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Wells Fargo, Others Under Contractor Watchdog’s Scrutiny

Jan. 30, 2019, 10:51 AM

Wells Fargo & Co., Deloitte, and Huntington Ingalls Industries Inc. are among more than 200 federal contractors that received notices of violation from the Labor Department between 2016 and 2018. Those notices could provide a glimpse into this year’s pipeline of settlements that an agency official has said could be the largest yet.

Known as NOVs, the notices can outline anything from technical record-keeping violations, which generally carry no monetary penalties, to discrimination allegations that can lead to hefty settlements or costly litigation. From January 2016 to September 2018, the DOL’s Office of Federal Contract Compliance Programs sent NOVs to more than 244 federal contractor locations after agency audits, according to documents obtained by Bloomberg Law through a Freedom of Information Act request.

At least 64 of the notices, or more than a quarter, included hiring or pay discrimination claims. The NOVs can be crystal balls of sorts into violations that could translate into grounds for future settlements, the Institute for Workplace Equality’s David Cohen told Bloomberg Law. The institute advises contractors on compliance with federal affirmative action and nondiscrimination obligations.

“I think that’s a good proxy for what OFCCP has in its pipeline for cases and settlements,” he said.

Some Audits Still Open

Many of the audits that triggered the 244 notices have been closed, either through conciliation agreements or another form of resolution.

For those that remain open, the agency withheld from Bloomberg Law copies of the NOVs, such as the ones issued to Huntington Ingalls, Wells Fargo, and CBRE Group Inc.

Deloitte, Time Warner Cable, and Bank of America Corp. also received notices of violation, but specifics weren’t disclosed by the agency because the audits remain pending. Company representatives either didn’t respond to requests for comment or declined to comment.

Huntington Ingalls and Wells Fargo representatives said the companies haven’t resolved their notices of violation and declined to comment further on the audits or any potential enforcement action against them. CBRE declined to comment, but a Labor Department enforcement database doesn’t indicate a resolved audit.

“As a government contractor, HII and its divisions are routinely audited by OFCCP,” a Huntington Ingalls spokesperson told Bloomberg Law. “It would be inappropriate to comment on any open audits.”

Notices of violation are the result of a random and regular auditing process the DOL undertakes to ensure that companies that do business with the federal government are in compliance with federal affirmative action and nondiscrimination laws.

An agency spokesman declined to comment on ongoing matters.

Settlement Predictions

The notices don’t always translate into enforcement action, but OFCCP director Craig Leen said in November 2018 that fiscal year 2019 could be “the largest year on record” for financial collections from discrimination settlements. Every company that settles with the Labor Department, or defends litigation, must first receive an NOV.

Fiscal 2018 was the agency’s third highest year on record for monetary collections from discrimination settlements, but the agency is also upping the number of contractor locations to be audited in 2019. That means more NOVs could be on the way.

The agency plans to conduct 3,500 audits in fiscal 2019, up from 1,750 scheduled audits in fiscal 2018.

Top Violations

The most common offense called out in the NOVs was a violation of record-keeping obligations. Companies are required to maintain records of their hiring, pay, and other employment practices while doing business with the government.

There were at least 44 allegations of hiring discrimination and at least 20 allegations of pay discrimination in the NOVs, with at least two companies accused of both.

Bank of America received at least three NOVs from January 2016 to September 2018, but the Labor Department declined to specify the allegations against the financial institution. This isn’t Bank of America’s first rodeo with the OFCCP—it settled allegations of hiring bias against black employees in 2017, the conclusion of a long-running legal dispute with the agency that spanned more than two decades.

Wells Fargo, which received at least one NOV during the period analyzed, also has a past conciliation agreement with the OFCCP, settling allegations that it failed to provide a disability accommodation to a job candidate.

To contact the reporter on this story: Paige Smith in Washington at

To contact the editors responsible for this story: Jay-Anne B. Casuga at; Terence Hyland at