Last week, the Department of Labor moved to dismiss Frito-Lay’s lawsuit (Frito-Lay, Inc. v. Department of Labor, 3:12-cv-01747 (N.D. Tex. 2012)) seeking to block the production of employment data for an OFCCP investigation into discrimination at its Dallas facility.  The case is an important test of the scope of OFCCP’s authority to request documents from government contractors in connection with compliance audits.

In July 2007, OFCCP issued a Scheduling Letter selecting Frito-Lay for a routine audit.  The Letter requested hiring data from Frito-Lay for the 2006 affirmative action plan year and the first half of 2007.  Frito-Lay provided that information.  More than two years later, in November 2009, OFCCP asked Frito-Lay for additional employment data from January 2008 through October 2009, a period outside of the original Scheduling Letter, asserting that OFCCP had found a “statistically significant” disparity in the hiring rates of women at one of the company’s facilities.

Frito-Lay refused to supply the additional data, arguing that the agency’s request for the 2008 and 2009 data was time-barred under Title VII.  OFCCP moved to compel Frito-Lay to provide the additional data.  An administrative law judge affirmed Frito-Lay’s objection to producing the data, finding that OFCCP was only authorized to seek data for the period two years prior to the date on the initial Scheduling Letter.  Two years later, however, the Administrative Review Board for DOL reversed the decision (OFCCP v. FritoLay, Inc, ARB Case No 2010-132), prompting Frito-Lay to file a complaint in federal court.

In its March 22 motion to dismiss, the DOL claims that neither Title VII nor Executive Order 11246 relieve Frito-Lay from producing the additional requested information.  In addition, the DOL broadly argued that “assuming that the President has the power under the Executive Order to prohibit employment discrimination by federal contractors — which it does — that authority must include the concomitant power to fashion effective remedies to effectuate that power.” 

We will continue to closely monitor this case as it has the potential to significantly affect the breadth of OFCCP data compliance audits and enforcement proceedings and the scope of relief sought by it.  In the meantime, contractors should continue to maintain their records in accordance with OFCCP retention regulations and understand that the refusal to provide records requested by OFCCP during a compliance audit could result in the initiation of enforcement proceedings against it.