While conceding that OFCCP's affirmative action reporting requirements applied generally to its operations, the corporation claimed that OFCCP lacked jurisdiction to conduct a review of this particular facility because the facility itself was not connected with any government contract work. Accordingly, the corporation requested an exemption or waiver for the facility. The local district office replied that it did not have the authority to grant such a request and directed the corporation to contact the Deputy Assistant Secretary of Labor, who is the head of OFCCP. The corporation took no further action to obtain the waiver and did not supply the requested affirmative action information. Was the corporation's facility entitled to a waiver?
Answer: No. Even though the facility was "autonomous and entirely divorced" from work relating to the corporation's federal government contracts, the facility was subject to the reporting requirements absent an express waiver or exemption from the Deputy Assistant Secretary of Labor.
DOL, not company, determines whether a facility is autonomous and entitled to waiver. The Rehabilitation Act of 1973, Executive Order 11246, and regulations implementing the Vietnam Era Veterans Readjustment Assistance Act of 1974 show that the Labor Secretary is not required to grant waivers; rather she may in her discretion grant waivers. Neither case law nor federal regulations supported the corporation's position that it had authority on its own to determine if one of its facilities was "autonomous" and not subject to OFCCP reporting requirements.
Separate incorporation not controlling; "actual control" is. Moreover, the corporation mistakenly relied on a 1972 Comptroller General opinion stating that a separately incorporated subsidiary was not subject to reporting requirements because its parent corporation did not exercise "actual control" over it. In the present case, the corporation admitted that it operated the facility, set the personnel policies implemented by the facility, and controlled certain aspects of hiring, promotion and discharge decisions at the facility.
What should you do? Apply directly to the Deputy Assistant Secretary of Labor for a waiver. Absent the waiver, the employer must supply the affirmative action information pertaining to the facility that is requested by the OFCCP.
Cite: Trinity Indus, Inc. v Herman (4thCir 1999) 75 EPD P45,808.
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