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Trump Contractor Watchdog Wants Closer Tabs on Career Attorneys

June 6, 2019, 10:15 AM

The chief of the Labor Department’s contractor watchdog wants to take a larger role in the agency’s litigation against businesses accused of pay discrimination, leading to clashes with career attorneys who handle those cases.

Craig Leen, who heads the Office of Federal Contract Compliance Programs, wants to be briefed by lawyers before they file legal complaints against federal contractors stemming from OFCCP audits, according to a March memo signed by Leen and Labor Solicitor Kate O’Scannlain, who oversees the Labor Department’s primary office of attorneys. The memo, obtained by Bloomberg Law, also instructs lawyers to consult with the OFCCP before filing “material” motions and briefs in those cases, to confirm they are accurately presenting the facts and to confer on any policy decisions.

The memo comes as the Solicitor’s Office and Leen have tussled over litigation, especially in complex pay discrimination cases, multiple former agency officials and attorneys involved in ongoing litigation with the agency told Bloomberg Law. Related disputes have also pitted political appointees against career DOL attorneys, who some say haven’t gotten fully on board with changes to how the OFCCP enforces contractor pay requirements under the Trump administration.

The Office of the Solicitor and the OFCCP are designed to function in a professional attorney-client relationship. Instead, confrontations between the two offices have led the OFCCP to change its approach to pay bias audits, which will be delineated in a soon-to-be published compensation directive.

The OFCCP is unique among many federal enforcement agencies because it can use random audits to access and review hiring, pay, and other employment data from some of the largest companies in the country—like Google and Dell—that contract with the federal government. With the help of the Solicitor’s Office, the department in recent years has brought high-profile pay and hiring bias cases against Oracle, Bank of America, and JPMorgan Chase & Co..

Debates about how to handle pay discrimination cases have become increasingly tense. For example, the contractor compliance office and its lawyers recently brawled over whether to appeal the agency’s loss in a compensation discrimination case against Analogic Corp., a Boston area-based medical imaging and security technology company, according to multiple individuals familiar with the proceedings who wished to remain anonymous given the sensitivity of the situation.

As a result, the agency is releasing its second compensation directive in less than a year, informing employers of how the OFCCP will analyze pay data to determine whether there’s enough evidence to pursue a discrimination case.

Despite the internal conflict, the two entities within the Labor Department continue to present a unified front when they interact with companies undergoing investigations, a source with ongoing litigation with the agency said.

“OFCCP and SOL work together regularly, hand-in-hand to further the Administration’s agenda and protect U.S. workers,” a Labor Department spokesperson told Bloomberg Law. “The Department declines to comment on ongoing litigation.”

Career Professionals vs. Political Appointees

There is another dynamic to the fractious relationship between the OFCCP and the Solicitor’s Office. Trump political appointees within the OFCCP are pushing to encourage contractors to voluntarily comply with pay requirements. They’ve butted heads with career attorneys within the Solicitor’s Office who want to continue to aggressively pursue companies when audits turn up pay discrepancies. That’s left O’Scannlain caught somewhere in the middle.

Any compensation-related case turns into a “big fight with the careers,” one former Labor Department official said.

The agency’s interests shifted from enforcement to compliance under the Trump Administration, another source with knowledge of the situation told Bloomberg Law.

“They’re not interested in enforcement, they’re interested in voluntary compliance,” the individual said. “The career staff was just trying to implement the law as the law exists.”

As a result, Trump appointees formed their own “secret circles” to move the agenda forward, only sharing certain information with the upper management of the career workforce, the former official said.

Career and political officials also disagreed on how to handle litigation against Oracle. The case was originally filed in January 2017, days before the end of the Obama administration. The agency has since amended its complaint and settled allegations of hiring bias in the tech company’s college recruitment program, after claiming Oracle owed women and minority workers $400 million in wages.

A former agency official said political appointees wanted to ensure the Oracle case was “properly brought” and grounded in pre-existing law. That rubbed some career officials in the Solicitor’s Office the wrong way, the official said.

Agency lawyers traditionally handle litigation decisions, while the OFCCP decides policy moves. Some litigation decisions push the envelope, however, and turn into policy decisions, Lawrence Lorber, the OFCCP’s director under President Gerald Ford, said. Lorber is now a senior counsel with Seyfarth Shaw.

“The Solicitor’s Office has, some would say, an overwhelming amount of authority or weight in the policy decisions of the OFCCP,” Lorber said. “They’re making policy and calling it law.”

But a source with knowledge of the situation said department attorneys are simply trying to do their jobs.

“They’re just public servants trying to enforce the law,” the source said.

Still, OFCCP should have the final say in litigation, a source within the Labor Deparment told Bloomberg Law.

“The head of OFCCP should be consulted on all legal matters affecting his agency,” the source said.

Joint Memo

The March 25 memo from O’Scannlain and Leen was published three days after a DOL administrative law judge issued the final ruling in the Analogic case. The SOL and the OFCCP subsequently clashed on whether to seek further review of that case. The case wasn’t appealed.

The memo was also released just over two months after the agency attorneys filed an amended complaint against Oracle.

Although the memo requires solicitor’s office lawyers to consult with the OFCCP, it also says O’Scannlain’s office has “responsibility and authority for all filings and legal arguments.”

“They apply principals that I set from a policy perspective,” Leen told Bloomberg Law in an April 10 interview, when asked about potential friction with career attorneys. “The Solicitor’s Office and OFCCP are a team and we agree on these principals.”

Leen is a lawyer and former city attorney for Coral Gables, Fla.

Adam Pulver, an attorney with Public Citizen who worked at the Labor Department in the Obama administration, said early solicitor’s office involvement can be helpful when working with compliance officers who are often not attorneys.

“Generally, early involvement of SOL is only a good thing,” Pulver said. “OFCCP is not unique across DOL agencies, though, in that some staff in enforcement agencies see SOL as an interloper.”

Structure to Blame?

Some of the friction naturally arises from the structured roles of the offices.

“There are just different priorities,” a former agency official said. “Many of the careers in SOL are more aligned with the previous administration,” the official said, referencing the Obama administration.

Other officials from past administrations acknowledged that working with the SOL wasn’t always smooth sailing, but described their relationships as collaborative overall.

“We worked pretty closely with the Solicitor’s Office,” especially after the formation of President Barack Obama’s National Equal Pay Enforcement Task Force in 2010 to focus on pay discrimination audits, one former agency official in a Democratic administration said.

Some discord is predictable between political appointees trying to move an agenda forward and career officials in SOL who might have other opinions about how the agency should proceed, Jaime Ramón, a former OFCCP director under the George H.W. Bush administration, said.

“Whenever you propose a policy directive, there is always going to be pushback,” he said. “I think in spite of the differences, we did have a collaborative effort in the cases that were referred, and I must say, there weren’t a lot.”

Solicitors have long since struggled with how to balance the agendas of different administrations, dating back to the Carter administration, management attorney John Fox of Fox, Wang & Morgan P.C. said. Fox worked for the Labor Department during the Reagan administration.

“They have a different client every administration,” he said.

— With contributions from Ben Penn and Chris Opfer

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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