September 4, 2013

IMPLICATIONS OF VF JEANSWEAR CASE ON RACE COMPARISON GROUPS

In a follow-up to our August 7th blog on the ALJ ruling in the OFCCP v VF Jeanswear Limited case, we’d like to reiterate the importance of this case for contractors covered by EO 11246. In the last 5 or so years, some regions of OFCCP have moved away from conducting disparity analyses on an aggregated minority group versus non-minority (White) group and have begun conducting sub-group analyses by individual race/ethnicity categories. Not only have we seen this during the course of a compliance evaluation but OFCCP went on the record in the Note to Reviewer included in their Information Collection Request related to the Scheduling Letter and Itemized Listing (discussed here). OFCCP stated:

Presenting data for “minorities” in the aggregate is useful for the utilization analyses and goal setting components of the contractor’s affirmative action programs. However, to determine whether the contractor has discriminatory employment practices requires analyzing data by sex, and by separate racial or ethnic groups.

Clearly, for EEO analytics, a minority to non-minority analysis is not the direction of the current OFCCP administration.

However, OFCCP has taken this position to the extreme by comparing not only each individual sub-group to every other group (e.g. Hispanic to Black) but each group to every other group in the aggregate (e.g. Asian to non-Asian). Fortunately for the contractor community, the VF Jeanswear Limited ruling puts an end to this madness. Problems inherent to such comparisons lie in the volume of comparisons made and the potentially arbitrary nature of the groupings. By conducting comparisons of individual subgroups to every possible aggregation grouping, OFCCP is capitalizing on statistical chance. With so many analyses being conducted, the probability of finding some statistically significant result goes through the roof and almost guarantees that OFCCP will find statistical significance in each and every audit. Additionally, the groupings themselves are problematic, as clarified by the ALJ ruling. This case reminds us that the Uniform Guidelines on Employee Selection Procedures (UGESP) suggest that adverse impact analyses are most appropriately conducted as highest-selected comparisons in a 2-by-2 analysis, comparing the highest-selected racial subgroup to each of the other individual racial subgroups. Title VII of the Civil Rights Act of 1964 spells out the definition of race within the context of regulatory recordkeeping. The defined races are comprised wholly of: Blacks, American Indians, Asians, Hispanics, American Indians and Alaskan Natives, Native Hawaiians and Pacific Islanders, and Whites. The ALJ ruling notes that the “non-Asian” group used by OFCCP in this case is not a race category found in the regulations and law, thus rendering it inappropriate for use in adverse impact and other disparity analyses.

The primary take-away from this ruling is that the courts support a statistically-sound and evidence-based approach to conducting adverse impact and other disparity analyses. Contractors should first be identifying which defined racial subgroup has the highest selection rate (and comprises at least 2% of the pool), and then compare each subgroup separately to the identified highest-selected group.

by Jana Garman, M.A., Associate Consultant, and David Cohen, President, DCI Consulting Group

INDUSTRY NEWS & LEARNING

DCI Consulting is a risk management human resources consulting firm strategically located in Washington, D.C.

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