The Fox OFCCP Report

June 2013


The precise legal question presented in Abigail Noel Fisher v. University of Texas at Austin et al., No. 11-345 (U.S. Sup Ct, cert granted 2/21/12) is:
  • "Whether this Court's decisions interpreting the Equal Protection Clause of the Fourteenth Amendment, including Grutter v. Bollinger, 539 U.S. 306 (2003), permit the University of Texas at Austin's use of race in undergraduate admission decisions."
So, how did UT use race in its admission decisions? And, why would federal contractors subject to OFCCP's "Affirmative Action Plan" jurisdiction care about this issue since the Fisher case involves college admission decisions, and not employment decisions?

Taking the second question first, federal contractors will care because the federal Courts have long ago cited educational admission case decisions and employment case decisions (along with construction set-aside programs) interchangeably in their Equal Protection Clause case decisions. This is because the same constitutional Equal Protection Clause law underlies all race conscious and/or race preferential action in whatever form those actions take in the contexts of employment contracts, construction contracts or education institution admission decisions.

Supreme Court Now Poised to Explain More Precisely HOW Government Decision-Makers May Take Race Into Account

The Fisher case now promises, and the United States Supreme Court now seems poised, to answer more precisely HOW decision-makers may take race into account for all forms of government "race conscious" decision–making processes. Please remember that a decade ago, the U.S. Supreme Court handed down its famous "split-decision" in two companion "preference" in educational admission cases arising at the University of Michigan:
  • -Gratz v. Bollinger, 539 U.S. 244 (2003) [University of Michigan Undergraduate school admissions]; and
  • -Grutter v. Bollinger [University of Michigan Law School admissions].
NOTE: Mr. Bollinger was the then President of the University of Michigan and thus was the nominal defendant.

In a 5-4 "squeaker" decision which Sandra Day O'Connor (a Reagan appointee) wrote for the 5-Justice majority of the Court, the Court upheld the Law School's race-preferential admission process (in the Grutter case) using the Court's "strict scrutiny" standard (applied to all situations in which government actors use race in decision-making). "Strict scrutiny" requires that the state actor have a "compelling state interest" to act and that its action then be "narrowly tailored" to achieve the end objective the government has identified without unnecessarily intruding upon the rights of others. The majority reasoned that the Law School had a "compelling state interest" to promote diversity of "underrepresented minority groups" so as to create a "critical mass" to allow minority students, especially in small classes, to not feel isolated and thus miss some of the value of education. The majority further reasoned that the Law School had used racial factors appropriately by exercising "good faith judgments" to "narrowly tailor" its use of race both by (a) considering race only a "plus" while (b) also individually factoring in numerous other qualities each candidate would bring to the school without applying a preference which automatically rewarded a candidate based only on his or her race or national origin. Nonetheless, Justice O'Connor expressed the hope that race-based preference programs would no longer be necessary in education admission processes within 25 years (i.e. by 2028).

In the Gratz case, Chief Justice Rehnquist wrote the majority 6-3 decision striking down the undergraduate school's across-the-board award of 20 "bonus points" to each African American and Hispanic applicant (on a 160 point admittance scale and which scale awarded a perfect SAT score only 12 points). The majority found the point scale to be an unlawful quota which lacked the kind of individualized consideration the Law School applied to its candidates for admission.

And for those of you who remember 6th grade civics and whose minds are now racing forward to the next puzzler, how is it that private corporate interests could be impacted by the Abigail Fisher lawsuit which arises only under the Equal Protection Clause…which is ONLY applicable to public employers like the states (and their subsidiary divisions like counties, parishes, towns, and villages, etc.) via the Fourteenth Amendment and the federal government via the Fifth Amendment? (Please remember the states passed the Constitution and its Amendments as restraints on government.)

It is not the potential impact on federal contractors directly which alarm some Fisher case "watchers", but rather it is the potential impact on OFCCP which garners the attention. Yes, the Equal Protection "Component" of the Fifth Amendment limits what federal agencies, like OFCCP, may do and what the agency may order up from federal contractors. So, it is the possible impact on OFCCP's regulations for the construction of Affirmative Action Programs for Minorities which has generated the nervous glances toward the docket of this year's United States Supreme Court.

For those of you who are attentive-to detail, you will have noted the fact that the Abigail Fisher case arises under only the Fourteenth Amendment (applicable to only the states). Please see the precise "Question Presented" and note that the case does not arise under the Fifth Amendment's Due Process "Component". (NOTE: there is actually no Due Process "clause" in the Fifth Amendment, although the Supreme Court has, over the centuries, read such a "component" to in fact exist and originate from within the Fifth Amendment.) That observation may have then troubled you and caused you to then wonder how a case arising only under the Fourteenth Amendment could possibly have relevance to OFCCP actions given that only the Fifth Amendment limits them.

But then you will remember the celebrated recent constitutional law case of Adarand v. Pena, 515 U.S. 200 (1995) (construction contracting set-aside preferences case), in which the U.S. Supreme Court took the occasion for the first time in its 200 year history to hold that the reach and application of the Fourteenth Amendment "Due Process Clause" and the Fifth Amendment Due Process "Component" were "coextensive": meaning that they both limited and required the same things of their respective state and federal government actors. So, whatever the Fourteenth Amendment Due Process Clause means, the Fifth Amendment "Due Process Component" now also automatically means the very same thing.

Civil rights lawyers reading the precise "Question Presented" in the Abigail Fisher case now pending before the Court convert that question (in their mind's eye) to the OFCCP context as follows:
  • "Whether this Court's decisions interpreting the Equal Protection Clause of the Fourteenth Amendment, including Grutter v. Bollinger, 539 U.S. 306 (2003), permit the University of Texas at Austin's OFCCP's use of race in undergraduate admission decisions Affirmative Action Plans for Minorities."
So, do OFCCP's Executive Order 11246 regulations prescribing the ingredients for Affirmative Action Plans ("AAPs") for Minorities mandate that contractors take "race" into account in their employment-related decision-making? Before I answer that question, let's go back to the first question from above which I have left hanging until this moment so you may now see, as a federal contactor representative, the importance of the way the University of Texas used race in its college admission process.

UT Applied Race In "Good Faith" In Its Admission Selections

How did UT use race in its admission processes to the University? That mystery is part of the controversy of the case and gives rise to fears that the U.S. Supreme Court now has a case in front of it with an open invitation to prescribe specifically how and when to use racial criteria consistent with the limitations the 14th Amendment imposes on state government actors (and, de facto, also on federal agencies given the cross-breeding of the 14th Amendment Due Process Clause with the Fifth Amendment Due Process "Component"). The University of Texas had no prescribed rules regarding the application of race to its selection process. Rather, UT simply asked its admissions officials to factor in race (favoring African Americans and Hispanics) in "good faith" in only some unidentified fashion as to the 19% of the total selections as to which UT admissions officials had discretion to apply when admitting candidates to the University. One may generally describe the UT admission process as one which called upon UT admissions officers to exercise "good faith efforts" to use race in the admissions process.

Again, those federal contractor representatives concerned about the possible application of a decision in Fisher limiting the use of AAPs note a parallel "good faith effort" structure in AAPs for Minorities they create for federal contractors:
  • Placement goals. (See 41 CFR Section 60-2.16)
    1. Purpose: Placement goals serve as objectives or targets reasonably attainable by means of applying every good faith effort (emphasis added) to make all aspects of the entire affirmative action program work. Placement goals also are used to measure progress toward achieving equal employment opportunity.
    2. A contractor's determination under § 60-2.15 that a placement goal is required constitutes neither a finding nor an admission of discrimination.
NOTE: Like the University of Michigan Law School Admission preferences process, OFCCP's Placement Goals regulations are also "narrowly tailored" and outlaw certain kinds of unlawful preferential action based on race (and gender). Specifically, 41 CFR Section 60-2.16 goes on to also state at paragraph "e" that:
    1. In establishing placement goals, the following principles also apply:
      1. Placement goals may not be rigid and inflexible quotas, which must be met, nor are they to be considered as either a ceiling or a floor for the employment of particular groups. Quotas are expressly forbidden.
      2. In all employment decisions, the contractor must make selections in a nondiscriminatory manner. Placement goals do not provide the contractor with a justification to extend a preference to any individual, select an individual, or adversely affect an individual's employment status, on the basis of that person's race, color, religion, sex, or national origin.
      3. Placement goals do not create set-asides for specific groups, nor are they intended to achieve proportional representation or equal results.
      4. Placement goals may not be used to supersede merit selection principles. Affirmative action programs prescribed by the regulations in this part do not require a contractor to hire a person who lacks qualifications to perform the job successfully, or hire a less qualified person in preference to a more qualified one.

The "Pig-in-The-Poke" Concern

Further fueling fears that the U.S. Supreme Court may lay down strict rules for the use of race (assuming the Court continues to allow, as a practical matter, the use of race in government decision-making), is the record fact that UT Admissions officers made no notes about when they used a candidate's African American race or Hispanic ethnicity to offer a candidate a seat in the school they would not have otherwise offered. Moreover, UT admission officers did not make, or if they did make them they did not keep them, notes documenting what factors caused the selection official to extend an offer s/he would not otherwise have extended in a race neutral system.

Several Judges on the Fifth Circuit Court of Appeals (in New Orleans) wrote about their discomfort with the Fifth Circuit's decision upholding UT's race-based system as lawful (within the meaning of the Equal Protection Clause of the 14th Amendment) simply because they felt they were abdicating their responsibility to provide oversight and were deferring blindly to UT admission officials as to how they exercised their discretion to use racial considerations in their admission decisions. These Judges wondered how they were to review the exercise of management discretion since UT could not determine exactly who benefited from UT's consideration of race and could not determine exactly how UT weighted and considered race in the admissions process. Fifth Circuit Judge Garza, for example, a leading Appellate Judge and one of the most prominent Hispanic Judges on the federal Appellate bench, expressed his concern, in a reluctant concurring opinion (clearly feeling handcuffed by what he viewed as an unfortunate decision in Grutter which he viewed as straying from "strict scrutiny" and "narrow tailoring" by allowing admission officials unbridled discretion to apply race-based decision-making in some uncertain and ill-defined "good faith" manner). Judge Garza described the Fifth Circuit's panel opinion as a "faithful, if unfortunate, application of" what he considered to be Grutter's incorrect "digression in the course of constitutional law". Judge Garza thought the effect of the Grutter decision was to "abandon" strict scrutiny and to "substitute in its place an amorphous, untestable, and above all, hopelessly deferential standard that ensures that race-based preferences in university admissions will avoid meaningful judicial review for the next several decades."

PUNCHLINE: If the Fisher decision lays down some rigid rules for the use of race-based decision-making, as opposed to limiting their use to the point of extinction, then OFCCP and federal contractors will have to equally take notice of those limits since OFCCP will similarly be limited under the Fifth Amendment Equal Protection Component as to the range of "good faith efforts" OFCCP may require of federal contractors.

Fisher's "Knockout Punch" Fear

UT admitted the other 81% of its Freshman student body by use of the so-called "Top Ten Percent Law". Since 1997, when Texas schools initially stopped using "race" as an admission consideration, the Texas Legislature ordered that the top 10% of each Texas High School be automatically admitted to UT. UT identified "The Top Ten Percent" by reviewing the "Academic Index" ("AI") of each student (computed by high school rank and standardized test scores) in consideration with a so-called "Personal Achievement Index" ("PAI") (a composite score developed from a reading of the candidate's written essay and consideration of ostensibly race-neutral "personal achievement" scores, weighted by socio-economic status, whether the student lived in a single-parent household and by whether the candidate's family spoke any languages at home other than English).

NOTE: In 2003, and ironically on the very day the U.S. Supreme Court announced its Gratz decision (striking down the University of Michigan undergraduate school diversity admissions program), UT again began the use of race to admit students to UT and despite the increase of Black students to UT which had brought them to their highest levels ever on the UT campus.

It is this background fact coloring the Abigail Fisher case which has fueled the concern of some that the Supreme Court took the case as the vehicle to "end Affirmative Action". Given that the "Top Ten Percent Law" raised dramatically and immediately the percentage of Black students applying to and being admitted to the University of Texas, some critics of race-based preferences make the argument that the "Top 10% Law" proves convincingly that other prophylactic social programs – not focusing on race-conscious programs, may be enough by themselves to resolve lingering doubts about whether society may achieve diversity-Nirvana with enough time and without "Affirmative Action".

If Properly Understood, and Applied, however, AAPs Should Not Be Affected By The Fisher Decision, Regardless How The Court Decides The Case

Every year in October, at the four-city National Employment Law Institute Affirmative Action Briefing, I start the first day of the 3-day seminar (for those new to Affirmative Action planning or in need of a refresher on the basics of OFCCP regulations) in all four cities asking this fundamental although complex question:
  • "What is the purpose of an Affirmative Action Plan for Minorities and Women which OFCCP's regulations require of covered federal contractors?
There is always an uncertain look from most members of the audience. So, I give them a BIG hint: I then note that an AAP for Minorities and Women tells them the ONE thing they need to know to conduct proper non-discrimination preventative maintenance analyses and which information no other known Human Resource system answers:
  • ...the percentage availability of Minorities and Women for each of the "Job Groups" the contractor has identified in its AAP.
Knowing the percentage of minorities and women "out there" and available to the contractor to hire (referred to in discrimination law cases as "demographic data") is VERY important given that the law will hold the contractor legally responsible for hiring against the HIGHER OF either (a) "demographic" data or (b) "applicant flow" data.

Example: Assume applicant flow data revealed 10% minorities available for the job in question, your Hiring Log revealed that 15% of your Offers/Hires were Minorities (Happy Days! – so far you have hired a greater percentage than showed up at the door), BUT demographic data, let's also assume, revealed 20% availability!!! (i.e. your recruiters missed half of the available market – they found only 10% of the 20% "out there").

Grand Conclusion: Prepared correctly (few are), your AAP is for your Recruiters. It tells corporate recruiters what percentage is generally available for your available jobs. It is not a "Hiring Goal" or "Hiring Target". It is not a "Selection Goal" for managers "to hit" or come close "to hitting". (Remember: A contractor's determination to set a "Placement Goal" is not a finding of unlawful discrimination.) Go back and read 41 CFR Section 60-2.16 (b) set out above for your convenience. The development of a Placement Goal is simply not a predicate the law recognizes to allow contractors to engage in race-based selections (i.e. Placement Goals do not provide either evidence of (a) a "strong basis in evidence"=state employers (see Ricci), or (b) a "manifest imbalance" or prima facie case of unlawful discrimination=private employers (see Weber). Rather, AAP goals are designed to inform contractors what is "out there" and available to your company to hire.

Here's OFCCP's Regulatory Architecture: Once you get Applicants to the front door of your company in at least the volumes your demographic data report are available (that is why you need the AAP for Minorities and Women), then Title VII and Executive Order 11246 non-discrimination obligations attach and regulate whether your selection procedures from among those Applicants are lawful or not. The Fischer decision, whatever it will be, will not say that calculating demographic data in AAPs is unlawful since there is no "adverse action" associated with counting. The adverse action, if any, comes later…when selection occurs… It is what the contractor does with the census that counts (no pun intended).