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Twenty-Three Years And Counting: OFCCP v. Bank of America

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History of the case and recent changes

After more than 23 years of disputes following a routine Executive Order 11246 compliance review revealed indications of discriminatory hiring practices at Bank of America’s (“BOA”) corporate headquarters, it appeared the matter had finally reached a resolution. On April 21, 2016, the Administrative Review Board (the “Board”) for the Office of Federal Contract Compliance Programs (“OFCCP”) issued its decision for OFCCP v. Bank of America. The Board affirmed the administrative law judge’s (“ALJ”) finding as to 1993 conduct -- that the bank intentionally discriminated against African American applicants -- but reversed the ALJ’s finding of similar behavior for the period of 2002-05.

However, the never ending compliance review appears to continue as BOA recently appealed the case to the U.S. District Court for the District of Columbia.

The Historical Overview

This matter arose in 1993 when BOA was notified by the OFCCP that its Charlotte, North Carolina headquarters had been selected for a compliance review under the Executive Order 11246 (the “EO”) and was required to submit documentation regarding its affirmative action program. Following its review, the OFCCP notified BOA that it had violated the EO by discriminating against African American applicants in its hiring for entry level positions and issued a Notice of Violation on October 19, 1994. On June 29, 1995, an amended and subsequent Notice of Violation was issued accompanied by a proposed Conciliation Agreement. BOA subsequently rejected the conciliation process and the required Notice to Show Cause was issued on August 17, 1995. Upon determining BOA’s continued lack of compliance, the OFCCP filed an Administrative Complaint on July 18, 1997.

Several years of judicial and administrative litigation ensued thereafter. BOA brought suit against the U.S. Department of Labor and the OFCCP to challenge the constitutionality of the OFFCP’s selection of certain bank offices for compliance review under the EO. The bank argued that OFCCP’s notification letter constituted coercion and, as such, the bank did not voluntarily consent to the OFCCP’s compliance review. In response, the OFCCP moved for summary judgment in this suit on the grounds that the bank failed to exhaust administrative remedies. This motion was denied and the bank was awarded a temporary injunction that enjoined the OFCCP’s administrative proceedings against it pending the outcome of the suit. On appeal, however, this injunction was vacated by the Fourth Circuit Court of Appeals in 1999 holding that BOA had to first exhaust its administrative remedies.

From 2000 to 2013, the multiple ALJ’s issued a series of recommended decisions which, among other things, ultimately concluded with the following outcomes: (i) rejection of BOA’s Fourth Amendment challenge based on the OFCCP’s selection of the bank’s headquarters for a compliance review; (ii) liability under the EO for intentionally and unlawfully discriminating against African American applicants in 1993 and 2002-05; and (iii) award of more than two million dollars in back pay damages and interest. The Board’s Decision

In a forty page split decision, the Board affirmed the ALJ’s rejection of the bank’s Fourth Amendment challenge, finding no evidence of a coercive or otherwise illegal search of the bank’s records. In particular, the Board noted that the bank’s argument relied solely on the language of the standard OFCCP scheduling letter. The Board held that it was incumbent on the bank to present additional evidence, such as communications between the OFCCP and bank employees, to sufficiently support its argument.

Before affirming in part the ALJ’s finding of liability, the Board’s opinion addressed arguments from the OFCCP and BOA regarding the requisite burden of proof. BOA argued that because the OFCCP had pursued liability for intentional discrimination and disparate treatment, rather than a disparate impact claim, the OFCCP was required to identify and prove that particular BOA individuals deliberately discriminated against African Americans and that statistical evidence alone was insufficient to establish intentional discrimination. The OFCCP countered that its statistical evidence was overwhelming and sufficient to establish a prima facie case of discrimination and that the burden then shifted to BOA to prove otherwise.

In addressing this issue, the Board ultimately held that burden of production analysis was not needed in a full evidentiary hearing, holding that “the burden of proof always remains with the OFCCP.” However, the Board went on to conclude that statistical evidence could be used to establish liability -- holding that “the more severe the statistical disparity, the less additional evidence is needed to prove that the reason was [intentional] race discrimination.” The Board even went on to state that “very extreme cases of statistical disparity may permit the trier of fact to conclude intentional race discrimination occurred without needing [any] additional evidence.”

In accordance with these holdings, the Board unanimously affirmed the ALJ’s finding that the bank engaged in a pattern or practice of intentional discrimination in 1993 after noting multiple severe disparities between the hiring of White and African American applicants and the use of “disposition codes”, some of which (credit checks and incompatible hours) were found to have a statistically significant adverse impact on African Americans. Accordingly, the Board upheld an award of almost one million dollars in back pay damages and interest to those affected applicants by 1993 conduct. However, the Board failed to affirm the ALJ’s finding as to liability for 2002-05. Administrative Appeals Judge Corchado, writing for the majority, concluded that statistical evidence was not sufficient for this period and thus found that the OFCCP had failed to meet its burden -- noting that in a couple years the evidence suggested of only 2-3 individuals. Board Judge Brown determined that because the 2002-05 period was a separate claim, rather than a continuation of the 1993 claim, the claim should be denied because the OFCCP failed to afford the bank certain pre-enforcement safeguards to which it was entitled under the EO, including issuing the bank notice of violations and proposing conciliation agreements. As such, the Board reversed the ALJ’s finding of a pattern or practice of intentional discrimination during the 2002-05 period, and reversed all pertaining remedy orders, including over one million dollars in back pay and interest damages for that period.

After the Board’s Decision

Since the Board’s decision, and now that BOA has finally exhausted its administrative remedies, it has appealed the case to the U.S. District Court for the District of Columbia where it is currently pending. In the appeal, the bank alleged, among other things, that the Board’s finding that BOA intentionally discriminated against African American applicants in 1993 was erroneous and unsupported by substantial evidence -- arguing that the OFCCP’s reliance on statistical evidence was improper. The bank has also challenged the Board’s finding that it consented to the compliance review, reasserting its claims for violations of the Fourth Amendment.
This appeal is significant because its outcome could impact the use of statistical analyses by the OFCCP in its enforcement efforts. Stay tuned.

  1. When OFCCP filed the initial complaint, NationsBank was the respondent. Since then, NationsBank merged with Bank of America. For the purposes of this article, the bank/contractor shall be referred to as Bank of America or “BOA”.

  2. The full text of the Board’s April 2016 opinion is available on the United States Department of Labor’s website here: http://www.oalj.dol.gov/PUBLIC/ARB/DECISIONS/ARB_DECISIONS/OFC/13_099.OFCP.PDF

  3. See NationsBank Corp. v. Herman, No. 3:95CV103-MU (W.D.N.C., Nov. 17, 1997).

  4. Id.

  5. See Nationsbank Corp. v. Herman, 174 F.3d 424, 424 (4th Cir. 1999), cert. denied, Bank of America Corp. v. Herman, 528 U.S. 1045, 1045 (1999).

  6. Board Judge Royce issued a dissenting opinion on this issue, finding liability for this time period.

This article was prepared expressly for OutSolve, LLC by Jason Regas and Britney J.P. Prince, associates at Andrews Kurth. Copyright © 2016. Andrews Kurth. This communication has been prepared by Andrews Kurth for informational purposes and does not constitute legal advice. A past performance or prior result is no guarantee of a similar future result in another case or matter. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Attorney Advertising.

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