APPENDIX I.

LETTERS OF CLARENCE THOMAS, CHAIRMAN,

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

TO ROBERT COLLYER, DEPUTY UNDER SECRETARY

FOR EMPLOYMENT STANDARDS, REGARDING

OFCCP'S PROPOSED REGULATORY CHANGES

(Reprinted from Staff Report on the Department of Labor's Proposed Affirmative Action Regulations, Committee on Education and Labor, Subcommittee on Employment Opportunities, December 1983.)

VII APPENDIX

ATTACHMENT A

Hon. ROBERT COLLYER,

Deputy Under Secretary of Labor, U.S. Department of Labor,
Washington, D.C.

APRIL 19, 1983.

DEAR BOB: Pursuant to its authority under Executive Order 12067 and in a spirit of cooperation, the Commission has reviewed the proposed final rules of the Office of Federal Contract Compliance Programs (OFCCP) that were submitted on February 28, 1383. This letter discusses the operating principles that have guided our review, presents a summary of our recommendations and raises several additional serious procedural concerns. Detailed comments on the ruies and the Commission's recommendations are attached as an appendix. We look forward to meeting with you and your staff to discuss our comments and resolve any disagreements that we may have.

Operating principles of our review

First, the Commission endorses OFCCP's decision to make its rules consistent with Title VII. Section 715 of Title VII and Executive Order 12067 require the coordination of Federal equal employment efforts to reduce duplication and inconsistency among the operations of Federal departments and agencies. The goal of consistency between OFCCP and EEOC's programs on matters of concurrent jurisdiction is of great importance. Each agency must be able to rely on the findings made and remedies secured by the other to minimize the need for duplicating investigations and obtaining additional relief. Contractors have the right to know what the Government's position is, as opposed to what the positions of different agencies are, so that they can comply with the law. Complainants have a similar right to the same protection no matter which agency reviews their claims, rather than lesser or greater protections based on the agency that handles a complaint. Therefore, our review of OFCCP's draft final rules has concentrated on achieving consistency between our agencies on issues of discrimination. Second, we have identified issues which potentially may put contractors in the anomalous position of being in compliance with OFCCP's rules, but susceptible to findings of discrimination. Third, we have identified provisions which may impair OFCCI's ability to identify discriminatory practices.

We must express to you our concern over the effect on Commission programs of the proposed rules which frequently appear inconsistent with established Title VII law and which may create a situation where two appreciably different legal standards exist. Our concerns are that the situation may prove confusing to contractors and may impair Commission programmatic efforts.

As we point out below, issues such as shifting burdens of proof, the duration of Title VII's liability period and the appropriate statistical test for establishing discrimination are threshold issues of liability which have been settled. OFCCP's policy proposals, in effect, reopen these and other critical issues.

We also see these proposed rules as impacting upon the Commission's charge processing systems. Respondents may focus on inconsistencies to cause unnecessary delays during the administrative process. The attendant delays will be costly to charging parties, employers and the government alike.

Lastly, the proposed rules are in condict with the programmatic principle established by the EEOC-OFCCP Memorandum of Understanding-that only in rare situations would both agencies investigate the same respondent. The basis of this agreement was that two government agencies seeking the same results would apply essentially the same legal standards on pivotal issues. To the extent that OFCCP's proposal is at variance with existing Titile VII law, in order to comply with its own statutory mandate, the Commission may be forced to undertake its own systematic investigations and initiate class litigation against respondents who have already received OFCCP approval.

(21)

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Summary of recommendations

1. We urge OFCCP to amend its interpretations to be consistent with Title VII, the weight of case law and positions taken by EEOC. This may be accomplished by:

a. allowing formula relief to remedy discrimination in appropriate circumstances; -,

b. acknowledging that after a finding of discrimination the burden shifts to the contractor to demonstrate that the aggrieved individual is not entitled to relief;

c. not limiting relief other than back pay to two years and not placing a two year limitation on investigations;

d. not deducting unemployment and workers compensation from back pay awards; e. recognizing that victims of discrimination are entitled to interest on back pay;

f. adopting fully consistent interpretations of pregnancy discrimination, sexual harassment and discriminatory job progression based on sex;

g. adopting consistent standards on religious accommodation and national origin discrimination;

h. adopting the current poster and requiring it to be posted in English and Spanish.

2. We recommend that OFCCP modify its rules to avoid the possibility of a contractor being in compliance with affirmative action obligations but susceptible to a finding of discrimination by:

a. not limiting its definition of underutilization by adopting an inflexible SO percent rule which could result in the anomaly that a contractor may be fully utilizing minorities and women for affirmative action purposes while potentially discriminating against the same protected groups:

b. defining "immediate labor area" in terms of reasonable commuting to patterns, rather than in terms of actual commuting patterns which may perpetuate past discrimination:

c. not setting aggregate goals for all minority groups because this may mask discrimination against particular groups;

d. defining the availability of minorities and women to include those whom the contractor can reasonably train to obtain requisite skills during the term of an affirmative action program;

e. applying the construction goal for women by trade, not in the aggregate;

1. defining "fair share" effort for Hometown Plan participants to mean a good faith effort to meet all goals rather than allowing a Plan's adminis trative committee to define "fair share".

3. We also recommend that OFCCP modify its rules to retain its ability to identify discriminatory practices by:

a. allowing offsite access to salary data;

b. explaining what kind of evidence is necessary to question a contractor's workforce and availability analyses:

c. modifying its extended affirmative action program provisions by:
i. limiting the exemption to two or three years;

il. specifying that it will seek information on complaints from EEOC
before approving an exemption;

iii. monitoring contractors that are parties to a conciliation agree ment that resolves issues of discrimination and retaining the ability to withdraw an exemption from those contractors not in compliance. d. specifying the employee threshold at which financial institutions must develop affirmative action programs.

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hat could and should have been resolved by our staffs needlessly have been raised o higher levels of authority. We continue to hope that in the future the more collegial and efficient practice of early and full consultation will once again become the standard mode of operation between our agencies.

We are deeply concerned that a number of recent OFCCP actions are not in accord with the requirements of Executive Order 12067. OFCCP apparently has used its internal directives system, without consultation with EEOC or notification to the public, to implement in advance certain policy changes proposed in the present final draft regulations. A directive entitled "Interim Description of the Required Ingredients of Discrimination Cases", issued on March 10, 1983, sets out procedures for determining relief for "identifiable victims" which are inconsistent with the weight of Title VII case law and with EEOC policy. (The issue of formula relief is discussed in detail in the attached Appendix). This directive also establishes policy not in the regulations. For example, it improperly construes the Supreme Court's decision in U.S. v. Hazelwood School District, 433 U.S. 299 (1977), to require a showing of 5 or 6 standard deviations to establish a prima facie case of discrimination through statistical comparison, whereas the Court actually indicated that in large job groups a showing of 2 or 3 standard deviations is sufficient to establish such a case. 433 U.S. at 308 n. 14, citing Castaneda v. Partida, 430 U.S. 477, 482, n. 17 (1977). The directive should be withdrawn until it can be corrected and coordinated.

In addition, it appears that other substantial policy changes may have been communicated to OFCCP staff without consultation with EEOC or opportunity for public comment. We refer particularly to the recent statements made by the Executive Assistant to the Director of OFCCP, reported in the March 15, 1983 edition of the Wall Street Journal, confirming that OFCCP now prevents contractors from setting annual goals higher than availability and will find higher long term goals a violation of Executive Order 11246. Such interpretations were described by a former director of OFCCP as a "dramatic change" from previous policy. They are inconsistent with OFCCP's own compliance manual and with this Commission's policy and practice. The preamble to EEOC's Guidelines on Affirmative Action cite court approval for setting interim goals greater than availability for previously excluded groups, so that long term goals may be reached in a reasonable period of time. Such goals may be required to resolve systemic charges under Title VII, and they appear to have been a long-standing requirement of OFCCP's affirmative action program. If the Journal report is true. OFCCP should issue a directive returning its policy to what it was. Should OFCCP want to adopt a new policy, after coordination, it should publish the new policy for notice and comment.

As I have indicated, the Commission desires to resolve outstanding differences with the Department of Labor over OFCCP's rules and to develop the cooperative relationship anticipated by Executive Order 12067. To that end, Commission staff and I stand prepared to meet with you and your staff at your convenience. Our experience indicates that such meetings are the most effective means to resolve differences on multiple issues, such as those raised in these comments. In any case, please resubmit the final rule for our review before publication.

Very truly yours,

CLARENCE THOMAS,

Chairman. (For the Commission).

Attachment.

COMMENTS ON PROPOSED FINAL OFCCP AFFIRMATIVE ACTION BULES RECEIVED

FEBRUARY 28, 1983

1. Inconsistencies with Title VII/the Weight of Case Law and EEOC Policy and Practice

This section discusses issues raised either in the preamble or rules in which OFCCP adopts policies that are inconsistent with Title VII law, with positions that the Commission has taken in Title VII litigation and/or with EEOC guide lines or practices. OFCCP's adoption of such inconsistent standards may subject contractors to conflicting requirements, endanger legal positions of both the Commission and OFCCP and result in duplicative investigations and reviews of contractors because one agency will not be able to rely on the findings of and relief secured by the other.