UNITED STATES DEPARTMENT OF LABOR OFFICE OF ADMINISTRATIVE LAW JUDGES OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Plaintiff, v. Case No. POTOMAC ABATEMENT, IN C., Defendant. ADMINISTRATIVE COMPIAINT Plaintiff, Of?ce of Federal Contract Compliance Programs, United States Department of Labor by its attorneys, alleges the following facts. Jurisdiction and Coverage 1. This action is brought by OFCCP to enforce the contractual obligations imposed by Executive Order 11246 (30 Fed. Reg. 12319), as amended (?Executive Order 11246? or ?Executive Order?), and the rules and regulations issued pursuant thereto at 41 C.F.R. Chapter 60. 2. This Court has jurisdiction of this action under Sections 208 and 209 of Executive Order 11246, 41 C.F.R. 60-126, 41 CPR. 60-4.8, and 41 C.F.R. Part 60-30. 3. Defendant Potomac Abatement, Inc. (?Defendant? or ?Potomac?), is a construction company with a business of?ce in Jessup, Maryland that Specializes in demolition work, particularly asbestos abatement. 4. At all times relevant hereto, Potomac?s employees performed construction work, as that term is de?ned at 41 C.F.R. 60-13, on federal contracts within the Washington, DC. and Baltimore, Maryland greater metropolitan areas. 5. At all relevant times, Potomac held federal subcontracts in excess of $10,000 per year. 6. Potomac is a Government subcontractor within the meaning of the Executive Order. 7. Potomac is subject to the contractual obligations imposed on Government contractors and subcontractors by Executive Order 11246 and the implementing regulations issued thereunder. 8. The regulations issued pursuant to Executive. Order 11246 provide at 41 C.F.R. 60-4.1 provide that each employer with a federal or federally-assisted construction contract or subcontract of greater than $10,000 is required to comply with the nondiscrimination provisions of Executive Order 1 1246 and its implementing regulations. Compliance Review 9. OFCCP conducted a compliance review of Potomac beginning on May 2, 2012, with a review period of May 1, 2011 to April 30, 2012. OFCCP found that from May 1, 2011 to February 2012, PotomaC?s work force was almost entirely Hispanic. This homogenous Hispanic work force included about 100 workers classi?ed by Potomac as skilled Field Technicians and unskilled Laborers. 10. In February 2012, Potomac hired 17 black Laborers and Field Technicians who were residents of the District of Columbia in order to meet a contractual requirement that a project be staffed primarily with residents of the District of Columbia. During the pendency of those contracts, Potomac assigned the black workers disproportionately to perform higher paying, skilled work. k) 11. OFCCP noticed that, in the spring of 2012, Potomac was laying off black workers at a higher rate than HiSpanics, and requested an additional six months of payroll records through November 2012. 12. review of the additional records revealed that by July 2012, Potomac had laid off all of its black employees, resulting once again in a homogenously Hispanic work force. 13. As a result of this compliance review, OFCCP found that Potomac violated the Executive Order by laying off its entire black workforce by July 2012, paying Hispanic workers lower wages than similarly quali?ed black workers before July 2012, and harassing its Hispanic employees throughout the investigation period. OFCCP also found that Potomac failed to provide equal employment opportunities to minorities, women, veterans, and quali?ed individuals with disabilities. These violations are described in detail below. Discrimination in Compensation 14. Pursuant to Section 202 of the Executive Order, 41 C.F.R. Potomac agreed not to discriminate against any employee in assigning rates of pay or other forms of compensation because of race or national origin. 15. From February 2012 to July 2012, Potomac discriminated against Hispanic employees based on their race and national origin with regard to compensation. Speci?cally, Potomac paid its Hispanic employees lower average hourly rates than similarly skilled black employees on similar or identical federal wage scale contracts. This wage disparity existed because Potomac assigned a disproportionately high number of Hispanic employees to perform lower-paying, unskilled tasks, and assigned a diSprOportionately high number of black employees to perform the higher?paying, skilled tasks. 16. Potomac classi?ed its employees as skilled Field Technicians and unskilled Laborers. Field Technicians generally had asbestos licenses indicating that they had been trained in how to work safely with asbestos, and Laborers often lacked these licenses. 17. Potomac assigned its employees to federal wage scale projects that paid a relatively higher hourly wage for skilled work and a relatively lower wage for unskilled work. The rates for skilled and unskilled work were set by Department of Labor wage determinations and varied with the location of the work and the dates that the work was performed. For example, one wage determination in effect during the relevant period required Potomac to pay $26.68 per hour for skilled work but only $15.84 for unskilled work. 18. From February 2012 to the present, on information and belief, Potomac?s managers exercised discretion in deciding which employees should be assigned to perform the higher paying, skilled work and which should be assigned to perform the lower paying, unskilled work. Potomac?s managers sometimes assigned Field Technicians to perform unskilled work, and sometimes assigned Laborers to perform skilled work. An employee could be assigned to perform skilled work one week and unskilled work the next week. 19. From February to July 2012, Hispanic Field Technicians were more likely to be assigned by Potomac to perform lower paying, unskilled work than black Field Technicians were. Also, black Field Technicians were more likely to be assigned by Potomac to perform higher paying, skilled work than Hispanic Field Technicians were. This disparity in job assignments caused Hispanic Field Technicians to receive a lower average hourly rate than black Field Technicians. This wage disparity remained after adjusting for differences in legitimate, pay-determining factors such as experience and training. Upon information and belief, OFCCP alleges that this discrimination continues to the present. 20. From February to July 2012, black Laborers were more likely to be assigned by Potomac to perform higher paying, skilled work than Hispanic Laborers were. Also, Hispanic Laborers were more likely to be assigned by Potomac to perform lower paying, unskilled work than black Laborers were. This disparity in job assignments caused Hispanic Laborers to earn a lower average hourly wage than black Laborers. This wage disparity remained after adjusting for differences in legitimate, pay-determining factors such as experience and training. Upon information and belief, OFCCP alleges that this discrimination continues to the present. 21. ?Since at least February 2012, Potomac has failed to identify and provide complete relief including, but not limited to, lost wages and hourly rate adjustments, to the Hispanic Field Technicians and Laborers who have been adversely affected by Potomac?s discrimination in compensation. Upon information and belief, OFCCP alleges that this failure continues to the present. Failure to Protect Employees from Workplace Harassment 22. Pursuant to 41 C.F.R. 41 C.F.R. 60-132, and 41 C.F.R. Potomac agreed to maintain a harassment-?ee work environment at all worksites and in all facilities at which Potomac?s employees were assigned to work. 23. Since at least May 1, 2011, Potomac has failed to ensure and maintain a working environment free of harassment, intimidation, and coercion at all construction sites where Potomac?s employees work. Speci?cally, Potomac?s managers verbally abused Potomac?s Hispanic Field Technicians and Laborers because of their race and/or national origin. Supervisors, known at Potomac as ?push men,? routinely screamed Obscenities at Hispanic employees and repeatedly sexually harassed Hispanic female employees. Supervisors would regularly deny water or breaks to HiSpanic employees, while providing water and breaks to black employees. Hispanic employees who complained would be sent home for the day without pay and sometimes had their schedules reduced. Since at least May 1, 2011, Potomac has had no policy prohibiting workplace harassment and no established process by which Potomac employees Could report instances of harassing conduct. Upon information and belief, OFCCP alleges that these failures continue to the present. Laying offits Entire Black Workforce while Reassigning Hispanics to New Contracts 24. In February 2012, Potomac began working on construction projects funded in part by the District of Columbia. These Contracts? required that the majority of jobs created by the projects be given to DC. residents. To meet this residency requirement, Potomac hired 17 new employees who were D.C. residents, and all of these employees were black. The black employees included both Field Technicians and Laborers. 25. The 17 black employees worked almost exclusively on the DC. projects, and many of Potomac?s Hispanic employees also worked on the DC. projects. As the DC. projects approached completion, Potomac laid off the black workers. By July 2012, when the DC. projects had been completed, Potomac had laid off all of its black workers. By contrast, most of the Hispanic workers who had been assigned to the DC. projects had been reassigned to new projects, and Potomac continued to hire additional Hispanic workers. When laid off black workers called to ask about reassignment, they were told that Potomac had no work for them. 26. Since at least July 2012, Potomac has failed to identify and provide complete relief to its black employees who have been adversely affected by Potomac?s discrimination in employee retention and reassignment. Upon information and belief, OFCCP alleges that this failure continues to the present, although after OF review, Potomac claimed to have rehired three of the black employees that it had laid off in 2012. Failure to Maintain Personnel and Employment Records 27. Pursuant to Section 202 of the Executive Order, 41 C.F.R. and Potomac agreed to preserve and maintain all personnel and employment records for a period of two years from the date of the making of the record or personnel action involved. 28. During the review period of May 1, 2011 to April 30, 2012, Potomac failed to preserve and maintain all personnel and employment records for a period of two years from the date of the making of the record or personnel action involved. Speci?cally, Potomac failed to preserve copies of records pertaining to hiring, promotion, demotion, complaints, transfers, layoffs or terminations, rates of pay or other terms of compensation, applications, resumes, and any and all expressions of interest through the Internet or related electronic data technologies, and records identifying job seekers contracted regarding interest in a particular position. Failure to Recruit Minorities, Women, Veterans, and Qualified Individuals with Disabilities 29. During the review period, Potomac failed to establish and maintain a current list of minority and women?s recruitment sources; failed to provide written noti?cation to minority and female recruitment sources and community organizations when it had employment opportunities available; and failed to maintain a record of the organizations? responses, in violation of 41 C.F.R. Potomac also failed to maintain a current ?le of the names, addresses, and telephone numbers of each minority and female off-the-street applicant and referral from a recruitment source or community organization, indicating what action had been taken with respect to each individual, in violation of 41 C.F.R. Potomac further failed to direct recruitment efforts, oral and written, to minority, female, and community organizations, to schools with minority and female students, and to minority and female recruitment and training organizations serving the contractor?s recruitment area and employment needs, in violation of 41 C.F.R. 30. During the review period, Potomac failed to undertake appropriate outreach and positive recruitment activities that were reasonably designed to effectively recruit protected veterans, in violation of 41 C.F.R. or quali?ed individuals with disabilities, in violation of 41 C.F.R. Speci?cally, Potomac failed to send job vacancy announcements to recruitment sources for special disabled veterans, covered veterans, or quali?ed individuals with disabilities, or to undertake positive recruitment activities. During the review period, Potomac failed to make a good-faith effort to meet the utilization goal for females in the Washington, DC Standard Metropolitan Statistical Area (SMSA). Speci?cally, during the review goal for the actual work hour utilization percentage for female Laborers was but Potomac?s actual utilization rate was Potomac?s lack of good-faith efforts to meet this goal violated 41 C.F.R. and 60-46. 32. During the review period, Potomac failed to list any of its employment openings, as de?ned in 41 C.F.R. with the appropriate employment service delivery system where the opening occurred, including the state workforce agency job bank or local employment service delivery system, in violation of 41 C.F.R. Specifically, Potomac did not list its employment openings at its Jessup, Maryland establishment with the local employment service office for the entire review period. Failure to identify and Train Minorities and Females for Advancement to Supervisory Posilions 33. During the review period, Potomac failed to develop on-the-j ob training opportunities and/or participate in training programs for areas that expressly included minorities and females, including upgrading programs and apprenticeship and trainee programs relevant to the company?s employment needs, and failed to provide notice of these programs to minority and female recruitment sources, in violation of 41 C.F.R. Speci?cally, during the review period, Potomac did not provide female employees with training opportunities to prepare them to be promoted to supervisory positions. 34. During the review period, Potomac failed to conduct an inventory and evaluation of all minority and female personnel for promotional opportunities and failed to encourage these employees to seek or to prepare for such opportunities, in violation of 41 C.F.R. Speci?cally, training for supervisory positions was provided only to male employees. Failure to DeveloD and Implement an Equal Emplovment Opportunity Policv 35. During the review period, Potomac failed to disseminate its EEO policy by providing notice of the policy to training programs and requesting their cooperation in assisting Potomac in meeting its EEO obligations as required by 41 C.F.R. Speci?cally, Potomac failed to disseminate its EEO policy internally or externally during the review period, and failed to review the policy annually with minority and female employees. 36. During the review period, Potomac also failed, in violation of 41 C.F.R. 60- to review its EEO policy and af?rmative action obligations at least annually with all employees responsible for hiring, assignment, layoffs, terminations, and other employment decisions. 37. During the review period, Potomac also failed, in violation of 41 C.F.R. 60- to disseminate the company?s EEO policy externally by including?it in all advertising, and by providing written noti?cation to and discussing the EEO policy with all other contractors and subcontractors with whom Potomac has, is, or anticipates doing business. 38. During the review period, Potomac failed to monitor, on a systemic and ongoing basis, seniority practices, job classi?cations, work assignments, and other employment practices to make sure that they did not have a discriminatory effect, in violation of 41 C.F.R. 60- 39. During the review period, Potomac failed to adequately develop a system to review, at least annually, its supervisors? adherence to and performance under the company?s EEO policies and obligations, in violation of 41 C.F.R. During the review period, Potomac?s Controller, Albert Horak, admitted do not monitor supervisors for BBQ compliance, not formally.? 40. During the review period, Potomac failed to file an EEO-1 report as required by 41 C.F.R. 41. During the review period, Potomac failed to prepare and maintain an af?rmative action program for protected veterans at each establishment, in violation of 41 C.F.R. 60- 300.40(b) and 41 C.F.R. 60-741.40. Accordingly, Potomac failed to comply with its Af?rmative Action Plan obligations set forth in Subpart of the regulations, 41 C.F.R. 60? 40?45 (2014). Potomac had no affirmative action program for veterans or quali?ed individuals with disabilities. Failure to Record Solicitations of Offers from Minority andfor Female Construction Contractors mm 42. During the review period, Potomac failed to document and maintain a record of all solicitations of offers for subcontractors from minority and/or female construction contractors and suppliers, including circulation of solicitations to minority and female contractor associations and other business associations, in violation of 41 C.F.R. During the 10 investigation, Potomac admitted that it did not have a list of minority and/or female recruitment subcontractors. Failure to Ensure that all Company Activities were Non-segregated 43. During the review period, Potomac failed to ensure that all company activities were non-segregated, in violation of 41 C.F.R. Speci?cally, Potomac provided Hispanic workers with fewer and shorter breaks than non-Hispanic employees and only provided non-Hispanic employees with water. Violations 44. Through the acts and practices described in paragraphs 1 through 43, above, Potomac violated Executive Order 11246 and the regulations promulgated thereunder, as well as Potomac?s contractual obligations to the Federal Government. 45. Unless restrained by Administrative Order, Potomac will continue to violate the obligations imposed upon it by Executive Order 11246 and the regulations promulgated thereunder. 46. All of the procedural requirements prior to the ?ling of this Complaint have been met. On May 4, 2012, OF CCP sent a scheduling letter to Potomac. On May 17, 2012, OF CCP requested payroll and contract data from Potomac, and received documentation on various dates in June 2012. From June 26 to 29, 2012, OF CCP conducted an onsite investigation at Potomac?s headquarters in Jessup, Maryland, and continued this review at the Drive Project and Colonial Village Project worksites, both located in Arlington, Virginia. On July 8, 2012, Potomac provided an employee roster indicating which employees were Laborers and which were Field Technicians. In January and February 2013, OF CCP received and reviewed an 11 additional 6 months of payroll records and continued to investigate Why all 17 of Potomac?s black workers had been laid off by July 2012. OFCCP compiled and shared statistical data with Potomac indicating discrimination against blacks in retention and discrimination against Hispanics in compensation. On March 21, 2014, OFCCP issued the Notice of Violations to Potomac. On April 15, 2014, OFCCP conducted a conciliation meeting with Potomac?s counsel, Stephanie Scheck of Stinson Leonard Street, LLP. The parties continued to exchange data, and conducted additional conciliation meetings on May 9, 2014, February, 11, 2015, June 29, 2015, July 21, 2015, August 5, 2015, August 24, 2015, and September 9, 2015. On September 14, 2015, OFCCP issued a Show Cause Notice to Potomac, and received a response on October 14, 2015. After reviewing Potomac?s response, OFCCP concluded that further negotiations would not result in voluntary compliance. ?xer for Relief WHEREFORE, Plaintiff OFCCP prays for a Decision and Order pursuant to 41 C.F.R. 60-30.27 and 41 C.F.R. 60-30.30, providing the following relief: 1. Enjoining Potomac from failing to preserve and maintain all personnel and employment records for a period of not less than two years from the date of the making of the record or the personnel action involved, whichever occurs later, in accordance with the requirements of 41 C.F.R. and Part 60-3. 2. Requiring Potomac to recruit women, minorities, veterans, and quali?ed individuals by taking the following steps: a. Developing and maintaining a list of minority and female recruitment sources, providing written noti?cation to minority and female recruitment sources and community organizations when Potomac has employment opportunities available, and maintaining a record of the organizations? responses, in accordance with the requirements of 41 C.F.R. 12 3. b. Maintaining a current ?le of the names, addresses, and telephone numbers of each minority and female off-the-street applicant and referral from a recruitment source or organization, in accordance with the requirements of 41 C.F.R. c. Directing its recruitment efforts, both oral and written, to minority, female, and community organizations, to schools with minority and female students, and to minority and female recruitment and training organizations serving the contractor?s recruitment area and employment needs, as required by 41 C.F.R. d. Undertaking appropriate external outreach and positive recruitment activities that are reasonably designed to effectively recruit protected veterans and quali?ed individuals with disabilities, such as described by 41 C.F.R. 60- and 41 C.F.R. e. Annually reviewing its outreach and recruitment activities, assessing their effectiveness, and documenting this review, as required by 41 C.F.R. and 41 C.F.R. f. Making good faith efforts to meet the utilization goal for females in the Washington, DC. SMSA, as required by 41 C.F.R. and 60- 4.6, including expanding its recruitment resources in order to recruit female applicants for all of its construction trades; g. Annually documenting all sixteen (16) af?rmative action steps listed in 41 C.F.R. maintaining this documentation, and making it available to OF CCP upon request; and h. Immediately listing all employment openings, as they occur, with the appropriate employment service delivery system where the openings occur, including the state workforce agency job bank or local employment service delivery system, as required by 41 C.F.R. 60-3 Requiring Potomac to deveIOp on-the-job training Opportunities and/or participate in training programs, apprenticeships, and trainee programs relevant to the company?s employment needs, and to provide notice of these programs to minority and female recruitment sources, in accordance with 41 C.F.R. Requiring Potomac to conduct an inventory and evaluation of all minority and female personnel for promotional opportunities, and, on an ongoing basis, encourage these employees to seek or prepare for such opportunities, for example 13 by ensuring that minority and female employees are given equal access to supervisory training, in accordance with 41 C.F.R. 4. Requiring Potomac to develop and implement a compliant EEO policy by taking the following steps: a. Reviewing its EEO policy to ensure that it complies with all requirements of the Executive Order; b. Disseminating its revised EEO policy by providing notice of the policy to training programs and requesting their assistance in meeting EEO obligations; including its EEO policy in any policy manual or agreement; publicizing its EEO policy in company documents and newsletters; reviewing the policy with all management personnel and, all ,minority and female employees at least annually; posting the EEO policy on bulletin boards accessible to all employees at each location where construction work is performed; including the EEO policy in all advertising, speci?cally advertising directed to minorities and females; and providing written and verbal communication about its EEO policy to all contractors and subcontractors it is or anticipates doing business with, in accordance with 41 C.F.R. c. Reviewing, at current worksites and prior to the initiation of construction work at future job sites, its EEO policy and af?nnative action obligations with all employees having responsibility to recommend and implement personnel actions, advising them of their obligations to suport and carry out the policy. Maintaining written records identifying the time and place of these meetings, the people attending the meetings, the content of the discussion, and to conduct BBQ and af?rmative action reviews at least annually, in accordance with 41 C.F.R. d. Developing an adequate system to review, at least annually, its supervisors? adherence to and performance under the company?s equal employment opportunity and af?rmative action obligations, to address any problems identi?ed, and to maintain written documentation of the reviews and any corrective procedures; and e. Filing an annual report on or before September 30th of each year, as required by 41 C.F.R. 5. Requiring Potomac to ensure that all company activities are non-segregated by race and/or national origin, including but not limited to break time and bottled water, in accordance with 41 C.F.R. 6. Requiring Potomac to ensure that seniority practices, job classifications, work assignments, and other employment practices do not have a discriminatory effect by continually l4 recording and monitoring the same. Potomac will implement this system and take corrective actions for problems found during this monitoring process, in accordance with 41 C.F.R. 60- 7. Requiring Potomac to document and maintain a record of all solicitations of offers for subcontracts from minority and/or female construction contractors and suppliers, including circulation of solicitations to minority and/or female contractor associations and other business associations, in accordance with 41 CPR. 8. Requiring Potomac to prepare and maintain an af?rrnative action program for protected veterans and quali?ed individuals with disabilities at each establishment where its employees perform work. The AAP shall set forth Potomac?s policies and procedures in accordance with 41 CPR. 300.40?45 (2014). This AAP may be integrated into or kept separate from other AAPs. Potomac shall review and update annually its AAP pursuant to 41 CPR 60- 300.40(c) and comply with all obligations set forth in Subpart of the regulations, 41 CPR. 60-300.40-45 (2014). 9. Permanently enjoining Potomac, its successors, of?cers, agents, servants, employees, divisions, subsidiaries, and all persons in active concern with them from failing and refusing to comply with the requirements of the Executive Order and the regulations promulgated thereunder. 10. Requiring Potomac to provide complete relief to the affected black employees, including, but not limited to, a position, back pay, interest, front pay, retroactive seniority, and all other lost bene?ts of employment resulting from its discriminatory failure to retain them. 11. Requiring Potomac to restore back wages to the Hispanic class, including, but not limited to, lost wages, interest, front wages, salary adjustments, fringe bene?ts, and all other lost bene?ts of employment resulting from Potomac?s discrimination in compensation. 15 12. In the event Defendant Potomac fails to provide relief as ordered, pursuant to 41 C.F.R. 60-3030, Plaintiff prays that Defendant be subject to the following: 1) 2) An Order canceling all of Defendant?s Government contracts and those of its of?cers, agents, successors, divisions and subsidiaries, and persons in active concert or participation with them, and declaring said persons and entities ineligible for the extension or modi?cation of any such Government contracts; and An Order debarring Defendant and its of?cers, agents, successors, divisions and subsidiaries, and persons in active concert or participation with them, from entering into future Government contracts until such time as Defendant satis?es the Director of the Of?ce of Federal Contract Compliance Programs that it has undertaken efforts to remedy its prior noncompliance and is currently in compliance with the provisions of the Executive Order and the regulations promulgated thereunder. Plaintiff further prays for such other relief as justice may require. Post Of?ce Address: Oscar L. Hampton Regional Solicitor Of?ce of the Solicitor Respectfully submitted, M. Patricia Smith Solicitor of Labor Oscar L. Hampton Regional Solicitor U. S. Department of Labor Suite 630E, The Curtis Center 170 S. Independence Mall West Philadelphia, PA 19106?3306 (215) 861-5144 Date: Fifi/I? Aiidrea Luby Senior Trial Attorney 215-861?5128 U.S. DEPARTMENT OF LABOR Attorneys for Plaintiff 16