down to risk tolerance. Chris,
the other weird consideration here is that oftentimes applicant
tracking systems are not sophisticated enough to be able to toggle
a question on and off.
So, for an average employer to think about maybe, okay, in state X,
I'm going to turn that question on and, state Y, I'm
going to turn the question off, it's not realistic for an
average applicant tracking system, there might be some out there
that can do that, but that would also require the employer to,
again, track down on a requisition by requisition basis, which
states they would need to comply with, which seems pretty
burdensome. So, the other major consideration if you continue to
solicit this information will be to preempt this presumption that
the EEOC is alleging. I think you would want to be very careful,
double-check those IT protections, Chris. This information should
be tightly, tightly safeguarded, you should have a very small
number of people, a handful or less, who have access to this
data.
They should only be able to access it at an aggregated level. No
one who is involved in recruiting, selection, hiring in any way
should have access to this information. And to be clear, when I say
access, I mean not just that it's not openly visible, but
that they cannot toggle to that information by clicking on some
links within the system. That's something you just work with
your systems team and make sure that it's very clearly walled
off and that you have a nice trail for who's accessing that
data and when, so that you could use that to defend, if you had to,
in any type of investigation. Chris, as far as unwind, we've
talked about the self-ID and several other considerations, anything
else that the contractor should be thinking about or reviewing as
part of this unwind process?
Chris Near: Yeah, it's a lot to cover. We've talked
about stuff to maybe stop, stuff to review, maybe some stuff to
pull down, some other things to keep in mind. And you made some
great points about the self-ID and with respect to applicants and
whether the self-identification of applicants continues or not,
whatever that decision might be for companies, one of the things to
continue to do is be sure that you are continuing to disposition
your applicants throughout the hiring process. I realize that that
may not necessarily be an “unwind issue,” but I think
it goes hand in hand with a lot of the other things that
we're talking about today. Because if the decision ultimately
is not to continue to self-ID race and sex, then another possible
avenue to do some analyses, whatever you might need to do, maybe to
look at those dispositions and figure out where these folks might
be falling out of a hiring process.
So, one thing, even if the process for identification of applicants
might fall away, the rest of the hiring process remains very much
important from the time that a recruiter might disposition someone
because they don't meet minimum qualifications on through
hiring. Now, I know I mentioned minimum qualifications, folks who
have been federal contractors and dealt with applicant tracking
systems for a long time will understand that the internet applicant
rule guided contractors with how they ought to keep people in or
pull people out of an analysis and things like that. The Internet
Applicant Rule was an animal of 11246, but I think the things that
were done because of the Internet Applicant Rule can still be a
very helpful tool for contractors, so do keep that in mind.
Other things to review too with respect to where we might see
references to 11246 or affirmative action under 11246, things like
trainings, particularly EEO type trainings, harassment trainings,
there very well might be some things baked into those trainings
that might need to be revised, removed, things of that nature.
We've talked about policies. It's not just EEO
policies. A lot of times companies will have a lot of different
policies that talk about what their approach is to
non-discrimination, to no harassment, no retaliation. And, again,
references that we're talking about today very well may find
their way into some of those policies as well.
But generally, just think about what employment activities you do
on a regular basis, on a daily basis, where might we have these
affirmative action or 11246 type issues in and around those
activities, those are the kinds of things that now is the time, and
time is taking here now that we're in April, time is taking
to inventory what's actually there and take some action on it
if needed. We've been talking to this point really about what
is supply and service and construction I think we've talked
about could be handled on both those sides, but, Lauren, anything
additional that we can call out specifically for our construction
contractors?
Lauren Hicks: Yeah, quickly for our construction contractors, we no longer have the race and sex obligations that you were used to with the 16 steps, so maintaining hours worked by construction trade, asking unions for employee referrals, those types of things. And then, additionally, some construction contractors are probably very relieved to hear, Chris, that they no longer have to report subawards through the NCAP. And they were on the verge of having to start doing this demographic data, monthly employment utilization report called the CC257, it would've just gone into effect around this time actually, and that report is no longer going to be happening. So, contractors that were concerned about meeting those obligations no longer have to worry about meeting those obligations, Chris. With that, is there anything else we want to let the listeners know today to wrap up?
Chris Near: No. And one thing just to mention with the NCAP portal, and this really is with all of the portals, because I think we've gotten a number of questions about, “Am I going to have to do this because I've had to certify in this portal or that portal, I've had to provide this information?” OFCCP's website has taken a bit of an overhaul, might be an understatement, but those portals don't seem to be active right now, at least as of the time that we're taping this podcast. That's not to say that they may not pop up down the road. So, certainly, while we talk about this today and NCAP portal or any of the other portals that may currently be inactive, by the time you listen to this podcast and down the road certainly that might be a difference, something that just be aware of that, this is a very constantly changing landscape that we're dealing with and this is just one tiny piece of it. So, that's about all I've got. And Lauren, anything else to wrap us up?
Lauren Hicks: Yeah, you're right Chris, it's a super volatile space. Stay tuned. Changes all the time. And I will just make one more quick note that OFCCP did name a new director last week. So, some had thought, well, the agency is just going to die off, it's getting killed by this administration. We don't yet know exactly what they're going to be doing, if it's exclusively focused on veterans and disabilities, it certainly will include that, but it sounds like they may intend to look into some other areas, this DEI space that the administration is keenly interested in. So, stay tuned, things are changing, and we will update as there are updates from OFCCP. Thank you for joining us today.
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