The new head of the Labor Department’s federal contractor watchdog office says the agency is taking steps to deter diversity, equity and inclusion policies at companies doing business with the government.
Catherine Eschbach, the new director of the Office of Federal Contract Compliance Programs, told employees in an email Monday that the agency must “conduct an autopsy” of its actions and regulations.
President Donald Trump, in an executive order signed in his first week in office, eliminated an executive order from the Lyndon B. Johnson administration that prohibited federal contractors from engaging in employment discrimination, based on an employee or candidate’s “race, creed, color, or national origin.”
The Johnson-era executive order also required federal contractors to implement affirmative action plans to ensure equal access to these jobs.
“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,” Eschbach wrote in an email obtained by Federal News Network.
OFCCP conducts audits of federal contractors to ensure they aren’t discriminating against their employees.
Just days after Trump’s inauguration, Acting OFCPP Director Vincent Micone ordered the agency to “immediately cease and desist all investigative and enforcement activity under the rescinded Executive Order.”
Eschbach said OFCCP has until late April to verify that all federal contractors have “wound down their use of affirmative action plans,” and ensure companies doing business with the federal government comply with Trump’s executive order.
“We will also be examining federal contractors’ previously submitted affirmative action plans to determine whether they indicate the presence of long-standing unlawful discrimination and whether it is appropriate for OFCCP to undertake any investigation and enforcement actions, or refer the matter to other relevant agencies with jurisdiction to investigate and/or initiate enforcement action,” she wrote.
Eschbach said OFCCP will also advise Lori Chavez-DeRemer of measures to “deter DEI programs” by “identifying potential civil compliance investigations” of publicly traded corporations, large nonprofit corporations or associations and foundations with assets of $500 million or more.
OFCCP, she added, will also apply the same scrutiny to state and local bar and medical associations, and institutions of higher learning with endowments over $1 billion.
Prior to joining OFCCP, Eschbach was an attorney at the law firm Morgan, Lewis & Bockius, where she represented Elon Musk’s space and satellite company SpaceX. The company has argued in court that the National Labor Relations Board is unconstitutional.
Eschbach said OFCCP will go through layoffs as part of a nonvoluntary Reduction in Force happening governmentwide. The agency’s “rightsizing,” she told employees, reflects the agency’s “reduced scope of mission and is consistent with the administration-wide DOGE agenda.”
The acting OFCCP director, in another email sent earlier this month, said it would cut about 90% of its total workforce.
The memo directed the remaining OFCCP staff to focus on enforcement of Section 503 of the Rehabilitation Act, which prohibits the federal government and federal contractors from discriminating against employees based on their disability.
The memo also directed remaining OFCCP staff to prioritize enforcement of the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), which protects veterans from job discrimination and requires federal contractors to set benchmarks for hiring protected veterans.
OFCCP had 479 employees, as of mid-February, including 317 investigators. The planned cuts would leave the office with 50 total employees. Of those, about 20 would be investigators conducting nondiscrimination audits of federal contractors.
OFCCP already scheduled audits for about 2,000 federal contractors this year, but this workload would be untenable with the proposed workforce cuts.
Bloomberg Law first reported details from Eschbach’s email on Tuesday.
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