Got a Govt Contract But You're Violating Labor Laws? No Problem

RAND Corporation, one of the premiere think-tanks with over $100Mil in govt contracts every year, several of which have to do with labor issues, continues to do business with the US govt despite admitting egregious labor violations, particularly of its female employees, going back some ten years.

RAND now faces a sex-discrimination class action filed by a group of women on its research staff, and three years ago it paid almost $200,000 to settle a government claim that it was violating the federal law that governs health and pension benefits.

In 1998, RAND settled Labor Department claims that its affirmative action plan, which federal contractors are required to maintain, was inadequate. The department found 12 violations that RAND agreed to fix - without admitting or denying liability - including the failure to keep the data needed to analyze the number and positions of the women or members of minorities it had hired. RAND agreed to compile the data and do the required analysis.

Despite these problems with federal labor laws, RAND continues to get the bulk of its contracts from Washington - more than $100 million last year.

That may sound surprising. But RAND is not unique among government contractors in continuing to do business with the government after being found in violation of labor law.

RAND, like all federal contractors, is subject to an executive order, dating to the Johnson administration, requiring it to create and put into effect an affirmative-action plan. The Labor Department, however, monitors just 8 percent of the companies it hires, according to the Office of Federal Contract Compliance Programs, the arm of the Labor Department that conducts these investigations, mostly by asking contractors to mail in a copy of their plans.

The ultimate punishment, debarment from working for federal agencies, has never been invoked against a major contractor. (emphasis added)

Let's have that again: never? NEVER? Well, then, I guess the violations weren't terribly serious, huh? Guess again.

In 2002, Judge Richard W. Roberts of the Federal District Court in Washington agreed to approve a class action for 373 women who worked at RAND from 1995 to 1998, saying that the plaintiffs had used statistical evidence to establish a "systemwide practice" of paying women less than men.

In a 1998 brief - filed under seal, but obtained before plaintiffs' lawyers removed it from a Web site about the case - the plaintiffs called women researchers "shockingly underpaid" in the 1990's. Their statistician, after examining RAND pay scales from 1992 to 1997, found that women researchers were paid, on average, $22,488 less than male counterparts in 1992. The gap narrowed to $21,408 by 1997 - but men were still paid 33 percent more, on average.

The statistician concluded that the pay disparities had been systemic even when considering factors like education and seniority. As of 1997, he said, the difference in annual pay attributed solely to being a woman was $5,907.

And it isn't like RAND is alone.

Boeing, one of the largest federal contractors, was the subject of a Labor Department investigation in 1998 over whether it was meeting its affirmative-action obligations. The issue arose in an on-site audit, and was settled in 1999 when Boeing offered $4.5 million in back pay and future pay adjustments to female and minority workers.

But Boeing refused to turn over internal studies showing that it had been aware of pay disparities between men and women since at least 1994, saying the studies were subject to attorney-client privilege. It was later forced to turn over those studies in a class-action lawsuit, which it settled in July by agreeing to pay the class members - as many as 29,000 current and former employees - up to $72.5 million.

To some people, the pay studies suggested that the problems at Boeing might have been deeper than the Labor Department realized when it settled with the company. But the lawyer for the Boeing plaintiffs, Joseph Sellers, said the Office of Federal Contract Compliance Programs had never contacted him to review the information.

"I think it underscores the importance of private enforcement," Mr. Sellers said, referring to the pursuit of a class-action suit. (emphasis added by me)

I would think. What's the Labor Dept got to say about all this? Listen and learn, kids.

Although Labor Department investigators asserted labor law violations against the company and settled the claims in 2001, the department continues to contract with RAND. A department spokesman - the Labor Department does not allow its spokesmen and spokeswomen to be identified by name - said that breaking the rules did not necessarily disqualify a contractor.

"If someone gets a speeding ticket," he said, "it doesn't mean they can't ever drive again."

The Labor Dept is contracting with a corporation that has admitted--admitted--breaking major labor laws in a big way, systemically, over a long period of time, and then equating those violations with a speeding ticket??

Tra-la tra-la. In Elaine Chao's Labor dept, it's NBFD. In fact, trashing your workers, especially the female ones, is pretty much a laughing matter. Nothing to be concerned about. Back to your homes, there's nothing going on here.

So how much of that $$Hundred MIL$$ do you reckon is being kicked back into one of Chao's offshore numbered accounts?