# On January 21, 2025, the White House and President Donald Trump issued an Executive Order, "Ending Illegal > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Adol%3A3da48c295ffb7fe9 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text On January 21, 2025, the White House and President Donald Trump issued an Executive Order, "Ending Illegal 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information, see Secretary's Order 03-2025, To Cease and Desist All Investigative and Enforcement Activity Under Rescinded Executive Order 11246 (Jan. 24, 2025).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 A. Purpose B. Executive Order 11246 has "force and effect of law" III. Jurisdiction A. Section 715 of the National Defense Authorization Act of 2012 B. Contract for Legal Services C. Regulations only authorize OFCCP to file complaint with OALJ IV. The complaint A. Where to file 1. Generally 2. No requirement that individual complaint be filed prior to compliance review complaint 3. Discretion to investigate incomplete complaints B. Who may file 1. Generally 2. Impleader and intervener C. Class actions permitted D. Exhaustion of remedies E. 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 Return to Top of Document 1 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 E. 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 B. The Rehabilitation Act 1. Burdens, generally 2. Dual motives C. Executive Order 11246 1. Burdens, generally 2. Rebuttal by defendant 3. Pretext 4. Cost of compliance not a valid defense to discrimination Return to Top of Document 2 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 A. Generally B. Applicability of the Federal Rules of Civil Procedure C. Discovery of testimony of government officials D. Failure to file an answer, effect of E. Failure to comply with pre-hearing exchange, effect of F. 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 A. First Amendment B. Fourth Amendment 1. Generally 2. "Consent" exception 3. Requirements of the Fourth Amendment a. Violated b. Not violated C. Fifth Amendment Return to Top of Document 3 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 A. 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 X. D. Return to Top of Document 4 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 i. 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 Return to Top of Document 5 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 B. 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 C. 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 D. 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 Return to Top of Document 6 • 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 Return to Top of Document 7 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 Return to Top of Document 8 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: Return to Top of Document 9 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. Return to Top of Document 10 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. Return to Top of Document 11 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. Return to Top of Document 12 (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 Return to Top of Document 13 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 Return to Top of Document 14 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 1. 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 2. 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). 3. 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 15 Return to Top of Document 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). E. Who may file 1. 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. 2. 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). F. 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: Return to Top of Document 16 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. Return to Top of Document 17 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 1. Generally a. Return to Top of Document Complaint for discrimination 18 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). b. 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). 2. Each claim analyzed separately a. 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. b. Continuing violations i. 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. Return to Top of Document 19 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. 3. 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 Return to Top of Document 20 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 1. 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 Return to Top of Document 21 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 1. 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). Return to Top of Document 22 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 Return to Top of Document 23 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. 1. 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). Return to Top of Document 24 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. 2. 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). 3. 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. I. "Working on the contract" is a jurisdictional issue and cannot be presumed 1. 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). Return to Top of Document 25 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 1. 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 Return to Top of Document 26 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. Return to Top of Document 27 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 1. 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 Return to Top of Document 28 remedy its prior noncompliance and is currently in compliance with the provisions of the Executive Order 11246 and it implementing regulations. 2. 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. Return to Top of Document 29 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 30 Return to Top of Document 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. 3. 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 Return to Top of Document 31 (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 Return to Top of Document 32 • 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. Return to Top of Document 33 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 1. 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. 2. 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 Return to Top of Document 34 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 1. 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)). 2. 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 Return to Top of Document 35 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 1. 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 Return to Top of Document 36 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 1. 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 Return to Top of Document 37 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 dism [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Adol%3A3da48c295ffb7fe9. Public record. Not legal advice.