Hunton Employment & Labor Perspectives

The Administrative Review Board (“ARB”) has issued its decision in OFCCP v. Florida Hospital of Orlando, ruling that Florida Hospital is not a federal subcontractor and therefore not subject to the jurisdiction of the Office of Federal Contract Compliance Programs (“OFCCP”). The OFCCP is a federal agency that enforces equal employment opportunity and affirmative action laws. Entities subject to its jurisdiction have numerous affirmative action obligations. The ARB’s decision addresses whether the OFCCP can establish jurisdiction over hospitals and other health care entities based solely on their contracts to provide medical services for beneficiaries of TRICARE.

The OFCCP is a federal agency that enforces equal employment opportunity and affirmative action laws.  Entities that fall under the jurisdiction of the OFCCP have numerous affirmative action obligations if they have contracts or subcontracts with executive branch agencies.  A Labor Department Administrative Law Judge (“ALJ”) recently issued a decision that could expand the reach of the OFCCP to include hospitals and other health care entities which provide medical services for beneficiaries of TRICARE.  See OFCCP  v. Florida Hospital of Orlando, DOL OALJ No. 2009-OFC-00002 (October 18, 2010).  Florida Hospital has appealed the ALJ’s ruling.  If the ruling stands, numerous health care providers will be subject to the OFCCP’s jurisdiction.

The ruling is especially notable considering that there has been an increase in funding of the OFCCP and an increase in hiring of OFCCP compliance officers.  With this in mind, hospitals and health care providers should review their contractual obligations to determine whether they are federal contractors or subcontractors.  Entities that are federal contractors and subcontractors must comply with numerous obligations including filing EEO-1 and Vets 100/100A reports, ensuring nondiscrimination in employment, posting certain notices, establishing affirmative action programs and conducting adverse impact analyses for hires, promotions and terminations.