As we previously reported, President Trump, as part of his Fiscal Year 2018 Budget request, proposed a merger of the Office of Federal Contractor Compliance Programs (“OFCCP”) and the Equal Employment Opportunity Commission (“EEOC”) to “promote greater efficiency and effectiveness.” In an August 24, 2017 letter, Acting Director of the OFCCP, Thomas Dowd, signaled a delay in the proposed merger.

In his letter to The Institute for Workplace Equality – a group opposed to the merger – Acting Director Dowd informed the group that its concerns were being considered by the OFCCP and the Trump Administration. But he also shared “that the consolidation proposal includes several challenging transition issues” which “could delay” the merger.

He explained that such a merger would require congressional amendments to the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”) and Section 503 of the Rehabilitation Act, laws which govern government contractor obligations relating to individuals with disabilities and veterans. Even with such amendments, Acting Director Dowd noted there would also need to be rulemaking to implement the statutory changes. In addition, any merger would need to address “different enforcement structures and approaches used by the two agencies.” Acting Director Dowd noted as one example that the EEOC’s judicially-focused enforcement structure and the OFCCP’s administratively-focused enforcement structure would need to be “bridg[ed].”

Based on these challenges, Acting Director Dowd shared that all of these difficulties “could delay the expected [Fiscal Year] 2019 start for the proposed consolidation, which would result in a concomitant delay in the realization of intended benefits.”

While Acting Director Dowd noted that the merger may be delayed, he emphasized the ability of the two agencies to increase efficiency in the interim through, for example, the existing Memorandum of Understanding between the two agencies. Thus, we may see internal modifications in the near term by the two agencies to “identify operational cost savings by eliminating existing redundancies.”

We will continue to monitor developments on this topic.