Opinion

Rogue Federal Agency Makes Up Own Rules to Harass Tech Companies

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Posted: Mar 16, 2020 12:01 AM
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Rogue Federal Agency Makes Up Own Rules to Harass Tech Companies

Source: AP Photo/Marcio Jose Sanchez

In the past, when federal contractors complained about the treatment they received from the Office of Federal Contract Compliance Programs, agency officials would dare them to take it to the judge because “he works for us.”

But Google took the dare – it took a complaint about harassment by the agency over alleged employee discrimination to an administrative law judge who works for the agency. And the judge agreed Google was right.

Google said it turned over 740,000 pages of documents, at a cost of 2,300 man hours and $500,000, to address an inquiry by the Office of Federal Contract Compliance Programs into Google’s compensation practices. When the office came back and added to its demands the names of all Google employees, the company said enough.

Google sued, and an administrative judge from the Department of Labor ruled the agency had been “overbroad, intrusive on employee privacy, unduly burdensome, and insufficiently focused on obtaining the requested information.”

Of course, it took a company with the clout and wherewithal of Google to press the case. The Office of Federal Contract Compliance Programs has the power to debar federal contractors, which prevents them from doing future business with the federal government. This can be a death sentence to many businesses, which means those of lesser means than Google – which is well north of 99 percent of every company on the planet – have no choice but to accept mistreatment and move on.

And there has been plenty of such mistreatment – an agency focus on high-dollar settlements with top companies to secure splashy headlines, frequent and systemic antagonistic behavior toward the firms it regulates, given to making extraordinary and overly broad demands for information then insisting near-impossible deadlines be met to produce it.

That the Department of Labor ruled in favor of Google is a sign the agency finally may be getting the message that its conduct is not proper or productive. Its mission is to ensure federal contractors follow federal employment law – that they do not discriminate on the basis of race, religion or ethnicity, nor differentiate in pay by gender or in any other discriminatory manner.

But in the final years of the Obama administration, the agency had focused on high-dollar verdicts and headlines. It fined Goldman Sachs and Dell Technologies $10 million and $7 million respectively and fined Bank of America $4.2 million. These verdicts struck such fear into American businesses that many were reluctant to talk even anonymously to the U.S. Chamber of Commerce for a white paper it produced on the agency’s problems.

In the deregulatory age of President Trump, American companies ought not fear their regulators.

Perhaps sensing the climate would change when President Trump took office, the Office of Federal Contract Compliance Programs decided to go big-time with its harassment efforts in the waning days of the Obama administration. The agency filed suits against Google, Oracle and Palantir, which provides software and data analysis to the federal government.

The suit against Oracle seeks not $1 million or $10 million but $400 million that the agency alleges the firm owes to female, Asian and African-American employees. It alleges the company systemically paid Caucasian male workers more than their counterparts in the same job title and favored Asian-Americans in hiring for some technical positions.

In none of those had employees at these firms complained of discrimination. The agency is attempting to prove these firms have discriminated through statistical analysis only.

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For instance, if a job requires expertise in finance, someone with a business or finance degree likely would earn more starting out than someone with a degree in history. But if these employees had the same title but were not paid the same, the office of Federal Contract Compliance Programs would consider this discriminatory and subject to fines and sanctions.

The Chamber and others say these lawsuits reflect the priorities of the previous administration, not the current one, and should be dropped. Alex Acosta, President Trump’s first secretary of labor, declined to do so during his term, and it is hoped his successor, Eugene Scalia, will be more forceful on the matter.

It also is hoped by the Chamber and many of its members who are federal contractors – that the agency will return to its core purpose, working with contractors and subcontractors to foster true affirmative action, and reduce emphasis on punitive and seemingly politically motivated prosecutions.

What is clear is the people in charge of advancing the president’s deregulatory program should spend some time on fixing this agency and erasing the midnight mischief of the previous administration.