Some might be surprised to learn that the Trump administration has stood by as holdovers from past administrations dictate labor policy. Yet that is what is happening as lawyers continue to file frivolous claims against some of our nation’s most successful companies in order to advance an extreme and quixotic interpretation of anti-discrimination law.
In the waning days of the Obama administration, lawyers in the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) launched lawsuits aimed at government contractors alleging discrimination. But they had no whistleblower employees bringing testimony of bosses committing discrimination, nor did they have smoking gun emails with the employers professing a plan to discriminate.
Instead, they were intent on pushing the boundaries of anti-discrimination law by exclusively using statistics to prove discrimination while disregarding other reasonable explanations.
To build their cases, OFCCP subjects companies to routine audits, often using intimidation, deceit and other bullying tactics to collect troves of data. Any disparity between demographic groups is then taken as evidence of discrimination, even when such data alone cannot logically prove their claims.
This is what’s known as disparate impact, which finds a policy to be discriminatory even when it is facially neutral if outcomes among different racial or other protected groups are not perfectly distributed, and even if the disparity could be explained by individual choice or other factors outside the company’s control.
Disparate impact originated without a textual basis and was instead read into the relevant statute — Title VII of the Civil Rights Act — by the Supreme Court in Griggs v. Duke Power Co. However, while the court ruled that a plaintiff could simply demonstrate that a seemingly neutral practice carried a disparate impact to show discrimination in violation of Title VII, it also allowed for a defense that the disputed practice was justified by business necessity. Only later, after further limiting decisions from the Supreme Court, did Congress codify disparate impact.
But whereas current law recognizes common-sense defenses against disparate impact claims, which have traditionally been difficult to win, OFCCP does not. It instead operates as judge, jury and executioner, using its power to debar contractors — making them ineligible for government contracts — to run roughshod over due process.
In a report highlighting the need for reform at OFCCP, the U.S. Chamber of Commerce highlighted how “OFCCP’s debarment authority emboldens the Agency and creates an incentive to engage in aggressive investigatory tactics.” Nor are such complaints new, with abuses by OFCCP having been reported going back decades.
One of the companies targeted, Oracle, is fighting back in federal court with a lawsuit that challenges the agency’s legal authority. Asserting that Congress never provided “the broad and unfettered authority that the Department of Labor has assumed for itself to investigate, prosecute and adjudicate lawsuits entirely in-house,” Oracle hopes to show that legitimate discrimination claims must be proven in the Article III court system where the accused are afforded due process, not simply before Labor’s own administrative law judges.
As it stands now, fear of debarment often compels companies to settle even the most frivolous of claims.
Despite the deck being stacked in their favor, sometimes OFCCP’s Captain Ahab-like fixation on statistical harmony is too much even for Labor’s administrative law judges. After supplying the agency with 740,000 pages of documents at the cost of approximately $500,000 and 2,300 man hours, Google said enough was enough, and that it wouldn’t turn over invasive demands for complete salary histories along with the name, address, telephone number, and personal email of every employee who worked at the company during select time periods.
The judge eventually ruled the request was “over-broad, intrusive on employee privacy, unduly burdensome, and insufficiently focused on obtaining the requested information.” OFCCP recently dropped its appeal of that decision, though the audit itself continues.
The setback for OFCCP in the Google case being an exception, Labor’s in-house judges cannot be counted on to police the agency. Real reform is needed.
It is hoped the new secretary of Labor, Eugene Scalia, will do what his disgraced predecessor, Alex Acosta, did not and bring about serious reforms to the agencies under his purview. That must include reining in a rogue department that has been allowed to operate largely unfettered and is still harassing American businesses without just cause.
