August 2012

The Strange Case of Hawaii and Puerto Rico: Or, Where to Affirmative Action?

By convention and practice (not by Executive Order, statute, regulation or guideline), OFCCP has never required covered federal contractors and subcontractors to prepare Affirmative Action Plans for minorities for their establishments in Hawaii or Puerto Rico. OFCCP has nonetheless always required federal contractors with establishments in Hawaii and Puerto Rico to create AAPs for Women. (You will recall the entertaining case in the Clinton Administration when OFCCP sued a small latex glove manufacturer in the Puerto Rican rain forest outside of San Juan (which was 100% Puerto Rican owned and which employed a 100% Hispanic workforce) because it refused to create AAPs. The company wondered: "Really? What's the use?" OFCCP answered, of course, that while the company need not have an AAP for minorities, it did need to create an AAP for women since they were in Puerto Rico and not in the homeland of the Amazons. A Consent Decree then followed since the company wanted to continue to sell its gloves to the United States Army's surgical hospitals around the world.)

Regardless whether Obama/Biden or Romney/Ryan win the presidential election in November, come January 21, 2013 (when the Chief Justice swears in the new President) he will awake to a worsening problem as to the current plight and direction of Affirmative Action in America.

Please consider that Hawaii today has only a 24% White population (which is one reason why attendees at the National Industry Liaison Group conference convening in Kona (on The Big Island of Hawaii) in two weeks will feel as though they have really gone out of country!)

But please consider, too, that the County of Los Angeles is now only 30% White, and has a land mass slightly smaller than that of Hawaii (about 4,000 square miles (LA) vs about 6,400 sq miles (HI)--of which The Big Island is itself about 4,000 sq miles). Or please consider that San Francisco is now more minority than White (although barely: 49% White).

Should (or may) federal contractors who only hire locally in Los Angles County develop Affirmative Action Plans for minorities even while not developing AAPs for their Hawaiian establishments? What public policy rationale would recommend that disparity in approach?

And, should (must?) federal contractors in Hawaii and Puerto Rico start setting goals for Whites?

In fact, this issue of the dwindling majority White population has become so prevalent that new demographic terminology has recently sprung up to assist the national discussion about it: "Minority-Majority" states and counties (in which Whites are the minority). Indeed, the latest census data available from 2011 (yes, the US now conducts statistically significant census more frequently than every 10 years and the Bureau of the Census may well bag the Decennial Census in the future but accomplish it in other ways) reports:

There are now four states (including two with among the largest citizen populations) which are "Minority-Majority" states: Hawaii, New Mexico, California and Texas;

All populated territories of the United States are "Minority-Majority": Puerto Rico, the District of Columbia, Guam, the U.S. Virgin Islands, the Northern Mariana Islands and American Samoa;

11% of U.S. counties (mainly in the Southwest (where Hispanics—the countries' now fastest growing population and totals 16% nationwide—is expanding very rapidly) are now "Minority-Majority"; and

7% of U.S. counties will, in coming months/near years, be "Minority-Majority".

In other words, 20% of counties in the United States will very soon be locations where "Minorities" are the majority population.

So, what is OFCCP doing about this major demographic shift unfolding right now in front of our eyes on our shift?

Let's first start by looking at OFCCP's current regulations which bear on these issues (and which have not changed since installed in 1972—40 years ago).

Let's start first with:

"Why Do We Do AN AAP?"

41 CFR Section 60-2.10 (a): General purpose and contents of affirmative action programs. Purpose. (1) An affirmative action program is a management tool designed to ensure equal employment opportunity. A central premise underlying affirmative action is that, absent discrimination, over time a contractor's workforce, generally, will reflect the gender, racial and ethnic profile of the labor pools from which the contractor recruits and selects. Affirmative action programs contain a diagnostic component which includes a number of quantitative analyses designed to evaluate the composition of the workforce of the contractor and compare it to the composition of the relevant labor pools. Affirmative action programs also include action-oriented programs. If women and minorities are not being employed at a rate to be expected given their availability in the relevant labor pool, the contractor's affirmative action program includes specific practical steps designed to address this underutilization. * * * (Emphases added)

So, the AAP is designed to help the contractor avoid unlawful discrimination (by allowing it to select Applicants for hire, promotion and involuntary termination—I know that sounds funny as to terminations—in volumes approximately proportional to their qualified availability). In fact, the AAP accomplishes this task by calculating for the Human Resources Officer and Recruiter the one number s/he does not know from any other human resources information system or exercise s/he undertakes. (If you do not know what that is, you need to attend, by the way, the first day of the National Employment Law Institute (NELI) Affirmative Action Briefing (AAB) this October).

Next, it is important to reflect on:

41 CFR Section 60-2.11(b)(3)(iv): Organizational profile.

"(3) For each organizational unit, the organizational display must indicate the following: (iv) the total number of male and female incumbents in each of the following groups: Blacks, Hispanics, Asians/Pacific Islanders, and American Indians/Alaskan Natives."

Please note three things:

OFCCP's Regulations Do Not Require AAPs To Analyze The Availability Of or Set Goals For Whites

First, OFCCP regulations do not require AAPs to include, let alone analyze, the availability of "Whites" or to set Goals for Whites. (So, that answers the above question I posed as to whether federal contractors "must" undertake AAPs, availability analyses and Goals for Whites in Minority-Majority locations. The answer is "No". Whether a federal contractor "may" set Goals for Whites is another entirely lengthy column subject too lengthy to write about today.) By the way, almost every AAP form set (including mine) or AAP creation word processing tool I have seen, contains columns in every statistical display to capture demographic information about Whites (sometimes erroneously referred to as "Caucasians"). And, there is nothing wrong with that. One may include more information in the AAP than its minimum regulatorily required ingredients, so long as you have all of the necessary ingredients baked in. Moreover, many HR and Affirmative Action managers have told me over the years that they must have a total count as to every analysis the AAP calls for just so they may quality control check their demographic head counts.

OFCCP Regulations Thus Far Do Not Require AAPs to Analyze The Availability of or Set Goals for "Two or More Races" or for "Asians" or for "Native Hawaiians and Pacific Islanders"

Second, yes it is odd that 12 years after the 2000 United Census changed the manner of ALL (including OFCCP) federal agency statistical reporting of race in America that OFCCP still has not re-written its Affirmative Action Plan regulations to keep pace by adding the "Two or More Races" designation OFCCP (and the EEOC) installed years ago, for example, in the EEO-1 Form. Nor has OFCCP balkanized the Asian/Pacific Islander definition into "Asian", and separately, "Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino)". By the way, are federal contractors now non-compliant if they obey OFCCP's ancient AAP regulations but fail to properly classify Applicants and Employees in their AAPs as OMB Directive 15 directs (governing the racial classification of Applicants and Employees)? That answer, too, we discuss at some length on the first day of the NELI AAB in October).

OFCCP's AAP Regulations Do Not Require Disparity Analyses For Whites

Contractors must annually undertake disparity analyses (often erroneously called "adverse impact analyses") as part and parcel of their AAPs (see 41 CFR Section 60-2.17(b)(2) & (4)) but only as to "minorities" and women.

(a) Identification of problem areas. The contractor must perform in-depth analyses of its total employment process to determine whether and where impediments to equal employment opportunity exist. At a minimum the contractor must evaluate:

* * * *

(2) Personnel activity (applicant flow, hires, terminations, promotions, and other personnel actions) to determine whether there are selection disparities;

* * * *

(4) Selection, recruitment, referral, and other personnel procedures to determine whether they result in disparities in the employment or advancement of minorities or women; and…." (Emphasis added)

NOTE: OFCCP regulations do not define the term "minority". So which Minority are they speaking of? Blacks? Hispanics? Asians? Hawaiian and Pacific Islanders? Native Americans? Or, the new and emerging "minority" of Whites?

While not defined, OFCCP has always, of course, meant that the term "minority" meant everyone other than Whites (i.e. Blacks? Hispanics? Asians? Hawaiian and Pacific Islanders? Native Americans?)

But note two other curiosities:

Asians are now the wealthiest group of individuals one can identify in the United States…and the wage gap between Asians and all other groups or subgroups one can identify continues to grow at a fast pace. The U.S. Bureau of the Census reported in 2009 that as of 2008, Asian Americans had both the highest educational attainment level and median household income of any racial demographic in the country, and had attained the highest overall median personal income.

This development becomes important because many government officials over the decades have justified the need for Affirmative Action by reference to wage disparities. Indeed, Len Biermann, the founder of OFCCP and my Co-Chair of the NELI AAB for 15 years, tells the story that his boss at The White House at The President's Committee on Equal Employment Opportunity in the Johnson Administration which formed the EEOC and the OFCC—predecessor to the OFCCP—told him his job was to make sure Blacks earned about the same as Whites in America. So, should federal contractors quit developing AAPs for "Asians", since they are apparently no longer economically disadvantaged as a group in America?

OFCCP's recent Consent Decree with Federal Express Corporation brought America's currently diverse demographics into sharp relief when OFCCP alleged that FedEx had discriminated against EACH AND EVERY protected Group and required back pay and hiring remedies for EVERY protected Group, including Whites.

So, while OFCCP AAP regulations do not require Availability and Goals analyses for Whites, OFCCP has no hesitancy to enforce the non-discrimination requirements of Executive Order 11246 on federal contractors, including as to Whites. Now, go back and read the above referenced OFCCP regulation on the purpose of Affirmative Action Programs and wonder why it does not require availability and Goals for Whites if it is going to require Availability and Goals for any protected group.

CONCLUSIONS:

OFCCP's Sex Discrimination and Construction industry regulations are not the only ones which are antiquated and have not kept pace with the advance of our Society. It is difficult to explain with a straight face why a local employer in LA County should develop an AAP for Minorities… but not in Hawaii, or why a federal contractor which hires locally in counties in New Mexico with minority populations larger than those found even in Puerto Rico should develop an AAP for "minorities", but not Whites. And, as OFCCP (properly) continues for the 10th year in a row to cite a substantial number of contractors for unlawful discrimination against Whites, many contractors are asking whether they should have analyzed their selections of Whites as part of their AAPs as a preventative maintenance system to help them avoid claims of systemic discrimination. Meanwhile, other contractors are struggling through legally difficult discussions as to whether contractors must, should, and/or may set Goals for Whites in their AAPs for "Minorities" and Women…especially as they suffer "shortfalls" in the hiring of Whites.

Whether contractors should develop availability and Goals for Whites is a difficult legal and policy discussion, but it is one which should probably be had in virtually every major contractor headquarters tower. Whether federal contractors "should" (not "must") develop disparity analyses which include Whites is a no brainer: Absolutely. Federal contractors should do so for their own protection and to reduce legal and financial risk to the corporation (and, of course, those analyses may remain under attorney-client privilege since OFCCP's regulations do NOT require them. See above).

And, finally, it is another no-brainer that the new President in January should look at OFCCP's now 40 year old Executive Order 11246 Affirmative Action regulations and re-define purpose by asking the question with which I began every meeting when I was at OFCCP: "Why are we here? What is our purpose today?"

Thanks…John

THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.