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Judge Finds That OFCCP’s Audit Selection Is Limited By Fourth Amendment

Published by on February 1, 2012

In Bank of America N.A. v. Solis, No. 09-2009 (D.D.C. Dec. 13, 2011), United States Magistrate Judge Deborah A. Robinson for the District of District of Columbia issued a report and recommendation that includes a finding that OFCCP’s ability to select contractors for audit is limited by the Fourth Amendment’s prohibition against unreasonable search and […]

In Bank of America N.A. v. Solis, No. 09-2009 (D.D.C. Dec. 13, 2011), United States Magistrate Judge Deborah A. Robinson for the District of District of Columbia issued a report and recommendation that includes a finding that OFCCP’s ability to select contractors for audit is limited by the Fourth Amendment’s prohibition against unreasonable search and seizure. This presents an interesting issue for contractors facing compliance review.  More after the break.

The case originates in 2004, when OFCCP sent a letter advising Bank of America (“BOA”) that it had been selected for an audit.  OFCCP requested BOA to produce its affirmative action plans and other documents within thirty days.  In its initial response, BOA asked for information about the process that resulted in its selection for audit and for an extension of the 30-day deadline.  OFCCP stated, in response, that it followed its standard selection procedures.  BOA ultimately produced the requested information.  OFCCP then identified indicators of bias in the initial data and requested more information, but BOA refused to provide it.  The Department of Labor Administrative Review Board then found BOA in violation of Executive Order 11246.

In its district court action, Bank of America challenged all aspects of OFCCP’s investigation, including the criteria used to select it for an audit.  In response to Bank of America’s Fourth Amendment claims, OFCCP argued that selecting the bank for a “desk audit” was not subject to the Fourth Amendment because it did not involve entry onto private property. In OFCCP’s view, a desk audit is simply a request for documents that contractors are required to maintain and provide on request.

The Court disagreed with OFCCP’s argument, stating that OFCCP was required to show that the request for audit data was “within the authority of the agency.”  The request must also be “not too indefinite, and . . . reasonably relevant” – i.e. the “Oklahoma Press” standard. 

The court ultimately recommended applying a different standard to the initial decision to select a contractor for audit. Magistrate Judge Robinson’s decision concluded that the initial selection must be based on “(1) specific evidence of an existing violation, (2) reasonable legislative or administrative standards that have been met with respect to that particular contractor or (3) an administrative plan containing specific neutral criteria.”   This is known as the “Beverly Enterprises” standard.

According to the Court, OFCCP’s initial selection decision was unlawful because OFCCP failed to demonstrate that the bank had been selected in accordance with neutral selection criteria.  This was not ultimately of much help to BOA, however, as the Court determined that BOA had waived its Fourth Amendment rights by voluntarily producing the requested information.

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