https://www.law360.com/articles/1148742/ofccp-warns-law-firms-to-get-house-in-order-on-diversity
By Vin Gurrieri
Law360, New York
(April 10, 2019, 9:43 PM EDT) — Law firms need to “get their house in order”
when it comes to their diversity and inclusion practices, the top official at
the Office of Federal Contract Compliance Programs
told industry stakeholders Wednesday, both to serve as a model for other
businesses and to fulfill their responsibilities as federal contractors.
OFCCP Director Craig Leen’s comments came at a legal industry compliance event
the agency held in Manhattan. There, he cautioned that law may be among the
industry sectors that will soon face increased scrutiny by the agency of their
equal employment opportunity practices — particularly when it comes to
promotions — since women, minorities and disabled individuals are vastly
underrepresented in top-level equity partner positions.
“Law firms need to get their house in order,” Leen told industry stakeholders.
“You need to take a look at what’s happening because you are the example to the
world of compliance with law. … It’s important that you never be in a position
where it be viewed as you are being hypocritical or not following the legal
advice that you give to others.”
The OFCCP is a department within the U.S. Department of Labor that enforces
nondiscrimination and affirmative-action requirements for federal contractors
and subcontractors, which can include law firms that perform work for
government agencies.
During his remarks, Leen cited a recent study by the National Association for
Law Placement that said women and women of color are vastly underrepresented at
the equity partner level when compared with the percentage of women who
graduate law school and those that make up firms’ associate ranks. He also
cited a statistic that less than a half-percent of equity partners are
individuals with disabilities.
“These numbers are glaring, they are concerning, they are troubling, they are
problematic, and they are systemic,” Leen said. “They’re something that law
firms need to take a look at, and it’s something it’s going to be a focus of
OFCCP.”
While he mostly avoided discussing the root causes of firms’ long-standing
problems with diversity and inclusion in high-level positions or possible
solutions, Leen made a point to mention that inadequate policies regarding paid
leave for new parents can be an obstacle to diversity at the top or, if a good
policy is in place, a way to combat any lack of diversity that exists.
As best practices, Leen said that law firms could consider prorating billable
hour requirements for any parent that takes leave and making sure that they
aren’t penalized for taking leave. He also suggested that firms conduct
self-assessments every year at whether men are taking leave when they have
kids, figuring out ways to encourage them to do so and studying how both men
and women fare upon their return to work.
Moreover, the OFCCP’s top official said the agency plans to issue guidance
regarding how far the agency’s reach extends when it comes to policing
problematic practices involving lawyers who are equity partners, an issue that
Leen acknowledged has been up for debate. But the OFCCP director also said he
believes the agency can currently look at issues surrounding promotions to
equity partner positions.
“The promotion of associates or nonequity partners to partner is something I
think we would have jurisdiction over because we have jurisdiction over the
employees who are being promoted to partner or not promoted,” Leen said.
“Someone who’s not promoted to partner is still an employee. So, they’ve been
harmed would be the argument if they’ve been discriminated against,
particularly if that affects their compensation or their opportunities at the
firm.
“Generally, I do think we have a hook here, which is the promotion hook, and we
are going to be pursuing that when we look at firms,” Leen added.
While not many firms were scheduled for audits this year based on the “neutral
criteria” that the agency used to make its selections, Leen said the issue over
promotions will be a focus of the agency as soon as the next fiscal year for
for law firms and contractors in other sectors like finance and academia where
women and minorities are statistically underrepresented in top positions.
Wednesday’s event was the second held by the OFCCP in two days, coming on the
heels of an event Tuesday for financial industry
stakeholders. The events were held with the dual-pronged objective of informing
industry stakeholders about the agency’s initiatives and goals, but also to
obtain feedback about areas where the agency can improve.
On the former front, Leen on Wednesday laid out a general set of principles
that the agency will focus on under his watch: increasing transparency,
creating certainty, improving efficiency and publicly recognizing the best
performing contractors.
As to the first of those planks, Leen acknowledged that the agency “has been
known in the past to not be very transparent,” and said he wants contractors to
have a clear idea of both what it is doing and how it is doing it.
“Transparency is key to the success of this agency and making sure that it has
a bigger impact across the United States,” Leen said.
As to improving the efficiency of the matters it handles, Leen said that the
long periods of time that it takes to resolve some cases “is a huge threat and
problem for the agency” in part because many companies often won’t move to fix
a problematic compensation system until a case is resolved.
Leen noted that the agency has over 100 administrative matters pending that are
more than four years old, a number he said “makes no sense” and that isn’t
helpful for businesses, workers or the agency itself. The agency will be
increasing the number of random audits it conducts in the future but
streamlining them so they are completed far quicker and place a priority on
resolving the oldest cases currently in the system, he said.
“My general view of the contractors in this country is that the vast majority
of them don’t intend to discriminate,” Leen said, noting that bias is only
found in about 2% of the agency’s audits. “Nevertheless, a good company, when
we show them a disparity and there’s no explanation for that disparity, should
want to fix it and they should work with us to do so.”
–Editing by Aaron Pelc.