DC District Court applies Christian Doctrine, upholds hospitals as subcontractors subject to OFCCP anti-discrimination provisions

In a significant decision with implications beyond the healthcare industry, the DC District Court upheld a ruling by the US Department of Labor’s Administrative Review Board (ARB) deeming three Pennsylvania hospitals’ government subcontractors subject to the Office of Federal Contract Compliance Programs’ (OFCCP’s) jurisdiction - UPMC Braddock v Harris, No. 1:09-cv-01210-PLF (DDC 30 March 2013).

The hospitals had each agreed to offer medical products and services to federal employees through UPMC Health Plan (HMO). The HMO was itself under contract with the US Office of Personnel Management (OPM). Despite express agreement with the HMO that, as providers of medical services, the hospitals were not federal subcontractors covered by mandatory equal employment opportunity and auditing regulations, the court found otherwise and invalidated the contract provision.

The issue decided by the court first arose in 2004 and follows a recent OFCCP trend of broadly expanding its jurisdiction over potential subcontractors. Initially, based on the HMO’s contract with OPM, the Department of Labor determined that UPMC Braddock, UPMC McKeesport and UPMC Southside (the hospitals) qualified as federal subcontractors. Denying this status, the hospitals refused to comply with OFCCP’s request for a compliance review. In response, the OFCCP brought administrative enforcement proceedings against the hospitals and won judgments before an ALJ in 2006 and the ARB in 2008, which the hospitals appealed to the DC District Court…

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