The Impact of Dodd-Frank 342 on Diversity in the Financial Services Industry
Though the equality divide seems to be inching closed with the repeal of Don’t Ask Don’t Tell and other protective enactments, provisions are continuously being made to seal the gap. These changes are not an accessory but a necessity in today’s society. A prime example is Wall Street, which is very much still a patriarchal and discriminatory climate. The Dodd-Frank 342 bill is a catalyst of change in diversifying America’s financial industry. It tackles the issue of LGBT discrimination in the workplace which is by no means an out-dated issue. It is really important people understand their rights and are attentive of the legal compensation available to them when faced with discrimination in the workplace. This is especially imperative for the LGBT community since we can face discrimination based on gender identity and sexual orientation as well as race and ethnic background.
Barney Frank is one of the leading visionary’s of their Dodd-Frank 342 bill which protect the LGBT community in the financial industry. Mr. Frank has been a strong advocate for the progress in equality reform for the LGBT community. With the recent success of the repeal of Don’t Ask Don’t Tell, Frank’s response to the importance of the repeal and LGBT issues was “It is to be protected against violent crimes driven by bigotry, it’s to be able to get married, it’s to be able to get a job, and it’s to be able to fight for our country…For those who are worried about the radical homosexual agenda, let me put them on notice. Two down, two to go.” The agenda for change continues with the efforts laid out by the Dodd-Frank 342 bill.
The bill mandates race and gender employment ratios. Quotas must be observed by private financial institutions that do business with the government. This provision is part of an over-arching effort to bring reform to the financial industry within the broader efforts of the Dodd-Frank Wall Street Consumer Protection Act (H.R. 4173/ Public Law 111-203). It aims to create more than a dozen new financial regulatory offices with a focus on establishing Offices of Minority and Women Inclusion.
These OMWI’s will be responsible for monitoring and insuring inclusion of women and minority groups, including the LGBT community, in the regulated entities and agencies for which they are responsible. The OMWI’s will set the ground-rules and establish criteria for these agencies to include women and minorities in the recruitment efforts. If they continue to fail according to the new standards of inclusion, the agency will then be met with the appropriate action up to or including termination of contracts.
Contracts are major facets of leverage. The bill states that agencies are required to establish contract proposals describing the procedures for selecting employees, to the extent that is legally permissible. This is a section which specifies diversity of the applicant as a factor in the hiring process. In the case that an agency fails to establish these measures, the bill allows for the OMWI Director to recommend to the agency head that the contract be terminated. Upon receipt of such a recommendation, the agency head may: (a) terminate the contract; (b) make a referral to the Office of Federal Contract Compliance Programs; or (c) take other appropriate action (Section 342(c)(3)).
The bill has a wide spread effect on various entities not limited to financial domestic articles. Provisions are aimed at large financial institutions but smaller institutions are affected. Many of the bill’s provisions give a basic structure of reform and leave the regulators to fill in the details.
The effect of this diversity clause has caused some expected backlash, especially Republican opposition. It has been deemed over-arching and ineffective as most of the agencies that are being targeted already have what they believe to be overlapping nondiscrimination laws. Most of the opposition claims it to be an example of big-government, declaring it to be vague and lacking teeth.
Regrettably, some of these allegations may hold true. While Section 342 would require that investment banks, contractors, and other agencies be to some extent at the mercy of regulators, it does not offer specific solutions. Existing non-discrimination laws are not clearly distinguished from some components of the Dodd-Frank 342 provision. For these reasons the bill may not be as effective at creating evidence of change through substantial quota measurements as hoped by progressives. Terms like “fair inclusion” are not concretely defined. Moreover, it lacks thorough guidelines for those entities that are willing to fully comply with the standards.
If you are facing discrimination in the workplace, it is important to trust your instincts. Do not dismiss acts of discrimination as “just part of the job.” Everyone has the right to be treated equally and fairly at work. If you suspect discrimination begin by taking notes. Keep a record of the derogatory language, racial slurs, or comments you hear. This paper trail could become important in the future. You should file a report with the human resources department or if your company doesn’t have one, the next step would be to talk to your management staff. If your company does not take action, you can file a charge of discrimination with the Equal Employment Opportunity Commission or the Pennsylvania Human Relations Commission. This government agency will typically ask your employer to answer to your charges. They may even conduct an investigation, requiring documentation and explanations for actions. Finally, you could file a lawsuit.
While the Dodd-Frank 342 bill is a catalyst of change in diversifying the financial industry, the issue of work-place discrimination in the LGBT community is pervasive. With more laws and protections aimed at leveling the playing field and bringing awareness to the inequity we face, we are one step closer to equality.
**Angela D. Giampolo, Principal of Giampolo Law Group maintains offices in both Pennsylvania and New Jersey and specializes in LGBT Law, Business Law, Real Estate Law and Civil Rights. Her website is www.giampololaw.com and she maintains a blog www.phillygaylawyer.com. Please feel free to send Angela your legal questions at [email protected].
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