Trump proposal to merge anti-discrimination agencies falling flat

President Trump’s proposed merger of two federal agencies that combat employment discrimination is consistent with his approach of reducing the federal bureaucracy and cutting costs. But the proposal isn’t getting much traction from either employers or labor, who agree such a move would result in more confusion and litigation.

The merger idea stems from a pre-election recommendation by the Heritage Foundation calling for eliminating redundancies in the Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) and the Equal Employment Opportunity Commission (EEOC). In the president’s budget, the OFCCP would see its budget reduced from $105 million to approximately $88 million and have its operations merged with those of the EEOC. Funding for the EEOC is proposed to essentially stay the same at roughly $364 million.

Labor Secretary Alexander Acosta testified this week at a House Appropriations subcommittee hearing in support of the Trump proposal. He called the merger a “commonsense change” that “combines two civil rights agencies that already work together closely.” The merger, according to Secretary Acosta would achieve a cost saving without reducing enforcement. But opposition to the plan is widespread.

Not only have 73 civil rights groups condemned the measure, but no less a business champion than the U.S. Chamber of Commerce has lined up against it. Camille Olson, chair of the U.S. Chamber of Commerce’s equal employment opportunity policy subcommittee, told lawmakers recently that numerous companies have contacted the Chamber with concerns about merging the agencies. “Both the EEOC and the OFCCP need reforms,” she said, but not in the form of a merger.

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In formulating the merger idea, the Heritage Foundation is right in that both agencies enforce laws prohibiting disability discrimination. But the agencies also have distinct missions and enforcement structures.

The EEOC focuses specifically on workplace discrimination and individual complaints, while the OFCCP focuses more on affirmative action and enforces workplace bias doesn’t function on individual notices. Combining them, critics suggest, could dilute the purpose and goals of both, or it could magnify potential problems for employers.

“I believe the administration expected … the business community would be behind this merger because it would be an elimination of one agency that they deal with, (but) big and small businesses that I work with have lined up squarely against the proposal,” Mickey Silberman, a partner with Jackson Lewis P.C. in Denver, told Federal Drive with Tom Temin.

Mickey Silberman, principal, affirmative action practice, Jackson Lewis

The main reason behind business opposition, according to Silberman, is combining the two agencies could result in more enforcement and potentially more lawsuits and damages for which employers would be liable. The fear in the business community is that this newly formed grouping might result in the worst of all worlds from both agencies.

Silberman explained that because the OFCCP and the EEOC have different remedial schemes, damages against an employer could be multiplied.

OFCCP, he said, can ask for make-whole relief. So in the event it finds pay discrimination, the employer would be liable for the difference in what was not paid. OFCCP can threaten “capital punishment” for government contractors, which is disbarment from government contracts.

EEOC can also demand that make-whole relief, but Silberman said they also have the power to require compensatory and punitive damages. In addition, he said, it can levy emotional distress damages because of stress endured while being discriminated against, as well as a significant amount as a pure penalty.

“So if you think of stacking these remedial options on top of each other, and then an employer undergoes some remedial investigation, they are facing the prospect of much broader and deeper potential liability coming along with those investigations,” Silberman said .

Fear in the business community is that a merger could result in the worst from both agencies. But Silberman said if businesses are savvy, they can profit from the current regulatory process.

The OFCCP conducts audits of thousands of government contractors each year to determine whether or not they are proactively in compliance with their EEO requirements. Under the Obama administration the OFCCP increased the number of comprehensive compliance reviews.

“The logic behind it at that time was being a government contractor is a privilege, not a right,” said Silberman. “And with that privilege comes additional legal obligations. If you’re getting the benefit of taxpayer dollars, then you should hold yourself to the highest standard of legal compliance.”

What has resulted from that thinking is what Silberman describes as OFCCP’s proactive approach to EEO.

“Don’t wait for complaints. Instead, you should proactively examine all the phases of what I call the ’employee lifecycle’ — from recruitment, to application, to hires, to termination and compensation. You should be examining that on an ongoing basis to see if there are hidden barriers to equal employment opportunity,” he said.

Silberman works with some employers who are government contractors and some who are not who are trying to get EEO right. But because of the OFCCP obligation, he said government contractors are more proactive.

“They tend to see fewer complaints for discrimination, and they tend to be more successful in responding to those complaints because of their more pro-active posture,” said Silberman.

The merger idea is now one that rests with Congress and passage of the Trump budget. While Labor Secretary Acosta is moving forward with the proposal in his plan to reorganize the agency, Congress is hearing from both labor and business against the proposal. Chances of passage of the law with that kind of bi-partisan lobby appear slim.