Ruling Limiting Scope of OFCCP Desk Audits Reversed

What is commonly referred to as the “Frito-Lay ruling” is a decision limiting the scope of OFCCP desk audits to the time frame included in the Scheduling Letter (notice of audit) sent to the federal contractor. This ruling was good for affirmative action employers because it meant that if a desk audit was drawn out over several years, the OFCCP could not request more current data. 

On May 8, 2012, the Administrative Review Board (ARB) issued a stunning reversal of the Frito-Lay ruling. (OFCCP v Frito-Lay, Inc., ARB Case No. 10-132, 5). The ARB held that because the desk audit revealed a “statistically significant disparity” in the affirmative action plan data, the OFCCP could require Frito-Lay to produce data outside the temporal scope of the Scheduling Letter. Apparently guided by the spirit of the regulations, the ARB stated that when the OFCCP finds disparities, such as indicators of systemic discrimination, they needed to be able to objectively continue to investigate the disparity to ensure “compliance with the affirmative action mandate in Executive Order 11246.”  

The ARB held that, in the specific circumstances of this case, the OFCCP clearly had discretion to request affirmative action plan data covering activity occurring after the Scheduling Letter. 

It remains uncertain what effect this ruling will have on other desk audits. The ARB cautioned that its ruling is narrow and that it did not address whether the OFCCP has the ability to ask for post-Scheduling Letter data in all desk audits or where the OFCCP has not objectively identified a concern about non-compliance.