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Understanding Affirmative Action Obligations as a Landlord, Tenant or Government Contractor

By Paula M. Ketcham
February 24, 2005

Given the plethora of government regulations spawned in the 80s and 90s, Executive Order 11246 (the “Order”), signed into law by President Lyndon B. Johnson in 1965, may appear to be relatively ancient history. Nevertheless, compliance with this far-reaching rule remains as essential today as it did when the Order was issued. Similarly, it continues to catch unwary federal contractors by surprise. Under the Order, companies that hold federal contracts or subcontracts in excess of $10,000 are prohibited from discriminating against employees and applicants for employment in hiring or employment decisions on the basis of race, color, gender, religion, and national origin. This aspect of the Order is generally widely understood. What is often overlooked, however, is that these contractors are also subject to certain affirmative action requirements. While the Executive Order has been on the books for nearly 40 years, many companies still find themselves in uncharted territory with respect to their coverage under affirmative action regulations.

This article provides an overview of the applicability of the Order to real estate leases involving the federal government as a tenant and also other contracts and subcontracts that may form a part of the business commonly conducted by lessors, leasing agents, property managers and tenants (such as tenants leasing federal government property). After exploring coverage thresholds and basic regulatory requirements under the Order, this article provides information concerning enforcement of and penalties for noncompliance with the Order and then concludes with tips for preparing for and successfully passing affirmative action audits. Although not within primary focus, two other affirmative action rules that often apply hand in hand with the Order ' Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans Readjustment Assistance Act (“VEVRAA”) ' are also referenced.

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