Wilt Toikka Kraft LLP


Focus on Holistic Diversity Efforts Important for Government Contractors in Wake of SCOTUS Affirmative Action Ruling

The national conversation is abuzz with passionate statements both in favor, and opposed to, the recent U.S. Supreme Court decision applying to affirmative action mandates in higher education admission processes. Given the spotlight on this issue, questions arise as to the effect on government contractors in regards to employment decisions. An experienced employment lawyer can advise you that this decision does not alter legal requirements for federal contractors.  

     The Office of Federal Contract Compliance Programs (OFCCP) includes a section of frequently asked questions (FAQ) on its website which addresses contractors’ affirmative action obligations versus affirmative action in higher education. 

     One question reads, “Are the affirmative action obligations OFCCP enforces similar to the affirmative action steps taken by some educational institutions to increase the racial diversity of their student bodies?”  

     Prior to the recent Supreme Court’s decision, the OFCCP’s response to the question read: 

     No. While OFCCP seeks to increase the diversity of the federal contractor workforce through the variety of affirmative action obligations described above, the obligations it enforces are wholly distinct from the concept of affirmative action as implemented by some post-secondary educational institutions in their admissions processes. In contrast to the affirmative action implemented by many post-secondary institutions, OFCCP does not permit the use of race to be weighed as one factor among many in an individual’s application when rendering hiring, employment, or personnel decisions, as racial preferences of any kind are prohibited under the authorities administered by OFCCP … OFCCP, therefore, does not permit the use of race as a factor in contractors’ employment practices to achieve diversity in the workforce, either by using race as one factor among many to achieve a “critical mass” of representation for underrepresented minorities or through direct numerical quotas or set-asides … OFCCP’s affirmative action regulations expressly forbid the use of quotas or set asides, provide no legal justification for a contractor to extend preferences on the basis of a protected status, and do not supersede merit selection principles. 

     On July 27, 2023, the OFCCP FAQ answer was changed to read: 

     No. OFCCP enforces nondiscrimination and affirmative action obligations to ensure equal opportunity in the federal contractor workforce, while some post-secondary educational institutions have implemented a wholly distinct concept of affirmative action that permitted the use of race to be weighed as one factor among many in admissions processes. Further, the Supreme Court’s decision … applies only to higher education admissions programs and does not address the employment context … There continue to be lawful and appropriate ways to foster equitable and inclusive work environments and recruit qualified workers of all backgrounds. OFCCP’s affirmative action requirements enable employers to reduce the risk of discrimination in their workforces and recruit and retain diverse talent. 

     The Supreme Court precedent applies to university affirmative action programs precisely because they took into consideration applicants’ race in admissions. Federal contractors are expressly prohibited from doing so. In fact, affirmative action in the context of employment decisions refers to ensuring that protected characteristics are NOT a weighted factor in the hiring process itself.

     The same regulations continue to be in effect for federal contractors, namely EO 11246, which prohibits employers “from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin.” 

     This Executive Order also “requires Government contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment.” 

     Despite the fact that the ruling does not apply to regulations for government contractors, the resulting conversation around affirmative action as a whole is expected to result in a heightened scrutiny of contractor hiring practices. 

     To assess both legal and cultural risks, contractors might choose to conduct a self-audit of their current policies and procedures. This entails reviewing the messaging and policies surrounding diversity, equity, and inclusion (DEI) initiatives, checking the legality and absence of any preferences or quotas in recruiting and hiring practices, and offering training, particularly to recruiters and hiring managers so they base all hiring decisions on appropriate, nondiscriminatory criteria. 

     If women or minorities are underrepresented in a contractor’s workforce relative to the relevant labor market, then placement targets must be set. Contractors are not permitted to give any individual a hiring or promotion preference since placement goals are not quotas. Set-asides and quotas are prohibited. Contractors who set placement targets might want to concentrate on going above and above in their outreach and hiring efforts to find competent individuals from a variety of backgrounds.

     Applicant tracking systems (ATS) which include anonymized screening tools, removing names and other data which could provide information about protected characteristics, are another effective tool in fostering affirmative action adherence. 

     Employers should continue to include EEO statements in job postings as well. However, despite affirmative action remaining a requirement, the layman’s understanding of the term after the recent news of the Supreme Court decision, may warrant downplaying the verbiage of this facet of hiring practices. 

      “Contractors may want to consider removing references to “affirmative action” in their taglines, given the potential confusion over the impact on employers of the Supreme Court decision and the current cultural implications of the term.” 

     In short, a focus on genuine diversity goals and efforts, as well as evaluation of outcomes is the prudent course for federal contractors, but no comprehensive legal changes were mandated by the recent Supreme Court ruling. 

     Federal contractors interested in learning more about their protected rights are encouraged to contact our firm to speak with an experienced employment lawyer. 

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