Mister Chairman and Members of the Subcommittee:
My name is Shirley J. Wilcher, and I am the Deputy Assistant Secretary for Federal Contract Compliance, Employment Standards Administration, U.S. Department of Labor. I appreciate the opportunity to appear before the Subcommittee to discuss the Office of Federal Contract Compliance Programs (OFCCP), its mission and its efforts to promote equal employment opportunity in the American workplace. In particular, I would like to thank Chairman Fawell, with whom I met earlier this year, for inviting me to address the Subcommittee and I will try to respond to the issues referenced in your invitation to testify. I request that my written statement be entered into the record of these proceedings and I will briefly summarize my remarks.
As you know, President Clinton has asked for a comprehensive review of Federal affirmative action policies. The reasons for this review are: (a) to examine current Federal laws and regulations regarding affirmative action policies; (b) to analyze their effectiveness and relevance to the current economic climate; and (c) to recommend changes as appropriate. This review is ongoing, and I am advised that the President has drawn no conclusions and made no decisions about particular affirmative action policies. Until such time as the President's review has been completed, I can only respond to questions that pertain to the OFCCP and the enforcement of the nondiscrimination and affirmative action mandates under the laws we administer.
I do note, of course, that on June 12 the Supreme Court handed down its decision in Adarand Constructors, Inc. v. Pena. The decision has significant implications for Federal programs that accord minority preferences. However, Executive Order 11246 does not require the use of racial or gender preferences. The numerical goals approach, which implements the affirmative action provision of Executive Order 11246, is not based on racial or gender preferences in employment decisions. Rather, it is a mechanism designed to measure the success of contractors' good faith efforts at broadening the pool of qualified candidates for entry level or promotional opportunities. Quotas are expressly prohibited by OFCCP's regulations. Accordingly, the Adarand decision should not have an effect on affirmative action as it is implemented by OFCCP under Executive Order 11246.
While I cannot, in this forum, engage in a general debate about the Nation's affirmative action policies, I am pleased to discuss the OFCCP and its methods of administering the laws that have been entrusted to it. Additionally, I would like to discuss how we are also working to update our procedures, streamline our operations and improve our ability to respond to contractor and constituent needs.
Over the past few months there has been an extended national debate about affirmative action programs. At times, the debate has been characterized by historical inaccuracies, factual errors, and a complete misuse of the terms that describe these important public policies. Even worse, at times the discussion has degenerated to the point that reasonable voices could not be heard. I welcome the opportunity to appear before the Subcommittee to offer an informed, reasoned discussion about affirmative action as enforced by the OFCCP.
The Programs
OFCCP is responsible for the administration of three equal employment opportunity programs that apply to government contractors and subcontractors: Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 and the affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974. Taken together, these laws ban discrimination and require Federal contractors and subcontractors, as a condition of their government contracts, to take affirmative action to ensure that minorities, women, individuals with disabilities, special disabled and Vietnam era veterans have an equal opportunity to compete for employment.
Approximately 22 percent of the labor force (about 26 million workers) is employed by Federal contractors or subcontractors subject to the laws administered by OFCCP. In Fiscal Year 1993, OFCCP's covered Federal contractors included 92,500 non-construction establishments and an estimated 100,000 construction establishments. The Federal government awarded more than $161 billion involving 176,000 prime contracts in Fiscal Year 1993.
The requirement that government contracts contain a clause prohibiting the contractor from discriminating in employment on the basis of race, color, creed, and national origin has been an established part of Federal contracting policy since 1941 when President Roosevelt signed Executive Order 8802 outlawing discrimination in the Federal government and in the war industries. It has been strengthened by subsequent Executive Orders issued by five successive presidents -- Presidents Roosevelt, Truman, Eisenhower, Kennedy and Johnson.
The early Executive Orders prohibited discrimination alone.
Experience, however, indicated that something more than mere non- discrimination was needed to overcome the lingering effects of past discrimination and the continuing barriers that prevented minorities from being hired and promoted on the basis of merit. In its Final Report to President Eisenhower, the President's Committee on government Contracts, headed by Vice President Nixon, concluded:
Overt discrimination, in the sense that an employer actually refuses to hire solely because of race, religion, color, or national origin is not as prevalent as is generally believed. To a greater degree, the indifference of employers to establishing a positive policy of nondiscrimination hinders qualified applicants and employees from being hired and promoted on the basis of equality.
President Kennedy incorporated the concept of "affirmative action," into Executive Order 10925 which he issued in 1961. Affirmative action was not contingent upon a finding of discrimination. Rather, Executive Order 10925 imposed on all covered contractors a general obligation requiring positive steps designed to overcome obstacles to equal employment opportunity. In 1965, President Johnson issued Executive Order 11246, which assigned responsibility for the contract compliance program to the Secretary of Labor, and the Nixon administration issued regulations providing a blueprint for developing affirmative action programs (AAPs), including numerical goals, for the first time in 1970.
Executive Order 11246 is a lawful exercise of the President's authority to ensure that contractors doing business with the Federal government do not discriminate. This authority is well recognized by the courts; and the operation of the Executive Order program advances the statutory objectives of the procurement acts which grant the Executive broad discretion for the establishment of procurement policy.
I would like to provide an overview of what affirmative action is and is not.
WHAT IS AFFIRMATIVE ACTION UNDER EXECUTIVE ORDER 11246?
In the employment context, affirmative action is the set of positive steps that employers use to promote equal employment opportunity. Affirmative action under Executive Order 11246 refers to a process that requires a government contractor to examine and evaluate the total scope of its personnel practices for the purpose of identifying and correcting any barriers to equal employment opportunity. Where problems are identified, the contractor is required to develop a program that is precisely tailored to correct the deficiencies. Where appropriate, the contractor is required to establish reasonable goals to measure success toward achieving that result.
The regulations implementing the Executive Order, found at 41 CFR Part 60, set forth the procedures for implementing the nondiscrimination and affirmative action requirements. Under the regulations, a non-construction contractor or subcontractor, for example, a contractor that provides supplies and services to the Federal government with a Federal contract of $50,000 or more, and 50 or more employees, is required to develop a written AAP for each of its establishments. A written affirmative action program helps the contractor identify and analyze potential problems in the participation and utilization of women, minorities, Vietnam-era veterans and the disabled in the contractor's workforce. The affirmative action program is kept on file and carried out by the contractors. It is submitted to OFCCP only if the agency requests it for the purpose of conducting a compliance review.
Viable affirmative action programs have several core components. These core components are: problem identification (absences from and concentrations in certain occupations); self- analysis to determine cause(s) of problems; action oriented programs to overcome the problems; and, goals to reflect outcome from action programs.
The first step in developing an AAP is to prepare a workforce analysis, which is simply a "map" or diagram of the organization of the contractor's workforce and the representation of employees by race, gender and ethnicity. The workforce analysis can help the contractor determine whether there are jobs within the contractor's facility that either do not employ minorities and women or jobs that reflect a clustering or concentration of minorities or women. The result of the analysis may yield information that suggests that the groups are not being hired, advanced, or compensated as are other employees. The drafter of the AAP should then seek to determine, through self- analysis, how the absences or concentrations came about.
The contractor next prepares a utilization analysis, which involves three steps: (1) dividing the workforce into job groups; (2) determining the percentage availability of qualified minorities and women for each job group; and (3) comparing the utilization of minorities and women in the contractor's incumbent workforce with their availability for each job group and, where the contractor has fewer minorities or women in a job group than would reasonably be expected by their availability, establishing a goal. Where underutilization is identified by the contractor, OFCCP's regulations require that it assess its employment procedures to determine which, if any, have contributed to the underutilization, eliminate any such policies, procedures or practices that are unjustified, and initiateaction-oriented measures as part of its AAP.
The proactive measures might include the expansion of recruitment to include locations where qualified minorities and women may learn of job vacancies; the elimination of potentially discriminatory policies and procedures; and the inclusion of programs that facilitate the full participation of all employees in every aspect of the contractor's culture. The goal setting process is consistent with other corporate approaches to development and implementation of programs where measurement of overall accomplishments is essential to achieving goals.
By embracing the core components outlined herein, contractors will have addressed two inextricably linked contractual requirements of Executive Order 11246 --
nondiscrimination and affirmative action.
The goals component of affirmative action planning sometimes gives rise to the erroneous claim that Executive Order 11246 is a "preference" or "quota" program. It is critical that we correct these misconceptions and clarify the essential characteristics of the affirmative action requirements Executive Order 11246 imposes upon employers that contract with the Federal government.
ARE GOALS A SUBTERFUGE FOR QUOTAS?
No. The numerical goals component of the affirmative action programs under the Executive Order has never been designed to be, nor may it properly or lawfully be, interpreted as employment quotas or preferential treatment with respect to persons of any color, race, religion, sex or national origin. The Executive Order regulations are explicit on that point: "Goals may not be rigid and inflexible quotas which must be met, but must be targets, reasonably attainable by means of applying every good faith effort to make all aspects of the entire affirmative action program work." (41 CFR 60-2.12(e).)
In addition to the prohibition regarding quotas contained in the regulations, OFCCP (then OFCC) was one of the signatories to a 1973 inter-agency Memorandum that distinguished between goals and quotas. The 1973 Memorandum, which also was signed by the Department of Justice, the then Civil Service Commission and the Equal Employment Opportunity Commission (EEOC), was one of the earliest and most comprehensive policy statements on the subject. The Memorandum was cited with approval by Justice O'Connor in her separate opinion in Sheet Metal Workers v. EEOC, 478 U.S. 421, 495-496 (1986). The Memorandum described goals to be a numerical objective realistically established based on the availability of qualified applicants in the job market and expected vacancies. Quota systems, on the other hand, were described as "any system which requires that considerations of relative abilities and qualifications be subordinated to considerations of race, religion, sex or national origin in determining who is to be hired, promoted, or otherwise favored in order to achieve a certain numerical position...." There is no basis for the often repeated assertion that affirmative action requires employers to disregard the relative qualifications of employees and prospective employees. The numerical goals utilized by the Executive Order program meet the definition of goals as described in the 1973 Memorandum and not the quota systems the Memorandum also defined.
ARE GOALS INTENDED TO ACHIEVE PROPORTIONAL REPRESENTATION OR EQUAL RESULTS?
Not at all. Numerical goals do not create guarantees for specific groups, nor are they designed to achieve proportional representation or equal results. Rather, the goal-setting process in affirmative action planning is used to target and measure the effectiveness of affirmative action efforts to eradicate and prevent discrimination. While the employer's performance in achieving goals may indicate the effectiveness of that employer's current efforts, the goals are not ends unto themselves. Moreover, the numerical benchmarks are realistically established based on the availability of qualified applicants in the job market or qualified candidates in the employer's work force.
DOES AFFIRMATIVE ACTION UNDER EXECUTIVE ORDER 11246 REQUIRE EMPLOYERS TO HIRE OR PROMOTE WOMEN OR MINORITIES ON THE BASIS OF RACE OR SEX?
Absolutely not. No requirement exists that any specific position be filled by a person of a particular race, gender or ethnicity, even where the phenomena of jobs traditionally segregated by race or sex, remain intact. Instead, the requirement is to engage in outreach and other efforts to broaden the pool of qualified candidates to include groups previously excluded. The selection decision -- to hire, promote or lay off -- is to be made on a non-discriminatory basis.
This past year, OFCCP conducted a random survey of recent conciliation agreements obtained by the agency. One of the agreements required a contractor to correct an employment practice that discriminated against males, both whites and minorities, and to provide relief to both white and minority male victims.
DOES AFFIRMATIVE ACTION UNDER EXECUTIVE ORDER 11246 CONFLICT WITH THE PRINCIPLES OF MERIT?
No. In seeking to achieve its goals, an employer is never required to hire a person who does not have the qualifications needed to perform the job successfully; hire an unqualified person in preference to another applicant who is qualified; or hire a less qualified person in preference to a more qualified one. Thus, unlike quotas, numerical goals allow persons to be judged on individual ability, and are, therefore, entirely consistent with the principles of merit.
SHOULD GOALS BE TREATED AS A CEILING OR A FLOOR?
Neither. The Executive Order does not require that contractors treat goals as either a ceiling or a floor for the employment of particular groups. Goals establish neither a minimum nor a maximum number of individuals of any group that must be employed. Moreover, using numerical goals as a minimum or a maximum without regard to job qualifications would be an impermissible quota and in violation of the Executive Order.
WHAT IS THE STANDARD FOR COMPLIANCE UNDER THE EXECUTIVE ORDER?
The standard is and has always been "good faith effort." Good faith is measured by the extent to which the contractor has taken steps to overcome real and artificial barriers to nondiscriminatory employment. These steps include expanded recruitment of minorities and women, and increased training and educational opportunities. Compliance is never measured solely by whether the goals are met. Failure to meet the goals, for example, simply raises the question of whether good faith efforts were undertaken to achieve the goals, and to make the overall affirmative action program work. Failure to meet the goals by itself is not a violation of the Executive Order; and no contractor is sanctioned on merely numerical grounds. A recent random review of conciliation (settlement) agreements between OFCCP and Federal contractors has shown that this agency has not required quotas or insisted on the attainment of a goal without regard to job qualifications or the circumstances in which contractors operate and their good faith efforts.
IS AFFIRMATIVE ACTION UNDER EXECUTIVE ORDER 11246 SIMPLY A "RACIAL SPOILS SYSTEM"?
Unquestionably no. Critics of affirmative action have argued that affirmative action is a system of spoils for unqualified African Americans or Hispanics, and is intended to benefit only these groups. As indicated above, affirmative action under Executive Order 11246 is not, nor has it ever been, intended to require preferences.<2> Affirmative action does not entail the disregard of qualifications. Moreover, affirmative action at OFCCP is not merely a race issue, it is also a gender issue, a disability issue and a veterans' issue. Not only does OFCCP enforce Executive Order 11246, amended to include gender in 1967, it also enforces Section 503 of the Rehabilitation Act of 1973 and the affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974. Both statutes, signed into law by a Republican president, require affirmative action. Thus, mischaracterizing affirmative action as a preference or quota program for the unqualified misrepresents its scope, as well as its intent.
SHOULD AFFIRMATIVE ACTION AS IMPLEMENTED UNDER EXECUTIVE ORDER 11246 BE ABOLISHED BECAUSE IT STIGMATIZES ITS BENEFICIARIES?
Definitely not. Beneficiaries of affirmative action have no reason to be ashamed. Affirmative action is a rejection of employment discrimination rather than a reflection of the abilities of minorities, women, the disabled and veteran workers. Those who understand the intent of the architects of affirmative action under Executive Order 11246 know that all it essentially requires is that employers "cast a wider net"; that they make additional efforts to seek and recruit persons who may not ordinarily be considered for opportunities for positions in a company. Affirmative action requires employers who underutilize qualified women and minorities to extend beyond their usual networks, where they would be likely to find others resembling themselves, and locate qualified women, minorities, persons with disabilities or Vietnam-era veterans for consideration. Once identified, these persons should be allowed to compete with their counterparts without any diminution in standards or expectations. Moreover, one must compare any stigma of benefitting from affirmative action with the stigma and frustration of being unemployed or under-employed, and feeling altogether shut out despite one's qualifications.
HOW DOES OFCCP ADMINISTER THE CONTRACT COMPLIANCE PROGRAM?
In administering the Executive Order, OFCCP conducts compliance reviews to investigate the employment practices of contractors and subcontractors. The agency also investigates complaints of discrimination.
Compliance Reviews
Consistent with the dual mandate of Executive Order 11246 -- nondiscrimination and affirmative action -- a compliance review consists of an examination of the contractor's affirmative action program and a determination of whether there is discrimination in a contractor's employment policies and practices. In Fiscal Year 1994, the agency completed more than 4,000 reviews.
It is important to note that OFCCP only conducts compliance reviews of approximately 4% of the contractor universe. Even if we could perform compliance reviews of 100% of the contractor universe, I am not convinced that that would be an efficient use of scarce government resources or an effective way to monitor compliance.
We depend upon contractors to be in compliance independent of an OFCCP enforcement action. We know that many of them are, or at least intend to be as a matter of general corporate policy. But we also know, unfortunately, that a significant number of others are not, or that they have not been able to effectively provide equal employment opportunity at all times.
OFCCP uses a neutral computerized selection system in order to determine which contractor establishments will be reviewed in any given year. This system, the Equal Employment Data System, commonly referred to as the EEDS system, is based on the EEO-1 Employer Information Report form and information contained in OFCCP'S Compliance review information system. The EEO-1 is a joint project of EEOC and OFCCP under the auspices of the Joint Reporting Committee. Companies are required to submit annually an EEO-1 form to the Joint Reporting Committee. The EEO-1 form contains workforce demographic information for all employees at a particular establishment. Pursuant to EEDS, OFCCP selects for review those contractors most likely to have a compliance problem, as evidenced by their workforce data compared to the workforce data of similar contractors in the same geographic area.
A service and supply compliance review consists of two basic parts: an off-site review that we refer to as the desk audit and the onsite review. The desk audit begins with a request from OFCCP for the contractor's written AAP and supporting documentation. The contractor has 30 days to submit the information. This material is reviewed by the compliance officer to determine whether the material presented meets the requirements of the regulations. Employment data are analyzed to determine if members of a particular group are adversely affected by the contractor's employment practices. Potential problem areas and questions for further investigation are developed. For every problem area that is identified, an onsite investigative plan is developed.
The onsite portion of the compliance review covers the problem areas identified during the desk audit and an examination of the contractor's implementation of its affirmative action program. The onsite review begins with an entrance conference with the chief executive officer of the facility. At this meeting the compliance officer reviews the contractor's obligations and the scope of the onsite review. This portion of the review also includes visual inspection of the contractor's facility, interviews with management and non-management personnel, and the review of any pertinent records, such as personnel files and application forms. The onsite phase concludes with a closing conference during which the compliance officer discusses the findings.
Construction contractors are not required to develop written affirmative action programs under the Executive Order program and, therefore, the procedures for a compliance review of a construction contractor are slightly different. In order to take into account the fluid and temporary nature of the construction workforce, OFCCP does not require construction contractors to develop their own written affirmative action program. Instead, OFCCP has established the utilization goals based on civilian labor force participation rates, and has outlined in the regulations good faith steps for construction contractors to follow. The onsite review verifies the construction contractor's records of the number of hours worked by minorities or women in each trade and evaluates the contractor's affirmative action efforts to comply with its equal employment opportunity obligations. The review begins with a notification letter to the contractor that identifies the information that the contractor should have available for review. The steps in the onsite review process are the entrance conference, review of records, audit of the good faith steps required by the regulations, employee and supervisory interviews, physical inspection of the contractor's worksites, identification and resolution of any discrimination issues and the exit conference.
In addition, the compliance review procedures described above for non-construction contractors apply generally to the examination of written affirmative action programs developed by contractors and subcontractors for disabled veterans and veterans of the Vietnam-era, and for individuals with disabilities. These obligations are set forth in the regulations at 41 CFR Parts 60- 250 and 60-741. The AAPs under these two laws are requested and examined as part of the desk audit phase and additional elements are reviewed during the onsite portion of the review.
Complaints
OFCCP also responds to discrimination complaints it receives that involve a class of individuals or that indicate a pattern of discrimination. OFCCP's compliance review process uniquely provides an ability to review the contractor's entire personnel program and to address systemic discrimination. Complaints under Executive Order 11246 involving only one individual are usually referred to the EEOC pursuant to a Memorandum of Understanding between the two agencies. OFCCP also investigates complaints filed under Section 503 of the Rehabilitation Act of 1973, alleging discrimination on the basis of disability, or under the Vietnam Era Veterans' Readjustment Assistance Act, where disabled and Vietnam era veterans allege discrimination on the basis of their status as veterans. In Fiscal Year 1994, more than 800 complaints of discrimination were investigated.
Conciliation
Where problems are found, whether during a compliance review or a complaint investigation, OFCCP attempts to work with the contractor towards their resolution, often entering into an agreement to resolve problems. The remedies provided by an agreement may involve back pay, job offers, seniority credit, promotions or other forms of make-whole remedies to those who have been discriminated against. Where a contractor has underutilized members of the protected groups and has not made good faith efforts, the agreement may also involve new training programs, special recruitment efforts, or other affirmative action measures. In Fiscal Year 1994, OFCCP conducted over 4,000 compliance reviews and discovered violations of the Executive Order and the other laws it enforces in 73 percent of the cases. Over 99 percent of these violations were resolved through conciliation and negotiation and less than 1 percent were referred to the Solicitor of Labor's Office for formal administrative enforcement.
In that relatively small number of cases where conciliation efforts prove unsuccessful, OFCCP refers the case to the Solicitor of Labor for administrative enforcement proceedings under which a contractor is entitled to a hearing before an administrative law judge who then makes a recommendation for dispensation of the case to the Secretary of Labor. Where a settlement is not reached before or after a hearing, the Secretary of Labor may impose sanctions on the contractor where a violation of the law is found, including loss of its government contracts or debarment from future contracts. It is important to point out that OFCCP provides contractors with full due process rights in the administrative process and the contractors may appeal the Secretary's order in Federal court.
Where the Secretary finds that a contractor has discriminated against an individual or an affected class, the Secretary orders make whole remedies. These remedies may include back pay, a job offer, retroactive seniority, and fringe benefits. In a disability based discrimination case, the relief ordered may also include a reasonable accommodation.
OFCCP's enforcement strategy also includes a variety of initiatives which utilize innovative approaches as the agency seeks a more efficient use of resources by reviewing contractors where there is the greatest occurrence of violations or a history of compliance problems. We are testing several different operational strategies on a regional level. These initiatives highlight the pro-active nature of OFCCP's programs.
You requested that I address the differences between the OFCCP and the EEOC missions. As you can see from my description of the OFCCP programs, OFCCP and EEOC serve different purposes and therefore do not perform duplicative functions. Although both agencies are concerned with employment discrimination against minorities, women, and individuals with disabilities, OFCCP and EEOC play complementary roles. Pursuant to Executive Order 11246, OFCCP acts as the Equal Employment administrator in the Federal government's contracting system by requiring contractors to comply with their contractual equal opportunity obligations. These obligations include the development of affirmative action programs that monitor and evaluate the contractor's efforts to provide equal employment opportunity. These affirmative action efforts are aimed at preventing systemic as well as individual instances of discrimination through critical self-analysis on an ongoing basis. OFCCP promotes fulfillment of these obligations by conducting broad-based compliance reviews of Federal contractors' employment practices. In addition, OFCCP brings enforcement actions based on findings of failure to make a good faith effort to implement an affirmative action program or based on findings of discrimination by Federal contractors. In contrast, the EEOC is charged with enforcing the Federal anti-discrimination statutes which apply to employment. Its principal focus is on individual charges of discrimination; this year alone, nearly 100,000 charges of discrimination will be filed with its offices against private and public sector employers, unions and employment agencies including individual charges referred by OFCCP pursuant to the Memorandum of Understanding between the agencies.
OFCCP and EEOC are further distinguishable because of the differences between their legal mandates. As noted above, OFCCP enforces the affirmative action requirements of Section 503 of the Rehabilitation Act 1973 and of the Vietnam Era Veterans' Readjustment Assistance Act. In addition, OFCCP examines contractor's compliance with Title I of the Americans with Disabilities Act, the Immigration Reform and Control Act of 1986, Bureau of Apprenticeship and Training equal employment opportunity regulations, and the Family and Medical Leave Act of 1993. The EEOC on the other hand, enforces Title VII of the Civil Rights Act of 1964, Titles I and V of the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, and the Equal Pay Act. Further, the administrative apparatus of the two agencies also differs in many respects. For example, OFCCP's enforcement is pursued through the administrative hearing process within the Department of Labor and complainants have no private right of action.
HAS OFCCP HAD MUCH SUCCESS IN REDUCING EMPLOYMENT DISCRIMINATION?
Yes, progress has been made; but there is more work to be done. Research studies conducted in the 1980s documented that affirmative action had been effective in raising the occupational status of minority and female workers.<3> A similar conclusion was reached in a study of OFCCP-reviewed and unreviewed contractor establishments, with reviewed establishments showing a greater utilization of women and minorities in the higher-skilled and white collar jobs.<4> A recent staff analysis shows that contractor establishments show higher increases in employment of minorities and women in the top 3 EEO-1 categories during the 1980 - 1993 period when compared to noncontractors.
In spite of this progress, we know discrimination still exists. Studies such as the Glass Ceiling Commission report have provided evidence of continuing discrimination. Additionally, OFCCP's enforcement statistics provide a testament to the continuing problem of discrimination in America: back pay and other remedial relief worth nearly $40 million for 11,000 victims of discrimination were obtained in settlements in 1994 alone. During FY 1994, four debarments were also ordered for contractors who had violated conciliation agreements that had been previously entered to resolve violations of Executive Order 11246.
OFCCP is finding discrimination at the entry level as well as in the executive suite. From New York City to San Diego, Atlanta to Seattle, companies continue to deny access to women, minorities, veterans and the disabled. In banking, engineering, construction, computers, higher education, the hotel industry, manufacturing, utilities, and hospitals, OFCCP continues to find discrimination; no industry has been without discrimination.
In one fairly recent egregious example our compliance officers recently found at an Alabama bank, the personnel officer, in interviewing potential hires, had interview notes that revealed statements pertaining to race, the color of one's eyes, hair and other physical attributes. This bank official wrote:
Candidate A was attractive white female, blond hair, blue eyes teller type appearance... Candidate B [however was described as] very large lips and hips, overweight, dark skin, black girl. Her hair is longer than most. Appearance is not good enough to meet the public.
These are not the interview notes of a bank official in 1965; these are the perceptions, stereotypes and biases of a person working for a Federal contractor in 1995. And this is not an isolated case.
Other examples include a large manufacturer of business machines in California that agreed to a back pay settlement to 30 qualified individuals who were discriminatorily denied jobs on the basis of gender, race and national origin. The Washington, D.C. headquarters of an internationally known hotel and restaurant chain agreed to back pay and salary adjustments to 40 top-level women and minorities who were paid less than their white male peers. In addition, the firm agreed to review its compensation practices to prevent a recurrence of the wage disparity.
A suburban Washington, D.C. hospital was found to have engaged in gender-based salary discrimination. Back pay was given to 52 women in the top 6 grades at the hospital. More than 100 minority applicants for part-time meter reader positions benefitted when an Ohio utility agreed to a financial settlement to resolve charges of racial discrimination.
A nationally known poultry processor in Texas agreed to back pay for 82 qualified individuals with disabilities who were discriminatorily denied employment. There are dozens of African- American women in Southern California who benefitted when a hotel there agreed to provide back pay to resolve charges of race and sex discrimination in hiring. The hotel also agreed to consider them for job openings as they occur. In the State of Washington, veterans who were discriminated against by a utility, benefitted from the OFCCP's settlement in which the contractor agreed to provide back pay, training and hire a specialist to address veterans issues. And in resolving a case involving a Minnesota manufacturer, more than 6,000 women who were victims of gender discrimination were eligible to share in a multi-million dollar settlement.
These enforcement cases illustrate the importance of the contract compliance program, and how nondiscrimination and affirmative action are intertwined. Had these contractors successfully implemented an effective affirmative action program, we believe they would either have prevented these acts of discrimination from occurring or they would have discovered and rooted them out without the necessity of an OFCCP compliance review. In either case, the applicants or employees concerned would not have been seriously injured, and the contractors would not have had a substantial back pay liability. Enforcement is certainly an important aspect of the contract compliance program. However, we not only enforce the law, we also seek out opportunities to explain the underlying principles of the law and assist contractors in complying with the law.
To those who think that discrimination is no longer a problem, I submit that this nation has not reached the point of being a colorblind society and that the color of one's skin, or one's gender, continues to be considered in an assessment of one's ability to perform a job. As long as OFCCP continues to find discrimination at the entry level as well as in the executive suite; as long as the workplace fails to reflect the qualified and available women, minorities, disabled and veterans that are in the workforce and deserve a chance to prove their worth, then affirmative action is still necessary.
Managerial Reforms
Mister Chairman, I recognize that OFCCP can do a better job in serving its "customers" -- both contractors and individuals who are denied employment opportunities on the basis of their race, color, religion, sex, national origin, disability or veterans status. And despite having only half the staff that OFCCP had in 1980, I am committed to making sure that it does. Since I became head of the OFCCP on February 14, 1994, we have embarked on an exciting and exhaustive program of self- assessment, streamlining and self-improvement with a primary focus on serving our customers better. Much has happened for which I am very proud and which I believe is good not only for OFCCP, but more importantly for Federal contractors and individuals who rely on us for employment protection.
We are considering ways to reduce paperwork requirements, eliminate unnecessary regulations, and simplify and clarify the regulations while improving the efficiency and effectiveness of our programs. This is not only in response to Vice-President Gore's initiative to reinvent government -- but also in response to feedback we received from Federal contractors and complainants to our 1994 customer survey.
One of the first steps in our regulatory review consisted of numerous meetings across the country with contractors, civil rights groups and our front line staff. Meetings were held, for example, in Dallas, Pittsburgh, San Diego and Chicago. As a result of our regulatory review, we have begun the process for proposing regulatory changes that I believe will help transform OFCCP into a more customer service oriented organization. OFCCP is considering revisions to its affirmative action procedures in a number of areas, including these three: revision of the structure and format of the written affirmative action program; implementing the requirement for the annual summary report; and revision of the compliance review process.
Our overall objectives are to reduce the paperwork, reduce the time it takes to prepare an affirmative action program, devise reporting requirements that make sense and that are tailored to the contractor's organization, and to focus on substantive issues, rather than boilerplate text. A revised review process will also allow OFCCP to better tailor and focus its limited compliance review resources. This should shorten the compliance review process in many instances. It also has the benefit of allowing OFCCP to concentrate its compliance efforts on contractors with the most significant employment problems.
We also plan to issue final rules under Section 503 in order to conform them with EEOC's regulations implementing Title I of the Americans with Disabilities Act. In addition, we plan to issue proposed regulatory revisions to our veterans' program regulations to conform them with the Section 503 regulations, where appropriate.
In order to insure that OFCCP has procedures and regulations that make sense, we will continue to have consultation meetings and regularly seek input both from the contractor and constituent communities. Before finally implementing these revised compliance review procedures, OFCCP will also engage in substantial pilot testing, in order to gauge the relative burden and impact of the changes on both the contractor community and the agency.
Working with the major contracting agencies, OFCCP is creating partnerships with contractors, community groups, and labor unions, to monitor the construction mega-projects, focusing on good faith efforts for recruiting women and minorities. We will provide technical assistance and consult on affirmative action from the preaward stage through the completion of these mega-projects.
I am aware of the concerns about uneven application of our laws and regulations. I would like to take this opportunity to pledge to this Subcommittee that we are undertaking efforts to correct these problems. These efforts include enhanced training of all staff; accountability audits; a customer survey and a customer service improvement plan.
Partnerships and Outreach
OFCCP continuously engages in efforts to foster partnerships between the Federal government, state and local governments, organized labor, employers including higher education institutions, public interest organizations and the contracting agencies, with the ultimate goal of ensuring equal employment opportunity. In 1994, well over 17,000 contractor establishments received nearly 48,000 hours of compliance assistance.
For the first time, we are now drafting a "how to" manual -- a technical assistance guide which will be used by compliance officers during workshops and seminars with contractors. This manual also will be provided to contractors and the public upon request. In addition, an electronic data network is being established to allow prompt responses to requests for information from customers. We are also providing first-time contractors with individualized assistance in developing their first affirmative action program. This one-on-one service is, we believe, a critical step in continuing the development of partnerships with contractors.
As stated above, OFCCP also plans to implement a customer service improvement plan which was developed based on data and comments received from surveys of construction and supply and service contractors. In the fourth quarter of FY 1994, we established a complaint appeals task force which successfully eliminated our entire backlog of discrimination complaint appeals in five weeks and developed procedures that are now used to avoid having future backlogs. We also meet regularly with other civil rights enforcement agencies to share information and to better coordinate our actions so as to avoid duplicating efforts and wasting limited resources.
RECOGNITION AND AWARDS
The Department of Labor believes that it is important to recognize exemplary efforts contractors have taken to ensure equal employment opportunity. The Secretary's Opportunity 2000 and our Exemplary Voluntary Efforts (EVE) annual awards programs recognize private employers who have worked effectively to support the creation of innovative and successful efforts to advance equal employment opportunity. In 1994, recipients of the Opportunity 2000 and EVE awards included Proctor and Gamble (Cincinnati, Ohio), Hyman/Manhattan Joint Venture (Fort Sam Houston, Texas), Rohm and Haas (Philadelphia, Pennsylvania), Union Bank (San Francisco, California) and Marshall University (West Virginia). Previous recipients include Hallmark (Kansas); Motorola (Illinois); Digital Equipment (Massachusetts); United Technologies (Connecticut); Saturn Corporation (Tennessee); and Dow Corning (Michigan).
Recipients of our first annual Exemplary Public Interest Contribution (EPIC) Awards included Women Employed (Chicago, Illinois), for its critical role in combating discrimination in the workplace; Crispus Attucks Association (York, Pennsylvania), for its efforts to provide jobs and training for low income and minority residents; and the Council for Tribal Employment Rights and Cheyenne River Sioux Tribe (South Dakota and Washington) for providing exceptional training and employment for Native Americans on reservations.
CONCLUSION
Mister Chairman and Members of this Subcommittee, I believe that nondiscrimination and affirmative action as enforced by the OFCCP are useful, and indeed vital, tools in preventing and combating employment discrimination by government contractors. I also believe that we can, and must, eliminate unnecessary regulation and paperwork imposed on contractors. Additionally, I am committed to ensuring that we are as efficient as possible in our agency's efforts to ensure equal opportunity in the workplace. Much remains to be done to achieve the Nation's goal of equal employment opportunity. Outreach and recruitment to expand the pool of qualified applicants and goals to measure progress are reasonable and useful elements of our program to ensure equal employment opportunity. With the changes we are implementing, I believe you will see OFCCP move much closer than ever to fulfilling this commitment.
Make no mistake about it. The principles upon which the Executive Order program is built are needed and viable. These principles are: government contractors must not discriminate; they should identify and remove barriers to equal opportunity; and they must expand employment opportunities to all who are qualified. Subscribing to these principles and with your support, we shall help make the "American Dream" a reality for women, minorities, Vietnam era veterans, the disabled and more importantly for us all.
This concludes my prepared testimony. I would be pleased to answer any questions. THANK YOU.
<1>See, e.g., Contractors Association of Eastern Pennsylvania v. Secretary of Labor, 442 F. 2nd 159 (3rd Cir. 1970), cert. denied, 404 U.S. 854 (1971).
<2> Early affirmative action efforts were derived from the efforts of leaders of the corporate community in 1961. These efforts came from Plans for Progress, an adjunct to the President's Committee on Equal Employment Opportunity.
<3>Leonard, Jonathan S., Employment and Occupational Advance Under Affirmative Action, August 1984.
<4> Crump, Griffin, Employment Patterns of Minorities and Women in Federal Contractor and Noncontractor Establishments, 1974-1980: a Report of the Office of Federal Contract Compliance Programs, June 1984.
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