On January 21, 2025, the White House and President Donald Trump issued an Executive Order, "Ending Illegal

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Discrimination and Restoring Merit-Based Opportunity," revoking Executive Order 11246. For additional information,

see Secretary's Order 03-2025, To Cease and Desist All Investigative and Enforcement Activity Under Rescinded

Executive Order 11246 (Jan. 24, 2025).

Judges' Deskbook:

Office of Federal Contract Compliance Programs (OFCCP)

Updated January 2021

The Office of Federal Contract Compliance Programs is charged with investigating and

prosecuting alleged violations of Executive Order 11246, Section 503 of the Rehabilitation Act of 1973

(Rehabilitation Act), and Section 402 of the Vietnam Era Veterans' Readjustment Assistance Act of 1974

(Veterans' Act or VEVRAA). The purpose of Executive Order 11246 is to promote and ensure equal

employment opportunity for all persons without regard to race, color, religion, sex, or national origin. It

applies to those persons who are employed or seeking employment with government contractors or with

contractors performing under federally assisted construction contracts. The Veterans' Act requires that

government contractors take affirmative action to employ and advance qualified disabled veterans and

veterans of the Vietnam Era. Finally, the Rehabilitation Act requires that government contractors take

affirmative action to employ and promote qualified handicapped individuals.

Captions for these cases are: Department of Labor, Office of Federal Contract Compliance

Programs, Plaintiff v. , Defendant. See 41 C.F.R. §§ 60-30.5 and 60-30.6. Pursuant to 41 C.F.R. § 60-30.35

the administrative law judge issues a recommended decision and "[t]he recommendations shall be

certified, together with the record, to the Administrative Review Board, . . . for a final Administrative

order."

Table of Contents

I. Statutory and regulatory authority

II. Generally

Purpose

Executive Order 11246 has "force and effect of law"

III. Jurisdiction

Section 715 of the National Defense Authorization Act of 2012

Contract for Legal Services

Regulations only authorize OFCCP to file complaint with OALJ

IV. The complaint

Where to file

1. Generally

2. No requirement that individual complaint be filed prior to compliance review complaint

3. Discretion to investigate incomplete complaints

Who may file

1. Generally

2. Impleader and intervener

Class actions permitted

Exhaustion of remedies

Service

V. Scope of investigation

1. Generally

2. Discretionary decisions by the Secretary not presumptively reviewable by federal courts

C. Time limit for filing a complaint; 180 days

1. Generally

1. Complaint for discrimination

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2. Administrative complaint based on compliance review

2. Each claim analyzed separately

1. Generally

2. Continuing violations

i. Established

ii. Not established

3. Extension of time to file claim

1. ALJ without authority to grant

2. Director with authority to grant for good cause

4. Not controlled by Title VII statute of limitations

D. Laches

E. Collateral estoppel

1. Held applicable

2. Held inapplicable

F. Bankruptcy stay not apply

G. Bifurcated hearing; no jurisdiction over appeal

H. Issues of constitutionality and validity

1. ALJ without authority to determine validity of regulations

2. Language not unconstitutionally vague

I. "Working on the contract" is a jurisdictional issue and cannot be presumed

1. Generally

2. Admission by defendant; insufficient to establish

J. Included in contract by law

K. Interplay with other statutes

1. Department of Transportation jurisdiction

2. Civil Rights Act of 1964

3. Contract Disputes Act

VI. Review

A. By the ALJ

B. By the ARB

1. In general

2. Standard of review

3. Interlocutory appeal not favored

C. Reconsideration

D. When an ALJ decision becomes final

1. When expedited procedures apply

2. When expedited procedures do not apply

By the courts

VII. Evidence

A. Back wages owed

1. Burdens, generally

2. Utilization of a class-wide analysis to establish

3. After-acquired evidence

The Rehabilitation Act

1. Burdens, generally

2. Dual motives

Executive Order 11246

1. Burdens, generally

2. Rebuttal by defendant

3. Pretext

4. Cost of compliance not a valid defense to discrimination

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D. Use of statistical data; circumstantial evidence of discrimination

E. Carrying out a government contract; burden to establish on OFCCP

1. Generally

2. Rebuttable presumption

F. Admissibility issues

1. Hearsay

2. Admissions

3. Studies from other federal agencies

4. Evidence admitted on remand; legal error committed by ALJ

G. Credibility determinations

H. Expert opinions

1. Generally

2. Treating physician entitled to particular deference

VIII. Discovery

Generally

Applicability of the Federal Rules of Civil Procedure

Discovery of testimony of government officials

Failure to file an answer, effect of

Failure to comply with pre-hearing exchange, effect of

Compelling participation in discovery

1. Generally

2. Failure to comply

a. Exclusion of evidence

b. Adverse inference

G. Interrogatories

1. Limitation of number

2. Cannot be served on non-parties

H. Document production

1. Medical examinations, records, and releases

2. Defendant's computer tapes; not entitled to confidentiality

3. Intervener's right to discovery of settlement

4. No right to harass defendant through discovery

5. Prepared in anticipation of litigation

I. Interference with investigation

J. Sanctions for failure to comply with discovery

1. No authority to impose attorney fees and costs

2. Debarment

3. Discovery requests must be decided prior to issuance of summary judgment

K. Privileges

1. Informant's privilege

2. Deliberative process privilege

3. Attorney-client privilege

4. Work-product privilege

IX. Constitutional issues

First Amendment

Fourth Amendment

1. Generally

2. "Consent" exception

3. Requirements of the Fourth Amendment

a. Violated

b. Not violated

C. Fifth Amendment

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Expedited hearing procedures

Government contractor

A. Federal contracts

1. Generally

a. Apply to all operations absent obtaining a waiver

b. Does not apply to all operations; waiver regulations

2. Obligation to ensure that subcontractor complies

3. Federal government may be a purchaser or seller

4. Waiver for independent facilities

B. Federal contract defined

1. Established

a. Depository of federal funds

b. Bills of lading

c. Contract for use of federal property and services

d. Blanket purchase agreement

i. Subcontractor performs "necessary" services for the federal contract

2. Not established

a. Lease of space in a government building

b. Subcontractor not perform “necessary" services for

c. Federal grant monies not constitute federal contracts

3. Term of contract

XI. Compliance Review

A. Generally

1. Desk audit not required to precede on-site review

2. Follow-up "on-site review" permitted

3. OFCCP’s authority to request AAP data post-dating desk audit scheduling letter

B. Reporting requirements

C. Establishing affirmative action plans

XII. The Rehabilitation Act

Generally

1. The Americans With Disabilities Act of 1990

2. Disability could cause harm to individual’s health

3. ADA Amendments Act of 2008 – Congressional disagreement with Supreme Court

interpretations

4. Types of adverse actions

5. Affirmative action requires more than obligation not to discriminate

6. Employer's knowledge of disability at time of adverse action required

7. Sovereign immunity of states

B. Qualified handicapped individual; “substantially limited in a major life activity”

1. Burdens

a. Generally

b. Dual motives

c. Worker argued not handicapped; complaint dismissed

2. Major life activity, defined

3. Employee regarded as a handicapped individual

4. Ability at the time of employment decision relevant

a. Generally

b. Employer must reconsider decision on request if condition has changed

5. Assessment of disability must be based on mitigated condition

a. Myopia

b. Radial keratomy

C. Business necessity for job requirements

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1. Defendant's burden to establish

2. Defendant must adequately research employee's condition

3. Defendant has right to medical records/releases

a. Failure to gather sufficient information

4. "Business necessity" established

5. "Business necessity" not established

6. Likelihood and imminence of injury

a. Generally

b. Defendant's burden to establish

Generally

ii.

Failure to gather sufficient information

iii.

Factors to be considered; individualized consideration

7. Generally

a. Risk of higher premiums

b. Circumstances at time of decision considered

c. Complainant's actions

D. Accommodation

1. Defendant's burden to establish undue hardship

2. Generally

3. Must gather information to make determination of reasonable accommodation

a. Generally

4. Undue hardship

a. Established

b. Conflict with seniority rules

c. Not established

d. Not at issue; worker capable of performing job without accommodation

5. Use of transfer as accommodation

a. Generally

b. Not constitute accommodation; lower pay

E. Employee has duty to mitigate damages

XIII. Retaliation

A. Protected activity, generally

B. Burdens of persuasion and production

1. Generally

2. Types of protected activity

3. Defendant's burden to put forth non-discriminatory reasons for its action

4. Dual motives

XIV. Relief

A. Generally

B. Back wage award

1. Purpose

2. May be awarded

a. Generally

b. Burdens

c. Subject to mitigation

3. Payment not tolled because of delay in adjudication

4. Not barred by collective bargaining agreement

5. Not offset by unemployment compensation

6. Factors to consider in calculating back pay award

C. Costs incurred by employee as result of adverse action

D. Employee voluntarily leaves work; no relief

E. Pre-judgment and post-judgment interest

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F. Compensatory damages not precluded by FECA

G. Violation of conciliation agreement

1. Enforcement by third-party beneficiaries

2. Cancellation of contract

3. Debarment

H. Debarment

1. Generally

2. Conduct warranting debarment

a. Failure to submit written affirmative action program

b. Denial of access to premises

c. Violation of conciliation agreement

3. Conduct not warranting debarment automatically

I. Sanctions

1. Due process required

2. Attorney misconduct

J. Equal Access to Justice Act (EAJA) inapplicable

XV. Types of dispositions

A. Consent decree

1. Generally

2. Not subject to ARB review

3. May be amended by the ALJ

4. May not be blocked by intervener

5. Factors to be considered

Conciliation required under the Rehabilitation Act

1. Generally

2. Sufficiency of conciliation efforts

3. Amended complaint; effect on conciliation

4. Distinction between conciliation and letter of commitment

Dismissal

1. Upon compliance with consent decree

2. Complaint is moot

3. Settlement

4. Factors to be considered

5. Types of dismissal

a. With prejudice

b. Voluntary

6. Dismissal versus summary judgment

Summary judgment

I. Statutory and regulatory authority

•

Executive Order 11246 at 30 Fed. Reg. 12319, enacted on September 28, 1965, as amended; 41

C.F.R. Part 60-1, 60-2, 60-3, 60-4, 60-20, and 60-50. See also History of Executive Order 11246,

available at https://www.dol.gov/agencies/ofccp/about/executive-order-11246-history (last

accessed January 21, 2021).

•

Section 503 of the Rehabilitation Act of 1973 at 29 U.S.C. § 793; 41 C.F.R. § 60-741; 41 C.F.R. Part

60-741.65

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•

Section 402 of the Vietnam Era Veterans' Readjustment Assistance Act of 1974; 38 U.S.C. § 4211;

38 U.S.C. § 4212; 41 C.F.R. § 60-300; 41 C.F.R. Part 60-300.65

The rules of practice and procedure before the Office of Administrative Law Judges for the foregoing

Executive Orders and enactments are found at 41 C.F.R. § 60-30. See 41 C.F.R. § 60-300.65(b) (Vietnam

Act); 41 C.F.R. § 60-741.65 (Rehabilitation Act).

II. Generally

A. Purpose

The purpose of Executive Order 11246 is to provide a more efficient and effective method of

redressing discrimination than was possible by other means requiring federal court litigation. Uniroyal,

Inc. v. Marshall, Case No. OFCCP 79-1702 (Sec'y July 20, 1979).

The purpose of the Rehabilitation Act is essentially the same as that of Title VII of the Civil Rights

Act of 1964 and Executive Order 11246; namely, the purpose is to eradicate discrimination against

handicapped persons and to make victims of such discrimination whole for injustices suffered. OFCCP

v. Black, 482 F. Supp. 364 (D.D.C. 1979).

B. Executive Order 11246 has "force and effect of law"

In OFCCP v. Uniroyal, Inc., OFCCP 1977-1 (Sec'y June 28, 1979), aff'd sub nom., Uniroyal, Inc. v.

Marshall, 482 F. Supp. 364 (D.D.C. 1979), the Secretary cited to numerous decisions, including Regents of

the University of California v. Bakke, 98 S. Ct. 2733, 2781 n.28 (1978) and United States v. New Orleans

Public Service, Inc., 553 F. 2d 459 (5th Cir. 1977), and stated that "it has been held by the courts that the

Executive Order program has the force and effect of law."

III. Jurisdiction

A. Section 715 of the National Defense Authorization Act of 2012

OFCCP COMPLIANCE REVIEW OF HOSPITAL PROVIDING SERVICES TO TRICARE PATIENTS IS BARRED BY

SECTION 715 OF THE NATIONAL DEFENSE AUTHORIZATION ACT OF 2012

In OFCCP v. Florida Hospital of Orlando, ARB No. 11-011, ALJ No. 2009-OFC-2 (ARB Oct. 19, 2012)

(en banc), the ARB held en banc that OFCCP did not have authority to engage in a compliance review of

Florida Hospital under E.O. 11246, Section 503 of the Rehabilitation Act and Section 402 of the Vietnam Era

Veterans Readjustment Assistance Act, because Section 715 of the National Defense Authorization Act

(NDAA) for Fiscal Year 2012 precludes such a review.

TRICARE is the Defense Department's world-wide health care program for active-duty and retired

military and their families. TRICARE contracts for managed care support. Humana Military Healthcare

Services (HMHS) contracted with TRICARE to provide networks of healthcare providers to TRICARE

patients. The Respondent, Florida Hospital, is a not for profit hospital that entered into a sub-agreement to

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be a HMHS participating hospital and part of the network of providers that HMHS agreed to make available

to TRICARE under the prime contract.

In 2008, OFCCP informed Florida Hospital that it had been selected for a compliance review. OFCCP

later filed an administrative complaint with DOL's Office of Administrative Law Judges when Florida

Hospital refused to comply with OFCCP's request for a compliance review. Florida Hospital argued that it

did not qualify as a federal contractor or subcontractor and that OFCCP lacked jurisdiction. The ALJ granted

summary decision in favor of OFCCP.

While the matter was pending on appeal before the ARB, President Obama signed the NDAA into

law on December 11, 2011. Section 715 of the NDAA, entitled "Maintenance Of The Adequacy Of Provider

Networks Under The Tricare Program" amended 10 U.S.C.A. 1097b to provide that "For the purpose of

determining whether network providers under [TRICARE] provider network agreements are subcontractors

for purposes of the Federal Acquisition Regulations or any other law, a TRICARE managed care support

contract that includes the requirement to establish, manage, or maintain a network of providers may not

be considered to be a contract for the performance of health care services or supplies on the basis of such

requirement."

In December 2010, OFCCP had issued Policy Directive 293 on "Coverage of Heath Care Providers

and Insurers," addressing inter alia coverage questions pertaining to TRICARE, and concluding that OFCCP

jurisdiction is driven by the existence of a federal contractor or subcontractor relationship, giving as an

example as a covered relationship Florida Hospital's healthcare services to TRICARE beneficiaries. Four

months after enactment of Section 715 of NDAA, OFCCP rescinded Policy Directive 293.

The ARB ordered additional briefing on the impact of Section 715 on the Florida Hospital appeal pending

before it.

The ARB first determined that Section 715 applies to the pending appeal because its application

imposed no retroactive effect. The ARB found that Section 715 "appears to remove from the definition of

'subcontract' for purposes of [41] C.F.R. Part 60 (as it relates specifically to this case), the subcontract/subagreement between HMHS and Florida Hospital establishing Florida Hospital as a medical network provider

for TRICARE beneficiaries pursuant to the prime contract between TRICARE and HMHS." USDOL/OALJ

Reporter at 18. The ARB found no significance to OFCCP's argument that Section 715 had retroactive effect

because it impaired its right to take a compliance review of Florida Hospital. Thus, the ARB determined that

Section 715 applies to the appeal before it.

The basis for OFCCP's jurisdiction in the matter was grounded in the regulations at 41 C.F.R. Chap.

60, which permit compliance reviews of Federal contractors and subcontractors. The focus thus was on the

regulatory definition of a "subcontract" at 41 C.F.R. § 60.1.3. That regulation defines "subcontract" as "any

agreement or arrangement between a contractor and any person (in which the parties do not stand in the

relationship of an employer and an employee: (1) For the purchase, sale or use of personal property or

nonpersonal services which, in whole or in part, is necessary to the performance of any one or more

contracts; or (2) Under which any portion of the contractor's obligations under any one or more contracts

is performed or undertaken or assumed."

Although OFCCP conceded that Section 715 removed the basis for its jurisdiction under the second

prong of the regulatory definition of subcontract, it argued that Section 715 did not remove jurisdiction

under the first prong because Florida Hospital's services as a participant in the network were "necessary to

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the performance" of the prime contract. The ARB rejected this argument finding that under the particular

contract at issue, Section 715 would apply and preclude OFCCP jurisdiction.

Three members of the Board concurred in part and dissented in part.

OFCCP JURISDICTION UNDER PRONG ONE OF 41 C.F.R. § 60-1.3 TO CONDUCT A COMPLIANCE REVIEW OF

A HOSPITAL UNDER SUBCONTRACT TO A TRICARE REGIONAL CONTRACTOR; SECTION 715 OF THE

NATIONAL DEFENSE AUTHORIZATION ACT OF 2012 BARS PRONG TWO, BUT NOT PRONG ONE

JURISDICTION

OFCCP JURISDICTION TO CONDUCT A COMPLIANCE REVIEW OF A HOSPITAL UNDER SUBCONTRACT TO A

TRICARE REGIONAL CONTRACTOR; QUESTION OF WHETHER TRICARE IS A FEDERAL FINANCIAL

ASSISTANCE PROGRAM NOT SUBJECT TO OFCCP’S JURISDICTION; ARB CONCLUDES THAT

CONGRESSIONAL INTENT IS CRUCIAL, AND REMANDS FOR FURTHER DEVELOPMENT OF THE RECORD ON

THAT QUESTION

In OFCCP v. Florida Hospital of Orlando, ARB No. 11-011, ALJ No. 2009-OFC-2 (ARB July 22, 2013)

(en banc), the ARB granted reconsideration of its decision in OFCCP v. Florida Hospital of Orlando, ARB No.

11-011, ALJ No. 2009-OFC-2 (ARB Oct. 19, 2012) (en banc), in which it had held that an OFCCP compliance

review of a hospital providing services to TRICARE patients was barred by Section 715 of the National

Defense Authorization Act of 2012 (hereinafter "Section 715"). The ARB rendered its decision on the merits

on reconsideration in a separate opinion by the full Board issued that same day, OFCCP v. Florida Hospital

of Orlando, ARB No. 11-011, ALJ No. 2009-OFC-2 (ARB July 22, 2013) (en banc). The ARB determined that

the Florida Hospital contract qualified as a subcontract under the first prong of the regulation as a matter

of law, but that because of an unaddressed issues of law and material facts, a remand was necessary for

the ALJ to consider whether OFCCP is nevertheless barred from asserting jurisdiction over Florida Hospital

because the payments the Hospital receives under the TRICARE program constitute federal financial

assistance. [NB: The ARB's decision is detailed and technical, and researchers must read the full decision to

fully understand the issues presented and the ARB's rulings on those issues.]

OFCCP modifies its assertion of jurisdiction to rely on Prong One of 41 C.F.R. § 60-1.3

Although originally asserting jurisdiction over the hospital to conduct a compliance review under the

second prong of 41 C.F.R. § 60-1.3, OFCCP withdrew this basis for jurisdiction because during the course of

the litigation Congress enacted the Section 715 bar, and OFCCP essentially conceded that Section 715

applies to bar jurisdiction under prong two. OFCCP instead now seeks instead to establish jurisdiction

under the first prong of 41 C.F.R. § 60-1.3(1).

Section 715 does not bar OFCCP jurisdiction under Prong One

The ARB first rejected the Respondent's argument that Section 715 bars OFCCP jurisdiction under both

prong one and two of 41 C.F.R. § 60-1.3, based on the straightforward terms of the law and the legislative

history of the provision. See 10 U.S.C.A. § 1097b(a)(3).

The Respondent is a subcontractor within the meaning of the regulations; meaning of "nonpersonal

services"; "Necessary for Performance" condition

The ARB then turned to the Respondent's argument that it was not, within the meaning of the regulations,

a subcontractor subject to incorporation of the EEO clause into its service contract. The ARB described the

regulatory context as follows:

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The regulations enforcing OFCCP's authority to conduct compliance reviews of Federal government

contractors and subcontractors under the EO Laws are set out at 41 C.F.R. Chap. 60 (Office of Federal

Contract Compliance Programs, Equal Employment Opportunity). These regulations apply to all

Government contracting agencies and to contractors and subcontractors who perform under Government

contracts. Under the regulations, a "contract" is "any Government contract or subcontract." A

"Government contract" means any "agreement or modification thereof between any contracting agency

and any person for the purchase, sale or use of personal property or nonpersonal services," and the term

"contractor" means "a prime contractor or subcontractor."

"Prime contractor" refers to "any person holding a contract and, for the purposes of Subpart B of this part,

any person who had held a contract subject to the order." The term "subcontractor" means "any person

holding a subcontract and, for the purpose of Subpart B of this part, any person who had held a

subcontract subject to the order." A "subcontract" is defined as follows:

Subcontract means any agreement or arrangement between a contractor and any person (in which the

parties do not stand in the relationship of the employer and an employee):

(1) For the purchase, sale or use of personal property or nonpersonal services which, in whole or in part, is

necessary to the performance of any one or more contracts;

(2) Under which any portion of the contractor's obligation under any one or more contracts is performed,

undertaken or assumed.

41 C.F.R. § 60-1.3.

The regulations state that "each contracting agency shall include the . . . equal opportunity [EEO] clause

contained in Section 202 of the [Executive] [O]rder in each of its Government contracts." The regulations

state that the EEO clause is "incorporated by reference in all Government contracts and subcontracts," and

"by operation of the [Executive] Order" is "considered to be a part of every contract and subcontract

required by the Order and the regulations . . . whether or not it is physically incorporated in such contracts

and whether or not the contract between the agency and the contractor is written."

USDOL/OALJ Reporter at 10-11 (footnotes omitted) (see the decision at 9-12 for a fuller description of the

regulatory process).

One of the central issues in the instant case was the meaning of the term "nonpersonal services" in the

service contract, a term not defined by the EO laws. The ARB, however, found that the definition had been

settled in its decision in OFCCP v. UPMC Braddock , ARB No. 08-048, ALJ Nos. 2007-OFC-001, -002, -003

(ARB May 29, 2009), aff d UPMC Braddock v. Harris , __ F. Supp. 2d __, 2013 WL 1290939 (D.D.C. Mar. 30,

2013), and found that the contract was for the purchase of nonpersonal services because the undisputed

facts demonstrated that the hospital's medical care professionals operate independently from the TRICARE

regional contractor when deciding the ultimate care provided to beneficiaries.

Another issue was the second condition for prong one jurisdiction, the "Necessary-for-Performance"

condition." The ARB stated

The threshold for the Necessary for Performance Condition is low. By its plain terms, the

Florida Hospital contract satisfies this condition if Florida Hospital provides, "in whole or in

part," personal property or nonpersonal services necessary to the performance of the HMHS

contract. We find that it does.

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USDOL/OALJ Reporter at 27. Although the Respondent advanced several arguments to minimize the

significance of its role with respect to the contract with the regional TRICARE contractor, the ARB found

that "[t]he record indisputably establishes medical services as the essential reason for the TRICAREHMHS-Florida Hospital arrangement." USDOL/OALJ Reporter at 29. The ARB stated: "Like the

intermediary in UPMC Braddock , HMHS is much more than an insurer; HMHS must establish and

maintain a high-level network to ensure that members actually receive medical care, not simply

insurance or access to health care." USDOL/OALJ Reporter at 29. The ARB found immaterial the

Respondent's argument that it had not expressly agreed to be such a subcontractor, stating that it had

previously rejected this argument in UPMC Braddock (equal opportunity clause is incorporated into any

federal contract or subcontract even if it has not been expressly included).

The ARB thus concluded that OFCCP has jurisdiction under prong one as a matter of law.

Potential exemption based on TRICARE's possible status as a "federal financial assistance" program

The ARB then addressed whether the Respondent could demonstrate that it is nevertheless

exempt from OFCCP jurisdiction because the payments it receives under the TRICARE program

constitute federal financial assistance.

The Respondent argued in a cross-motion for summary judgment "that TRICARE has stated that it

is a federal financial assistance program subject to Title VI of the Civil Rights Act of 1964, 42 U.S.C.A. §

2000d et seq . (West 2003), and substantially resembles the federally subsidized health programs like

Medicare Part A and Part B. Because courts have found that Medicare payments constitute federal

financial assistance, Florida Hospital argues that the payments to Florida Hospital also constitute federal

financial assistance not subject to OFCCP's jurisdiction." USDOL/Reporter at 31 (footnote omitted).

OFCCP's response was that "TRICARE was established to ensure or optimize the delivery of quality

medical services to military personnel (or uniformed services) and, therefore, it is different from

Medicare and not a federal financial assistance program." ." USDOL/Reporter at 31-32. The ALJ had

concluded that TRICARE differs from Medicare, and therefore is not a federal financial assistance

program. The ARB found that the parties failed to address the most critical question the intention of the

government. Noting that the statutes governing TRICARE created a "very comprehensive" program, the

ARB found that "[n]either of the parties analyzed whether Congress intended that funding for any of

these statutory provisions constituted federal financial assistance or a part of military compensation or

entitlements that TRICARE would provide through military medical providers and/or private medical

providers." USDOL/OALJ Reporter at 35. The ARB also noted that TRICARE had evolved into the current

program, making analysis of congressional intent complex. The ARB found that the parties had not

specifically analyzed the evolutions and whether Congress intent in those evolutions was to provide

federal financial assistance. The ARB also found that the record must be developed to establish "which

programs, medical services, beneficiaries and corresponding federal funding source(s) relate to the

medical services Florida Hospital provides prior to the ALJ's analysis of the Congressional intent

question." USDOL/OALJ Reporter at 36. The Board concluded by stating: "Our ruling on this issue of

federal financial assistance is simply that the parties must provide additional argument and supplement

the facts as necessary on the issue of congressional intent to allow the ALJ to make the necessary

additional findings of fact and ultimate determination on the issue of federal financial assistance." The

majority of the Board thus remanded to the ALJ for further proceedings.

Two members of the Board dissented on the ground that Section 715 removes OFCCP jurisdiction

under both prongs of the regulation.

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B. Contract for Legal Services

CONTRACT FOR LEGAL SERVICES; WHETHER CONTRACTOR IS SUBJECT TO THE EO LAWS AND THEREFORE

AN OFFCP COMPLIANCE REVIEW IS DEPENDENT ON WHETHER THE CONTRACT AT ISSUE WAS FOR

"NONPERSONAL SERVICES"; FEDERAL ACQUISITION REGULATION DEFINITION MAY BE USED FOR THIS

DETERMINATION; KEY QUESTION IS THE NATURE OF THE GOVERNMENT’S SUPERVISION AND CONTROL

OVER THE CONTRACTOR’S EMPLOYEES

In OFCCP v. O'Melveny & Myers LLP, ARB No. 12-014, ALJ No. 2011-OFC-7 (ARB Aug. 30, 2013), the

Defendant, a law firm, entered into a contract with the U.S. Department of Energy (DOE) under which it

agreed to provide legal advice and assistance, including legal representation in administrative

proceedings, in connection with the DOE's divestiture of a naval petroleum reserve. OFCCP sent a

scheduling letter to the Defendant initiating a compliance review under the EO Laws, and requesting a

copy of the Defendant's Affirmative Action Plan and other specified supporting documentation. After

several unsuccessful attempts to secure the Defendant's compliance with its request for documents,

OFCCP filed an administrative complaint with the Office of Administrative Law Judges. The ALJ granted

summary decision in favor of OFCCP, and ordered that the Defendant comply with OFCCP's request for

documents and inspection. The Defendant appealed.

Whether the contract for services constituted a “Government contract” within the meaning of OFCCP's

regulations

The central issue before the ARB was whether the contract for services constituted a “Government

contract” within the meaning of 41 C.F.R. §§ 60-1.3, 60-741.2(i), and 60-250.2(i). The ARB observed:

For O’Melveny to be subject to OFCCP's jurisdiction under the EO Laws, the contract with DOE

must constitute a "Government contract" within the meaning of the EO Laws’ implementing regulations,

which define "Government contract" in pertinent part as:

any agreement or modification thereof between any contracting agency and any person for

the purchase, sale or use of personal property or nonpersonal services. . . . The term

“nonpersonal services” as used in this section includes, but is not limited to, the following

services: Utilities, construction, transportation, research, insurance, and fund depository.

The term Government contract does not include: (1) Agreements in which the parties stand

in the relationship of employer and employee; and (2) Federally assisted construction

contracts. 41 C.F.R. § 60-1.3. See also 41 C.F.R. §§ 60-741.2(i), 60-250.2(i) (setting forth same

definition).

USDOL/OALJ Reporter at 8. The ARB noted that neither the EO Laws nor the OFCCP regulations define the

term "nonpersonal services," and agreed with the ALJ's decision to use the Federal Acquisition Regulation

definition at 48 C.F.R. § 37.104 to determine whether the contract at issue was a "nonpersonal services"

contract. The FAR regulations identify six indicia of a personal services contract:

(1) Performance on site.

(2) Principal tools and equipment furnished by the Government.

(3) Services are applied directly to the integral effort of agencies or an organizational

subpart in furtherance of assigned function or mission.

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(4) Comparable services, meeting comparable needs, are performed in the same or similar

agencies using civil service personnel.

(5) The need for the type of service provided can reasonably be expected to last beyond

one year.

(6) The inherent nature of the service, or the manner in which it is provided reasonably

requires directly or indirectly, Government direction or supervision of contractor

employees in order to:

(i) Adequately protect the Government's interest;

(ii) Retain control of the function involved; or

(iii) Retain full personal responsibility for the function supported in a duly authorized

Federal officer or employee.

48 C.F.R. § 37.104(d). The FAR regulations emphasize that "the overarching and ‘key

question’ for assessing whether a government contract is for personal services is: ‘Will the

Government exercise relatively continuous supervision and control over the contractor

personnel performing the contract?’ 48 C.F.R. § 37.104(c)(2)." USDOL/OALJ Reporter at 9-10

(footnote omitted). Moreover, the FAR regulations dictate that in "determining whether a

government contract is for personal or nonpersonal services, ‘[e]ach contract arrangement

must be judged in the light of its own facts and circumstances.’ [48 C.F.R. § 37.104(c)(2).] "

USDOL/OALJ Reporter at 10 (footnote omitted).

In the instant case, the parties stipulated to the facts on their cross motions for summary decision

before the ALJ. The ARB, however, found that those stipulated facts were insufficient to reach a decision.

Specifically, the ARB found that four of the six factors of the FAR guidance appeared to cut equally for and

against the conclusion that the services at issue were of either a personal or nonpersonal nature, and that

in regard to the remaining two factors, the factual record presented by the parties was insufficient to

reach a conclusion one way or the other in resolving the issue of whether the contract was a qualifying

"Government contract" under the EO laws.

In regard to the fourth element of the FAR guidance -- whether comparable services, meeting

comparable needs, are performed in the same or similar agencies using civil service personnel – the

Defendant pointed only to a contract clause that stated that it "was to provide "professional legal

assistance to the Office of the General Counsel." The ARB found that this contract clause was not

sufficient to determine the question.

In regard to the key question of the nature of the Government's supervision and control over the

contractor's employees (the sixth element of the FAR guidance), the ARB found that the affidavits

presented by the Defendant stating that there was no close government supervision were not relevant,

because the focus is not on whether supervision occurs, but whether it should occur. The ARB stated: "It

must be demonstrated that the supervision is necessary to assure that the Government's interests are

protected, that control of the contractually-provided services is maintained, or that a duly authorized

government official or employee retains full personal responsibility for the provided services."

USDOL/OALJ Reporter at 12. The ARB stated the contract's terms were of little assistance in addressing

the question, and instead turned to the manner of the DOE's contract administration. Both parties had

focused in their stipulations on a period of time under the contract when the Defendant was representing

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DOE in administrative proceedings, and disregarded almost six years of legal services provided under the

contract, worth almost three million dollars in legal services. The total payment for the entire duration of

the contract was $3,415,340.00. The ARB found this record "woefully inadequate for drawing any

meaningful conclusion regarding the supervision and control DOE exercised over O’Melveny's attorneys

during the entire ten-year period the DOE contract covered." USDOL/OALJ Reporter at 14. The ARB also

found that even if it was justifiable to focus only on part of the contract services, "still the evidence of

record does not afford a sufficient basis upon which any meaningful conclusion can be reached regarding

the nature and extent of DOE's supervision and control of O’Melveny's attorneys for this four-year period.

There was very little detail of the work O’Melveny actually performed to determine whether it was

directly connected to an ‘integral’ DOE function or mission or whether it was work that federal civil

service employees could not perform." USDOL/OALJ Reporter at 14 (citation omitted). The ARB therefore

remanded the case to the ALJ for further proceedings.

One member of the Board would have affirmed the ALJ's finding that the contract was a

nonpersonal services contract, noting that the regulation at 48 C.F.R. § 37.104(b) states that "[a]gencies

shall not award personal services contracts unless specifically authorized by statute (e.g., 5 U.S.C. 3109) to

do so." This member noted that there was not explicit statutory authority for the contract at issue, and

stated that given the presumption of agency regularity, and no suggestion that the contract was unlawful,

the contract was necessarily one for nonpersonal services. This member acknowledged that the OFCCP

and FAR regulation should be construed consistently, but argued for abolishment of any distinction

between a personal and nonpersonal service contract for purposes of the OFCCP regulations and

enforcement of the EO laws because such a distinction is no longer relevant to the operation of the

Federal government, which has been increasingly privatized and reliant on service contracts of all

varieties.

Whether Defendant Contractually Obligated Itself to Compliance with the EO Laws

The ARB also addressed another challenge by the Defendant regarding the ALJ's conclusion that

the Defendant contractually obligated itself to comply with the EO Laws. The ARB rejected the ALJ's

conclusion, writing:

Given the sparse record before us, we agree with O’Melveny's understanding of the Contract's

incorporation language: the fact that the laws or their implementing regulations are incorporated into the

DOE contract by reference merely signifies that should any of the cited laws or regulations be applicable,

the parties agree to their adherence. To interpret the incorporated references in any other manner would

render a number of the references in the DOE contract nonsensical, as for example the incorporation by

reference of 48 C.F.R. § 52.229-5 (cited by O’Melveny), which refers to taxes on contracts performed in

U.S. Possessions or Puerto Rico, or reference to 48 C.F.R. § 52.249-4, which requires the use of U.S.-flag air

carriers for government-financed international air transportation of personnel. Consequently, in the

specific circumstances of this case, we agree with O’Melveny that the incorporated references to various

FAR pertaining to the EO Laws are applicable to O’Melveny only if its contract with DOE constitutes a

"Government contract" within the meaning of those laws and their implementing regulations.

C. Regulations only authorize OFCCP to file complaint with OALJ

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FEDERAL CONTRACTOR’S COMPLAINT REQUESTING DECLARATORY RELIEF PROPERLY DISMISSED BY ALJ

ON THE GROUND THAT THE REGULATIONS ONLY AUTHORIZE OFCCP TO FILE A COMPLAINT WITH OALJ

In Entergy Services, Inc., ARB No. 13-025, ALJ No. 2013-OFC-1 (ARB May 19, 2014), the

Complainants, which were federal contractors subject to the equal opportunity laws, filed an

"Administrative Complaint for Declaratory Relief" with the Office of Administrative Law Judges (OALJ)

seeking declaratory relief from compliance reviews scheduled by the Office of Federal Contract Compliance

Programs (OFCCP). The Chief ALJ dismissed the Complaint for lack of jurisdiction. The ARB affirmed the

dismissal. The ARB stated:

The Office of Administrative Law Judges is an administrative tribunal that exercises authority

only as defined by statute or regulation. See, e.g., Matthews v. Leavitt, 452 F.3d 145, 152 (2d

Cir. 2006) (“The authority of an ALJ is circumscribed by the appointing agency's enabling

statutes and its regulations.”). The ARB found that the applicable OFCCP regulations at 41

C.F.R. § § 60-30.5 and 60-30.32(a) expressly grant only the OFCCP the authority to file a

complaint and that there was “no authorization in the statutes or their implementing

regulations empowering any other party to file a complaint under the EO Laws.”

USDOL/OALJ Reporter at 3.

IV.

The complaint

A. Where to file

Generally

The regulations at 41 C.F.R. § 60-741.26(a) require that a complaint be filed "with the Director."

It was further held that a signed statement accompanying the complaint demonstrating that the

complainant was "regarded as having an impairment" was for the benefit of the agency and any alleged

deficiencies in the statement do not constitute grounds for dismissal. OFCCP v. E.E. Black Ltd., Case No.

1977-OFCCP-7R (ALJ Sept. 13, 1978), aff'd (Ass't Sec'y Feb. 26, 1979).

No requirement that individual complaint be filed prior to compliance review

complaint

The filing of a Section 503 complaint by a worker is not a condition precedent to the filing of an

administrative complaint by OFCCP. The regulations provide OFCCP with express authority to conduct

compliance reviews and to follow-up such investigations by the filing of an administrative complaint.

OFCCP v. Conagra Poultry Co., Case No. 1989-OFC-15 (ALJ Feb. 5, 1990) (order denying summary

judgment).

Discretion to investigate incomplete complaints

OFCCP has the discretion to act or decline to act on an unsigned and, therefore, incomplete

complaint. OFCCP v. Yellow Freight System, Inc., Case No. 1979-OFCCP-7 (ALJ Aug. 26, 1988), remanded

on other grounds (Ass't Sec'y, Aug. 24, 1992). See also OFCCP v. Southern Pacific Transportation Co., Case

No. 1979-OFC-10A (ALJ Nov. 9, 1982), remanded on other grounds, (Ass't Sec'y, Feb. 24, 1994) (although

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the regulations impose a requirement that the complaint be in writing and signed by the complainant, an

informal presentation reduced to writing by the agency itself and sufficiently documented as to the

identity of the discriminatee constitutes substantial compliance with the regulation).

Who may file

Generally

The regulatory provisions at 41 C.F.R. § 60-741.15 authorize any one of several interests, such as

the agency, the director, the prime contractor, or subcontractor, to precipitate an agency

investigation without a discriminatee's formal complaint. However, the investigation must follow the

same procedures and it carries the same potential consequences. OFCCP v. Southern Pacific

Transportation Co., Case No. 1979-OFC-10A (ALJ Nov. 9, 1982), remanded on other grounds, (Ass't Sec'y,

Feb. 24, 1994). It was further held that all facts and issues which come to light from the investigation of

a properly filed complaint may be used against Defendant at trial.

Impleader and intervener

In OFCCP v. Burlington Northern Railroad, Case No. 1981-OFCCP-21 (ALJ Feb. 8, 1984), the ALJ

denied Defendant's motion to implead two unions on the ground that any retroactive seniority could not

be effective without their approval. The requirement of Fed. R. Civ. P. 19, that complete relief cannot

be accorded without the third party, was not established.

The ALJ issued orders which affirmed a union's right to intervene in a case between OFCCP and

United Airlines under 41 C.F.R. § 60-30.24(a)(3) without "[disrupting] the proceeding." The ALJ held

that Air Line Pilots Association's (ALPA) petition was untimely, but granted the petition to the extent that

its counsel would be allowed to participate at the hearing by cross-examining any witnesses whose

testimony is related to ALPA's collective bargaining agreement with United Airlines and any remedy which

could affect seniority/working conditions of ALPA pilots. OFCCP v. United Airlines, Case No. 1994-OFC-1

(ALJ Aug. 17, 1995).

Class actions permitted

A class action for monetary damages is maintainable under Executive Order 11246. OFCCP v.

Uniroyal, Inc., Case No. OFCCP 1977-1 (ALJ, Apr. 11, 1977), aff'd (Sec'y June 28, 1979) (citing to 41 C.F.R.

§ 60-2.1(b), United States v. Allegheny-Ludlum Industries, Inc., 517 F.2d 826 (5th Cir. 1975), and United

States v. Duquesne Light Co., 423 F. Supp. 507 (W.D. Pa. 1976)).

G. Exhaustion of remedies

In NationsBank Corp. v. Herman, 174 F.3d 424 (4th Cir.), cert. denied, Case No. 99-394 (1999) (Case

No. 1997-OFC-16), the Fourth Circuit held that Defendant was required to exhaust administrative

remedies in bringing a Fourth Amendment suit against OFCCP based on the alleged improper selection of

certain facilities for compliance reviews. In support of its holding, the court cited to Volvo GM Heavy Truck

Corp. v. Dep't of Labor, 118 F.3d 205 (4th Cir. 1997) and Thetford Properties IV L.P. v. Dep't of

Housing and Urban Dev., 907 F.2d 445 (4th Cir. 1990). The Fourth Circuit required exhaustion of

remedies even where the suit was premised on constitutional challenges and it reasoned as follows:

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If, as NationsBank alleges and the district court suspected, the OFCCP did single out

NationsBank for investigation and either has no policy governing its selection of targets

for compliance review or has one but intentionally disregarded it, exhausting would serve

the frequently noted purpose of allowing the agency to correct its mistakes before facing

judicial review.

Id. at 430. The court determined that NationsBank was not entitled to a waiver from the requirement that

it exhaust all administrative remedies on grounds that constitutional claims are unsuited for

administrative exhaustion or that “OFCCP’s questionable behavior, which so aroused the district court’s

suspicion” would justify waiver.

In American Airlines, Inc. v. Herman, 176 F.3d 283 (5th Cir. 1999) (Case No. 1994-OFC-9), OFCCP

alleged that American Airlines (American) failed to comply with Section 503 of the Rehabilitation Act of

1973 and its implementing regulations. These laws require that every covered government contractor not

discriminate against any employee or applicant on grounds of physical or mental handicap. Under the

procedural history of the case, the ALJ recommended dismissal of the complaint against American on

grounds that the government conducted an unauthorized compliance review. The parties appealed to the

"then-highest authority within the DOL," the Assistant Secretary who, in turn, disagreed with the ALJ's

decision and remanded the case for further proceedings. Rather than permitting the case to be

remanded to the ALJ, American filed for declaratory and injunctive relief in federal district court. The

district court judge entered judgment in favor of American. OFCCP appealed and argued that the

district court erred in denying its motion for summary judgment Abased on American's failure to exhaust

administrative remedies." The circuit court agreed and stated the following:

Neither the ALJ, the Assistant Secretary, nor the Administrative Review Board has ruled

on the merits of the OFCCP's claim that American discriminated in employment on the

basis of disability.

...

Grants of partial summary disposition by an agency are generally considered interlocutory

orders not subject to immediate review. American has not demonstrated that it will

suffer irreparable injury that cannot be remedied by petitioning for review at the

conclusion of the administrative proceedings.

As a result, the appellate court reversed the judgment of the district court and dismissed the

complaint for lack of subject matter jurisdiction.

For an additional discussion of constitutional issues, see Chapter VII.

E. Service

In OFCCP v. Penzoil Exploration and Production Co., Case No. 1995-OFC-11 (ALJ Apr. 17, 1995)

(order pursuant to conference call), the question involved when the time for answering a complaint begins

to run. Under the expedited hearing procedures of 41 C.F.R. 60-30.31, OFCCP contended that the date

mailed starts the time in which Defendant has to answer. The ALJ agreed with OFCCP that, under the Fed.

R. Civ. P. 4, a complaint is served when mailed, but since this complaint was mailed first class, OFCCP was

required to take additional steps, such as supplying a return envelope and postage. See Fed. R. Civ. P.

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4(c)(2)(C)(ii). The ALJ reasoned that, if a complaint was considered served upon first class mailing, it would

place a defendant in an unfair position because it could not be determined that the mail was received in

a timely fashion.

V. Scope of investigation

A. Generally

In OFCCP v. City Public Service of San Antonio, Case No. 1989-OFC-5 (Ass't Sec'y Jan. 18, 1995),

the Assistant Secretary held that a complaint investigation is distinct from a compliance review and the

investigation is more narrow than the compliance review. The scope of a complaint investigation should

be reasonably related to the violations alleged in "such complaint." However, the Assistant Secretary

found that the fact that OFCCP sought to conduct an investigation which exceeded its authority is not a

ground for dismissal of the complaint.

For a discussion of case law related to Fourth Amendment challenges to the scope of an

investigation and other constitutional issues, see Chapter VII.

B. Discretionary decisions by the Secretary not presumptively reviewable by federal courts

In Greer v. Chao, 492 F.3d 962 (8th Cir. 2007), the court held that the Secretary of Labor

discharged her statutory obligations under the Vietnam Era Veterans Readjustment Assistance Act of 1974

(VEVRAA) to investigate a complaint filed by appellant Greer even though the Secretary declined to seek

an enforcement action against Eaton Corporation, the employer.

Under the relevant facts of the case, Greer filed a complaint with the OFCCP alleging that Eaton

had not adequately trained its employees regarding VEVRAA "and had not adhered to the affirmative

obligations that the statute imposes." The court noted that OFCCP's investigation began in less than two

weeks and was concluded 18 months later after an on-site visit, interviews with co-workers and managers,

and review of Greer's employment file. In the end, OFCCP found no violations under the VEVRAA and

declined to seek an enforcement action.

Greer sought district court review of OFCCP's actions pursuant to 5 U.S.C. § 701 et seq. of the

Administrative Procedure Act (APA). Here, although the court noted a "stong presumption that agency

action is reviewable by courts," the Eighth Circuit held that an agency's decision to seek (or not seek) an

enforcement action is "not presumptively reviewable." In this vein, the court cited to 5 U.S.C. § 701(a)(2)

of the APA, which provides an exception to judicial reviewability where agency action is "committed to

agency discretion by law."

C. Time limit for filing a complaint; 180 days

Generally

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Complaint for discrimination

In OFCCP v. Southern Pacific Transportation Co., Case No. 1979-OFC-10A (ALJ Nov. 9, 1982),

remanded on other grounds, (Ass't Sec'y Feb. 24, 1994), it was held that the 180-day time limit for filing a

complaint is for the agency's benefit and is not jurisdictional.

The Assistant Secretary held that 41 C.F.R. § 60-741.26(a), providing that a complaint under

Section 503 of the Rehabilitation Act must be filed within 180 days from the date of the alleged violation,

is not jurisdictional. OFCCP v. CSX Transportation, Inc., Case No. 1988-OFC-24 (Ass't Sec'y Oct. 13, 1994).

Administrative complaint based on compliance review

The regulations implementing Section 503 of the Rehabilitation Act, which require the filing of a

complaint within 180 days, refer solely to the individual complaint filed with the Director. The regulations

contain no time limits for formal administrative complaints, filed by the Solicitor with the Office of

Administrative Law Judges arising out of compliance reviews. OFCCP v. American Airlines, Inc., Case No.

1994-OFC-9 (Ass't Sec'y Apr. 26, 1996).

Each claim analyzed separately

Generally

When the complainant alleged two distinct claims of discrimination (denial of full-time

employment and denial of re-employment) the timeliness of each claim should be analyzed separately.

OFCCP v. Yellow Freight Systems, Inc., Case No. 1982-OFC-2 (ALJ Sept. 30, 1986), remanded on other

grounds (Ass't Sec'y Oct. 6, 1993). The ALJ found that the complainant did not have sufficient information

to make a charge of discrimination when complainant was told by Defendant's doctor that he would not

be hired as a full-time employee, but complainant continued to work for Defendant. On the other hand,

the complainant had sufficient information to make a charge of discrimination when the discriminatee

was told by his supervisor that Defendant would no longer need his services, and this confirmed

the earlier statement made by Defendant's doctor. Even if the function of particular procedural

requirements of the regulations, such as the 180-day filing deadline, is to provide notice to Defendant

that OFCCP has made an initial finding of discrimination and intends to act upon such finding, a

procedurally deficient claim will not be barred if administrative convenience outweighs prejudicial harm

to Defendant. OFCCP may waive the 180-day filing requirement upon a showing of good cause.

Continuing violations

Established

In OFCCP v. CSX Transportation, Inc., Case No. 1988-OFC-24 (ALJ Mar. 23, 1990) (order granting

dismissal), rev'd and remanded on other grounds (Ass't Sec'y Oct. 13, 1994), the Assistant Secretary held

that a complaint alleging a violation under Section 503 is timely, if an incident of repeat violation occurred

within 180 days of the filing of the complaint. Under the facts of the case, the union's letter to Defendant

requesting that the complainant be reinstated and Defendant's denial constituted a refusal to re-employ

him. Because this rejection occurred within 180 days of the filing of the complaint, it was timely. It was

further determined that an employer should not be allowed to shield itself in perpetuity from its

obligations under Section 503 by arguing that past circumstances rendered the employee disqualified.

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Rather, upon request, Defendant is required to reconsider its employment decision after the passage of

time when the employee’s handicap is subject to change over time.

ii. Not established

A complaint alleging a violation of Section 503 filed by a complainant with OFCCP is timely, if an

incidence of repeat violation occurs within 180 days of the filing of the complaint. OFCCP v. CSX

Transportation, Inc., Case No. 1988-OFC-24 (Ass't Sec'y Oct. 13, 1994). Indeed, a continuing violation may

be relevant to the timeliness of a complaint, or to the issue of relief. Under the facts of the case, the ALJ

held that Defendant did not commit a continuing violation by failing to pay the complainant's back wages

or by failing to rehire the complainant after new medical evidence was submitted which allegedly

demonstrated that complainant was capable of returning to work. Rather, the ALJ concluded that a

continuing violation is where there is a prevailing scheme of alleged discrimination. Based upon the facts

before him, the ALJ found that Defendant's decision to disqualify the complainant from employment as a

track repairman for medical reasons was a single act and, although the complainant suffered the effects

of the act, the act only occurred once.

In OFCCP v. Burlington Northern, Inc., Case No. 1980-OFCCP-6 (Ass't Sec'y Dec. 11, 1991), the

Assistant Secretary held that Defendant's single refusal to hire did not constitute a continuing violation.

Extension of time to file claim

i. ALJ without authority to grant

In OFCCP v. CSX Transportation, Inc., Case No. 1988-OFC-24 (ALJ Mar. 23, 1990) (order granting

dismissal), rev'd and remanded on other grounds (Ass't Sec'y Oct. 13, 1994), the ALJ declined to extend

the 180-day filing period for good cause shown because the regulation at 41 C.F.R. § 60-741.26 granted

such authority only to the Director of OFCCP.

ii. Director with authority to grant for good cause

Although the complainant filed his complaint with OFCCP in April 1988, allegations of

discrimination occurring before that time are not time-barred by the 180-day time period for filing

complaints. The ALJ held that OFCCP's motion to amend the complaint to embrace an earlier time period

constituted an extension by the OFCCP Director of the time for filing the complaint. OFCCP v. Jefferson

County Board of Education, Case No. 1990-OFC-4 (ALJ Nov. 21, 1990) (order granting motion to amend

complaint).

In OFCCP v. Norfolk and Western Railway Co., Case No. 1990-OFC-8 (ALJ July 9, 1991), the ALJ

held that OFCCP's investigation and prosecution of a complaint received 187 days after the filing deadline

constituted an implicit waiver by the OFCCP Director of the 180-day limit.

In OFCCP v. Yellow Freight Systems, Inc., Case No. 1982-OFC-2 (ALJ Sept. 30, 1986), remanded on

other grounds (Ass't Sec'y Oct. 6, 1993), the ALJ held that OFCCP may not waive the 180-day filing

requirement for administrative convenience, but only for good cause. Good cause is an abstract term and

its meaning must be determined not only from the verbal context of the statute, but also from the

context of the action and procedures involved and the type of case presented. If the Director's finding of

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good cause appears reasonable and does not represent an abuse of discretion, it will be upheld. Under

the facts presented, the ALJ concluded that good cause was established where there was evidence that

the complainant made a good faith effort to file a cause of action at the state level and sought federal

relief, but was told no such relief existed.

In OFCCP v. Norfolk & Western Railway Co., Case No. 1993-OFC-4 (Ass't Sec'y, July 20, 1995), the

Assistant Secretary held that it was improper for the ALJ to grant Defendant's motion for summary

judgment while OFFCP's discovery motions were pending. OFCCP was entitled to have access to

information that would support its determination that Defendant's continuous refusal to reinstate the

complainant for medical reasons constituted a continuing violation and was "good cause" to extend the

filing date past 180 days. Because the plaintiff should also have the opportunity to make specific

arguments in support of its opposition to Defendant's summary judgment motion, OFCCP had a right to

discovery prior to the adjudication of the summary judgment motion.

Abuse of discretion

In OFCCP v. Norfolk & Western Railway Co., Case No. 1993-OFC-4 (ALJ Aug. 19, 1993), remanded

on other grounds, (Ass't Sec'y, July 20, 1995) (remanded without addressing the merits because the ALJ

improperly granted summary judgment without resolving pending discovery requests), the ALJ held that

the regulatory provisions at 41 C.F.R. § 60-741.26 provide that a Section 503 complaint must be filed within

180 days of the alleged violation, unless the time is extended by the OFCCP Director for good cause shown.

A union grievance initiated on behalf of a Section 503 complainant does not constitute a Section 503

complaint. Because Defendant posted notices regarding employees' rights under the Rehabilitation Act,

the ALJ was not persuaded by a suggestion that Complainant was unaware of his Section 503 rights and,

thus, the ALJ declined to find good cause for Complainant's failure to file a timely complaint. Indeed, the

ALJ concluded that the OFCCP Director accepted the untimely filing in error because: 1) the record did not

support a finding of a continuing violation; 2) the complaint was filed more than two years after the

alleged violation; and 3) Defendant had posted notices regarding employees' Rehabilitation Act rights.

4. Not controlled by Title VII statute of limitations

The Title VII statute of limitations does not extend to actions brought under Executive Order

11246. There was no authority to support a finding that the Title VII statute of limitations applied to

Executive Order actions. Moreover, Defendant's argument that the government's claim for back pay and

seniority relief stemming from conduct which occurred more than 180 days from the date of filing the

complaint was rejected. Dep't. of the Treasury v. Harris Trust, Case No. 1978-OFCCP-2 (ALJ Jan. 30, 1981).

See also OFCCP v. Uniroyal, Inc., Case No. OFCCP 1977-1 (Sec'y June 28, 1979).

D. Laches

Held inapplicable

In OFCCP v. First Federal Savings Bank of Indiana, Case No. 1991-OFC-23 (Sec'y Oct. 26,

1995), the Secretary adopted the ALJ's holding and reasoning on the issue of laches. Under the facts of

the case, there was a ten-month delay between the date OFCCP informed First Federal that the matter

was being referred to the Solicitor's Office for formal enforcement and the filing of the administrative

complaint. The ALJ concluded that the defense of laches requires a showing of lack of due diligence by the

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party against whom the defense is asserted, and prejudice to the party asserting the defense. As a general

rule, actions by the government to protect the public interest are not subject to the defense. The ALJ found

that the ten month delay between the final notice of referral for enforcement and filing the

administrative complaint was not so lengthy as to amount to a lack of due diligence, citing OFCCP

v. Georgia-Pacific Corp., Case No. 1990-OFC-25 (Sec'y Dec. 28, 1990) (19-month delay not unreasonable).

The ALJ also noted that the regulations provide no statute of limitations applicable to the filing of a

complaint by OFCCP, and that First Federal failed to show that the delay prejudiced its defense.

In OFCCP v. East Kentucky Power Cooperative, Inc., Case No. 1985-OFC-7 (ALJ Mar. 17, 1988), the

ALJ concluded that the first element of laches, inexcusable delay, was met where OFCCP offered no excuse

for the lapse of more than two years between the end of conciliation and the filing of an administrative

complaint. However, it was determined that the second element, substantial prejudice to Defendant, was

not established. The ALJ noted that Defendant was able to introduce key documents at the hearing and

was able to offer testimony from crucial witnesses.

E. Collateral estoppel

Held applicable

In OFCCP v. Beverly Enterprises, Inc., 1999-OFC-11 (ALJ Nov. 5, 2001), the ALJ applied collateral

estoppel and adopted a finding by the National Labor Relations Board, which was affirmed on appeal,

that the parent and subsidiaries of Beverly Enterprises constituted a “single employer.” The case

was appealed to the ARB and the parties subsequently submitted a consent decree which resolved

the outstanding issues. OFCCP v. Beverly Enterprises, Inc., ARB Case No. 02-009, 1999-OFC-11 (ARB Apr.

30, 2002).

In Exxon Corp. v. U.S. Dep't. of Labor, 2002 WL 356517 (N.D. Tex. Mar. 5, 2002) (Memorandum

Opinion and Order), the court concluded that OFCCP was collaterally estopped from litigating the issue of

whether a recovering alcoholic was discriminated against through the employer’s policy where the employer

precluded him from "safety sensitive" positions in the company. In particular, OFCCP pursued a

complaint under Section 503 of the Rehabilitation Act alleging that Exxon violated the affirmative action

requirements of the Act in a non-safety sensitive position. The ALJ and ARB held that the Act was violated

because Mr. Strawser was a qualified individual with a disability and . . . Exxon failed to show that the policy,

as applied to Strawser, was supported by ‘business necessity and safe job performance.'" The court then

noted that, in a related matter styled EEOC v. Exxon Corp., Civil Action Nos. 3:95-CV-1311-H and 3:95-CV2537-H, it adopted findings by a magistrate judge and entered judgment for Exxon "holding that the Plaintiffs

were not disabled under the ADA and therefore, the policy as applied to them, did not violate the ADA. See

EEOC v. Exxon Corp., 124 F. Supp. 2d 987, 1015 (N.D. Tex. 2000)." Because the definition of a "disabled

individual" under the Americans With Disabilities Act (ADA) and the Rehabilitation Act is identical, the court

held that OFCCP was collaterally estopped from pursuing its complaint under the Rehabilitation Act with

regard to Strawser. In applying collateral estoppel, the court noted that the EEOC and OFCCP Aare charged

with the same mission and purpose in addressing claims of disability and discrimination." Moreover, the issue

in both cases was whether the "Plaintiffs are individuals with disabilities." In addition, the court found that

the same judicial body is addressing both cases, both agencies are arguing that the same Exxon policy is

discriminatory for the same reasons, and but burden of proof under the summary judgment standard is the

same." As a result, summary judgment in favor of Exxon was granted. For a review of the underlying ALJ and

ARB decisions in this case, see OFCCP v. Exxon Corp., Case No. 1992-OFC-4 (ALJ June 15, 1993), aff'd in part,

(ARB Oct. 28, 1996).

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2. Held inapplicable

In OFCCP v. Norfolk Southern Corp., 1989-OFC-31 (Ass't Sec'y Oct. 3, 1995), the Assistant

Secretary concluded that OFFCP was not collaterally estopped from litigating a Section 503 enforcement

action where the state civil rights commission issued an adverse decision in a case involving the same

alleged victim of discrimination (among others) and the same employer. The Assistant Secretary found

both that: (1) the state commission did not rule on the nondiscrimination/affirmative action employment

policy and standards issues relating to the OFCCP action; (2) OFCCP was not a party, nor in privity with the

employee or the state commission in the state proceeding; and (3) traditional collateral estoppel doctrines

do not apply to Section 503 litigation. The Assistant Secretary concluded that the ALJ failed, under

University of Tennessee v. Elliott, 478 U.S. 788 (1986), to first determine whether Section 503

expressly or impliedly treats judicially unreviewed state agency decisions as preclusive. See also Astoria

Federal Savings and Loan Association v. Solimino, 501 U.S. 104 (1991). Although there is a presumption

is favor of estoppel where the statute is silent on the issue, the Assistant Secretary concluded that implicit

Congressional intent was to except Section 503 litigation from traditional collateral estoppel in regard to

handicap discrimination decisions of state agencies acting under state laws, because Congressional policy

was that Sections 503 and 504 of the Rehabilitation Act be enforced in a consistent and effective manner.

See Daniels v. Barry, 659 F. Supp. 999 (D.D.C. 1987).

A decision by an arbitrator in favor of Defendant on the union's grievance concerning Defendant’s

removal of the complainant from active duty and retention of sick benefits does not divest OFCCP of

jurisdiction in this case, nor do principles of collateral estoppel or res judicata apply. OFCCP v. American

Telephone and Telegraph Co. (AT&T), Case No. 1992-OFC-5 (ALJ Mar. 8, 1996).

Defendant's removal of the complainant from active duty and retention of sick benefits does not

divest OFCCP of jurisdiction in this case, nor do principles of collateral estoppel or res judicata apply. OFCCP

v. American Telephone and Telegraph Co. (AT&T), Case No. 1992-OFC-5 (ALJ Apr. 23, 1995). In so holding,

the ALJ stated that a labor arbitrator has only authority to resolve questions of contractual rights and his

task is to "effectuate the intent of the parties." However, the arbitrator lacks general authority to invoke

public laws that conflict with the bargain between the parties, such as Title VII or Section 503 of the

Rehabilitation Act. Therefore, even had the arbitrator's decision not been made pursuant to a collective

bargaining agreement, OFCCP could have brought an action in its role as a government agency charged with

enforcement of federal anti-discrimination statutes. The principles of res judicata or collateral estoppel do

not apply to such an action based on an arbitrator's decision. Moreover, the ALJ concluded that Defendant's

argument that OFCCP lacked subject matter jurisdiction because ERISA preempts the Act was wholly

without merit. Id. at 8.

There is no collateral estoppel or res judicata in a complaint filed under Executive Order 11246

based on a prior Title VII court action. The parties and issues were different in the two proceedings. The

legal issues in the Title VII court action were limited to discrimination practices against black applicants or

employees whereas the administrative proceeding also addressed affirmative action for Vietnam

veterans and other minority groups. OFCCP v. First Alabama Bank of Montgomery, Case No. 1980OFCCP-32 (ALJ Dec. 5, 1980), aff'd (Sec'y Mar. 16, 1981).

F. Bankruptcy stay not apply

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In OFCCP v. Jacksonville Shipyards, Inc., Case No. 1989-OFC-1 (ALJ June 10, 1997), the ALJ found

that the automatic stay provisions of the Bankruptcy Code did not apply to a back pay award because the

proceeding fell under the Department of Labor's regulatory authority. See Eddleman v. U.S. Dep't of

Labor, 923 F.2d 782 (10th Cir. 1991); In Re James H. Crockett, 204 B.R. 705 (Bank. W.D. Tex. 1997); Martin

v. Safety Electric Construction Co., 151 B.R. 637 (Bank. D. Conn. 1993).

G. Bifurcated hearing; no jurisdiction over appeal

In OFCCP v. Interstate Brands Corp., ARB Case No. 00-071, Case No. 1997-OFC- 6 (ARB Sept. 29,

2000), after a bifurcated hearing process, the ALJ issued a decision on liability while reserving the decision

on damages. The ALJ advised the parties that, after the ARB's review of the liability issue, he would

adjudicate the remedy. Citing to various environmental whistleblower decisions, the ARB initially noted

that it disfavored interlocutory appeals and piecemeal litigation. In addition, the ARB stated that, in OFCCP

v. The Cleveland Clinic Foundation, Case No. 1991-OFC-20 (Sec'y Apr. 18, 1995), the Secretary refused to

consider an interlocutory appeal under Executive Oder 11246 where the ALJ bifurcated the liability and

damages issues and the case involved damages owed only to two individuals. On the other hand, the ARB

found that the Secretary accepted an interlocutory appeal in OFCCP v. Honeywell, Inc., Case No. 1977-OFC3 (Sec'y June 2, 1993) where the case was one of the largest compliance cases ever submitted for decision

and the case had been pending before a succession of Secretaries for over ten years." Upon review of the

facts in Interstate Brands, the ARB concluded that it would not accept an interlocutory appeal. It stated that

"[w]hile we are not unsympathetic to Interstate's concerns regarding the complexity of the damages

calculations and the time and cost involved in litigating the issue, these factors are inherent in all complex

litigation." The ARB also rejected the argument that it must accept the appeal upon agreement of the

parties; rather, the ARB concluded that its acceptance or rejection of an appeal "is not subject to agreement

by the private parties."

H. Issues of constitutionality and validity

For an in-depth discussion of constitutional challenges to investigations under the antidiscrimination enactments, see Chapter VII.

ALJ without authority to determine validity of regulations

In OFCCP v. Goya De Puerto Rico, Inc., Case No. 1998-OFC-8 (ALJ June 22, 1999), aff'd, ARB No.

99-104 (ARB Mar. 21, 2002), the ALJ stated that he was without authority to rule on the validity of the

Executive Order or its implementing regulations. See Stouffer Foods Corp. v. Dole, 1990 WL 58502 1 (D.

S.C. Jan. 23, 1990) (citing to Oesterich v. Selective Service System, 393 U.S. 233, 241-42 (concurring

opinion) (1968)).

The Secretary of Labor may void regulations only through proper rule-making pursuant to the

Administrative Procedure Act. OFCCP v. Ozark Air Lines, Inc., Case No. 1980-OFCCP-24 (Dep'y Under Sec'y,

June 13, 1986).

An administrative tribunal is without jurisdiction to adjudicate the validity of OFCCP regulations

that implement the Rehabilitation Act. OFCCP v. American Airlines, Case No. 1979-OFCCP-2 (ALJ June 30,

1980), aff'd, (Dep'y Under Sec'y May 2, 1985).

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The ALJ and Assistant Secretary have the power to decide if an employer has violated Section 503

and the implementing regulations, but may not determine the underlying validity of the regulations.

OFCCP v. Western Electric Co., Case No. 1980-OFCCP-29 (Dep'y Under Sec'y Apr. 24, 1985). For purposes

of administrative enforcement proceedings, the validity of the waiver provisions at 20 C.F.R. § 60741.25(a)(5) must be assumed.

Language not unconstitutionally vague

The definition of "handicapped individual" contained in the Act and the regulations is not

unconstitutionally vague. E. E. Black, Ltd. v. Marshall, 497 F. Supp. 1088, 1097-98 (D. Hi. 1980).

Improperly Appointed ALJ

ARB ORDERS “LUCIA” REMAND FOR RECONSIDERATION BEFORE A NEW, PROPERLY APPOINTED ALJ OF

ISSUES FOR WHICH EXCEPTIONS WERE FILED

In OFCCP v. Convergys Customer Management Group, Inc., ARB No. 16-013, ALJ Nos. 2015-OFC-2

through 8 (ARB Jan. 31, 2019), the ARB had stayed the appeal pending the U.S. Supreme Court’s decision

in Lucia v. S.E.C.. The ARB noted that the Supreme Court issued its decision on June 21, 2018, Lucia v.

S.E.C., 138 S. Ct. 2044 (2018), and held that

ALJs at the Securities and Exchange Commission (SEC) are subject to the appointments

clause, that the SEC judge decided Lucia’s case without a constitutional appointment, that

Lucia timely objected, and that the appropriate remedy was to hold a new hearing before a

different ALJ. The Court specified that a properly appointed official cannot be the same ALJ

who previously decided the case because he ‘cannot be expected to consider the matter as

though he had not adjudicated it before.’

Slip op. at 2 (footnote omittted). The ARB thus dismissed Convergy’s petition for review and remanded “for

the appointment of an ALJ to reconsider the issues raised in Convergys’ exceptions to [the original] ALJ...’s

July 31 2017 Recommended Decision and Order.” Id.

"Working on the contract" is a jurisdictional issue and cannot be presumed

Generally

The issue of "working-on-the-contract" is one of subject matter jurisdiction, which cannot be

presumed. OFCCP v. Texas Industries, Inc., Case No. 1980-OFCCP-28 (Ass't Sec’y June 21, 1996).

Although neither party raised the contract issue before the ALJ or the Assistant Secretary, the Assistant

Secretary is required to address the issue before the case may proceed. See also OFCCP v. Texas Utilities

Generating Co., Case No. 1985-OFC-13 (Ass't Sec'y Aug. 25, 1994).

The "working-on-the-contract" issue is jurisdictional and must be specifically addressed by the ALJ

prior to proceeding to the merits. OFCCP v. Norfolk Southern Corp., Case No. 1989-OFC-31 (Ass't Sec'y Oct.

3, 1995).

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In OFCCP v. United Airlines, Inc., Case No. 1986-OFC-12 (Ass't Sec'y Dec. 22, 1994), the Assistant

Secretary remanded the case to the ALJ for appropriate findings on the "working-on-the-contract" issue,

and held that, "[a]lthough the "working-on-the-contract" jurisdictional issue was not raised or addressed

below or in the pleadings filed subsequent to the [ALJ] Recommended Decision and Order, I am required

to address this matter before the case can proceed."

For a discussion of whether a defendant is a government contractor, see Chapter VIII.

2. Admission by defendant; insufficient to establish "working on the contract"

Defendant's mere acknowledgment that it is a federal contractor under Section 503 of the

Rehabilitation Act cannot be construed as an admission that it had federal contracts which complainants

would have performed. OFCCP v. Yellow Freight Systems, Inc., Case No. 1979-OFCCP-7 (Ass't Sec'y Aug. 24,

1992).

J. Included in contract by law

In OFCCP v. First Federal Savings Bank of Indiana, Case No. 1991-OFC-23 (Sec'y Oct. 26,

1995), Defendant asserted that it was not covered by Executive Order 11246 because the agreements under

which Defendant was an issuing agent for United States Savings Bonds and a depository for federal funds

did not include the equal opportunity clause. The Secretary rejected this argument and held that the

regulations establish that "[b]y operation of the [Executive] order, the equal opportunity clause shall be

considered to be a part of every contract . . . required by the order and regulations . . . to include such a

clause whether or not it is physically incorporated in such contracts . . .." See 41 C.F.R. § 60-1.4(e). See also

OFCCP v. Southern Pacific Transportation, Case No. 1979-OFC-10A (ALJ, Nov. 9, 1982), remanded on other

grounds (Ass't Sec'y Feb. 24, 1994).

In OFCCP v. Goya De Puerto Rico, Inc., Case No. 1998-OFC-8 (ALJ June 22, 1999), aff'd, ARB No.

99-104 (ARB, Mar. 21, 2002), the ALJ concluded that Defendant violated the provisions of Executive Order

11246, the Vietnam Era Veterans' Readjustment Assistance Act of 1974, and Section 503 of the

Rehabilitation Act of 1973 for failing to develop and maintain a written affirmative action program.

Defendant operated under federal contracts to distribute food to two United States commissaries in

Puerto Rico and argued that OFCCP's exclusive remedy lie under the Contract Disputes Act at 41 U.S.C. §§

601-613. Citing to the implementing regulations at 41 C.F.R. § 60-1.1, the ALJ noted that the procedures

underlying the Executive Order apply "regardless of whether or not the contract contains a 'Disputes'

clause."

K. Interplay with other statutes

Department of Transportation jurisdiction

Where an overlap of jurisdiction occurs, the agency exercising its authority cannot take actions

which impinge on another Federal agency's jurisdiction. However, the fact that there is overlap of

jurisdiction between Department of Transportation truck driver qualifications and Rehabilitation Act's

prohibition against handicap-based discrimination does not necessarily constitute an intrusion into

another agency's jurisdiction. OFCCP v. Yellow Freight Systems, Inc., Case No. 1979-OFCCP-7 (Dep'y

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Under Sec'y Apr. 8, 1987). The Deputy Under Secretary held that, requiring that OFCCP wait until

the Department of Transportation has ruled on the qualifications of drivers who fail to meet carriers'

additional requirements before it can institute proceedings, preempts jurisdiction of the Rehabilitation

Act and deprives drivers of remedies provided through Section 503, i.e., back pay, lost fringe benefits, and

reinstatement, which are not available under the Motor Carrier Act. It was noted that OFCCP conceded

that the Department of Transportation had authority to set minimum qualification standards for

drivers and that OFCCP and the Department of Transportation have concurrent jurisdiction over job

qualifications imposed by the carrier. Where drivers are qualified under Department of Transportation

standards, they also meet the definition of qualified handicapped individuals under the Rehabilitation Act.

In OFCCP v. Texas Industries, Inc., 1980-OFCCP-28 (Sec'y June 7, 1988), the Secretary stated

the following with regard to DOT authority as it relates to complaints filed under the Rehabilitation

Act:

[A]fter a thorough consideration of DOT's authority over physical qualifications for

drivers, it was held that exhaustion of DOT administrative remedies is not a prerequisite

to a Rehabilitation Act proceeding where the handicapped employee or applicant for

employment holds a valid DOT medical certificate.

2. Civil Rights Act of 1964

The Civil Rights Act of 1964 does not limit application of Executive Order 11246. The legislative

history of the Act indicate that enforcement is to be separate from that of the Executive Order and that,

while the purpose of Title VII is remedial and preventive, the goal of the Executive Order is to promote job

opportunities irrespective of a finding of discrimination. In the Matter of Firestone, Case No. 1978-OFCCP13 (Sec'y Dec. 8, 1978).

A federal contractor is not exempt from complying with the affirmative action requirements of

Executive Order 11246 on grounds that those requirements might conflict with Title VII. The courts, and

not an administrative tribunal, are the appropriate forum in which to challenge the constitutionality of the

Executive Order. Dep't of Treasury v. Nat'l Bank of Commerce of San Antonio, Case No. 1977-OFCCP-2

(Sec'y May 3, 1978).

In OFCCP v. The Cleveland Clinic Foundation, Case No. 1991-OFC-20 (ARB July 17, 1996), the ARB

adopted the ALJ's approach of paralleling the regulations implementing Executive Order 11246, which

required covered contractors "to ensure that no person intimidates, threatens, coerces, or discriminates

against any individual for the purpose of interfering with the filing of a complaint, furnishing information,

or assisting or participating in any manner in an investigation, compliance review, hearing, or any other

activity related to the administration of the order . . .", with the anti-retaliation provision at § 704(a) of

Title VII of the Civil Rights Act.

3. Contract Disputes Act

In OFCCP v. Goya De Puerto Rico, Inc., Case No. 1998-OFC-8 (ALJ June 22, 1999), aff'd, ARB No.

99-104 (ARB Mar. 21, 2002), the ALJ concluded that Defendant violated the provisions of Executive Order

11246, the Vietnam Era Veterans' Readjustment Assistance Act of 1974, and Section 503 of the

Rehabilitation Act of 1973 for failing to develop and maintain a written affirmative action program.

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Defendant operated under federal contracts to distribute food to two United States commissaries

in Puerto Rico. Defendant argued that OFCCP's exclusive remedy lie under the Contract Disputes Act at

41 U.S.C. §§ 601-613. Citing to the implementing regulations at 41 C.F.R. § 60-1.1, the ALJ noted that the

procedures underlying the Executive Order apply "regardless of whether or not the contract contains a

‘Disputes’ clause." In addition, the ALJ noted that Section 605(a) of the Contract Disputes Act provided

that it did not apply "to a claim or dispute for penalties or forfeitures prescribed by statute or regulation

which another Federal agency is specifically authorized to administer, settle or determine." Consequently,

it was determined that OFCCP had a right of action against Defendant which was not barred by the

Contract Disputes Act.

VI. Review

A. By the ALJ

The ALJ conducts a de novo review of the record. See e.g., OFCCP v. Bridgeport Hosp., 1997-OFC1 (ALJ, Jan. 21, 2000), aff'd in relevant part, ARB Case No. 00-034 (ARB Jan. 31, 2003); OFCCP v. Beverly

Enterprises, Inc., 1999-OFC-11 (ALJ July 22, 1999), remanded on other grounds, ARB Case No. 01-028 (ARB,

Jan. 31, 2001).

B. By the ARB

In General

DISMISSAL OF ARB REVIEW WHERE EXCEPTIONS ARE NOT TIMELY FILED

In OFCCP v. D & S Construction of Pineville, Inc., ARB No. 14-088, ALJ No. 2010-OFC-6 (ARB Aug.

28, 2014), the ARB issued a final order affirming the ALJ's recommended decision granting the Plaintiff's

(OFCCP) motion for default judgment. The motion was based on the Plaintiff’s inability to contact the

Defendant to determine whether the Defendant obtained new counsel after former counsel withdrew. The

ALJ put the Defendant on notice of the nature of the motion and warned that failure to respond timely

could result in the motion being granted. The ARB noted that 17 months had passed since the ALJ issued

his recommended decision; that no party had filed exceptions with the Board; that the ALJ’s recommended

decision contained a certification that it was served on the Defendant at its last known address (at which

the Defendant had previously accepted mail); there was no evidence that the ALJ's recommended decision

was returned as undeliverable or that the Defendant provided any alternative address. The ARB thus found

that the period for filing exceptions had expired.

In OFCCP v. Patriot Steel, LLC, ARB No. 2019-0086, ALJ No. 2019-OFC-00001 (ARB Sept. 24, 2019)

(Final Administrative Order), because no party filed exceptions to the ALJ’s Recommended Decision and

Order of Default Judgment, the ARB adopted the ALJ’s decision as the Final Administrative Order in the

matter and directed the parties to comply therewith. Because of the default, the ALJ entered OFCCP’s

requested order debarring Defendant indefinitely from receiving future contracts or modifications or

extensions of existing contracts, until it satisfies the Director of the OFCCP that it has undertaken efforts to

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remedy its prior noncompliance and is currently in compliance with the provisions of the Executive Order

11246 and it implementing regulations.

Standard of Review

In OFCCP v. Goodyear Tire & Rubber Co., ARB Case No. 97-039, Case No. 1994- OFC-11 (ARB Aug.

30, 1999), the ARB held that it "retains complete freedom of decision" as though it heard the case when

reviewing an ALJ's recommended decision under Section 503 of the Rehabilitation Act. See also OFCCP v.

Keebler Co., ARB Case No. 97-127, Case No. 1987-OFC-20 (ARB Dec. 21, 1999) ("[o]ur review is de novo").

In OFCCP v. Yellow Freight Systems, Inc., Case No. 1989-OFC-40 (Sec'y Sept. 18, 1995) (order),

OFCCP moved to strike a letter from the Chief Counsel of the Federal Highway Administration, United

States Department of Transportation, which was attached to Defendant's exceptions. The Secretary

denied the motion because he found that the letter contained only legal argument and, therefore, did not

violate the regulation requiring that the Secretary render a decision "on the basis of the record" made

before the ALJ. 41 C.F.R. §§ 60-30.29 and 60-741.29(b)(1). Similarly, the Secretary denied a motion to

strike portions of the exceptions that relied on arguments made in Chief Counsel's letter on grounds that

the portions of the letter which were targeted did not contain references to extra-record evidence.

In OFCCP v. Bank of America, ARB Case No. 00-079, 1997-OFC-16 (ARB Mar. 31, 2003), the ARB

concluded that the ALJ erred in granting summary judgment because "genuine issues of material

fact" existed. Citing to 41 C.F.R. §§ 60-30.29 and 60-30.30 as well as Secretary's Order No. 1-2002, the ARB

held that it has "plenary power to determine whether summary judgment should be granted."

ARB’S STANDARD OF REVIEW IN OFCCP APPEALS IS DE NOVO; HOWEVER, ARB MAY ACCEPT ALJ’S

FINDINGS OF FACT IF THEY SUPPORTED BY SUBSTANTIAL EVIDENCE

In OFCCP, USDOL v. Bank of America, ARB No. 13-099, ALJ No. 1997-OFC-16 (ARB Apr. 21, 2016),

the ARB described its standard of review of ALJ’s Recommended Decision and Order in appeals arising

under EO 11246, the Rehabilitation Act, and the Veterans’ Act. The ARB stated:

Because no standard of review exists in EO 11246, the implementing regulations, or

Secretary’s delegation of authority, we rely on the Administrative Procedure Act. Under the

Administrative Procedure Act, we have previously determined that our review is de novo

and that the standard of proof in administrative adjudications “is the traditional

preponderance-of-the-evidence standard.” Even under a de novo review, nothing prohibits

us from accepting as our own the ALJ’s material fact findings that led up to the ALJ’s ultimate

finding of fact (i.e., intentional discrimination) if those findings are supported by substantial

evidence. In Bobreski v. J. Givoo Consultants (Bobreski II), we defined substantial evidence

as evidence in the record that logically supports each of the material findings of fact and the

record as a whole does not overwhelm the particular finding or expose the fact finding as

genuinely unresolved.

USDOL/OALJ Reporter at 9-10 (footnotes omitted).

In the instant case, the ARB found that because of “the extensive hearing presentation before the

ALJ and the ALJ’s firsthand observations, we accept the ALJ’s predicate fact findings supported by

substantial evidence.” Id. at 10. The ARB stated that it would “review de novo the ALJ’s ultimate finding of

discrimination and her legal conclusions.” Id.

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BURDENS OF PROOF AND PRODUCTION IN EO 11246 INTENTIONAL DISCRIMINATION CASE; AFTER FULL

HEARING, THE QUESTION FOR REVIEW ON APPEAL IS WHETHER OFCCP PROVED THE CASE, AND BURDEN

OF PRODUCTION ANALYSIS IS UNNEEDED

In OFCCP, USDOL v. Bank of America, ARB No. 13-099, ALJ No. 1997-OFC-16 (ARB Apr. 21, 2016),

the ARB noted that this particular case was grounded in OFCCP’s charge of intentional disparate treatment,

and not disparate impact or a claim that the Defendant violated its affirmative action obligation under the

EO laws. The ARB noted in this regard that, in addition to “EO 11246, its implementing regulations, and

Department precedent, we also look to federal appellate court decisions addressing similar pattern or

practice claims of intentional discrimination adjudicated under Title VII of the Civil Rights Act of 1964.”

USDOL/OALJ Reporter at 11 (footnote omitted). The ARB then described the legal burdens of the parties

for an intentional racial discrimination case:

To prove that [the defendant] violated EO 11246 by engaging in a pattern or practice of

intentional discrimination, the OFCCP must prove that unlawful discrimination was [the

defendant]’s regular procedure or policy. … In a pattern or practice claim of intentional race

discrimination, the OFCCP must show that there was a sufficient disparity and prove that

race was a cause. Often in such cases, the complainant or plaintiff employees point to a

substantial disparity in selection rates for a particular job as proof of an unlawful bias against

members of a disadvantaged or protected class, an allegation that must be proven by a

preponderance of the evidence. Palmer, 815 F.2d at 90. The burden of proving pattern or

practice discrimination remains at all times with the plaintiff. Segar v. Smith, 738 F. 2d 1249,

1268-69, 1287 (D.C. Cir. 1984); Craik v. Minn. State Univ. Bd., 731 F. 2d 465, 486-87 (8th Cir.

1984). Once the OFCCP proves a pattern or practice of discrimination against AfricanAmerican applicants, each qualified African-American applicant benefits from a rebuttable

presumption that he or she suffered from the same discrimination. Teamsters, 431 U.S. at

361-62. This rebuttable presumption shifts the burden of proof to the employer to

demonstrate that it rejected the individual applicant for lawful reasons. Id. at 362.

USDOL/OALJ Reporter at 12 (footnotes omitted). The ARB then noted that after a full evidentiary hearing,

the question on appeal is the ultimate question of whether OFCCP proved the case:

In reviewing the ALJ’s ruling on the merits, we focus on the ultimate question of whether

the OFCCP proved that [the Defendant] engaged in a pattern or practice of intentionally

rejecting African-American applicants and that race was a factor. After a full evidentiary

hearing, there is no need to engage in the burden of production analysis to determine

whether the OFCCP presented a prima facie case or whether BOA presented legitimate, nondiscriminatory reasons for its practices. This burden of production analysis applies to

motions for summary judgment and motions for judgment as a matter of law. To decide the

ultimate question of causation the ALJ must consider both the complainant’s and the

respondent’s evidence. The complainant’s evidence may include a wide variety of

circumstantial evidence, including motive, bias, work pressures from the employer, past and

current relationships of the involved parties, animus, temporal proximity, pretext, shifting

explanations, and material changes in employer practices, among other types of evidence.

Id. at 12-13 (footnotes omitted) (emphasis as in original). The ARB rejected OFCCP’s contention that the

Defendant failed, as a matter of law, to present proper rebuttal for the ARB to consider on the question of

intention discrimination – specifically, that once OFCCP presented its evidence, the Defendant had the

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burden of showing that OFCCP’s “statistical proof was unsound or to prove that the disparity occurred as a

result of legitimate, non-discriminatory reasons.” Id. at 13. The ARB stated that the burden of proof always

remains with OFCCP, and that the Defendant’s task had been to present admissible rebuttal evidence, just

as in any civil tort litigation.

Interlocutory appeal not favored

In OFCCP v. Bank of America, ARB Case No. 04-169, remanding 1997-OFC-16 (ARB Dec. 17, 2004),

the Board declined to accept Defendant's interlocutory appeal of the ALJ's Recommended Decision and

Order on Cross-Motions for Summary Judgment. In particular, the ALJ issued partial summary judgment in

favor of Plaintiff on the issue of Defendant's Fourth Amendment challenge to its selection for a compliance

review. The ALJ further noted that the merits of Plaintiff's complaint had yet to be litigated. Citing to

Plumley v. Federal Bureau of Prisons, 1986-CAA-6 (Sec'y Apr. 29, 1987), the Board addressed the

procedure for requesting an interlocutory appeal. After noting its "strong policy against . . . piecemeal

appeals," coupled with the ALJ's denial of Defendant's request that the case be certified for interlocutory

review, the Board denied the interlocutory appeal and remanded the matter for adjudication on the

merits of Plaintiff's complaint.

Subsequently, on January 21, 2010, the ALJ issued a Recommended Decision and Order finding

that Defendant had intentionally and unlawfully discriminated against African-American candidates in

hiring. Defendant appealed and the Board declined to accept the appeal on grounds that it was

interlocutory. Notably, the Board found that the ALJ retained jurisdiction to adjudicate remedies such that

the case was remanded to the ALJ for adjudication of damages. OFCCP v. Bank of America, ARB Case No.

10-048, ALJ Case No. 1997-OFC-016 (ARB Apr. 29, 2010) (a party seeking review of a non-final order must

demonstrate that the order “involves a controlling question of law,” there is “substantial ground for

difference of opinion in resolving the issues presented by the order,” and an “immediate appeal from the

order may materially advance the ultimate termination of the litigation”; here, the Board found “at least

nine” controlling questions of law and decline to accept the appeal).

ARB NOTES THAT WHETHER INTERLOCUTORY REVIEW IN OFCCP CASES IS AVAILABLE IS AN OPEN

QUESTION; INSTEAD OF DECIDING THAT QUESTION, ARB DETERMINED WHETHER SUCH REVIEW WAS

WARRANTED IN THE CASE BEFORE IT; REVIEW DENIED IN VIEW OF LACK OF CERTIFICATION BY ALJ,

INAPPLICABILITY OF COLLATERAL ORDER EXCEPTION, DISTINGUISHING FACTORS FROM HONEYWELL ,

AND FAILURE TO MEET CHENEY CRITERIA FOR MANDAMUS

INTERLOCUTORY REVIEW UNDER CHENEY WRIT OF MANDAMUS CRITERIA; WHETHER ARB HAS

MANDAMUS AUTHORITY IS AN OPEN QUESTION; RATHER THAN DECIDING THAT QUESTION, ARB FINDS

THAT INTERLOCUTORY REVIEW WAS NOT WARRANTED WHERE IT IS COMMON TO DENY SUCH REVIEW

OF A MOTION TO DISMISS AND WHERE THE ALJ MADE A REASONABLE INTERPRETATION OF THE

REGULATIONS IN FINDING THAT THE PLEADING STANDARD FOR OFCCP ADMINISTRATIVE COMPLAINTS

WAS NOT GOVERNED BY IQBAL/TWOMBLY PLAUSIBILITY STANDARD

In OFCCP v. JPMorgan Chase & Co., ARB No. 17-063, ALJ No. 2017-OFC-7 (ARB Oct. 5, 2017),

OFCCP filed an Administrative Complaint alleging that the Respondent violated E.O. 11246 and its

implementing regulations by discriminating against female employees in regard to compensation. The ALJ

denied the Respondent’s motion to dismiss for failure to state a claim. The Respondent had based on the

motion on the ground that the complaint did not meet the plausibility standard for stating a claim under

FRCP 8 as set forth in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544

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(2007) (Iqbal/Twombly). The ALJ also denied the Respondent’s request for reconsideration and for

certification of an interlocutory appeal. The Respondent argued before the ARB that exceptional

circumstances for interlocutory review through a writ of mandamus existed under Cheney v. U.S. District

Court for the District of Columbia, 542 U.S. 367, 380-381 (2004). The ARB denied interlocutory review.

The ARB first noted that the regulations implementing E.O. 11246 do not provide a mechanism for

interlocutory review. The ARB noted that some caselaw indicated that such review is not available, but also

noted that the caselaw was not uniform and that the Secretary’s Order delegating authority to the ARB

includes the authority to conduct interlocutory review in exceptional circumstances. The ARB thus

proceeded to consider whether interlocutory review was warranted in this case.

The ARB noted that interlocutory appeals are disfavored and that there is a strong policy against

piecemeal appeals. The ARB noted that the ALJ had not certified the question as a controlling question of

law under 28 U.S.C. § 1292(b), a statute that the ARB uses as guidance on such matters. The ARB noted

that the Respondent had not addressed the collateral order exception, presumably because the ALJ’s

denial of its motion to dismiss did not involve a collateral order. The ARB distinguished the granting of

interlocutory review in OFCCP v. Honeywell, Inc., 1977-OFC-3 (Sec’y June 2, 1993), on the grounds that

interlocutory review in the instant case would not encourage the parties to pursue voluntary mediation as

it had in Honeywell, and that unlike in Honeywell, OFCCP objected to interlocutory review in this case.

The ARB noted that it has not yet been determined whether it has mandamus authority. The ARB

continued to pretermit the question in the instant case, and instead found that the Respondent failed to

demonstrate that the circumstances met the Cheney criteria. The ARB noted that it is common for courts

to deny interlocutory review of motions to dismiss. The ARB also found that the Respondent had not

demonstrated that its right to a writ was clear and indisputable because the ALJ’s finding that OFCCP

pleading standard at 41 C.F.R. § 60-30.5(b) applies to this complaint was a reasonable interpretation.

41 C.F.R. § 60-30.19(b) UNAMBIGUOUSLY RESTRICTS THE ARB FROM INTERLOCUTORY REVIEW OF ALJ

RULINGS, DESPITE THE GENERAL AUTHORITY OF THE ARB TO PERFORM INTERLOCUTORY REVIEW FOUND

IN SECRETARY’S ORDER 01-2019

ALTHOUGH ARB DENIES INTERLOCUTORY REVIEW, IT SUGGESTS THAT THE ISSUES OF DELEGATED

DISCRETION, SYSTEMIC COMPENSATION DISCRIMINATION, AND IDENTIFICATION OF STATUTORY

AUTHORITY TO PROCEED WITHOUT A STATUTE OF LIMITATIONS, ARE NOT EXCEPTIONAL

CIRCUMSTANCES THAT WOULD WARRANT INTERLOCUTORY REVIEW

ALTHOUGH ARB DENIES INTERLOCUTORY REVIEW, IT NOTES LACK OF SHOWING THAT IT HAS

JURISDICTION TO PASS ON THE CONSTITUTIONAL VALIDITY OF CONTESTED SECRETARIAL ACTIONS

In OFCCP v. JPMorgan Chase & Co., ARB No. 2020-0011, ALJ No. 2017-OFC-00007 (ARB Nov. 26,

2019), the ALJ denied Defendant’s motion to dismiss Plaintiff’s E.O. 11246 complaint. Defendant then

petitioned for interlocutory review by the ARB of four issues:

•

Whether the delegated discretion alleged by Plaintiff states a claim upon which relief can be granted;

•

Whether the systemic compensation discrimination alleged by Plaintiff states a claim upon which relief

can be granted;

•

Whether Plaintiff must identify statutory authority to proceed without any statute of limitations; and

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•

Whether the instant proceedings before the ALJ and this Board continue to violate Article II of the

United States Constitution.

Slip op. at 2. Defendant relied on the fact that Secretary’s Order No. 01-2019 (Delegation of Authority and

Assignment of Responsibility to the Administrative Review Board), 84 Fed. Reg. 13,072 (April 3, 2019), had

been relied upon by the ARB in the past to review interlocutory rulings in cases arising under E.O. 11246.

Plaintiff responded that 41 C.F.R. § 60-30.19(b) specifically limits the authority of the ARB to hear

interlocutory appeals. The ARB applied the canon of construction that—when there is a conflict between a

general provision and a more specific provision, the specific provision generally prevails—and found that in

the instant case the general provision of the Secretary’s Order must yield to the specific and unambiguous

restriction of the regulation. The ARB declined to credit prior decisions of the ARB to the contrary in the

face of the unambiguous regulatory prohibition. In a footnote, the Board noted that the decision to deny

interlocutory review was unanimous.

Despite the denial of interlocutory review, the ARB commented on Defendant’s petition in a footnote:

In light of this disposition, the Board need not address Defendant’s arguments concerning

the legal sufficiency of the allegations against it or Plaintiffs assertion that the Board could

not grant the requested relief in an appropriate circumstance. But even if the Board were

inclined to look beyond the prohibition of interlocutory review in § 60-30.19(b), it must be

noted that a panel of this Board previously denied interlocutory review to the same

petitioner in the same case raising largely indistinguishable issues based on the decision of

a previous ALJ. Office of Federal Contract Compliance Programs v. JPMorgan Chase & Co.,

ARB No. 17-063, ALJ No. 2017-OFC-007 (ARB October 5, 2017). The Board held that “none

of the recognized possible ‘extraordinary circumstances’ for interlocutory review have been

established” in the case. Id. at 8. If the relevant non-constitutional circumstances were

determined by the Board to be unexceptional in 2017, it is unlikely that they have become

more exceptional with the passage of time. As for the constitutional challenge to the ongoing

adjudication, the complaint is noted for the record. However, there has been no showing

that the Board has any jurisdiction to pass on the constitutional validity of contested

secretarial actions, and, in the absence of such showing, the issues raised must be resolved

in a court of the United States with jurisdiction over matters arising under the federal

Constitution.

Id. at 4, n.1.

C. Reconsideration

In OFCCP v. Florida Hospital of Orlando, ARB No. 11-011, ALJ No. 2009-OFC-2 (ARB July 22, 2013)

(granting reconsideration), the ARB granted reconsideration of an en banc decision it had rendered in

October 2012 finding that Section 715 of the National Defense Authorization Act for Fiscal Year 2012

precluded the OFCCP's exercise of jurisdiction over a TRICARE network hospital under "Prong Two" of the

"subcontract" definition in OFCCP's regulations at 41 C.F.R. § 60-1.3(2). Because of a split panel, the ARB

had not resolved whether OFCCP had enforcement jurisdiction under "Prong One" of the "subcontract"

definition, at 41 C.F.R. § 60-1.3(1). The OFCCP sought reconsideration arguing that the ARB's failure to

resolve the question of Prong One jurisdiction will impede compliance reviews, needlessly protract

litigation, and adversely affect the rights of employees of TRICARE network hospitals by leaving them

vulnerable to discrimination. The ARB stated that it generally uses a four factor test stated in Avlon v.

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American Express Co., ARB No. 09-089, ALJ No. 2008-SOX-51 (ARB Sept. 14, 2011), in determining whether

to reconsider a previously rendered decision The ARB stated that the four factors are not the sole criteria

upon which reconsideration may be granted, and that it has adopted principles employed by federal courts

under FRAP 40 and FRCP 59 and 60 in deciding requests for reconsideration. The ARB noted that the FRAP

use a more general and lenient standard than the ARB's four-part test. The ARB further noted that the 4th

Circuit local rules also permit reconsideration where the proceeding involves one or more questions of

exceptional importance. The ARB found the 4th Circuit local rule to be persuasive, and that the purpose of

a rehearing is to provide an opportunity to see that justice is done. The ARB found that in the instant case,

a majority of the Board failed to appreciate the extent to which OFCCP raised an independent ground for

Prong One jurisdiction. The ARB also observed that reconsideration in the instant case was not of the

merits but the ARB's decision to consider the merits of an important legal issue in an exceptional case

where it previously bypassed the issue on procedural grounds.

In ruling on the OFCCP motion, the ARB noted the Respondent's opposition on the ground that the

motion was not timely. The ARB stated that in absence of rules of procedure governing the timeliness of

such motions, it generally insists that the motion be made within a reasonable period following issuance of

the decision for which reconsideration is sought. The ARB further noted that the Federal court rules allow

the Federal government or its officers and agencies a longer period for the filing of such motions in

recognition of the fact that the Solicitor General needs time to conduct a thorough review of the merits of

a case before requesting a rehearing.

Two members of the ARB dissented, finding that OFCCP had failed to advance an argument

satisfying the criteria ARB requires for a grant of reconsideration.

D. When an ALJ decision becomes final

When expedited procedures apply

In USDOL, OFCCP v. United Space Alliance, LLC, ARB No. 11-033, ALJ No. 2011-OFC-2 (ARB Apr. 11,

2011), the ALJ’s decision under expedited procedures of 41 C.F.R. § 60-30.21 to 60-30.37 (2010) became

final Administrative Order when Board did not issue a final order within 30 days after the expiration of the

time for filing exceptions.

When expedited procedures do not apply

The failure of the ARB to issue a final order within one year of the ALJ’s recommended decision, or

exceptions and responses thereto, is not grounds for dismissal of the appeal; the time limit is directory and

not jurisdictional. In USDOL, OFCCP v. Frito-Lay, Inc., ARB No. 10-132, ALJ No. 2010-OFC-2 (ARB May 8,

2012), the ARB found that the provision in 41 C.F.R. § 60-1.26(b)(2) providing that the ARB issue a final

order within one year of either the ALJ's recommended decision or the submission of exceptions and

responses to exceptions, whichever occurs first, is directory not jurisdictional. Consequently, the ARB

denied the Respondent request that the ARB dismiss appellate review in USDOL, OFCCP v. Frito-Lay, Inc.,

ARB No. 10-132, ALJ No. 2010-OFC-2 (ARB May 8, 2012). The Respondent had noted that the ARB had

closed the appeal in USDOL, OFCCP v. United Space Alliance, LLC , ARB No. 11-033, ALJ No. 2011-OFC-2

(Apr. 11, 2011). The ARB, however, distinguished that case because it arose under the expedited review

procedure at 41 C.F.R. §§ 60-30.37, a regulation that sets forth consequences for a failure to act in a timely

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manner. [Editor's note: in Frito-Lay, the ALJ hearing had been conducted under the expedited review

procedure; however, on appeal the parties waived expedited proceedings before the ARB.]

E. By the courts

When a final agency action is challenged under the APA in district court, if the relevant

statute does not provide for direct review by the court of appeals, the district court is to sit as an appellate

tribunal and determine whether the agency made an error of law. If such an error has been made, the

court must remand the matter to the agency for further action consistent with the corrected legal

standard. PPG Industries, Inc. v. United States of America, 52 F.3d 363 (D.C. Cir. 1995) (formerly Case

No. 1986-OFC-9). In addition, there is nothing to restrict an agency from reopening proceedings for the

admission of new evidence, after the grounds on which it relied are determined by a reviewing

court to be invalid. See also Partridge v. Reich, 141 F.3d 920 (9th Cir. 1998) (application of "arbitrary and

capricious" standard; questions of law are reviewed de novo).

VII. Evidence

A. Back wages owed

Burdens, generally

Complainant has the initial burden of production in establishing back pay. Pettway v. American

Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974). Back pay is calculated by establishing what the worker's

earnings and fringe benefits would have been had the discrimination not occurred. This figure should

include promotions and raises. Moreover, the employment history of co-workers may be used to establish

the injured worker's career path and his or her hypothetical earnings. E.E.O.C. v. Korn Industries, Inc., 662

F.2d 256 (4th Cir. 1981).

Examination of company payroll records and time cards as well as interviewing employees is an

acceptable method of reconstructing back pay damages. Under these circumstances, it is not necessary

to prove the precise amount of uncompensated or under-compensated wage payments to affected

employees. Rather, the reconstructed records must only demonstrate wages owed for the amount and

extent of work done in the job classification as a matter of reasonable inference, even though the result

is approximate. Defendant bears the consequence of the imprecision because of its failure to maintain

accurate records of hours worked in violation of its contractual and statutory responsibilities. Dep't of the

Treasury v. Harris Trust, Case No. 1978-OFCCP-2 (ALJ Jan. 30, 1981) (citing to Anderson v. Mt. Clemens

Pottery Co., 328 U.S. 680 (1946)).

Utilization of a class-wide analysis to establish

In OFCCP v. Jacksonville Shipyards, Inc., Case No. 1989-OFC-1 (ALJ June 10, 1997), the ALJ

determined that a class wide approach to the measure of back pay was necessitated because the employer's

hiring requirements and the qualifications of the job applicants were ambiguous. The facts of the case did

not provide a clear indication of which individuals would have been hired absent discrimination. See Pettway

v. American Case Iron Pipe Co., 494 F.2d 211, 260-61 (5th Cir. 1974). In addition to the 69 women who applied

for 191 positions, 1,065 men (93.92% of the applicant pool) also applied, making it statistically impossible to

say that all 69 women would have been hired. The ALJ concluded that a more likely outcome is that the

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number of females hired would be the same proportion as the total proportion of female applicants,

i.e. since 6.08% of the applicants were female, 6.08% of the total hired should have been female. As

it was virtually impossible to determine which of the 69 applicants would actually have been hired, a class

wide approach based on the percentage of overall hires who, absent discrimination, would have been women

is more equitable. This approach has been accepted and utilized by numerous courts. See Dougherty v.

Barry, 869 F.2d 605 (D.C. Cir. 1989); Pitre v. Western Elec. Co., 843 F.2d 1262 (10th Cir. 1988); Stewart v.

General Motors Corp., 542 F.2d 445 (7th Cir. 1986). Consequently, it was noted that three women were

actually hired, which equaled 1.57% of the total number hired. As previously noted, absent discrimination,

it would have been expected that 6.08% of the persons hired would be female. Therefore, the shortfall

percentage was 4.51%. The back pay determination was then calculated by taking the number of total

earnings by all hirees during the applicable time period and multiplying that number by the shortfall

percentage. See EEOC v. Spring and Wire Forms Specialty Co., 790 F. Supp. 776, 780 (N.D. Ill. 1992).

3. After-acquired evidence

Defendant's contention that the complainant is not entitled to relief because of "after acquired

evidence" consisting of omissions on his application is a remedial issue to be addressed on remand. OFCCP

v. Yellow Freight System, Inc., Case No. 1984-OFC-17 (Ass't Sec'y Dec. 22, 1993).

B. The Rehabilitation Act

Act.

See also Chapter X for an in-depth discussion of case law under Section 503 of the Rehabilitation

Burdens, generally

The shifting, tripartite burdens of proof established under Title VII apply to cases brought under

Section 503 of the Rehabilitation Act. OFCCP v. Yellow Freight Systems, Inc., Case No. 1982-OFC-2 (ALJ

Sept. 30, 1986), remanded on other grounds (Ass't. Sec'y Oct. 6, 1993). Specifically, to establish a prima

facie claim, OFCCP must demonstrate that the employee is a qualified handicapped person and Defendant

utilized a physical job requirement that excluded the handicapped worker from employment. Once OFCCP

establishes a prima facie case, the burden of proof shifts to Defendant who may rebut this inference by

establishing that (1) the physical requirement is job related and consistent with business necessity and safe

job performance, or (2) the adverse employment decision was based on prior poor performance. If

Defendant rebuts the prima facie case, then OFCCP must establish that Defendant's justification is based

on misconceptions or is a pretext for a discriminatory motive.

In OFCCP v. American Commercial Barge Line Co., Case No. 1984-OFC-13 (Ass't Sec'y Apr.

15, 1992), the Assistant Secretary held that burdens of proof and production in Title VII cases apply

to individual handicap discrimination cases. It was initially noted that the burden of establishing a prima

facie case was not an onerous one and required that OFCCP merely establish that the worker was

discharged under circumstances which give rise to unlawful discrimination. Once OFCCP established a prima

facie case, Defendant had the burden of articulating some legitimate, non-discriminatory reason for the

employee's discharge. Once Defendant offers a legitimate, non-discriminatory reason for the discharge, the

burden of production shifts back to OFCCP to establish that the proffered reasons were pretextual, i.e.

the true motivation for the discharge was the intent to discriminate. It is noted that OFCCP bears the

ultimate burden of persuading the fact-finder that Defendant intentionally discriminated against the

worker. As an example, under the facts of American Commercial, Defendant met its burden of

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demonstrating that a manic depressive employee's termination was for a non-discriminatory reason, i.e.,

his failure to release his psychiatric records held by the VA hospital to the employer. OFCCP failed to prove

that the manic depressive employee actually and seriously re-applied for an available position after he was

terminated. Thus, the fact that the contractor did not re-employ him, even after he released his medical

records, did not establish that the stated reason for discharge (failure to release medical records) was a

pretext for discrimination.

2. Dual motives

In OFCCP v. Norfolk & Western Railway Co., Case No. 1980-OFCCP-14 (Assoc. Dep'y Under Sec'y

Dec. 8, 1986), it was determined that the burdens of proof to be applied in dual motive cases arising under

the Rehabilitation Act are those enunciated in Dartey v. Zack Co. of Chicago, Case No. 1982-ERA-2 (Sec'y

Aug. 25, 1983) (a case arising under the Energy Reorganization Act of 1974 at 42 U.S.C. § 585). In Dartey,

the Secretary applied the Supreme Court's analysis in Mt. Healthy City School District Board of Education

v. Doyle, 429 U.S. 274 (1976). The Secretary further held that the burdens of proof set forth in Texas

Department of Community Affairs v. Burdine, 450 U.S. 248 (1981) are not to be applied in dual or mixed

motive cases. Upon application of the Mt. Healthy standards, if OFCCP proves by a preponderance of

evidence that the protected conduct was a motivating factor in the company's adverse employment

action, then the employer must prove by a preponderance of the evidence that it would have reached the

same decision even in the absence of the protected conduct. When there is an even balance of

evidence as to whether the employee was discharged for legitimate or illegitimate reasons, the burdens

of proof for a mixed motive case should be applied. Under this analysis, in considering whether the

employer's justification for taking the employment action was pretext, the ALJ may properly consider

evidence presented as part of the prima facie case.

In OFCCP v. Yellow Freight System Inc., Case No. 1989-OFC-40 (ALJ May 17, 1994), in defense of

a prima facie case of discrimination, Defendant has the burden of producing evidence that the alleged

disparate treatment was motivated by legitimate, nondiscriminatory reasons. Where both legitimate and

prohibited motives constitute the basis for the adverse employment action, Defendant has the burden of

proof to establish by a preponderance of the evidence that it would have reached the same decision even

in the absence of the protected conduct.

C. Executive Order 11246

Burdens, generally

In an Executive Order 11246 class action, it is the government's burden to establish a prima facie

case of the existence of a discriminatory system affecting a class of employees. After this discriminatory

system is established, the government must demonstrate that certain employees are members of the

affected class and are entitled to compensatory relief. Then, the burden shifts to the employer to provide

that the individuals are not entitled to relief. OFCCP v. Honeywell, Inc., Case No. 1977-OFCCP-3 (Sec'y Mar.

2, 1994).

Based on statistical data and testimony, the government demonstrated by a preponderance of the

evidence that a few women and minorities managed to attain managerial positions or become officers, but

their scarcity in comparison to the numerous comparably qualified white males who have attained such

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positions established the continuing effects of Defendant's employment discrimination. Dep't of the

Treasury v. Harris Trust, Case No. 1978-OFCCP-2 (ALJ Dec. 22, 1986).

In OFCCP v. Greenwood Mills, Inc., Case No. 1989-OFC-39 (Sec'y Nov. 20, 1995), the Secretary held

that Defendant's successful hiring of females into positions in a job group about which it had received notice

of an OFCCP audit "might tend to show the existence of prior discrimination and an effort to repair the

harm after discovery." Slip op. at 17-18, quoting Rich v. Martin Marietta Corp., 522 F.2d 333, 346 (10th Cir.

1975) (footnote omitted). Moreover, the Secretary held that "ulterior motives" are not a prerequisite to a

finding of sex discrimination. Rather, the test is whether a person was treated in a manner but for which

his or her sex, the treatment would have been different.

In OFCCP v. The Cleveland Clinic Foundation, Case No. 1991-OFC-20, slip op. at 7, 8 (ARB July 17,

1996), the ARB found evidence of discriminatory intent and disparate treatment where a black employee

was fired for sending a letter to the employer's Board of Governors alleging racial discrimination, but

where a white employee, who repeatedly violated the employer's disciplinary procedures and work rules

to an extreme degree, never received more than "verbal counseling." Other evidence of disparate

treatment was found where a black employee, who lied on her application about previous applications

for worker's compensation, was terminated from employment, but a white employee only received a oneday suspension for making false statements.

In OFCCP v. Burlington Industries, Inc., Case No. 1990-OFC-10 (ALJ Nov. 1, 1991), the ALJ dismissed

the government's complaint under Executive Order 11246 for failure to sustain its burden of establishing

disparate treatment of its minority applicants. Citing to McDonnell Douglas Corp. v. Green, 411 U.S. 792

(1973), the ALJ noted that the government has the threshold burden of establishing by a preponderance of

the evidence a prima facie case of discrimination. Under Texas Dep't. of Community Affairs v. Burdine,

450 U.S. 248 (1981) and United Postal Service Board of Governors v. Aikens, 460 U.S. 709 (1983),

the Supreme Court clarified its holding regarding the prima facie burden of establishing discrimination to

state that it gives rise to a presumption that the employer engaged in unlawful discrimination; "plaintiff

need only show that qualified minority applicants were rejected under circumstances which give rise to an

inference of unlawful discrimination." Under the facts of the case, the ALJ noted that the evidence of record

demonstrated that non-minority applicants were hired when qualified minority applicants were available.

The selection process "was not random" and "[n]on-minorities were accorded a limited preference." The

ALJ concluded that the "hiring data together with the hiring practice, which Burlington has admitted,

resulted in an affirmative hiring of non- minorities . . .." As a result, the presumption of disparate treatment

of minorities was invoked and the burden shifted to Burlington to provide legitimate, nondiscriminatory reasons for its hiring practices.

Upon establishing a prima facie case, the burden then shifts to the employer to put forth evidence

that minority applicants were rejected, or non-minorities were preferred, for legitimate, nondiscriminatory reasons. Burdine, 450 U.S. at 254; Aikens, 460 U.S. at 714. If the employer sustains this

burden, then the government must demonstrate that the proffered reasons were not the true reasons

underlying the employment decisions, but were merely a pretext. The government carries the burden of

adducing evidence that the purported reason for the rejection of qualified minority applicants was, in fact,

a pretext for unlawful discrimination. See International Brotherhood of Teamsters v. United States, 431

U.S. 324, 362 n.50 (1977). The ALJ emphasized that the ultimate burden of persuasion that Burlington

"intentionally discriminated" against minority applicants "remains at all times with the Plaintiff." In this

vein, the ALJ noted that the Burdine presumption was designed "progressively to sharpen the inquiry into

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the elusive factual question of intentional discrimination." See also E.E. Black Ltd. v. Marshall, 1981 WL

265 (D. Hi. 1981).

OFCCP INTENTIONAL DISCRIMINATION COMPLAINT; ARB AGREES IN REGARD TO FIRST HIRING SEASON

THAT COMBINATION OF STATISTICAL EVIDENCE, AND EVIDENCE OF LACK OF DECISION MAKING

STANDARDS, ANECDOTAL EVIDENCE OF ARBITRARY TREATMENT, AND DISPARATE USE OF DISPOSITION

CODE WAS SUFFICIENT FOR OFCCP TO SHOW DISCRIMINATION

PLURALITY OF ARB REJECTS PORTION OF OFCCP’S CASE RELATED TO SECOND HIRING SEASON, ONE

MEMBER FINDING IT INSUFFICIENT BECAUSE IT WAS SUPPORTED ONLY BY STATISTICAL EVIDENCE OF

SMALL SHORTFALLS IN HIRING AFRICAN AMERICANS, ONE MEMBER FINDING THAT OFCCP SHOULD NOT

HAVE BEEN ALLOWED TO EXPAND THE COMPLAINT TO INCLUDE THE SECOND HIRING SEASON, AND THE

DISSENTING MEMBER FINDING THAT THE STATISTICAL EVIDENCE ALONE WAS SUFFICIENT IN THIS CASE

In OFCCP, USDOL v. Bank of America, ARB No. 13-099, ALJ No. 1997-OFC-16 (ARB Apr. 21, 2016),

the ARB, in a plurality decision, affirmed the ALJ’s finding that in 1993 the Respondent intentionally

discriminated against African-American job applicants for entry level positions. For different reasons, two

members of the ARB reversed the ALJ’s finding that the Respondent was liable for intention discrimination

in hiring in 2002-2005.

This matter began as a desk audit of the Respondent by OFCCP in 1994. During the 1993 hiring for

two job groups, the Respondent had used two recruiters who did initial screening and testing. If the

recruiters determined that the applicant was qualified and a good fit for the position, an interview was set

with the hiring manager. When an applicant was disqualified or rejected for a position, the Respondent

used disposition codes to record the reason. Two codes fell more harshly on the African-American

applicants – a code relating to credit checks, and a code relating to incompatible hours. OFCCP’s expert

found a standard deviation of 6.9. Extensive litigation caused an eight year gap in the review of the

Respondent’s hiring practices. By 2002-2005, the Respondent’ hiring practices had changed significantly.

The job groups originally at issue were by then treated as a single group; there were now 58 recruiters; the

Respondent had stopped using credit checks. OFCCP’s expert found a combined standard deviation of 4.0

for these years. OFCCP filed an Administrative Complaint that was based solely on a claim of intentional

disparate treatment; the complaint did not charge disparate impact or that the Respondent violated its

affirmative action obligations under the EO laws.

All three ARB judges agreed with the ALJ’s finding about the 1993 hiring. The ALJ relied on

statistical analysis; the lack of standards for some decision-making processes; anecdotal evidence of

arbitrary treatment; and troubling and disparate use of the disposition code. The lead opinion rejected the

ALJ’s finding with regard to the 2002-2005 hiring because the ALJ had relied solely on the statistical

disparity of that period as a whole. He found that the quality and quantity of evidence supporting the

determination on the 1993 hiring was fundamentally different than the support for the determination on

the 2002-2005 hiring. One ARB judge concurred in the resolution of the appeal but on the ground that

2002-2005 hiring had been adjudicated without affording the Respondent the full procedural protections

of EO 11246 and 41 C.F.R. Part 60-1 (i.e., the newer review resulted from discovery information rather than

a compliance review initiated under the regulations). The third ARB judge would have found that the 20022005 hiring was within the scope of OFCCP’s original Administrative Complaint that alleged ongoing

violations. This judge criticized the majority for analyzing the two periods as separate claims of pattern or

practice discrimination, and noted caselaw that if a plaintiff produces statistically significant evidence of

discrimination, it is not necessary to also provide anecdotal evidence or prove gross disparity.

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2. Rebuttal by defendant

In OFCCP v. Burlington Industries, Inc., Case No. 1990-OFC-10 (ALJ Nov. 1, 1991), the government

established a prima facie case of disparate treatment of minorities. In particular, the ALJ noted that the

evidence of record demonstrated that non-minority applicants were hired when qualified minority

applicants were available. The selection process "was not random" and "[n]on-minorities were accorded

a limited preference." The ALJ concluded that the "hiring data together with the hiring practice, which

Burlington has admitted, resulted in an affirmative hiring of non-minorities . . .." As a result, the

presumption of disparate treatment of minorities was invoked and the burden shifted to Burlington to

provide legitimate, non-discriminatory reasons for its hiring practices. To rebut the presumption, the ALJ

held that "Burlington must come forward with evidence that minority applicants were rejected, or nonminority applicants were preferred, for legitimate, non-discriminatory reasons. Upon review of the record,

the ALJ concluded that Defendant sustained this burden:

Burlington explained that (certain) job groups . . . were concentrated with minorities, and,

as such, it sought to address the concentration problem by hiring non-minorities. It

further emphasizes that it forthrightly described this hiring strategy to OFCCP in its

(Affirmative Action Plan), and OFCCP approved the Plan.

Slip. op. at 17. The ALJ noted that Burlington was required to consider the eight factors set forth at 41

C.F.R. § 60-2.11, but that it was entitled to calculate concentration in accordance with the “C-3

Agreement" underlying the Affirmative Action Plan. The ALJ stated the following:

OFCCP's contention that its post-hearing brief that the JTAR formula and the JAAR formula

are the same, thereby suggesting that calculations under both formulas should yield the

same result, seems to ignore that fact that the C-3 agreement uses external availability

for each job group, as well as the fact that the OFCCP investigator admitted at the hearing

that job groups . . . were concentrated using the JTAR formula. The testimony of OFCCP

witnesses at the hearing indicate that JTAR and JAAR calculations would not be expected

to yield the same results.

Slip op. at 17. The ALJ also placed significant importance on the fact that Burlington disclosed its

Affirmative Action Plan to OFFCP and it was approved. Moreover, he found that "[i]t is also probative that

OFCCP had approved precisely the same hiring policy in years past at other Burlington facilities which

experienced instances of concentration of particular job groups." Slip op. at 17, 18. In sum, the ALJ

concluded that the evidence demonstrated that “Burlington attempted to reduce the minority

concentration in these entry level jobs, because OFCCP viewed the minority concentration as a ‘red flag'

that the concentration itself may be due to discrimination.” Consequently, the ALJ determined that

Burlington rebutted the government's prima facie case.

3. Pretext

In OFCCP v. Burlington Industries, Inc., Case No. 1990-OFC-10 (ALJ Nov. 1, 1991), the ALJ

dismissed OFCCP's complaint on grounds that it could not demonstrate that Burlington's proffered

reasons for its hiring practices were pre-textual. See International Brotherhood of Teamsters v. United

States, 431 U.S. 324, 362 n.50 (1977). The ALJ noted that no present or past employee "testified that they

perceived any discriminatory animus in any of the personnel decisions at the plant." Moreover, OFCCP

officials did not testify that Burlington's "strategy of hiring non-minority applicants was based on anything

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other than the concerns expressed in the (Affirmative Action Plan) to soften the concentration of

minorities in the entry level 6B and 7B jobs." The ALJ further noted that hiring non-minorities in jobs

concentrated with minorities was not Burlington's idea; rather, the record contained a memorandum to

the company from a Department of Defense Equal Opportunity Specialist recommending the hiring

practice that the company implemented:

Whether or not the Specialist was authorized to make the recommendation, the record

shows that the hiring strategy was devised, not as a pretext by Burlington, but rather was

accepted by Burlington at the insistence of the Specialist to facilitate an 'in compliance'

report. The record reveals no hint of animus or pretextual motivation on Burlington's part

in accepting the hiring policy here challenged. See New York Transit Authority v. Beuzer,

440 U.S. 568, 584 (1979).

Slip. op. at 19. The ALJ further noted that Burlington revealed its Affirmative Action Plan to OFCCP and it

was approved. Indeed, the ALJ stated that "[b]oth Burlington and OFCCP knew that job groups 6B and 7B

at Pioneer I were concentrated (with minorities) for reasons wholly unrelated to discrimination"; yet,

OFCCP was "unwilling to advise the company that it did not need to de-concentrate the job groups" to

avoid prosecution. In conclusion, the ALJ stated:

Now, this is not to suggest that an approved (Affirmative Action Plan), which contains

isolated but discriminatory proposals inadvertently overlooked by OFCCP provides a

defense in all cases. The hiring of non-minorities as a means of addressing minority

concentration was repeatedly approved over a period of many years. The acceptance and

approval was not a singular and inadvertent oversight. Nor was the hiring plan one which

the contractor originated and then buried in a voluminous (Affirmative Action Plan).

As a result, the ALJ dismissed OFCCP's complaint to state that the government did not establish that the

company's employment decisions were motivated by discriminatory reasons.

4. Cost of compliance not a valid defense to discrimination

The cost of compliance does not constitute a valid defense to discriminatory conduct.

OFCCP v. Black, Case No. 1977-OFCCP-7R (Dep'y Sec'y Feb. 26, 1979).

D. Use of statistical data; circumstantial evidence of discrimination

In Dep't of the Treasury v. Harris Trust, Case No. 1978-OFCCP-2 (ALJ Dec. 22, 1986), the ALJ noted

that "[s]tatistics may be used as circumstantial evidence of intentional discrimination" but they are not

irrefutable . . .." The ALJ further found that "statisticians conventionally consider statistics to be significant

at two or three deviations."

In OFCCP v. Southern Pacific Transportation Co., Case No. 1979-OFC-10A (ALJ Nov. 9, 1982),

remanded on other grounds, (Ass't Sec'y Feb. 24, 1994), the ALJ held that one consideration which justifies

discrimination based on mere statistical probability has been the degree of risk to human life. Where it

cannot be determined whether an individual is qualified for a position, Defendant may determine the job

qualifications by applying the criterion of a class characteristic if (1) the discriminatee is a member of that

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class, and (2) all or substantially all members of that class are immediately unable to do the job. When

there is statistically a risk of massive loss of human life, then (1) the degree of risk of harm, (2) the degree

of probability of defect, and (3) the immediacy of the danger may be weighed.

In OFCCP v. Jacksonville Shipyards, Inc., Case No. 1989-OFC-01 (Sec'y May 9, 1995), the Secretary

advised that statistical evidence has long been accepted as an appropriate method for establishing a

violation of Title VII of the Civil Rights Act of 1964. A defendant cannot rebut statistical evidence by mere

conjectures or assertions; rather, the defendant must introduce evidence establishing that missing factors

can explain how the disparities in employment were a product of a legitimate, nondiscriminatory

selection criterion.

Proof that a disparity between the selections of men and women for particular jobs was caused

by sex discrimination need not be direct. Circumstantial evidence that the disparity, more likely than not,

was a product of prohibited discrimination will suffice to prove a pattern or practice of discrimination. The

circumstantial evidence may be entirely statistical in nature. Gross statistical disparities alone may be

prima facie proof of a pattern or practice of discrimination. However, the probative weight of statistical

evidence is weak if it fails to focus on the appropriate labor pool. In OFCCP v. Greenwood Mills, Inc., Case

No. 1989-OFC-39 (Sec'y Nov. 20, 1995), OFCCP alleged that Defendant discriminated against women in

entry level positions in one job group involving transportation and cleaning. The ALJ found that OFCCP's

statistical evidence was based on too narrow a timeframe and job grouping. The ALJ concluded that the

job group in issue should have been considered together with two other job groups because all three

groups drew new hires from a common pool of individuals chosen for entry level positions.

However, the Secretary held it was error for the ALJ to view all three groups together because the

three job groups had different sets of qualifications and, in reality, there were different applicant pools

for each group. The Secretary observed that grouping the three pools masked the statistical disparity in

hiring women for the job group at issue, which was inconsistent with the regulatory framework at 41

C.F.R. §§ 60-2.1(b), 60-2.11(b), and 60-2.23 for remedying discrimination through focused analysis of job

groups. While the ALJ noted that Defendant's overall female employment statistics were good, the

Secretary disproved the ALJ's notation of this fact, noting that the proper focus is on individual

discrimination. The Secretary cited to case law to state that an employer's apparent nondiscrimination in

various jobs or employment categories does not immunize or exonerate that employer's discrimination in

particular jobs or organizational units. In regard to the appropriate time period, the ALJ criticized OFCCP

for not waiting until the end of the Affirmative Action Plan year to conduct its audit and found that, when

the statistical period was extended to the end of the plan year, rather than the period of alleged

discrimination, any prima facie case of discrimination was rebutted. In this vein, the ALJ noted that

Defendant hired several women near the end of the plan year apparently upon realizing that it had not

yet met its goal for hiring women for the subject job group.

The Secretary concluded, to the contrary, that the fact that Defendant met its female affirmative

action plan goal by the end of the plan year did not prove that it did not discriminate against female

applicants prior to that date. The Secretary cited to case law and held that the effect that post- complaint

actions of an employer do not remedy past discrimination or rebut a prima facie case. Such evidence, if

anything, confirms the discrimination and goes to proper remedy rather than the existence of

discrimination. The Secretary also noted that, even assuming it was correct to extend the statistic period,

the hiring rate for females was approximately 3.3 standard deviations below the hiring rate for males, and

that a disparity of two or three standard deviations is sufficient to establish a prima facie case of

discrimination.

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OFCCP WITHDRAWS APPEAL OF ALJ'S DETERMINATION THAT "NON-ASIAN" IS NOT A "RACE" OR

"ETHNIC GROUP"

In OFCCP v. VF Jeanswear Limited Partnership, ARB No. 13-089, ALJ No. 2011-OFC-6 (ARB Sept. 25,

2013), the ARB closed the case before it upon OFCCP's filing of notice that it would not be filing exceptions

to the ALJ's recommended decision and order. OFCCP had brought a complaint against the Respondent on

the ground that it had allegedly discriminated against non-Asian job applicants. The ALJ granted summary

decision against OFCCP on the ground that "non-Asian" was not a "race" or "ethnic group" either by

regulatory definition or common parlance. See 41 C.F.R. 60-33 A and 60-34 B. OFCCP v. VF Jeanswear

Limited Partnership , 2011-OFC-6 (ALJ Aug. 5, 2013).

In OFCCP v. Interstate Brands Corp., Case No. 1997-OFC-6 (ALJ July 19, 2000), OFCCP alleged that

Defendant violated Executive Order 11246 by discriminating against minorities for entry-level bakery

positions. Initially, the ALJ noted that OFCCP must demonstrate disparate treatment based on race, color,

religion, sex, or national origin. Although evidence of discriminatory intent is required, such proof may be

based on circumstantial evidence, including statistical evidence. Indeed, "[a]n unlawful motive may be

inferred from a disparity between class members and comparably qualified members of a minority group."

Citing to Hazelwood School District v. United States, 433 U.S. 299 (1977) and OFCCP v. Greenwood Mills,

Inc., Case No. 1989-OFC-39 (Sec'y Nov. 20, 1995), the ALJ noted that a prima facie case of discrimination

"may be entirely statistical." It was noted that, in Hazelwood, the Supreme Court held that a disparity of

two or three standard deviations is sufficient to establish prima facie case of unlawful discriminatory

animus.

If a prima facie case exists, then the burden shifts to Defendant to demonstrate that OFCCP's

statistical evidence is inadequate, i.e. by “attacking” the government's statistical methods or by

demonstrating that the disparity arose from legitimate, non-discriminatory factors. If rebuttal is

established, then the burden shifts again to OFCCP to prove that the proffered reasons were pretext. The

ALJ found, based on the statistical evidence before him, that Defendant hired black applicants at a

statistically significantly lower rate than non- black applicants. In particular, he noted that the standard

deviation exceeded 3.8. Although Defendant proffered rebuttal, the ALJ was not persuaded by it. He stated

the following with regard to Defendant's rebuttal:

For example, IBC rejected 14 out of 102 black applicants in 1992-93 because they ‘could

not get references.' In all of 1990, 1991, and 1994, IBC never used this reason for rejecting

any applicant. Also, during the 1992-93 period, no whites were rejected on this basis. I

consider (1) the numerically disparate treatment of blacks, and (2) the unique use of the

‘could not get references' reason to be significant evidence of pretext even though there

is relatively little evidence specific to individual applicants that any given reason was false.

In addition, during the 1992-93 period, 30 black applicants were rejected because they

‘did not demonstrate interest in the position,' whereas only four whites were rejected for

this reason. Prior to 1992, this reason was never used as a basis for rejection of an

applicant. Again, I find that the selective and discriminatory use of the all-purpose reason

for rejection is strong circumstantial evidence that it is pre-textual.

Slip op. at 30-31.

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ROLE OF STATISTICAL EVIDENCE IN EMPLOYMENT DISCRIMINATION CASES; RULING OUT CHANCE

CREATES AN INFERENCE

In OFCCP, USDOL v. Bank of America, ARB No. 13-099, ALJ No. 1997-OFC-16 (ARB Apr. 21, 2016),

OFCCP had presented statistical evidence in support of its charge of intentional racial discrimination by the

Defendant. The ARB noted:

While some disagreement continues in the courts about the role of statistical evidence in

employment discrimination cases, a few principles seem fairly established. For example,

statistical evidence may be used to rule out chance as a likely reason for a significant racial

disparity. Courts have consistently found significance in disparities exceeding the two

standard deviation mark. See Hazelwood School Dist. v. U.S., 433 U.S. 299, 308, n.14

(1977); Adams v. Ameritech , 231 F.3d 414, 424 (7th Cir. 2000). Ruling out chance does not

automatically mean race discrimination was a motivating factor, but it makes such a reason

a viable factor that could be inferred. The more severe the statistical disparity, the less

additional evidence is needed to prove that the reason was race discrimination. Very

extreme cases of statistical disparity may permit the trier of fact to conclude intentional race

discrimination occurred without needing additional evidence.

USDOL/OALJ Reporter at 13-14 (footnotes omitted). The ARB stated that in the instant case: “Ultimately,

the OFCCP must present enough evidence to persuade the ALJ that race discrimination was a motivating

factor in [the Defendant]’s hiring decisions. What constitutes sufficient evidence must be evaluated on a

case-by-case basis.” Id. at 14.

E. Carrying out a government contract; burden to establish on OFCCP

For additional discussion of government contracts, see Chapter VIII.

Generally

Coverage extends to employees who were employed in, and applicants for, positions that are

engaged in carrying out a government contract. To establish coverage, OFCCP must demonstrate that the

duties of the position included work that fulfilled, was necessary to, or facilitated a contract. In OFCCP v.

Keebler Co., ARB Case No. 97-127, 1987-OFC-20 (ARB Dec. 12, 1996), the ARB held that OFCCP had met this

burden where the employee was a production attendant at one of only two Keebler facilities that produced

‘Tato Skins, some which it had contracted to provide to the government. Although the products were not

designated for any particular designation, and the attendants at the two locations were not separated

according to who worked on goods designated to fulfill government contracts, the ARB found that OFCCP

had established that the employee was covered under § 60-741.4(a)(2) because the duties of the

production attendant included work on government contracts.

Rebuttable presumption

In OFCCP v. Southern Pacific Transportation Co., Case No. 1979-OFC-10A (ALJ Nov. 9, 1982), aff'd,

(Ass't Sec'y Feb. 24, 1994), the ALJ held that there is a rebuttable presumption that a discriminatee was

employed to carry out the federal contract as long as he was working at a site which was not totally

segregated from the federal contract site.

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F. Admissibility issues

Hearsay

EXCLUSION OF A DECEASED PHYSICIAN’S REPORT

In Texas Eastern Transmission Corp., Case No. 1988-OFC-30 (ALJ June 11, 1990), the ALJ

denied OFCCP's motion to admit into evidence the medical report of a deceased physician containing

his opinion regarding complainant's ability to perform the job in question on the grounds that the report

constituted hearsay and did not fall within a recognized exception at Fed. R. Evid. 803. Moreover, the ALJ

held that the deceased physician's report constituted an unsworn statement of a declarant who could

not be subjected to cross-examination and, thus, the report lacked sufficient indicia of reliability to be

considered probative. In determining that report of deceased physician should not be admitted in

evidence, the ALJ interpreted the standards of admissibility set forth at 41 C.F.R. § 60-30.18 as

substantially the same as the standards imposed under the Federal Rules of Evidence, even though the

regulation provides that formal rules of evidence do not apply in Section 503 administrative proceedings.

Admissions

In OFCCP v. USAir, Inc., Case No. 1991-OFC-2 (ALJ, Feb. 24, 1993), the ALJ held that Defendant's

admission that it rejected the complainant because of his handicap obviated the need for OFCCP to

commence discovery to prove that Defendant knew about the handicap and considered it as part of its

decision-making process. However, the ALJ further determined that the admission did not foreclose the

presentation of evidence by Defendant regarding other factors which it considered in deciding to reject the

complainant.

Defendant's failure to file an answer constitutes an admission of OFCCP's complaint allegations

pursuant to 41 C.F.R. § 60-30.6(b). Moreover, the failure to file an answer will result in a waiver of the

right to a hearing and the ALJ may properly adopt OFCCP's materials fact as alleged in the complaint

pursuant to 41 C.F.R. § 60-30.6(c). On this basis, default judgment and sanctions, including debarment,

may be entered. OFCCP v. Rampart Electric, Inc., Case No. 1989-OFC-14 (Sec'y Sept. 11, 1995).

In OFCCP v. Owens-Illinois, Case No. 1977-OFCCP-11 (ALJ Nov. 21, 1980), the government was not

permitted to compel disclosure of prior settlements made by Defendant based on prior sex discrimination

claims. The ALJ noted that evidence of the settlements would be inadmissible and there was no indication

that the settlements would lead to the discovery of admissible evidence. Further, the ALJ reasoned that if

such discovery was allowed, it would discourage employers from settling employment discrimination

claims, with the result that the prescribed conference, conciliation, and mediation which are prerequisites

to sanctions would be greatly hindered, if not nullified.

Studies from other federal agencies

In Exxon Corp. v. U.S. Dep't of Labor, 2002 WL 356517 (N.D. Tex. Mar. 5, 2002) (Memorandum

Opinion and Order), the court concluded that Mr. Strawser was not a "disabled individual" under the

Rehabilitation Act because OFCCP was collaterally estopped from litigating the issue as EEOC had

unsuccessfully litigated the same issue under the Americans With Disabilities Act before the same court

in a case involving the same employer and the same allegedly discriminatory policy. However, the

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holdings of the ALJ and ARB may be instructive. See OFCCP v. Exxon Corp., Case No. 1992-OFC-4 (ALJ June

15, 1993), aff'd in part, (ARB Oct. 28, 1996).

In OFCCP v. Exxon Corp., Case No. 1992-OFC-4 (ALJ June 15, 1993), aff'd on other grounds, (ARB

Oct. 28, 1996), the ALJ concluded that FAA studies regarding its policy of returning recovering alcoholic

pilots into the work place are relevant in determining the risk of relapse of a recovering alcoholic because

the FAA policy appeared to be the only industry-wide program of its kind.

4. Evidence admitted on remand; legal error committed by ALJ

In Cissell Mfg. Co. v. U.S. Dep't of Labor, 101 F.3d 1132 (6th Cir. 1996), the circuit court concluded

that the agency committed a "legal error" in the adjudication of the complaint below such that it was

proper to remand the case to the Department of Labor to reopen the record and allow OFCCP to present

evidence that the complainant was employed to carry out a government contract.

G. Credibility determinations

In OFCCP v. Jacor, Inc., Case No. 1995-OFC-17 (Sec'y Jan. 19, 1996) (interim order), OFCCP

challenged a finding that Defendant made oral contacts with recruitment sources and argued that there

was no corroborating evidence on the point. The Secretary concluded that corroborating evidence is not

required for any finding in hearings convened pursuant to Executive Order 11246 and 41 C.F.R. Part 60-30.

The Secretary further noted that the ALJ found the witness testimony on this matter to be highly credible.

In OFCCP v. Beverly Enterprises, Inc., ARB No. 99-112, Case No. 1999-OFC-11 (ARB Sept. 1, 1999),

the ARB held that a government official is presumed to be telling the truth when making a sworn

statement. It is noted that, in a subsequent appeal to the ARB, in OFCCP v. Beverly Enterprises, Inc., ARB

Case No. 02-009, 1999-OFC-11 (ARB Apr. 30, 2002), the parties submitted a consent decree which was

approved by the Board.

H. Expert opinions

Generally

An expert opinion may be important in drawing inferences or estimates regarding harm to an

affected class as well as the amount of damages resulting from the class discrimination practices.

However, an expert opinion is not required to establish discriminatory practices, where such practices are

otherwise demonstrated. Dep't of the Treasury v. Harris Trust, Case No. 1978-OFCCP-2 (ALJ Dec. 22,

1986).

2. Treating physician entitled to particular deference

In OFCCP v. Norfolk and Western Railway Co., Case No. 1990-OFC-1 (ALJ June 26, 1991), a case

arising under Section 503 of the Rehabilitation Act, the ALJ held that the opinion of the complainant's

treating physician is entitled to particular deference. Under the facts of the case, Defendant demonstrated

that employment of the complainant, who suffered from monocular vision, may pose a possibility of injury

or an elevated risk of harm. However, Defendant failed to establish a reasonable probability of substantial

harm in light of the opinions of the complainant's treating physician and OFCCP's other medical expert as

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well as the fact that the record contained evidence that the complainant performed the job duties in

question and that other individuals with monocular vision safely performed the job.

VIII. Discovery

A. Generally

Discovery rules are to be liberally construed in favor of the requesting party. Under the facts

before him, the Secretary determined that discovery addressing past conduct may be appropriate in

employment discrimination cases. Moreover, he found that the pre- hearing discovery rules are

reasonable in light of the broad grant of power and detailed enforcement procedures. OFCCP v. Uniroyal,

Inc., Case No. OFCCP 1977-1 (Sec'y June 28, 1979), aff'd sub nom., Uniroyal, Inc. v. Marshall, 482 F. Supp.

364 (D.D.C. 1979) (the Executive Order's discovery provisions and implementing regulations are valid).

In discrimination actions, where statistical data is often of critical importance, discovery is

particularly essential to the production of material evidence and, hence, should not be proscribed or

unduly limited. OFCCP v. Owens-Illinois, Inc., Case No. 77-OFCCP- 11 (ALJ Nov. 21, 1980); Donaldson v.

Pillsbury Co., 554 F.2d 825.832 (8th Cir. 1977); Burns v. Thiokol Chemical Corp., 483 F.2d 300, 304-305

(5th Cir. 1973).

In OFCCP v. Owens-Illinois, Inc., Case No. 1977-OFCCP-11 (ALJ Nov. 21, 1980), the ALJ held that,

in discrimination cases, discovery is not restricted to the narrow inquiry of an individual violation; rather,

it is extended to obtain evidence which demonstrates patterns of discriminatory action in other aspects

of employment from which a reasonable inference of discriminatory motivation may be drawn. The ALJ

cited to Laufman v. Oakley Building and Loan Co., 72 F.R.D. 116, 120 (S.D. Ohio 1976) and Bluebell Boots,

Inc. v. Equal Employment Opportunity Commission, 418 F.2d 355, 358 (6th Cir. 1969) in support

of this holding.

B. Applicability of the Federal Rules of Civil Procedure

All hearings under Section 503 of the Rehabilitation Act shall be governed by the rules of procedure

at 41 C.F.R. Part 60-30. However, in the absence of a specific provision on point, the Federal Rules of Civil

Procedure shall apply. OFCCP v. Mississippi Power Co., Case No. 1992-OFC-8 (ALJ July 16, 1993), rev'd on

other grounds (Ass't Sec'y July 19, 1995).

In OFCCP v. American Airlines, Inc., Case No. 1994-OFC-9 (ALJ Jan. 19, 1995), the ALJ held that the

Federal Rules of Civil Procedure only apply in the absence of an applicable regulatory provision. The

implementing regulations for actions brought under Section 503 of the Rehabilitation Act of 1973, 29 U.S.C.

§ 793, are found at 41 C.F.R. Chapter 60. With regard to interrogatories, he noted that 41 C.F.R. § 60-30.9

does not limit the number of interrogatories which one party may serve upon another party. Thus, the 25

interrogatory limit contained in Fed. R. Civ. P. 33 did not apply. However, a test of reasonableness would

be imposed.. Under the particular circumstances of the case, the ALJ declined to further expand the issues

in this case and denied OFCCP's motion to compel responses to discovery requests pertaining to events

that occurred subsequent to the period covered by the 1988-1989 compliance review. The ALJ held that, in

his judgment, the interests of all concerned will be served by ordering Defendant to supply the requested

telephone numbers and addresses for all former and current employees except those with authority to

speak for the company; and, further, to supply addresses, either work addresses or home addresses, of

former and current management employees with authority to bind the company for the limited purpose of

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allowing OFCCP to notice depositions. Finding OFCCP's subject requests overbroad and unduly burdensome

and oppressive, the ALJ denied OFCCP's request to compel Defendant to respond to its interrogatories

concerning Defendant's system of storing personnel information on computers. On the other hand, the ALJ

granted OFCCP's request to compel Defendant to respond to a second set of interrogatories which sought

"facts and documents which American relied upon in support of each of the 24 affirmative defenses raised

in its Answer, as well as the individuals with knowledge of such facts." The ALJ held that, by raising

affirmative defenses, Defendant has placed at issue the specific facts, documents, regulations, and statutes

upon which they are based. OFCCP is entitled to sufficient information regarding these affirmative defenses

to enable it to prepare for trial.

C. Discovery of testimony of government officials

In Beverly Enterprises, Inc. v. Herman, Civil Action No. 99-2408 (RMU) (D.D.C. Aug. 24, 2000), a

case arising under anti-discrimination laws, the district judge determined that it was within the ALJ's

discretion to decline discovery of the testimony of Solicitor of Labor Henry Solano where the testimony

would “only repeat information that was included with other evidence."

D. Failure to file an answer, effect of

Defendant's failure to file an answer constitutes an admission of OFCCP's complaint allegations

pursuant to 41 C.F.R. § 60-30.6(b). Moreover, the failure to file an answer will result in a waiver of the

right to a hearing and the ALJ may properly adopt OFCCP's material facts as alleged in the complaint

pursuant to 41 C.F.R. § 60-30.6(c). On this basis, default judgment and sanctions, including debarment,

may be entered. OFCCP v. Rampart Electric, Inc., Case No. 1989-OFC-14 (Sec'y Sept. 11, 1995).

E. Failure to comply with pre-hearing exchange, effect of

In OFCCP v. United Parcel Service, Inc., Case No. 1988-OFC-7 (ALJ Sept. 25, 1990), stipulated

dismissal (Ass't Sec'y Jan. 14, 1992), the ALJ held that Defendant demonstrated good cause for failure to

request a hearing and failure to file a pre-hearing exchange as ALJ ordered where counsel candidly

admitted that lack of hearing request resulted from oversight or absence of memory and counsel did not

receive ALJ's order regarding pre-hearing exchange. The ALJ further noted that the case was allowed to

languish in the Office of Administrative Law Judges for two years before it was assigned and parties had

pursued discovery such that the proceedings were not prejudiced.

In OFCCP v. Brown Transport Co., 1979-OFCCP-20 (ALJ Apr. 20, 1980), the ALJ held that a response

by Defendant that it is without knowledge or information to admit or deny" the request for admission is

an insufficient response under 41 C.F.R. § 60-30.1 unless the party states that it made a reasonable inquiry

and the information is not available. Moreover, the ALJ concluded that an inadequate response to a

request constitutes an admission.

In OFCCP v. Rowan Companies, Inc., Case No. 1989-OFC-41 (Sec'y Apr. 11, 1995), the Secretary

held that a party cannot respond to an interrogatory request by directing the discovering party to an

undifferentiated mass of records. If the party responding to the interrogatories is the only one familiar

with the organization of the information, then that party must assist the interrogating party in locating

and deciphering the requested information.

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In OFCCP v. Holly Farms Foods, Inc., Case No. 1991-OFC-15 (ALJ Oct. 24, 1991), the ALJ

concluded that 41 C.F.R. § 60-30.9(b), which addresses answers to admission requests, does not require

less than Fed. R. Civ. P. 36(a), and thus, does not permit Defendant to simply plead lack of knowledge

in response to a request for admission. Rather, a failure to admit a request for lack of sufficient knowledge

must also include a statement that a reasonable inquiry has been made.

In OFCCP v. Crown Zellerbach Corp., Case No. 1987-OFC-23 (ALJ June 6, 1989), the ALJ held that

OFCCP failed to file its objections to Defendant's First Request for Production of Documents within the

25-day period allowed for responses to discovery requests under the regulations at 41 C.F.R. §§ 60-30.9

and 60-30.10. As a result, the ALJ determined that OFCCP waived any objection to producing the

documents requested.

F. Compelling participation in discovery

Generally

In Uniroyal, Inc. v. Marshall, Case No. OFCCP 1977-1 (Sec'y June 28, 1979), aff'd sub nom.,

Uniroyal, Inc. v. Marshall, 482 F. Supp. 364 (D.D.C. 1979), the Secretary held that the ALJ has authority

under 41 C.F.R. §§ 60-30.9, 30.10, 30.11, and 30.15 to compel the contracting party to participate in

depositions and discovery.

In OFCCP v. Jefferson County Board of Education, Case No. 1990-OFC-4 (ALJ Nov. 16, 1990), the

ALJ granted OFCCP's motion to compel Defendant to provide names, addresses, phone numbers,

positions, dates of employment educational background, and previous employment for all hires for twoyear period because it would be significantly more burdensome on OFCCP to search for this information

in Defendant's records as Defendant has greater

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