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DOL ALJ finds no violation in the Fourth Amendment for OFCCP bumping up the scheduling of an audit.

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ALJ rules that OFCCP used neutral selection criteria when OFCCP bumped up the review schedule in OFCCP v Baker DC LLC

On September 30, 2014, the General Services Administration (GSA) awarded Grunley Construction Company, Inc. (Grunley) a $139 million contract to renovate a building on the west campus of St. Elizabeth's Hospital’s. OFCCP selected the St. Elizabeth's as a mega construction project (MCP) and Grunley agreed to participate in the MCP program.

A MCP is a construction project which: (1) is directly federally-funded or federally-assisted; (2) has a contract value of $25 million or more; (3) is expected to have significant economic and/or employment impact on a community; and (4) will last more than one year. OFCCP works closely with MCP participants, both prime and subcontractors, to provide technical assistance with meeting their compliance obligations.

Four months after the construction work began; Grunley notified OFCCP that it has awarded a subcontract to Baker DC LLC (Baker) in the amounts of $100k and $15 million, respectively. Shortly after the start of the project in February 2015 during an OFCCP outreach event several African-American man and woman complained that Baker was allegedly engaging in discriminatory policies and actions. One individual called Baltimore Assistant District Director (ADD) Tonya Bennett several days after the event and made five specific allegations about discrimination.

In March 2016, OFCCP sent Baker a Construction Compliance Evaluation Notice initiating a compliance review. The letter informed Baker that OFCCP would start its on-site review on May 11, 2016. In response, one of Baker’s attorneys contacted Baltimore District Director (DD) Tom Wells to avoid the need for an entrance conference. On May 11, 2016, interviews were conducted with Baker’s corporate compliance manager along with two other managers. A document request including the identification of on-site employee interviews was sent to Baker on May 18th. Baker’s attorney denied OFCCP’s requests leading to a Notice to Show Cause for denial of access to the company’s Washington, DC worksites. Since the result of the show cause failed to lead to voluntary compliance, OFCCP filed an administrative suit on January 13, 2017 seeking an order to allow for access and document submission.

Defendant’s Argument

Baker argued that the OFCCP’s effort to conduct an on-site audit violated the Fourth Amendment. Since the case was filed under the jurisdiction of the D.C, Circuit, the Administrative Law Judge (ALJ) cited a 2000 ruling of Beverly Enters v Herman that states that an administrative search violates the Fourth Amendment unless an agency can show that a company‘s selection is based on: (1) specific evidence of an existing violation, (2) reasonable legislative or administrative standards that have been met with respect to that particular contractor or (3) an administrative plan containing specific neutral criteria.

OFCCP’s Argument

DD Tom Wells testified that in MCPs a subcontractor is selected for review when they reach the three month date after construction begins. All subcontractors are included and reviews are schedule sequentially based on the date that they reach three month’s work. By January 2016, Baker and four other companies, out of 21 subs/contractors, had reached three month’s work thereby putting them on the scheduling list. According to Wells, when OFCCP receives credible complaints of discrimination, they move the company up on the compliance review list.

ALJ Findings Baker argued the following points which were each addressed by the ALJ.

Argument 1: OFCCP’s selection process was not neutral and that the complaints against the company were not credible, therefore, OFCCP enforcement action violated the Fourth Amendment. The ALJ immediately dismissed Baker’s claims that the OFCCP did not use a neutral plan saying that Baker self-selected into the MCP program.

Argument 2: OFCCP did not have authority to demand documents for an off-site review asserting that it violated OFCCP’s policy and the Paperwork Reduction Act since the agency did not conduct an on-site review. The ALJ did not accept this argument as there was proof the Baker told the OFCCP not to come on-site and that the compliance officer conducted the entrance conference over the phone and did conduct off-site interviews.

Based on the above, the ALJ recommended that the Secretary of Labor order Baker to allow the OFCCP to conduct and complete its compliance review, including, but not limited to, an on-site review, and provide OFCCP all of the requested documents.

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