Big-Name Federal Contractors Dodge DOL Diversity Data Release

The vast majority of companies that accept the most taxpayer dollars opposed the public release of past employee diversity statistics, and those that did reveal those numbers only marginally increased executive diversity, according to data obtained by Bloomberg Law.

Among the 81 highest-earning contractors who consented to their 2016-2020 diversity data being released through the US Labor Department, the number of women in executive positions grew from about 24% to 31% in that period. Among the same contractors and during the same period, the number of minorities in executive positions grew from about 15% to 19%.

Thousands of contractors collect over $630 billion in taxpayer money each year to help keep the government running, from catering food to making weapons for the military. The DOL’s Office of Federal Contract Compliance Programs requires any federal contractor with 50 or more workers to fill out an annual EEO-1 report, which includes information on the race, ethnicity, and gender of employees, but that data is typically under seal.

Bloomberg Law received the EEO-1 data April 17 through a Freedom of Information Act request initially made by the Center for Investigative Reporting. The DOL has long resisted releasing the data, and once it agreed to do so, it struggled to handle the massive request.

The request is for all EEO-1 forms submitted by federal contractors from 2016 through 2020. The OFCCP released 19,289 federal contractor EEO-1 forms, which reflects companies that didn’t object to their information being released. The agency will decide later whether objectors’ arguments are valid and will release the remaining forms later this year.

Bloomberg Law’s analysis of the EEO-1 data zeroed in on the 303 companies that appeared at least once on Bloomberg Government’s annual lists of the top 200 highest-paid federal contractors between 2016 and 2020. In that narrowed group, which made more than $1.93 trillion total through contracts during this period, about two thirds objected to their data being released by the OFCCP. Objectors included big names like AstraZeneca PLC and General Motors Co.

Investor Interest

Increasing diversity in the leadership ranks of corporate America has been a persistent problem for companies, including some that hold major federal contracts.

There are several striking examples in the newly released EEO-1 data. Inter-con Security Systems Inc., for example, reported in 2020 having about 70% minority employees but less than 1% minority representation in its executive ranks.

The company, which didn’t respond to a request for comment on its diversity data, received over $1.1 billion from the government during the five-year period covered by the OFCCP data.

Investors lately have become more interested in disclosure of the number of women and minorities that make up company boards and executive positions.

Higher diversity in management has a positive relationship to business performance, according to a November report by shareholder advocacy organization As You Sow. The report analyzed data from the 277 publicly traded companies that had posted their EEO-1 reports publicly online at the time.

“If you’re not sharing your diversity data with investors, they’re going to assume the worst possible scenario,” said Meredith Benton, founder of Whistle Stop Capital LLC, an ESG-focused consulting firm. “And over time they’re going to be prioritizing investments in companies that can show their data.”

Of the top-earning contractors, hundreds weren’t included in the data set released, meaning they objected to the disclosure. Knowing which companies objected is helpful for people like Benton, who has been pushing companies for years to unseal that information.

“We’re going to know you’re worried about having this data out there, and we’re going to try and figure out why,” Benton said.

Company Pushback

Some companies—such as Lockheed Martin Corp., General Dynamics Corp., Oracle Corp., Exxon Mobil Corp., and Abbott Laboratories—started sharing their EEO-1 forms with investors and the public in 2020, but objected to their 2016-2020 data being disclosed by the DOL.

Among publicly traded corporations, companies who don’t disclose their EEO-1 forms are increasingly becoming a minority.

More than 80% of S&P 500 companies will have made their EEO-1 forms for at least one year public after this release from DOL, estimated Josh Ramer, CEO of DiversIQ, a research firm that specializes in diversity data.

“At this point, for the companies that aren’t making it public, there’s going to be more attention paid to that than the actual underlying data,” Ramer said.

The release of this data comes after years of litigation between the CIR and OFCCP. The disputes generally boil down to whether EEO-1 forms are considered commercial information that should be exempt from FOIA.

Contractors argue that it should remain confidential because that is what Congress intended when it made the requirement in Title VII of the Civil Rights Act of 1964, among other reasons. CIR points out that only the US Equal Employment Opportunity Commission has an obligation to keep EEO-1 forms confidential, not OFCCP, arguing that companies who accept taxpayer dollars should be subject to public scrutiny.

But as more companies willingly disclose their EEO-1 forms, those who don’t have less grounds to argue that revealing the information may hurt them competitively, according to Donald Tomaskovic-Devey, director of the Center for Employment Equity at the University of Massachusetts, who specializes in EEO-1 data analysis.

“For decades corporate America has resisted the release of these data, arguing that they represent trade secrets,” said Tomaskovic-Devey. “This was never a very convincing argument, but since the vast majority of contractors agreed to the release, it would seem that the era of secrecy has pretty much ended.”