By Susan Schoenfeld, JD
Senior Legal Editor

In January 2015, the Office of Federal Contract Compliance Programs (OFCCP) issued a proposed rule to change and modernize its existing sex discrimination guidelines originally issued in 1970.

Since the guidelines were issued 45 years ago, Title VII has been amended several times, including by the Pregnancy Discrimination Act (PDA). The current guidelines do not reflect the significant changes that Congress has made to Title VII since 1970, nor do they reflect the body of Title VII case law that has developed in the last 4 decades.

The components of the proposed rule

The proposed rule would prohibit caregiver discrimination, discrimination based on dress or personal appearance, caretaking, and other forms of sex stereotyping as sex discrimination. In addition, the proposed rule would grant accommodation rights to pregnant employees, an issue that is currently before the U.S. Supreme Court in the case of Young v. United Parcel Service, 707 F.3d 437 (4th Cir. 2013), cert. granted (U.S. No. 12-1226, July 1, 2014).

Specifically, the proposed rule would:

• Clarify that adverse treatment of an employee because of gender-stereotyped assumptions about family care-taking responsibilities is discrimination.
• Clarify that leave for childcare must be available to men on the same terms as it is available to women.

Confirm that contractors must provide workplace accommodations, ranging from extra bathroom breaks to light-duty assignments, to women affected by pregnancy, childbirth, and related medical conditions comparable to the accommodations that they provide to other workers similar in their ability or inability to work, such as workers with disabilities or occupational injuries.

• Clarify that compensation discrimination can result from job segregation or classification on the basis of gender, not just unequal pay for equal work, and thus may violate Executive Order (EO) 11246.
• Confirm that contractors must provide equal benefits and equal contributions for male and female employees participating in fringe-benefit plans.
• Address both quid pro quo and hostile-environment sexual harassment, and include as a best practice that contractors develop and implement procedures to ensure an environment in which all employees feel safe and welcomed, are treated fairly, and are not harassed because of sex.
• Clarify that adverse treatment of employees because they do not conform to gender norms and expectations about appearance, attire, and behavior is unlawful sex discrimination.
• Clarify that discrimination based on an individual’s gender identity is unlawful sex discrimination.

Finally, the regulations would change the “Sex Discrimination Guidelines” issued in 1970 to regulations about “Discrimination on the Basis of Sex” to make clear that the final rule has the force and effect of law.

What would change?

The OFCCP downplays the impact of the proposed rule, saying that most contractors are already subject to the gender discrimination provisions of Title VII or similar state laws and that the vast majority of those contractors already provide accommodations to pregnant employees. This may be true, however, experts in the contracting field point to a number of changes the proposed rule might bring about that would impact contractors more substantially.

Compensation. Among the more impactful changes proposed in the rule is an explicit prohibition on compensation discrimination based on gender. The rule would prohibit compensation discrimination between “similarly situated” employees. The relevant factors in determining who is similarly situated may include tasks performed, skills, effort, levels of responsibility, working conditions, job difficulty, and minimum qualifications. However, the OFCCP has also stated that there may be situations in which employees are similarly situated when comparable on some factors and not on others.

In addition to cases of similarly situated compensation discrimination, the proposed rule cites a more subtle form of discriminatory compensation that can result from de facto job segregation or classification on the basis of sex.

For example, a retail chain might disproportionately steer women into lower-paying cashier jobs—even though the women are qualified and available for higher paying positions—based on the outdated, stereotypical notion that men, and not women, are the primary wage earners. According to the OFCCP, these forms of discriminatory compensation practices, called “steering,” remain a potential concern that must be addressed.

Although not new, the proposed rule also cites federal contractors’ affirmative duties to maintain data, conduct internal reviews, and monitor pay practices for potential discrimination, as well as comply with EO 11246’s ban on discrimination in the payment of wages, salaries, and other forms of compensation and determining who and what jobs are “similarly situated” for the purpose of compensation reviews.

These obligations will be made somewhat more difficult by the increased scrutiny brought on by the final sex discrimination regulations and what promises to be OFCCP’s more focused enforcement efforts.

Policies and training. In anticipation of a final rule, contractors should schedule a review of existing policies and training programs to ensure that issues such as caregiver discrimination, discrimination based on dress or personal appearance, and other forms of sex stereotyping as sex discrimination are addressed.

Accommodation policies must be updated to include pregnant employees. Policies and training programs should also explicitly state that the employer and its management team will not make employment decisions or statements based on sexual stereotypes, such as perceptions about how women and men should act and dress, who should care for children, and perceived limitations of family responsibilities.

Enforcement. The final regulations will be enforced by the OFCCP. As a result, employees alleging gender discrimination may file either a Title VII charge with the EEOC and then a lawsuit in federal court, or a complaint of violation with the OFCCP. Unlike the EEOC and federal court, the OFCCP will have the enforcement power to debar a contractor under the standards established in the final rule.

Susan Schoenfeld, JD, is a Senior Legal Editor for BLR’s human resources and employment law publications. Ms. Schoenfeld has practiced in the area of employment litigation and counseling, covering topics such as disability discrimination, wrongful discharge, sexual harassment, and general employment discrimination. She has litigated numerous cases before the U.S. Court of Appeals, state court, and at the U.S. Department of Labor. In addition to litigating employment cases in state and federal court, she provided training and counseling to corporate clients regarding employment-related issues. Prior to entering private practice, Ms. Schoenfeld was an attorney with the Civil Rights Division at the U.S. Department of Labor in Washington, D.C., where she advised federal agencies, drafted regulations, conducted inspector training courses, and litigated cases for the Office of Federal Contract Compliance Programs, the Directorate of Civil Rights, and the Mine Safety and Health Administration. Ms. Schoenfeld received her undergraduate degree, cum laude, with honors, from Union College, and her law degree from the National Law Center at George Washington University.   Follow Susan Schoenfeld on Google+ Questions? Comments? Contact Susan at sschoenfeld@blr.com for more information on this topic