Lawsuits brought by the EEOC and OFCCP on behalf of employees and job seekers against U.S. employers routinely run into the hundreds of thousands or even millions of dollars. Yet in many cases, expensive legal action could be avoided with inexpensive training modules and by following best practices for the data you collect and build programs around. In this article, Affirmity Manager of Consulting Services and Diversity Planning Programs, Stephen Caldwell, looks at how you can prepare your teams to stay out of the headlines.
Between 2014 and 2024, OFCCP lawsuits obtained over $260.8 million in monetary relief on behalf of over 250,900 employees and job seekers. Meanwhile, between FY 2013 and 2023, the EEOC secured $477.5 million in monetary benefits across all suits it filed, achieving 1,468 resolutions. The numbers don’t lie: discriminatory practices can cost organizations dearly—and they likely cost even more once the lost time, lost resources, and legal fees involved in taking care of these cases are factored in.
Furthermore, there are signs that both agencies are changing their focus. For example, though the number of audits that the OFCCP has scheduled has actually decreased since 2020 (865 scheduled audits in the 2024 Financial Year, down from 1,538), the percentage of evaluations resulting in a conciliation agreement or consent decree is rising (14.2% to 21.5%). The agency is also finding more violations specific to race, gender, and individuals with disabilities. The top five discrimination types subject to EEOC enforcement activity are retaliation, disability, race, sex, and age.
Reading through recent cases, it’s perhaps striking how often organizations have simply failed to follow best practices that would’ve protected them and their employees. From training to ensuring you have the right data for the decisions you’re trying to make, let’s take a closer look at how five compliance best practices can mitigate risk and fend off fines.
1) Ensuring Adequate Training Is in Place
A number of EEOC discrimination and harassment cases could’ve been prevented if the organizations involved had regularly delivered adequate training.
For example, restaurant chain Red Robin International, Inc. paid out $600,000 in April 2024 for an EEOC sexual harassment lawsuit. This lawsuit involved a 45-year-old male line cook at a location in Washington state repeatedly harassing an 18-year-old female colleague. When multiple female employees reported the misconduct to various managers, the issue wasn’t promptly or effectively elevated, and one server quit their role as a direct result of the organization’s inaction. The alleged conduct violated Title VII of the Civil Rights Act of 1964 and the EEOC says that chain failed to adequately investigate and take measures to prevent harassment.
If something as simple as an eLearning course covering sexual harassment training had been in place for all employees, the outcome of this case may have been different—the managers involved may have escalated the issue as they were trained to, for instance.
It’s important for training to keep pace with changes to the law too. Among the EEOC’s 2024 enforcement activities were the first cases in relation to the the Pregnant Workers Fairness Act, which went into effect in June 2024. The act requires companies to make reasonable accommodations for pregnant workers when requested. Companies can comply with the act by moving individuals into different roles or otherwise changing the work that they’re doing while pregnant.
In one of the first cases brought in relation to the new act was one against Wabash National, a producer of semi-trailers and commercial trucking equipment. A pregnant employee made an accommodation request to transfer to a role that didn’t require her to lie on her stomach—the company denied her request and she was forced to take unpaid leave as she feared for the health of her pregnancy. She eventually resigned. Once again, training regarding the existence of the Pregnant Workers Fairness Act and its applicability to cases like this could’ve helped the organization avoid this EEOC action.
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2) Monitoring to Uncover Emerging Issues
While training could’ve helped Red Robin prevent the sexual harassment lawsuit described above, it’s not certain that training will always result in individuals taking the correct course of action. For this reason, training needs to be supplemented by reporting that detects potential issues requiring intervention from another level of the business.
For example, corporate-level reporting can be set up—perhaps delivered by a uncomplicated color-coded dashboard—to highlight abnormal turnover, promotions, or other personnel transactions happening across all locations. The organization would then be able to notice trends such as female employees consistently leaving at a higher rate than their male counterparts. It could then investigate further whether there’s an underlying and addressable cause, potentially allowing the company to get ahead of a problem before it becomes a lawsuit.
3) Conducting Robust Analysis for Difficult Decisions
A large number of EEOC cases have been brought in 2024 on the basis of different forms of discrimination, including age, sex, and race. One age discrimination case, regarding a food processing business called Smithfield Foods, illustrates the importance of making defendable, data-backed decisions. In this case, Smithfield Foods claims it terminated a 59-year-old employee as part of a reduction-in-force of its sales staff. The employee was one of six staff members terminated, five of which were 55 years or older. Furthermore, 14 out of the 18 employees who were considered for termination were under the age of 55.
The employer later changed its rationale, stating that the employee had refused to relocate to its new headquarters. However, the employee had previously agreed to this request before the employer withdrew the option.
While the degree to which this discriminatory decision was an intentional one is open for debate, it’s nonetheless true that a full RIF analysis would help an organization in this position reconsider this course of action. The fact that this age group would be adversely impacted would be flagged by the analysis. This would allow the organization to make small modifications to its termination criteria aimed at reducing impact on a particular class, or otherwise establishing and recording a legitimate and nondiscriminatory basis for making the decision.
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4) Understanding That You’re Not Exempt From Audit Activity
A couple of recent OFCCP cases serve as a reminder that there are fewer limitations on exactly who may be the subject of a lawsuit than you may think. Firstly, there’s Pennsylvania State University, which was recently ordered to pay $703,000 and enter into a conciliation agreement to resolve gender pay discrimination. It was found that Penn State had paid 65 women employees less than men holding similar positions across various roles in senior administration, extension education, facilities operations and maintenance, and faculty.
The case highlights how higher education organizations with federal contracts need to be just as diligent in minding their programs as contractors in the corporate sector—the OFCCP (and the EEOC) don’t take it easy on anybody.
Then there’s the case of State Street Corp., a financial services provider that has held more than $69 million in federal contracts and must now set aside $4.2 million for future pay equity adjustments as part of a conciliation agreement. Significantly, the organization had previously entered into a conciliation agreement over gender and race-based pay inequities in 2017. The case is a reminder that OFCCP and EEOC actions aren’t one-and-done—if you fail to correct an issue, you can expect the agencies to come back repeatedly. So, in addition to making sure you correct your practices, you have to make sure that those corrections are made in a timely manner.
5) Being Proactive in Your Data Handling Efforts
Applicant data can be a problematic area for many organizations. The hiring process generates a lot of data. Collecting and properly recording this data can be tough to manage, but it’s important to do so: it’s an easy target for the OFCCP during an audit, and if you’re not looking closely at what’s happening, you’re likely to be caught out.
Consequently, there are plenty of examples in the news of conciliation agreements related to hiring discrimination. In February 2024, GE Aerospace had to pay $443,000 in back wages to affected job applicants over alleged gender-based hiring discrimination. In May, Caterpillar paid $800,000 to resolve alleged racial hiring discrimination. Both cases resulted from federal compliance reviews.
We’ve seen the OFCCP’s diligence in this area for ourselves during compliance reviews we’ve assisted with—and we’ve seen a definite trend toward the OFCCP taking more time over fewer audits. Once all audit documentation is submitted by the contractor, compliance officers have requested a large amount of additional information. We strongly recommend that you:
- Make sure your data is clean, that you know it inside and out, and have a good idea of what’s likely to be queried before it’s queried
- Work with a third-party consultant who can advise you on whether what you’re being asked to provide actually makes sense
Organizations that are monitoring their data and not waiting until the last minute to clean it up are inevitably more successful in dealing with OFCCP queries. The 30-day response window for an OFCCP audit doesn’t leave a lot of time for getting a full understanding of your data: in that pressure cooker situation, you can definitely miss something important.
Regular, at least semi-annual monitoring, additional analyses (such as a step analysis), and close collaboration with your talent acquisition team help you notice adverse trends and take corrective action.
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In Conclusion
Keeping your organization in good standing with the OFCCP and EEOC requires a multi-pronged approach to compliance. You must provide adequate training, perform robust analysis at every stage of your people processes, and monitor your data to diagnose and act on issues that will render your organization non-compliant if left unchecked. With both agencies stepping up the depth of their investigations, it’s time to act.
CONTINUE EXPLORING THIS CONTENT IN VIDEO FORM | ‘Best Practices For Mitigating Risk From OFCCP and EEOC Violations’
For further help identifying the training courses your organization needs and for help with audit readiness and delivery, please contact us today.
About the Author
Stephen Caldwell is a Manager of Consulting Services and Diversity Planning Programs at Affirmity. In this role, he leads and manages a team of Affirmity consultants, providing consulting and project management in diversity planning. He has assisted clients in the utility, healthcare, defense, telecommunications, energy, chemical, and other industries.
Mr. Caldwell has been with Affirmity for more than eight years and has over 20 years of experience in human resource consulting and diversity planning.