Affirmative Action

Legal Issues

Affirmative action law in the United States is jointly determined by the Constitution, legislative acts, executive orders, and court decisions. It is complex, incomplete, and open to revision. The Office of Federal Contract Compliance Programs is responsible for developing and enforcing most AAPs, although the Equal Opportunity Employment Commission (EEOC) enforces AAPs in the federal sector.

A distinction exists between so-called set-aside AAPs and organization-specific AAPs. Set-aside AAPs exist when a pubic organization (e.g., a municipality or federal agency) is required to set a goal for directing a certain percentage of its budget to qualified firms—typically those owned by members of an underrepresented group.

In contrast, organization-specific AAPs are created for one of three reasons. First, some organizations are required by a court order or an EEOC consent decree to establish an AAP to compensate for illegal discrimination. These AAPs are relatively rare. Second, many organizations establish AAPs to satisfy regulatory requirements. Specifically, the Rehabilitation Act of 1973 and the Vietnam Era Veterans' Readjustment Assistance Act of 1974 require certain federal contractors to take affirmative action to employ individuals with disabilities and certain veterans, respectively. Most important, Executive Order 11246, signed by President Lyndon Johnson in 1965 and subsequently amended, requires federal contractors to take affirmative action to eliminate discrimination on the basis of race, color, religion, sex, or national origin. Along the same lines, state and local laws and regulations may require organizations to take affirmative action to improve the employment opportunities of various groups. Third, some organizations establish AAPs on a fully voluntary basis.

Precisely which organizations are required to establish AAPs and which actions are required, permitted, or forbidden varies with the legal basis for the AAP. Furthermore, actions of state and federal governments are limited by the U.S. Constitution, whereas actions of firms in the private sector are constrained by state and federal legislation (e.g., the Civil Rights Acts of 1964 and 1991). The following brief and incomplete description focuses on affirmative action as required by Executive Order 11246, because that is the primary source of AAPs in the United States and is the basis of much of the controversy.

Organizations with annual federal contracts of at least $10,000 are required to take affirmative action to eliminate discrimination on the basis of race, color, religion, sex, or national origin. They must establish nondiscrimination policies and communicate those policies to employees and applicants. Organizations with at least 50 employees and contracts above $50,000 are further required to perform and report the results of utilization analyses in which they compare the gender and racial distributions of their workforce to the relevant labor markets. The relevant labor market for any position includes only those individuals who are qualified for that position and who reside in the recruitment area. If the utilization analysis reveals that all groups are reasonably represented, no further actions are required. If the utilization analysis reveals that any group defined by gender, race, or ethnicity is underrepresented, the firm must establish flexible goals to eliminate the underutilization and must make a good faith effort (i.e., take affirmative actions) to meet those goals. Utilization analyses are not required for other protected dimensions (i.e., disability, veteran status, religion), so it is impossible to determine whether underrepresentation exists along these dimensions.

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