8D Show Cause Notice

SCNs pertain to violations of Executive Order 11246,398 Section 503,399 and VEVRAA.400

As a general rule, COs must issue an SCN whenever a contractor violates Executive Order 11246, Section 503, VEVRAA or their implementing regulations in order to proceed with an enforcement action. In certain circumstances, OFCCP may proceed directly to enforcement without issuing an SCN. This practice is discussed later in FCCM 8D02, When a Show Cause Notice is Not Required.

COs issue SCNs in all cases after conciliation fails. However, SCNs can be issued to a supply and service contractor at the desk audit stage. COs issue an SCN at the desk audit stage when the contractor fails to provide the records, information or data requested in the Scheduling Letter. For example, a CO must issue an SCN when a contractor:

• Fails to submit an AAP required by one or more of the laws enforced by OFCCP: Executive Order 11246, Section 503 or VEVRAA;401
• Fails to submit an AAP that substantially complies with the regulatory requirements under one or more of the laws enforced by OFCCP: Executive Order 11246, Section 503 or VEVRAA;402
• Fails to submit employment activity data or other information requested in the Scheduling Letter;403 or
• Fails to submit corrected data after providing employment activity data or compensation data, or both, that are incomplete or inaccurate.404

COs also issue an SCN when a contractor refuses to provide access to its premises for an on-site review, or refuses to provide access to records or other information necessary to conduct an on-site or off-site review.405

OFCCP may proceed directly to an enforcement recommendation without issuing an SCN in certain situations, such as when a contractor intimidates or harasses an OFCCP agent, or unreasonably interferes with a complaint investigation or compliance review. If the CO believes that the circumstances warrant moving directly to an enforcement recommendation without issuing an SCN, his or her District Director must seek the approval of the Regional Director. The Regional Director, prior to approving this action, should consult with RSOL.

A CO is not required to issue an SCN when a contractor violates a CA. Under such circumstances, OFCCP issues a 15-Day Notice.406

An SCN, including an ASCN, may have two parts, the notice and an enclosure.

a. Notice. The Notice itself which states the consequences under the regulations of not coming into compliance.

b. Enclosure. An enclosure states the violation and the required remedies. The statement of the violation should include appropriate regulatory citations. This approach also applies to the nondiscrimination and affirmative action provisions of the appropriate equal opportunity clauses. The appropriate format of an SCN will depend on the particular situation. FCCM 8D01 lists violations for which COs should issue an SCN and includes references to the letters that provide the format for each type of violation.

When a CO issues an SCN and subsequently identifies additional violations, the CO must issue an ASCN incorporating all violations, including the original ones. An ASCN must also be issued when the first SCN included violations in error. The CO may issue more than one ASCN.

For example:

• Supply and Service Contractors. If a CO issues an SCN at desk audit for failure to submit an Executive Order 11246 AAP, and the contractor then submits an unreasonable Executive Order 11246 AAP, the CO may issue an ASCN citing both the initial failure to submit and the subsequent unreasonable submission. If the contractor then submits a reasonable Executive Order 11246 AAP, but the CO identifies additional violations during the on-site review, the CO may issue a second ASCN citing all violations to date.

Just as an ASCN includes all violations, including those the CO cited in the original SCN, the CO uses a single CA to resolve all outstanding violations, regardless of when in the review the CO identified a particular violation.

A sample ASCN is provided in Letter L-32. An ASCN is sent to the same people as an SCN, has the same signature authority as the original SCN unless the Regional Director delegates otherwise, and follows the same procedures concerning contractor responses.407

COs send the SCN, or ASCN, to the top official at the establishment under review, or the top official of the construction company in the economic area being reviewed. A copy of the SCN is sent to the CEO if the establishment or construction company is part of a larger corporation. If the contractor submits a written request that the CO provide a copy of the review or investigation correspondence to an outside representative such as an outside counsel or consultant, the CO will also send a copy to the designated representative. When the CO provides a copy to a corporate CEO, other contractor official or a designated representative, the CO should include a “cc:” line on all copies indicating the people to whom he or she sent the Notice.

COs must always send SCNs or ASCNs by certified mail, return receipt requested. An additional copy may also be sent by email or facsimile.

The Regional Directors, or their designees, have signature authority for an SCN and ASCN.

This subsection covers the period of time the contractor has to respond to an SCN and ASCN, and resolution of the violations through a CA.

a. Period for Response. The contractor has 30 calendar days from the date it receives the SCN or ASCN to either adequately respond to or resolve the violations the CO specified in the SCN or ASCN.

b. Resolution in CA. Because violations generating an SCN or ASCN are usually significant, a CA is used to show how the violations were resolved. This is the case unless the contractor is able to demonstrate that it is exempt from OFCCP’s requirements or that OFCCP’s allegations are incorrect. The contractor may, therefore, take any of the following actions in response to an SCN or ASCN:

• Contractor Resolves the Violation. The contractor may resolve a violation by:
  • Entering into a written CA that remedies the violation, including the provision of make-whole relief for any victims of discrimination;408
  • Demonstrating that it is exempt from OFCCP’s requirements; or
  • Demonstrating that OFCCP’s allegations are incorrect.
• Contractor Does Not Resolve the Violation. If the contractor does not resolve all of the violations stated in the SCN or ASCN, the CO will normally recommend the initiation of enforcement proceedings as described in Section 8K of the chapter. Under these circumstances, the Regional Director must authorize any decision not to refer the contractor for enforcement and must document the reason for the decision in the case file.

This subsection reviews when a CO can rescind an SCN, the contents of the rescission, who signs the notices and who should receive them. Each item is reviewed below.

a. When to Use an SCN Rescission Letter. An SCN will not be rescinded merely because the contractor agrees to comply in the future or corrects violations. See 41 CFR 60-1.20(b), 60-4.8 and Castillo v. Usery, 14 Fair Empl. Prac. Cas. 1240, 1247 (N.D.Ca1. 1976). A CO may rescind an SCN or ASCN only if the SCN or ASCN was issued erroneously. For example:

• The contractor demonstrates that it is exempt from OFCCP’s requirements; or
• The contractor demonstrates that each of OFCCP’s allegations in the SCN is incorrect.

b. Contents. The notice rescinding the SCN or ASCN acknowledges that the SCN or ASCN was issued and the date it was issued, the authority under which it was issued, and that it was subsequently determined that the SCN or ASCN was erroneously issued and is being rescinded for one of the above reasons, or other appropriate reason. Letter L-34 provides a sample format for rescinding an SCN or ASCN.

c. Who Receives the Rescission Letter. COs send the letter rescinding an SCN or ASCN to the same people who received the original notice.

d. Signature Authority. The Regional Director signs the letter rescinding an SCN or ASCN. This authority may not be delegated without express approval from the national office.