5 The Legality of Preferential By C. Daniel Karnes* Preferential treatment, a term of art in the equal employment context, usually translates in actual practice to some form of goals, timetables, or quotas.1 Preferential Treatment The use of preferential treatment in the employment setting may generate claims of reverse discrimination. Allegations of reverse discrimination and illegality usually surface when: (1) preferential treatment is intentionally given to members of a particular group (in most cases minorities or women); and (2) such preferential treatment negatively affects the employment Mr. Karnes is an associate in the Washington, D.C., office of Seyfarth, Shaw, Fairweather & Geraldson. He was formerly Assistant Counsel for The Firestone Tire & Rubber Co. in Akron, Ohio, and a Supervisory Trial Attorney with the Equal Employment Opportunity Commission in Washington, D.C. He holds BA and J.D. degrees from Tulane University and is a member of the bars of California, Ohio, Louisiana, and the District of Columbia. 1. As the Fifth Circuit commented recently. "We refuse to engage in any semantic dispute over the difference in meaning between 'goals' and 'targets' on the one hand and 'quotas' on the other." United States v. City of Miami, 614 F.2d 1322 n.26 (5th Cir. 1980). 169 Federal Contract Compliance opportunities or conditions of persons who are not members of the preferred group. Preferential treatment may occur in one of five situations: 1. When preferential treatment is ordered by a court as a specific remedial measure after a finding of current or prior actionable discrimination. Cases of this type usually involve the imposition of a hiring, promotion, or other form of quota to remedy prior exclusionary employment practices. The remedy is generally tailored to a specific factual situation and is almost always temporary in nature. 2. When preferential treatment, usually in the form of goals and timetables, is required by a governmental unit as a condition of participating in government contracts or receiving government assistance. The goals and timetables imposed upon federal service and supply contractors by the Office of Federal Contract Compliance Programs ("OFCCP") are an example of this form of preferential treatment. 3. When preferential treatment is a part of a governmental equal employment policy implemented by an executive or legislative body.* 4. When an employment decision has been influenced by a race/sex/ethnic factor in the absence of any formal policy or plan, either private, governmental, or courtinduced." 5. When a voluntary affirmative action program is imple mented by a private party or parties to achieve equal employment opportunity. This type of preferential treat 2. See, eg, United States v. Elevator Constructors, Local 5, 538 F.2d 1012 (3d Cir. 1976); EEOC v. Sheet Metal Workers, 532 F.2d 821 (2d Cir. 1977). 3. Contractors Ass'n of E. Pa. v. Secretary of Labor, 442 F.2d 159 (3d Cir.), cert. denied, 404 U.S. 854 (1971). 4. Price v. Civil Serv. Comm'n of Sacramento County, 26 C.3d 257, 21 Fair Empi. Prac. Cas. 1512 (Cal. S. Ct. 1980); Detroit Police Officers Ass'n v. Young, 608 F.2d 671 (6th Cir. 1979). 5. Cf. McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273 (1976). Preferential Treatment after Weber ment was addressed by the Supreme Court in United Steelworkers v. Weber." THE OFCCP AND PREFERENTIAL TREATMENT Each federal service and supply contractor is required by the Office of Federal Contract Compliance Programs to perform a “utilization analysis" for each of its major job groups to determine whether minorities or women are "under-utilized." If such underutilization exists, then the contractor is required to set goals and timetables to correct the imbalance. These goals and timetables, of course, are a form of preferential treatment, the implementation of which may lead to claims of reverse discrimination from nonpreferred individuals. For some time it has been clear that courts could impose goals and timetables, pursuant to section 706(g) of Title VII, to remedy prior employment discrimination. In addition, the Supreme Court has extended the legitimacy of race-conscious goals to the private sector, if they are part of a voluntary affirmative 6. 443 U.S. 193, 99 S. Ct. 2721 (1979). 7. The limitations on the applicability of affirmative action obligations to contractors are set forth at 41 C.F.R. § 60-1.3. That section, for example, exempts contractors and subcontractors from compliance with the equal opportunity clause of the executive order if their annual aggregate of government contracts is less than $10,000. 8. The OFCCP regulations define underutilization as “having fewer minorities or women in a particular job group than would reasonably be expected by their availability." 41 C.F.R. § 60-2.11(b). The OFCCP's current interpretation of this provision, however, requires a contractor to declare underutilization whenever there is any difference, even frac tional, between the availability rate for minorities or women and their respective representation percentage in a job group. Whether the agency's rigid position on this issue will ultimately be upheld by the courts is questionable. See, eg., the Administrative Law Judge's Recommended Decision in Department of Labor v. The Firestone Tire & Rubber Co.. No. 80-OFCCP-15 (May 29, 1980), [1980] Daily Lab. Rep. (BNA) D-1 (June 4, 1980), in which the OFCCP's interpretation was held not to be the exclusive view under 41 C.F.R. § 60-2.11(b), and not to be mandatory since the agency had not complied with the requisite rulemaking procedures of the Administrative Procedure Act. Federal Contract Compliance action plan and within certain limitations discussed below." The question left still unanswered after Weber is whether the race- and sex-conscious preferential treatment required of contractors by the OFCCP passes muster under either Tide VII or the Constitution.10 Preliminarily it may be argued that Weber has no application to the federal contract compliance program at all, since the Supreme Court specifically limited its scope to private, voluntary affirmative action programs. The OFCCP's argument, of course, is that participation in the federal procurement program is voluntary and that contractors are free to decline to bid on federal projects if they find the conditions unpalatable. If, for the purposes of discussion, it is assumed that the OFCCP-imposed affirmative action requirements are voluntary, a determination must still be made as to whether the other Weber limitations are met. Requirements of the OFCCP It is important at this point to understand the OFCCP's position on goals-related issues. First, the agency considers the existence of past or present discrimination to be irrelevant to the requirement of goals and timetables. (Of course, if any such discrimination is suspected or uncovered during a compliance review or complaint investigation, the agency may likely initiate "enforcement" proceedings.) But the OFCCP's requirement of preferential treatment for underutilized groups is essentially 9. United Steelworkers v. Weber, supra note 6. 10. There may also be some question as to the propriety of preferential treatment under the executive order itself, that is, whether the order forbids such race- and sex-conscious preferences in the absence of prior discrimination. See, e.g., § 202(1) of the order, incorporated into 41 C.F.R. § 60-1.4(a), which prohibits discrimination because of race, sex, etc., and which requires the contractor to "take affirmative action to ensure that applicants... and employees are treated... without regard to their race, color, religion, sex or national origin.” This theory has been rejected by at least one court. Uniroyal v. Secretary of Labor, 20 Empl. Prac. Dec. 930107 (D.C. Cir. 1979). Preferential Treatment after Weber an in vacuo rule, which is not influenced by any consideration of discrimination, compliance status, or overall EEO progress by the contractor. Second, the OFCCP requires the setting of ultimate goals when there is any difference, however minute or fractional, between availability and utilization in a job group. In addition, if the difference translates to at least one person, annual percentage and numerical goals must be set. No import is attached to the degree of disparity, the size of the job group, the builtin imprecision of availability rates, or the history of equal employment progress at the facility. The existence of any numerical or percentage disparity is the sole, inflexible standard. Third, a contractor is required to maintain full utilization of minorities and women in each job group indefinitely. If the percentage of minorities or women falls at all below parity (ie., availability) in any job group, the contractor's next affirmative action plan must redeclare underutilization and reestablish goals. In other words, the OFCCP demands the continued maintenance of at least a specific minimum percentage of minorities and women in each job group. How do these OFCCP requirements measure up under Weber? In order to answer that question, a brief analysis of the Supreme Court's decision is necessary. Analysis of Weber The preferencial treatment involved in Weber took the form of a 50-percent quota for the admission of blacks into a craft training program. This one-black-for-one-white selection mechanism, which was negotiated between the employer (Kaiser) and the union (Steelworkers), replaced the traditional standard of selection-seniority. Plaintiff Weber, a white male employee, unsuccessfully argued that this portion of the company's affirmative action program was "reverse discrimination" prohibited by Tide VII of the Civil Rights Act of 1964." The Supreme Court had previously indicated in Regents of 11. 42 US.C. § 2000e et seq. |