Federal contract oversight employees contemplate resignation offer, as agency faces layoffs and mission realignment

Deferred Resignation 2.0 

Workers at the Office of Federal Contract Compliance Programs, as well as the International Labor Affairs Bureau, Women’s Bureau and Office of Public Affairs, received an email late on April 4 that they were eligible for a second round of the deferred resignation program. Under the initiative, DOL employees can keep their pay and benefits through Sept. 30 if they resign by April 14. 

The message also said eligible staff could utilize the Voluntary Early Retirement Authority by the same deadline in order to retire by the end of the calendar year. 

Government Executive has previously reported on an internal February DOL memo in which officials proposed slashing OFCCP’s workforce by 90% (reducing the number of employees from nearly 500 to 50) and cutting the number of regional and field offices from 54 to four.

“Employees are worried about their livelihoods, that they're being pushed out of their jobs and not given options [and] not given enough time to make real-life decisions for their families,” said one OFCCP employee who preferred to be unnamed due to fears of retaliation. “It just don’t seem like they’re sending things and doing things in good faith.” 

What is OFCCP? 

The agency was responsible for enforcing:

• Executive Order 11246, a 1965 presidential directive that established antidiscrimination requirements for federal contractors and subcontractors. 
• Section 503 of the Rehabilitation Act of 1973, which prohibits discrimination on the basis of disability in federal contracting. 
• The Vietnam Era Veterans’ Readjustment Assistance Act of 1974, which requires federal contractors and subcontractors to take affirmative action to employ and advance certain veterans. 

Former OFCCP Director Jenny R. Yang, who also served as chair of the Equal Employment Opportunity Commission, said the agency’s audits of contractors helped expose unnoticed issues. 

“Because workers see federal government investigators right there saying ‘We want to do something about it,’ people start to open up, and we learn about problems that never would have been reported,” she said.

In 2020, OFCCP secured a ​​$3.5 million early resolution conciliation ​​agreement with Newport News Shipbuilding, the sole designer, builder and refueler of Navy aircraft carriers, to resolve allegations of systematic hiring discrimination without having to go to litigation. Under the agreement, the company distributed $3.5 million in back pay and interest to more than 4,400 affected Black applicants who weren’t hired for certain positions. The company denied it discriminated against applicants during its hiring process. 

The next year, the agency reached a $3.8 million settlement with Google to resolve allegations of systemic compensation and hiring discrimination affecting female and Asian software engineers at certain facilities. This settlement was the result of a routine compliance evaluation, and Google denied wrongdoing.

Trump Changes

On the second day of his second term, President Donald Trump repealed EO 11246, one of the three mandates that OFCCP enforced. His directive also required OFCCP to stop promoting “diversity” and upholding contractor affirmative action programs. 

As a result, many OFCCP audits were halted, including one at Elon Musk’s car company Tesla. Musk is the de facto leader of the Department of Government Efficiency, which has overseen recent personnel and spending cuts across federal agencies. 

Trump on March 24 named Catherine Eschbach as the agency’s new director. Most recently, she worked at a law firm where she represented Musk’s company SpaceX in a case involving the National Labor Relations Board. 

In an email to staff on the day of her appointment, Eschbach said the agency would be “right-siz[ed]” and reduce its “physical geographic footprint.” She also acknowledged the repealed executive order and said officials would closely examine the agency’s responsibilities under section 503 of the Rehabilitation Act and VEVRAA, which she mistakenly referred to as “VERRA.”  

“The reality is, most of what OFCCP had been doing was out of step, if not flat out contradictory, to our country’s laws, and all reform options are on the table to bring OFCCP into compliance with its constitutional and statutory bounds,” she wrote. 

The OFCCP employee said the email was not well received by staff.

“We were all offended by the email,” they said. “To me, it seemed hateful.”

New Orders

In Eschbach’s March 24 email, she said that the agency will need to verify that all federal contractors have eliminated their affirmative action programs within 91 days of the rescission of EO 11246. Trump repealed that order on Jan. 21, meaning such work should be completed on or around April 22.

OFCCP employees that Government Executive spoke to, however, said they haven’t received specific instructions about what tasks they should be performing. DOL did not respond to a request for comment. 

The email also said the agency would examine contractors’ previously submitted affirmative action plans to determine if there’s evidence of “longstanding unlawful discrimination” and, as part of an effort to deter diversity, equity and inclusion programs, identify potential civil compliance investigations of corporations, non-profits and higher education institutions.

“This administration is trying to use the full force of government to intimidate employers into backing away unnecessarily from important efforts that are needed to advance equal opportunity,” Yang said.  

Sen. Patty Murray, D-Wash., and Rep. Shontel Brown, D-Ohio, led an April 11 letter signed by 38 congressional Democrats to Labor Secretary Lori Chavez-DeRemer, urging her to reverse course on OFCCP.

“For decades, OFCCP has worked effectively to prevent and address unlawful discrimination by investigating individual complaints from workers and by proactively reviewing federal contractors’ employment practices,” they wrote. “This unique power to proactively review whether employers were complying with the law allowed OFCCP to identify discrimination that might have otherwise gone unreported or undiscovered.” 

One OFCCP employee, who preferred to be unnamed due to fears of retaliation, said that weakening the agency removes a resource for federal contract employees. 

“Who can they reach out to to ensure that when they have an issue, whether they’re individuals with disabilities or they’re a protected veteran, who can they reach out to if OFCCP is to be dismantled?” the employee said. 

The other OFCCP employee said that the agency’s apparent near elimination feels like a betrayal. 

“We love our jobs. I served in the military. I'm a disabled veteran, and I worked hard to get to where I am. I feel like our country is turning its back on us,” the employee said. “We're civil servants. We're still serving our country. We're not sitting here twiddling our thumbs.”