Dell Inc. has agreed to pay nearly $3 million ($2,950,000) to settle compensation discrimination allegations resulting from compliance audits conducted by the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) at four establishments that at the time were owned by a company (EMC) that Dell subsequently acquired. The settlement shows that OFCCP is not letting up on its enforcement efforts.
The settlement also illustrates how significant liability can attach to an acquiring company for the sins of its new acquisition, as well as highlights the pressure on the acquiring company to quickly resolve disputes that it had no control over at the time they occurred. In addition, the settlement underscores the importance of including a target company’s employment law history within any due diligence efforts. In this case, the record shows that all four audits covered periods ranging from one to one-and-a-half years before Dell acquired EMC.
We should also note that the settlement includes a violation for failure “to establish, maintain, and supply accurate records or other information and failure to submit requested records relevant to the matter under investigation…,” suggesting, as is often the case with respect to a contractor faced with defending against OFCCP allegations, that Dell was unable to produce adequate records for a sufficient defense, increasing the pressure to settle.
Members of the Center for Workplace Compliance (CWC) can read more here.