MINUTES OF THE JULY 2003 COUNCIL OF FEDERAL EEO AND CIVIL RIGHTS EXECUTIVES

The meeting was held on July 22, 2003 at the National Science Foundation. Ana Ortiz, Director, Office of Equal Opportunity Programs at the National Science Foundation, hosted the meeting.

Council Chairs Delia Johnson and Jorge Ponce welcomed everyone and outlined the agenda.

Mr. Ponce introduced Christopher Keller, an attorney at the Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission (FTC). Mr. Keller gave a presentation on the Fair Credit Reporting Act (FCRA) (Public law No. 91-508), which was enacted on October 26, 1970, to regulate the preparation and distribution of consumer reports. FTC is the primary agency responsible for enforcing the FCRA.

Mr. Ponce mentioned that former EEOC Chair Ida Castro had testified in August 2000 before the U.S. House of Representatives, Committee on Banking and Financial Services, Subcommittee on Financial Institutions and Consumer Credit, regarding the serious unintended consequences that the FCRA would have in the enforcement of the civil rights laws. He also indicated that Rep. Peter Session (R-Texas) had introduced in April 2003, the Civil Rights and Employee Investigation Clarification Act (H.R. 1543) that would allow employers to utilize outside contractors to investigate allegations of employment discrimination by excluding them from the definition of a consumer report. He explained that some federal agencies were abiding by the requirements of the FCRA, others were ignoring it, and others had never heard of it.

Mr. Keller pointed out that the FCRA had been amended in 1996, after Congress enacted the Consumer Reporting Act Amendments by adding additional procedural requirements to the use of consumer reports in the employment context. On March 5, 1999, the FTC issued the Vail Opinion Letter that recited the FCRA provisions as applied to employers who use third-party investigators to implement the FCRA-required disclosures, consent, and communication procedures with respect to the investigated employee before and after the investigation is started. Whereas there was an implicit authorization given by the consumer to the agency to get a consumer report prior to the 1996 Amendments, agencies had to get the written authorization of employee before preparing a consumer report after 1996. Moreover, if the agency took an adverse action against a consumer that was based on the consumer report, the agency was required to provide the consumer with a copy of the consumer report and a written list of his/her FCRA consumer rights.

Mr. Keller explained that most 3rd parties that conduct workplace investigations for employers will qualify as a consumer agency under the FCRA, and, if the investigation includes personal interviews, its reports are considered investigative consumer reports under the FCRA.

Mr. Keller indicated that the FTC was fully aware of the practical problems that the application of the FCRA had on 3rd party employment investigations. He suggested that agencies should review the Meisinger opinion letter, dated August 1999, in which the FTC offered suggestions on how to comply with the FCRA. For example, the FTC suggested that an employee's consent to the preparation of a consumer report could be obtained at the start of employment for new employees, or by asking all current employees to sign a consent form.

Mr. Keller indicated that there were currently two bills in the House of Representatives (H.R. 1543 and 2622) to amend the FCRA, and a parallel Senate bill was expected in August 2003. He expects that prior to January 1, 2004, there will be new legislation on the FCRA, and the odds are high that there will be some type of fix to the applicability of the FCRA to 3rd party employment investigations. Mr. Keller indicated that the FTC favored a targeted fix of the problem, rather than a broad-bush elimination of all protections of the FCRA.

Regarding the liability for willful noncompliance, Mr. Keller explained that the FTC can obtain civil penalties of not more than $2,500 for knowing violations of the FCRA. However, he indicated that the FTC has not brought cases for the use of consumer reports in the context of workplace investigations since the 1996 Amendments became effective in 1997. Additionally, the FCRA provides for private causes of action for violations – willful violators could be subject to liabilities in the sum of any actual damages sustained by the consumer or damages of not less than $100 and not more than $1,000, plus any punitive damages that the courts allowed, court costs, and attorney's fees. Negligent violations do not involve punitive damages.

Mr. Keller gave Mr. Ponce a list of useful webpages on the FCRA for posting on the Council's webpage, and which Mr. Ponce agreed to post in the What's New directory immediately.

A GAO Presentation on Human Capital constituted the second half of the meeting. This presentation was an overview of the pre-conference workshop, “Running Your Human Capital Initiatives and Strategic Planning,” which will be presented at the Federal Dispute Resolution (FDR) Conference in Orlando, Florida August 9-15, 2003.

a. EEO/AA is more integrated with human capital.

b. In 1991, the GAO changed its dialogue and recognized that human capital was in crisis. Since that time, emphasis has been on addressing human capital. It is considered high-risk, as it was endemic across the federal government and Washington. Congress, among other things, has granted agencies new authorities for managing their human capital as part of the Homeland Security Act of 2002. Realizing that successful agencies must change their cultures, the GAO reviewed the performance management systems of several countries to gain insight on achieving a results-oriented culture. These countries were New Zealand, United Kingdom, Australia, and Canada.

c. Agencies continue to face challenges in key areas identified below:

(1) Leadership. It is a persistent problem. GAO reviewed individual development plans and how leaders were held accountable. Some recommendations were: a) hold Senior Executives accountable by linking performance with results-oriented organizational goals; b) evaluating Senior Executive performance results on customer satisfaction and employee perspectives; and, c) using performance results as a basis for pay and other personnel decisions. The GAO also looked at what SES members were evaluated on during the year. They brought measures for core competencies by setting quantitative targets for more accountability and measurability. They also considered the employee’s perspective by examining their training needs, equipment, teamwork, measure for fairness and diversity.

(2) Strategic Human Capital Planning. Agencies efforts must be fully integrated with mission and critical program goals. How will Federal Agencies cope with the demographic chasm?

(3) Succession Planning, Acquiring and Retaining Talent. Within the GAO, one half of the Senior Executives are eligible to retire within the next year, 71% of SES members will reach retirement age by 2005, and most will leave by 2007. There is a question regarding the loss of expertise and the lack of diversity. With no interventions, the current percentage of SES will remain flat. The GAO is reviewing how to use succession planning and how other countries used succession planning. It is examining how to develop models and opportunities to meet these challenges.

(4) Cultures -- Producing Results. There is a continuous lack of organizational cultures that embrace high performance, accountability, empowerment of employees in setting and accomplishing program goals. The major problem is not with federal employees, but is found in outdated, over-regulated, non-strategic policies and practices.