# Administrative Review Board

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Adol%3Aa779edee750aef63

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

Administrative Review Board
200 Constitution Ave. NW
Washington, DC 20210-0001

U.S. Department of Labor

In the Matter of:
OFFICE OF FEDERAL CONTRACT
COMPLIANCE PROGRAMS, UNITED
STATES DEPARTMENT OF LABOR

ARB CASE NO. 2020-0057

PLAINTIFF,

DATE: November 18, 2021

ALJ CASE NO. 2015-OFC-00009

v.
WMS SOLUTIONS, LLC,
DEFENDANT.
Appearances:
For the Plaintiff:
Elena S. Goldstein, Esq; Kate S. O’Scannlain, Esq.; Beverly I.
Dankowitz, Esq.; Jeffrey Lupardo, Esq.; Anna Laura Bennett, Esq.;
Samuel Y. DePrimio, Esq.; Office of the Solicitor, U.S. Department of
Labor; Washington, District of Columbia
For the Defendant:
Eric Hemmendinger, Esq.; Shawe Rosenthal LLP; Baltimore,
Maryland
Before: Thomas H. Burrell, Randel K. Johnson, and Stephen M. Godek,
Administrative Appeals Judges
DECISION AND ORDER
PER CURIAM. This matter arises under the nondiscrimination requirements of
Executive Order (“EO”) 11246 (30 Fed. Reg. 12319), as amended, and its
implementing regulations at 41 C.F.R. Chapter 60. WMS Solutions, LLC (“WMS”)
appeals a Department of Labor Administrative Law Judge’s (“ALJ”) Recommended

2
Decision and Order (“Recommended D. & O.”) issued on May 12, 2020.1 Specifically,
WMS appeals the ALJ’s finding that it is liable under Executive Order 11246 for
intentional and unlawful discrimination against non-Hispanic applicants with
respect to hiring and female and non-Hispanic employees regarding wage rates and
hour assignments.2 After thoroughly examining the parties’ arguments and the
record, we AFFIRM the ALJ’s Recommended D. & O.
BACKGROUND
WMS is a construction contractor based out of Baltimore, Maryland. WMS
provides demolition, lead, and asbestos mitigation staffing to construction sites
throughout the greater Baltimore-Washington area. This case arose out of a
modernization project for the federal government’s General Services Administration
building in Washington, D.C. (hereinafter the “GSA modernization project”). WMS
was hired to provide staff for the GSA modernization project by Asbestos
Specialists, Incorporated (“ASI”). ASI was a subcontractor on the GSA
modernization project. ASI was hired by Interior Specialists, who was hired by the
prime contractor for the project. The Office of Federal Contract Compliance
Programs, U.S. Department of Labor (“OFCCP”) received a complaint about the
working conditions at the GSA modernization project site, which led to an
investigation and eventually a compliance review of WMS. The compliance review
period was from February 1, 2011, to January 31, 2012. Upon completion of the
review, OFCCP engaged in the conciliation process and eventually filed an
administrative complaint on June 15, 2015, with the Office of Administrative Law
Judges (“OALJ”) for violations of equal employment opportunity under Executive
Order 11246.3 After a hearing in July of 2016, the ALJ issued a Recommended
Decision and Order on May 12, 2020. After a motion for clarification from OFCCP,
the ALJ issued a Supplemental Recommended Decision and Order Granting in Part
and Denying in Part Plaintiff’s Motion for Clarification on July 21, 2020.
WMS has a sister company, Princeton Industrial Training (PIT), that
provides the necessary training course to earn an asbestos mitigation license in
41 C.F.R. § 60-30.28 (2015) (providing for the filing of exceptions and responses with
the Administrative Review Board (ARB or the Board)).
1

OFCCP is authorized to enforce EO 11246 to ensure that Federal contractors and
subcontractors doing business with the Federal government comply with the laws and
regulations requiring nondiscrimination and equal opportunity in employment, as
implemented through 41 C.F.R. Part 60-30.
2

Executive Order 11246 (EO 11246), 30 Fed. Reg. 12,319 (Sept. 24, 1965), was
amended by Executive Order 11375, 32 Fed. Reg. 14,303 (Oct. 13, 1967) (adding gender to
list of protected characteristics), and Executive Order 12086, 43 Fed. Reg. 46,501 (Oct. 5,
1978) (consolidating enforcement functions in the Department of Labor). All references
herein to “Executive Order 11246” or “Executive Order” include such amendments.
3

3
Maryland. Both companies are housed in the same office building and owned by the
same person, Edward Woodings. Paulo Fernandes is WMS’s Chief Operating Officer
and manages much of the business. Wesley Black handles finance and payroll. Two
project managers,4 Hugo Rivera and Harold Ortega, handle recruitment and
staffing in addition to their project manager duties. A former project manager,
Hector Ortiz, was an employee during the review period (referred to in the
testimony). Aside from support staff that are not relevant to this case, the
remainder of WMS’s staff are asbestos, lead abatement, and demolition workers.
The number of people on payroll depends on the volume of projects that WMS works
on at any given time, with summer being the busiest season of the year.5
WMS does not typically have written contracts with its clients and relies on
purchase orders for recordkeeping.6 WMS provided copies of all purchase orders at
issue and Wesley Black provided the payroll data to OFCCP.
To begin a project, clients contact WMS and provide information about the
duration and nature of the work and how many employees are needed. Clients
communicate their preferences to WMS, including requesting specific workers and
specifying how many women to send to a job site.7 WMS then allocates existing staff
or hires new staff to meet the needs of the project.
WMS pays its construction employees on an hourly basis. Pay is set according
to whether a project is federal or non-federal, and whether there is asbestos
mitigation involved.8 WMS helps new hires and rehires become licensed or renew
their licenses in asbestos mitigation by sending them to PIT.9 Tuition for the license
education is deducted out of WMS employee paychecks or is paid by WMS.10 The
project managers conducted most of the hiring for WMS.
Ortega described his hiring process at the hearing. He does not require
experience or licensure and will hire applicants with no experience, as well as
applicants with certifications who have not yet worked in asbestos or lead
The project managers were referred to by different titles throughout the
proceedings, but all witnesses consistently described their job duties.
4

5

Recommended D. & O. at 26 (Sensenig testimony).

6

Id.

7

Id. at 15 (Gonzalez testimony).

8

Id. at 29 (Sensenig testimony).

9

Id. at 62, 65 (Hugo Rivera Deposition).

There is some conflict in the record about whether WMS or the employee pays for
the asbestos licensing training. All witnesses agreed that WMS helped employees become
licensed through its sister company, PIT.
10

4
removal.11 When OFCCP interviewed Ortega, he stated that he never told anyone
they would not be able to work. To determine which employees will work on a
project, he reviews the WMS system that stores employee information, as well as
the notebook he uses to track applicants and employees. If there are more
employees than projects, then he considers factors such as the length of time with
specific companies and supervisor feedback. He tries to find as much work for the
laborers as he can, and he spreads the work around. Ortega also considers how
many hours each laborer is going to receive when making assignments.
At the hearing, testimony was provided by WMS workers, eligible workers
who were not hired by WMS during the review period, and two expert witnesses.
The expert witness testimony is discussed in more detail below.
Procedural History
OFCCP received a complaint about the working conditions at the GSA
modernization project. It subsequently initiated a compliance review of WMS,
covering the period of February 1, 2011, to January 31, 2012. OFCCP typically
requests extensive documentation during a review. This documentation includes
“all records of [a contractor’s] applicants, potential workers, hiring, promotion,
termination, compensation or, in this case, payroll records; also evidence that they
followed the equal opportunity and affirmative action laws and regulations; that
they conducted the appropriate outreach and recruitment; notified the agencies of
any subcontracts they may have in general.”12
OFCCP claimed that WMS’s record keeping was not thorough enough to
provide OFCCP with a complete list of requested records.13 The data that WMS was
able to provide had gaps in it. WMS was able to provide payroll data and a list of its
current employees. WMS did not provide records about applicants, the
compensation process, or employee transportation. WMS was able to provide
information about the ethnicity of employees. WMS did not have a harassment or
Equal Employment Opportunity policy.14
OFCCP concluded that WMS kept incomplete records of worker candidate
profiles and did not have a system to track applicants. In total, WMS provided
OFCCP with 182 worker candidate profiles, only 49 of which were complete with

11

Id. at 10 (Ortega testimony).

12

Id. at 27 (Sensenig testimony).

13

Id. (Sensenig testimony).

14

Id. at 29 (Sensenig testimony).

5
information like work history and licensure.15 WMS kept no written employment
policies of any kind.16
OFCCP also determined that WMS lacked policies to prevent harassment
and that employees were regularly harassed:
[T]hrough our interviews with employees of WMS, we learned of
allegations of lack of water or water breaks, meaning no water breaks;
sometimes daily racial and ethnic slurs by supervisors on the worksites.
Employees reported to us that they felt that it was a hostile work
environment, meaning they could not speak up about any conditions or
the lack of safety equipment for the asbestos work that they were doing.
They told OFCCP of a supervisor who would show them a video of
Hispanic people being rounded up and deported and that they felt
fearful to complain about conditions for fear that they would be
deported; and also actual physical violence against workers on the
worksites.17
OFCCP issued a Notice of Violations on November 12, 2012, and eventually
filed an administrative complaint on June 15, 2015. The complaint alleged that
WMS violated Executive Order 11246 because it engaged in systematic
discrimination: “(1) on the basis of national origin in hiring; (2) on the basis of sex in
rates of compensation and assignment of hours worked; (3) on the basis of national
origin in assignment of hours worked; and (4) by permitting Hispanic workers to be
subjected to harassment on the basis of national origin.”18 OFCCP requested
extensive damages, as well as hiring and policy changes at WMS.
The hearing was held from July 26-28, 2016. The ALJ issued his
Recommended Decision and Order on May 12, 2020. Following issuance, OFCCP
moved for clarification under Federal Rule of Civil Procedure 60(a).19 The ALJ
issued a Supplemental Recommended Decision and Order on July 21, 2020,
granting in part and denying in part OFCCP’s order.

15

Id. at 28 (Sensenig testimony).

16

Id. (Sensenig testimony).

17

Id. at 29 (Sensenig testimony).

18

OFCCP exceptions at 6.

Under Federal Rule of Civil Procedure 60(a), “[t]he court may correct a clerical
mistake or a mistake arising from oversight or omission whenever one is found in a
judgment, order, or other part of the record.” The OFCCP Rules of Practice provide that, in
the absence of a specific provision, proceedings shall be in accordance with the Federal
Rules of Civil Procedure. 41 C.F.R. 60-30.1.
19

6
In his Recommended Decision and Order, the ALJ found that:
1) WMS Solutions, LLC is a contractor pursuant to EO 11246.
2) WMS Solutions, LLC violated EO 11246 when it discriminated
against White, Black, Asian, and American Indian/Alaskan Native
laborers in favor of hiring Hispanic laborers.
3) WMS Solutions, LLC violated EO 11246 when it discriminated
against female laborers based on their gender and Black and White
laborers based on their race/ national origin in hours and
compensation.
4) WMS Solutions, LLC violated EO 11246 when it failed to ensure
and maintain a working environment free of harassment,
intimidation, and coercion at construction sites where WMS
employees worked.
5) WMS Solutions, LLC did not violate EO 11246 by failing to
preserve and maintain all personnel and employment records for a
period of two years from the date of the record or the relevant
personnel action.20
The ALJ awarded the following damages:
1) An award of $780,998 in back pay damages and interest to be paid
to the non-hired workers who were injured by WMS Solutions,
LLC’s discriminatory hiring practices.
2) An award of $179,907 in back pay damages and interest to be paid
to the female laborers and non-Hispanic workers who were injured
by WMS Solutions, LLC’s discriminatory compensation practices.21
The ALJ also awarded the following affirmative relief, to take effect within 90 days
of the Recommended Decision and Order:
1) Develop a corporate-wide, zero-tolerance policy prohibiting
harassment, intimidation, threats, retaliation, and coercion against
any employee at any worksite. WMS’s zero tolerance policy should
be in writing and should list the name, job title, and telephone
number of the management official who is responsible and
accountable for the company’s compliance with EEO and
affirmative action obligations and include a detailed description of
the process for employees to make complaints concerning
allegations of harassment, intimidation, retaliation, and coercion
20

Recommended D. & O. at 88.

21

Id. at 89.

7
based on race, color, religion, gender, national origin, disability, or
veteran’s status. Additionally, WMS shall distribute such policy in
English and Spanish to all its employees and post and display the
policy in both English and Spanish in a prominent place at each
and every worksite where there are employees of WMS;
2) Provide to all of WMS’s managers and supervisors, and separately,
to all of WMS’s other employees, training on equal employment
opportunity and on the identification and prevention of harassment
based on race, color, religion, sex, national origin, disability, or
veteran’s status. Such training must be provided annually;
3) In no way retaliate, harass, or engage in any form of reprisal
against any of its employees for opposing harassment or other
forms of discrimination or participating in any investigation or
inquiry into allegations of harassment or discrimination; and
4) Identify and inform employees of the name, job title, and telephone
number of the WMS official for employees to contact to report
and/or secure relief from such harassment.22
In the Supplemental Recommended Decision and Order, the ALJ denied
several of OFCCP’s requests, but changed references to the “Administrator” to
“OFCCP Director” for the purposes of damages calculations.23 WMS timely appealed
to the Board.
JURISDICTION AND STANDARD OF REVIEW
In OFCCP cases such as this, the ALJ 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.”24 The Board has
jurisdiction to review the exceptions filed by the parties to the ALJ’s Recommended
D. & O. and to issue the final administrative order.25 For cases arising under
Executive Order 11246, the Board reviews ALJ decisions de novo in accordance with
the Administrative Procedure Act.26 “Even under a de novo review, nothing
prohibits us from accepting as our own the ALJ’s material findings that let up to the
22

Id. at 89-90.

Supplemental Recommended Decision and Order Granting in Part and Denying in
Part Plaintiff’s Motion for Clarification at 4.
23

24

41 C.F.R. § 60-30.35.

Secretary’s Order No. 01-2020 (Delegation of Authority and Assignment of
Responsibility to the Administrative Review Board), 85 Fed. Reg. 13186 (Mar. 6, 2020); 41
C.F.R. § 60-30.30.
25

OFCCP v. Bank of Am. (hereinafter “BOA”), ARB No. 2013-0099, ALJ No. 1997OFC-00016, slip op. at 8 (ARB Apr. 21, 2016).
26

8
ALJ’s ultimate findings of fact (i.e., intentional discrimination if those findings are
supported by substantial evidence).”27 The standard of proof is preponderance of the
evidence.28
DISCUSSION
On appeal, WMS raises several objections to the Recommended D. & O.
Specifically, WMS made several constitutional and procedural challenges including
arguing that the ALJ was improperly appointed, that OFCCP lacked authority to
initiate the enforcement proceeding, that WMS is not subject to EO 11246, and that
the enforcement proceeding was untimely. WMS further challenged the ALJ’s
finding that OFCCP proved its case of discrimination, arguing that the ALJ applied
the wrong legal standard, and challenged the ALJ’s damages award.
OFCCP also raised exceptions to the Recommended D. & O., all of which
focused on the appropriate remedies and damages, including requiring WMS to
make job offers and more interest on the damages award.
1. Appointments Clause
WMS argues that the ALJ was improperly appointed under the
Appointments Clause of the Constitution and, thus, the ARB should remand the
case to be assigned to a new ALJ, consistent with the Supreme Court’s June 21,
2018 decision in Lucia v. Securities and Exchange Commission (“SEC”).29 In Lucia,
the Court held that SEC ALJ appointments were invalid because the ALJs were
“Officers of the United States” under the Constitution, which requires appointment
by the President, “Courts of Law” or “Heads of Department.” The Court held that
because the ALJs had not been properly appointed, the appropriate remedy was for
the case to be reassigned to a new, properly appointed ALJ. In light of the
Appointments Clause issue working its way through the courts, many Secretaries of
federal agencies that followed similar ALJ appointment schemes, including the
Secretary of Labor, ratified the appointments of the agency’s ALJs. The Department
of Labor’s ALJ appointments were ratified in December of 2017, before the Court
issued Lucia.
OFCCP counters that Lucia requires a party to make a timely objection to
the ALJ’s appointment, which did not happen in this case. According to OFCCP,
WMS was under an obligation to raise an Appointments Clause challenge to the
ALJ before the case was on appeal to the Board and failed to do so, and, thus, the
27

Id. at 9.

28

Id.

29

Lucia v. SEC, 138 S. Ct. 2044 (2018).

9
objection was not timely. The Board has adopted OFCCP’s argument on timely
raising Appointments Clause objections in several prior cases, including recently in
Riddell v. CSX Transportation, Inc.30 In that case, the Board held that CSX’s
Appointments Clause argument was forfeited or waived when it failed to raise the
issue before the ALJ.
However, the Supreme Court’s issuance of Carr v. Saul in early 2021, which
resolved a circuit split as to whether claimants at the Social Security
Administration (“SSA”) are required to raise Appointments Clause challenges
before an ALJ, requires us to re-examine our approach to Appointments Clause
challenges.31 In Lucia, the Court afforded relief to “one who makes a timely
challenge to the constitutional validity of the appointment of an officer who
adjudicates his case.”32 Carr expanded upon this holding in the context of SSA
proceedings. At the crux of the timeliness dispute is whether a party is required to
exhaust the issue at the agency level in order to preserve the issue for appeal. Put
another way, if the party is required to exhaust the issue at the agency, then an
initial objection to the appointment at a later stage is untimely. The Carr Court
explained:
Administrative review schemes commonly require parties to give the
agency an opportunity to address an issue before seeking judicial review
of that question. The source of this requirement (known as issue
exhaustion) varies by agency. Typically, issue-exhaustion rules are
creatures of statute or regulation. Where statutes and regulations are
silent, however, courts decide whether to require [judicial] issue
exhaustion based on “an analogy to the rule that appellate courts will
not consider arguments not raised before trial courts.”33
In Carr, the Court held that the plaintiffs were not required to exhaust the
Appointments Clause issue in front of the agency and could raise it for the first time
in federal court. The Court found there was no statutory or regulatory requirement
to exhaust, and the Court declined to impose a judicial exhaustion requirement
based on facts specific to the SSA context. The Court cited the nature of SSA cases,
focusing its analysis on how dissimilar an SSA hearing is to a traditional judicial
proceeding where judicial exhaustion might be appropriate. SSA proceedings are
ARB No. 2019-0016, ALJ No. 2014-FRS-00054 (ARB May 19, 2020). See also Perez v.
BNSF Ry. Co., ARB Nos. 2017-0014, -0040, ALJ No. 2014-FRS-00043 (ARB Sept. 24, 2020).
30

31

Carr v. Saul, 141 S. Ct. 1352 (2021).

Lucia, 138 S. Ct. at 2055 (quoting Ryder v. United States, 515 U.S. 177, 182-83
(1995) (emphasis added).
32

Carr, 141 S. Ct. at 1358 (citing Sims v. Apfel, 530 U. S. 103, 107-08 (2000); United
States v. L. A. Tucker Truck Lines, Inc., 344 U. S. 33, 36 n.6 (1952)).
33

10
non-adversarial. In SSA proceedings, the ALJ can hold a hearing with no one
present, the claimant is not making a case for herself, and no one from the
government is arguing against the claimant. The ALJ decides the issues and can
raise new issues at any time, and claimants are not prompted to raise issues.
The Court further stated that in addition to the non-adversarial nature of the
proceedings, two factors weighed against requiring judicial issue exhaustion. First,
agency adjudications can be ill-suited to structural challenges, like constitutional
challenges. In prior cases involving the SSA, courts have not required the claimant
to raise constitutional issues. Second, the Court generally does not require issue
exhaustion before administrative agencies when it is futile. An SSA ALJ lacks
authority to address the Appointments Clause issue and it “makes little sense to
require litigants to present claims to adjudicators who are powerless to grant the
relief requested.”34 For these reasons, the Court refused to apply judicial exhaustion
requirements. Because there were no statutory, regulatory, or judicial exhaustion
requirements, the Appointments Clause issue raised for the first time on appeal in
federal court was timely.
Based on the reasoning in Carr, the Board invited the parties in this case to
submit supplementary briefing on the Appointments Clause challenge. The
Solicitor’s Office argues in its briefing that OFCCP regulations require issue
exhaustion, and, thus, Carr is inapplicable to this case because it establishes the
requirements for judicial issue exhaustion when the statute or regulations are
silent. The Solicitor’s Office further argues that, even if Carr were to apply to this
case, the factors the Supreme Court applied in Carr would weigh in favor of
requiring the parties to raise the Appointments Clause issue before the ALJ. WMS,
on the other hand, argues that Carr requires remand and assignment to a new ALJ.
For the reasons set forth below, we hold that the OFCCP regulations require
issue exhaustion, which WMS did not do in this case. Because WMS failed to
exhaust the issue by not raising an Appointments Clause challenge at any point
during the ALJ proceedings, its Appointments Clause challenge is waived.
To start, we address whether the regulations governing OFCCP cases require
administrative issue exhaustion. The Rules of Practice for Administrative
Proceedings to Enforce Equal Opportunity Under Executive Order 11246, located at
41 C.F.R. part 60-30 (“OFCCP Rules”), govern these proceedings. The Secretary of
Labor is authorized to initiate enforcement proceedings by filing an administrative
complaint, in which the contractor—in this case WMS—is called a defendant.35 The
defendant then must answer the administrative complaint, each allegation of which

34

Carr, 141 S. Ct. at 1361.

35

41 C.F.R. § 60-30.5(a).

11
it “shall specifically admit, explain, or deny.”36 Each party then bears the
responsibility to develop its case under procedures prescribed for motions,
discovery, and hearings.37 The proceedings are adversarial.38 In addition to granting
the ALJ all the powers necessary “to conduct a fair hearing,” the OFCCP Rules
authorize the ALJ to “[h]old conferences to settle, simplify, or fix the issues in a
proceeding, or to consider other matters that may aid in the expeditious disposition
of the proceeding by consent of the parties or upon his own motion.”39 The
regulations further allow the ALJ to “[r]equire parties to state their position with
respect to the various issues in the proceeding.”40 Once a Recommended Decision
and Order is issued by the ALJ, the parties may file exceptions with the ARB.41 The
ARB then issues a final order, relying on the record developed before the ALJ, and
taking into account the parties’ exceptions.
Taken together, the OFCCP Rules outline an adversarial process where the
record is developed in front of an ALJ and the ARB operates as a reviewing body.
The process overall is very similar to the process in an Article III court, where the
district court is the trial court and the appellate court reviews the record developed
at the trial court. The OFCCP Rules empower the ALJ to fully develop the record by
setting the issues. The parties each are responsible for presenting their own case,
and there is an opportunity for discovery and cross-examination. Importantly, once
the Recommended Decision and Order arrives at the ARB, the OFCCP Rules
presume that the entire record has been developed. The ARB issues a final order on
the record developed before the ALJ. The parties are permitted to file exceptions
with the ARB, but those exceptions are to the Recommended Decision and Order.
Examining the OFCCP Rules in their entirety, we find that they require issue
exhaustion.
Even if the OFCCP Rules do not require exhaustion, the Court’s reasoning in
Carr supports requiring issue exhaustion at the administrative level in OFCCP
cases like this one. As described above, the procedures of these cases are very
similar to those in Article III courts. Unlike the SSA proceedings discussed in Carr,
OFCCP proceedings involve both parties fully developing the record and ample
issue development. WMS argues that ALJs do not have expertise in constitutional
matters. The ALJs in OFCCP proceedings regularly address as-applied
constitutional issues, including Fourth Amendment issues. On this point, ALJs can
36

Id. § 60-30.6(b).

37

See generally id. §§ 60-30.7–.24.

See, e.g., id. §§ 60-30.9 (service on “an opposing party”), 60-30.17(a) (witnesses of
“the opposing parties”).
38

39

Id. § 60-30.15(a).

40

Id. § 60-30.15(b).

41

Id. § 60-30.36.

12
and have in the past awarded remedies for Appointments Clause claims, a factor in
favor of issue exhaustion. In the aftermath of Lucia, multiple Department of Labor
ALJs reassigned OFCCP cases to new ALJs when the parties requested a
reassignment due to Appointments Clause concerns.42 The ALJs in these cases not
only have the authority to address this issue—they have a prior history of doing so.
Requiring issue exhaustion at the agency level is appropriate in OFCCP
cases, even if the OFCCP Rules do not require it. The harm to judicial integrity and
efficiency caused by permitting a party to undertake a lengthy proceeding before an
ALJ only to challenge the ALJ’s authority on appeal, perhaps after an unfavorable
decision, is not insignificant.43
Turning to the specifics of this case, we observe that the ALJ gave WMS
ample opportunity to raise the issue and also warned WMS of the consequences for
failing to raise an issue with the ALJ. In his “Notice of Hearing and Pre-Hearing
Order,” the ALJ specifically directed the parties to exchange, and file with the court,
“pre-hearing statements setting forth the issues and any defenses that may be
raised at hearing . . . and a simple statement of the issues to be decided and the
relief or remedies sought.”44 The ALJ also required the parties to file post-hearing
briefs and warned the parties that issues would be considered abandoned if they
were not briefed:
(a) Each party is to file a post-hearing brief unless otherwise
directed at the hearing. Failure to file a brief by any party may be
construed as a waiver of all arguments concerning the issues
presented. Briefs shall address each of the contested issues identified
either at the hearing or by Order. Any ISSUE not specifically
addressed on brief will be considered abandoned by that party for
decisional purposes.
(b) Each party will make specific, all-inclusive FINDINGS OF
FACT with respect to each issue being briefed. The absence of factual
findings or arguments concerning record evidence will constitute an
OFCCP v. Oracle Am., Inc., No. 2017-OFC-00006, Order Granting Motion to
Reassign (ALJ Oct. 15, 2018); OFCCP v. JPMorgan Chase & Co., No. 2017-OFC-00007,
Order Granting Plaintiff’s Motion to Reassign (ALJ Sept. 25, 2018) (each of these ALJ
orders are available at https://www.oalj.dol.gov, “Search Tools,” > “Keyword Search/Case
Number Search,” > “Search by Case Number”).
42

Forrester Trucking v. Dir., Off. of Workers’ Comp. Programs, 987 F.3d 581, 592 (6th
Cir. 2021) (“While we do not see evidence that the operators acted with a nefarious motive,
we are nonetheless mindful not to invite ‘sandbagging’ or ‘judge-shopping’ in future black
lung proceedings.”).
43

44

Notice of Hearing and Pre-Hearing Order at 2.

13
admission that they are of no importance in the disposition of the issue
and that the party has abandoned any contention concerning the
applicability of the ignored evidence to the pertinent issue.45
WMS has vigorously contested these charges since OFCCP commenced its
review and continued to do so at the hearing. There is no indication in the record
that WMS did not have an opportunity to raise the Appointments Clause, or any
other relevant issue. The record shows that WMS raised other threshold issues—for
example, whether it is a “subcontractor” pursuant to EO 11246—during the
proceedings in front of the ALJ. WMS also had ample opportunity to raise the issue
once it came to the forefront in the lead up and aftermath to the Supreme Court’s
Lucia decision. In the time between the conclusion of the hearing in 2016, and the
date of the decision in 2020, the Secretary of Labor ratified all ALJ appointments
and the Lucia decision was issued. WMS could have, at any time, raised the
Appointments Clause issue before the ALJ, but did not. We conclude that because
WMS failed to raise the issue before the ALJ, raising it now in the proceeding before
the Board is untimely.
2. WMS is Subject to EO 11246
WMS raised several arguments on appeal alleging that OFCCP lacks the
authority to initiate this enforcement proceeding: EO 11246 is invalid, WMS is not
subject to EO 11246, OFCCP brought the complaint too late, and only WMS’s
federal contracts should be bound by the nondiscrimination clauses of the EO. For
the reasons set forth below, we find that WMS is subject to EO 11246 and that
OFCCP had the power to bring this enforcement action.
A. Validity of EO 11246
WMS argues that EO 11246 is an invalid exercise of power. This is an issue
that has been extensively litigated in the Federal courts.46 The Department of Labor
is bound by its own regulations, and the Secretary of Labor—and in this case, his
designee, the Board—acting in an adjudicatory capacity has no authority to review
the validity of those regulations.47 There is ample precedent holding that the
45

Id.

See generally Contractors Ass’n of E. Pa. v. Sec’y of Labor, 442 F.2d 159 (3d Cir.
1971); Liberty Mut. Ins. Co. v. Freidman, 639 F.2d 164 (4th Cir. 1981); Chrysler Corp. v.
Brown, 441 U.S. 281 (1979).
46

Secretary’s Order No. 01-2020 (Delegation of Authority and Assignment of
Responsibility to the Administrative Review Board), 85 Fed. Reg. 13186, 13187 (Mar. 6,
2020) (“The Board shall not have jurisdiction to pass on the validity of any portion of the
Code of Federal Regulations that has been duly promulgated by the Department of Labor
and shall observe the provisions thereof. . .”); Stouffer Foods Corp. v. Dole, No. 7:89-2149-3,
47

14
validity of EO 11246 and the regulations promulgated pursuant to it are not proper
subjects for an administrative proceeding.48 Thus, the Board declines to address
WMS’s challenges to Executive Order 11246 in this proceeding.49
B. Whether WMS is Subject to EO 11246
WMS argues that it is not subject to EO 11246 because it had no written
agreements with ASI, and WMS’s role was simply to supply labor to projects. The
ALJ concluded that WMS was a contractor within the meaning of EO 11246. The
ALJ determined that WMS provided workers to ASI as a client. Those workers
worked at the GSA site. In addition, the ALJ found that WMS billed an agreed upon
wage rate per laborer and that WMS submitted weekly invoices. Therefore, the ALJ
concluded there was a subcontract between the two entities even though there was
no written agreement.
We agree with the ALJ. The word “contract” in the context of Federal
government contracting is broadly construed. Under the regulations, a “contract” is
defined as any “Government contract or subcontract.”50 A “Government contract” is
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” could mean either “a prime contractor or
subcontractor.”51 41 C.F.R. § 60-1.3 defines a subcontract, in relevant part, as:
(1) Subcontract means 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):

1990 WL 58502, * 1 (D. S. C. Jan. 23, 1990) (citations omitted) (“Defendant’s [Department
of Labor] administrative law judges are bound by Executive Order 11246 and its
implementing regulations; they have no jurisdiction to pass on their validity.”).
The ALJ and Assistant Secretary have the power to decide if an employer has
committed a violation, but may not determine the underlying validity of the regulations.
OFCCP v. W. Elec. Co., Case No. 1980-OFC-00029, slip op. at 12-13 (Dep’y Under Sec’y Apr.
24, 1985) (Remand Decision and Order). In OFCCP v. Goya De Puerto Rico, Inc., ARB No.
1999-0104, ALJ No. 1998-OFC-00008, slip op. at 6 (ARB Mar. 21, 2002), the ARB held that
the ALJ 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 Oesterich v. Selective Serv. Sys., 393 U.S. 233, 241-42 (1968)
(concurring opinion)).
48

Any contractor with standing may challenge EO 11246 and the implementing
regulations in Federal court.
49

50

41 C.F.R. § 60-1.3.

51

Id.

15
(i) 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
(ii) [W]hich any portion of the contractor’s obligation under any one or
more contracts is performed, undertaken, or assumed.
Other parts of the regulation define nonpersonal services to include construction
services.52
The arrangement between WMS and ASI falls within this definition because
there was an arrangement for the use of nonpersonal services that was necessary to
the performance of a contract. WMS assumed a portion of the contractor’s
obligations, namely providing labor that could engage in construction demolition
and asbestos and lead abatement. Accordingly, we affirm the ALJ’s finding that
WMS had a subcontract with ASI.
We also agree with the ALJ that WMS’s subcontract with ASI is subject to
the terms of EO 11246.53 WMS argues, in essence, that it only provided labor and
that there was no contract specifying the terms of EO 11246. While WMS did
provide staff, that staff executed construction work, which is covered by the
regulation. It is also well established that contracts subject to EO 11246 incorporate
the equal employment provisions of EO 11246 regardless of whether those
provisions are actually contained in a written contract.54 For all of these reasons, we
affirm the ALJ’s conclusion that WMS is a “subcontractor” with a subcontract and,
therefore, is bound by EO 11246.

“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.” 41 C.F.R. § 60-1.3.
52

41 C.F.R. §60-1.3 (“any person holding a subcontract and, for the purposes of
Subpart B of this part, any person who has held a subcontract subject to the order”).
53

41 C.F.R. § 60-1.4(e) (“Incorporation by operation of the order. By operation of the
order, the equal opportunity clause shall be considered to be a part of every contract and
subcontract required by the order and the regulations in this part to include such a clause
whether or not it is physically incorporated in such contracts and whether or not the
contract between the agency and the contractor is written.”).
54

16
C. OFCCP Was Not Required to Bring This Proceeding within 180 Days of
Receiving a Complaint
WMS argues that because OFCCP received a complaint about working
conditions at the GSA modernization project, OFCCP must bring an enforcement
proceeding within 180 days pursuant to the regulation governing complaints.55
A close reading of the regulations indicates that the regulation WMS cites to
applies to individuals bringing a complaint, not to OFCCP. Section 41 C.F.R. 601.21 provides that “[c]omplaints shall be filed within 180 days of the alleged
violation.” Subsequent regulations, located at §§ 60-1.22 to 1.24, specify that
complaints are filed by “complainants.” Section 60-1.24 further provides that
OFCCP must conduct a thorough investigation when a complaint is received. When
the investigation indicates a potential violation, “the Director shall proceed in
accordance with § 60-1.26.”56 In turn, Section 60-1.26 outlines, in relevant part, the
procedures for administrative enforcement matters:
OFCCP may refer matters to the Solicitor of Labor with a
recommendation for the institution of administrative enforcement
proceedings, which may be brought to enjoin violations, to seek
appropriate relief, and to impose appropriate sanctions. The referral
may be made when violations have not been corrected in accordance
with the conciliation procedures in this chapter, or when OFCCP
determines that referral for consideration of formal enforcement (rather
than settlement) is appropriate.57
When read together, the regulations provide that individuals can bring
complaints and must do so within 180 days of the incident giving rise to the
complaint. Upon receiving a complaint, OFCCP has an obligation to thoroughly
investigate the complaint. However, the regulations do not require OFCCP to begin
enforcement within 180 days. In this case, OFCCP received a complaint,
commenced an investigation, and conducted a compliance review of WMS’s
practices. At the end of its compliance review, OFCCP engaged in conciliation and
eventually decided to initiate an enforcement proceeding. The record shows that
OFCCP appropriately followed the process outlined in the regulations. Therefore,
the OFCCP’s enforcement proceeding against WMS was not untimely and did not
violate the cited regulations.

55

41 C.F.R. § 60-1.21.

56

41 C.F.R. § 60-1.24(c)(3).

57

Id. § 60-1.26(b)(1).

17
D. All of WMS’s Contracts During The Review Period Are Subject to EO 11246
WMS next argues that only its federal contracts should be subject to EO
11246. The plain language of EO 11246 indicates, however, that EO 11246 applies
to the contractor, rather than to individual contracts. Specifically, Section 202
states that “[t]he contractor will not discriminate against any employee or applicant
for employment.”58 The plain language of the implementing regulations further
support the conclusion that EO 11246 applies to a contractor, and not to individual
contracts, stating, in part, “[t]he regulations in this part apply to all contracting
agencies of the Government and to contractors and subcontractors who perform
under Government contracts.”59 WMS is a subcontractor under EO 11246, and thus,
the executive order and regulations promulgated thereunder apply to WMS.
Accordingly, we find that OFCCP’s review of all of WMS’s contracts during the
review period was appropriate.
3. WMS Violated Executive Order 11246
OFCCP alleged that WMS violated EO 11246 when it discriminated against
non-Hispanic applicants in its hiring and discriminated against women and nonHispanics in assigning hours and setting pay during the review period of February
1, 2011, through January 31, 2012. OFCCP relied upon a theory of intentional
disparate treatment at the hearing to prove that WMS used race and ethnicity as
main factors during hiring. OFCCP also relied on intentional disparate treatment to
prove that WMS discriminated against women and non-Hispanics in assigning
hours and pay.
In addition to relevant provisions of EO 11246, the implementing regulations,
and Department precedent, the Board looks to federal appellate court decisions
addressing similar pattern or practice claims of intentional discrimination
adjudicated under Title VII of the Civil Rights Act of 1964.60
To prevail on a claim of a pattern or practice of intentional disparate
treatment, OFCCP must show that unlawful discrimination was WMS’s regular
procedure or policy.61 OFCCP bears the burden to produce sufficient evidence that
there was a disparity and that being a member of a protected class was the cause. A

58

EO 11246, § 202.

59

41 C.F.R. § 60-1.1.

OFCCP v. Greenwood Mills, Inc. ARB Nos. 2000-0044, 2001-0089, ALJ No. 1989OFC-00039, slip op. at 5 (ARB Dec. 20, 2002); BOA, ARB No. 2013-0099, slip op. at 11.
60

OFCCP v. Enterprise RAC Co. of Baltimore, LLC, ARB 2019-0072, ALJ No. 2016OFC-00006, slip op. at 5 (ARB Nov. 3, 2021).
61

18
pattern or practice claim requires that “discrimination was the company’s standard
operating procedure[,] the regular rather than the unusual practice.”62
OFCCP’s threshold burden is to make a prima facie showing that a pattern or
practice of intentional discrimination on the part of the employer existed.63 A prima
facie case of a pattern or practice of discrimination can be proven by both statistical
and anecdotal evidence.64 Courts have held that a statistical analysis that
demonstrates a disparity in selection rates of job applicants of two to three standard
deviations (i.e., a likelihood of less than five percent) is not likely due to chance or
random variations and, therefore, may be sufficient evidence to meet the initial
burden and establish a prima facie case of discrimination.65 In other words, the
probability of an event occurring by chance alone becomes less and less likely at
higher standard deviations.
In analyzing these type of cases, the Board may apply a burden-shifting
framework, just as the ALJ properly did at the hearing in this case.66 If OFCCP
establishes a prima facie showing of discrimination, the burden shifts to the
employer to rebut the presumption by either offering legitimate, non-discriminatory
reasons for its actions, or by showing that the statistical proof was unsound.67 This
is a “burden of production, of ‘going forward’ with evidence of ‘some legitimate,
nondiscriminatory reason for the [action].’”68 The employer’s burden is “to defeat the
prima facie showing of a pattern or practice by demonstrating that the proof is

62

Int’l Bhd. of Teamsters v. U.S., 431 U.S. 324, 336 (1977).

63

Id. at 360.

64

See Hazelwood Sch. Dist. v. U.S., 433 U.S. 299, 307 (1977).

65

Palmer v. Schulz, 815 F.2d 84, 94 (D.C. Cir. 1987).

Recommended D. & O. at 59-60. Cases such as this involve complicated fact-finding,
and the burden-shifting framework assists all parties, including the fact finder, in
ascertaining whether the plaintiff met their ultimate burden of proving discrimination by a
preponderance of the evidence. See U.S. v. City of New York, 717 F.3d 72, 84-87 (2d Cir.
2013) (discussing plaintiff’s initial burden and the broad evidence that a defendant may
produce to rebut the prima facie case).
66

67

Palmer, 815 F.2d at 99; BOA, ARB No. 2013-0099, slip op. at 11.

Wright v. Nat’l Archives and Recs. Serv., 609 F.2d 702, 713-14 (4th Cir. 1979)
(quoting Furnco Constrs. Corp. v. Waters, 438 U.S. 567, 578) (1978)).
68

19
either inaccurate or insignificant.”69 The burden can be met by “provid[ing] a
nondiscriminatory explanation for the apparently discriminatory result.”70
However, an employer’s purported, legitimate nondiscriminatory reasons
must be articulated with some specificity to avoid “conceal[ing] the target” at which
employees must aim pretext arguments.71 Although there is a risk that a nefarious
employer may attempt to use subjective standards as “cover” for unlawful
discrimination, subjective evaluation criteria “can constitute legally sufficient,
legitimate, nondiscriminatory reason[s]” for an employer’s business decisions.72 In
fact, “subjective evaluations of a job candidate are often critical to the decisionmaking process.”73 The ultimate burden of persuading the trier of fact that the
defendant intentionally discriminated remains at all times with the plaintiff.74
If the employer satisfies its burden of production, the presumption arising
from plaintiff’s prima facie case drops out. The trier of fact must then determine
whether the plaintiff has sustained its burden of proving by a preponderance of the
evidence the ultimate facts at issue.75 In other words, if the employer meets the
burden to produce a legitimate, nondiscriminatory reason, the plaintiff must
demonstrate that the proffered reason was not its true reason but was a pretext for
unlawful discrimination.76 If, however, the employer “fails to rebut the plaintiff's
prima facie case, the presumption arising from an unrebutted prima facie case
Teamsters, 431 U.S. at 360. As “Teamsters sets a high bar for the prima facie case
the Government or a class must present in a pattern-or-practice case: evidence supporting a
rebuttable presumption that an employer acted with the deliberate purpose and intent of
discrimination against an entire class . . . An employer facing that serious accusation must
have a broad opportunity to present in rebuttal any relevant evidence that shows that it
lacked such an intent.” City of N.Y., 717 F.3d at 87 (citing Teamsters, 431 U.S. at 358).
69

70

Teamsters, 431 U.S. at 360 n.46.

Figueroa v. Pompeo, 923 F.3d 1078, 1088 (D.C. Cir. 2019) (citing Lanphear v.
Prokop, 703 F.2d 1311, 1316 (D.C. Cir. 1983)).
71

72

Denney v. City of Albany, 247 F.3d 1172, 1185 (11th Cir. 2001); Figueroa, 923 F.3d at

1088.
Denney, 247 F.3d at 1185-86 (internal quotations omitted). For example, use of raceneutral subjective negative interview comments, when “similar comments are made of
white and non-black applicants, negating any possible inference that the comments were
codes for race . . . do not create an inference of pretext, but instead merely indicate that the
candidates were lacking traits needed for the job.” Millbrook v. IBP, Inc., 280 F.3d 1169,
1176 (7th Cir. 2002).
73

74

Tex. Dep’t. of Cmty. Affairs v. Burdine, 450 U.S. 248, 253 (1981).

See Teamsters, 431 U.S. at 336 (the government in pattern or practice cases must
prove that intentional discrimination was the defendant’s “standard operating procedure.”).
75

76

Burdine, 450 U.S. at 253.

20
entitles the plaintiff to prevail on the issue of liability and proceed directly to the
issue of appropriate relief.”77
A. Discrimination Against Non-Hispanic Applicants
i. OFCCP’s Prima Facie Case of Intentional Disparate Treatment
To prove its case, OFCCP relied on both statistical and anecdotal evidence.
For the statistics, Dr. Madden was hired to examine 1) racial and ethnic differences
in hiring, 2) gender, racial, and ethnic differences in hours worked, and 3) gender
differences in hourly pay. Dr. Madden approximated the applicant pool using U.S.
Census data for the construction laborer occupation in the Washington, D.C.
metropolitan area. Dr. Madden did not use WMS data because WMS only provided
180 incomplete Worker Candidate Profile forms. These forms were used by WMS to
track potential hires for a workforce of over 700. The Worker Candidate Profile
Forms were deficient and lacked the worker’s race, gender, and other demographic
information. WMS was unable to provide a complete list of applicants or other
information that would have allowed Dr. Madden to use their actual applicant pool.
The ALJ noted that “[c]ourts allow the production of evidence of other statistical
measures to establish discrimination when applicant flow figures are either flawed
or otherwise unavailable, as they are here.”78
Dr. Madden’s first finding was that non-Hispanic persons were less likely to
be hired by WMS during the review period.79 According to the U.S. Census data,
41.1% of the construction labor pool in the Washington, D.C. metro area is nonHispanic, while 7.5% of WMS’s employees were non-Hispanic. Dr. Madden’s
analysis determined that the likelihood of this discrepancy occurring by chance was
1 in 781 trillion (781,000,000,000).80 Put another way, the proportion of nonHispanic workers that WMS hired is 19.36 standard deviations below the census
proportion.
Using this data and other testimony, the ALJ determined that OFCCP met
its burden to establish by a preponderance of the evidence a prima facie case of
intentional discrimination against non-Hispanic applicants in hiring. A thorough
review of the record and the ALJ’s decision supports this finding.

77

City of N.Y., 717 F.3d at 87.

78

Recommended D. & O. at 61.

79

Id. at 33.

80

Id. at 33-34.

21
ii. WMS’s Rebuttal of Hiring Discrimination
The ALJ found that WMS’s rebuttal centered on three factors: 1) Hispanic
construction laborers have more of an interest in asbestos removal work than nonHispanic construction laborers; 2) WMS hired more Hispanic workers because
Hispanic workers were more likely to have an asbestos license when hired; and 3)
WMS required applicants to have an asbestos license before considering them for
employment.81
To support this argument, WMS relied on its own expert analysis by Dr.
White, who is also a statistician. Dr. White developed an alternative labor pool and
argued that the U.S. Census data that Dr. Madden used was unreliable because
those benchmarks did not “account for individuals’ interest or qualifications for
working in asbestos abatement at WMS.”82 Dr. White further argued that OFCCP’s
analysis was flawed because the U.S. Census data that defines the general
construction labor pool is overly broad. He then speculated that because of the
uniquely dangerous work WMS engages in, its workforce is more likely to be recent
immigrants of Hispanic background. In his initial report, Dr. White created a labor
pool using asbestos licensure data from parts of Virginia that are in the BaltimoreWashington metropolitan area. Because this data lacked complete ethnicity or race
data, he presumed anyone with a Latino or Hispanic surname to be Hispanic. Based
on this data, Dr. White concluded that 12% of the labor pool was non-Hispanic.
However, this figure included only 261 workers, which is far less than WMS’s
employee total of over 700 during the review period. In his rebuttal report, Dr.
White also included data from Maryland, but it also did not contain ethnicity or
race data. It did, however, contain data on the language in which the licensure
exam was taken, and 86% took the exam in Spanish. Data from the District of
Columbia was never obtained.
Dr. White also took issue with Dr. Madden’s approach to the data. First, he
argued that Dr. Madden’s hiring analysis did not accurately account for rehires
because she chose to use the January 29, 2011 pay period as her starting point for
rehires. In all proposed measures of the number of new hires, the percentage of the
WMS’s workforce that is non-Hispanic remains consistent. Dr. White’s second
concern was that Dr. Madden’s analysis did not consider the types of jobs that
laborers were hired to perform during the review period. Asbestos work accounted
for the largest projects during the review. Across all projects, 73.1% of WMS’s
workforce was working on asbestos abatement projects, and 26.9% was working on
demolition projects.83
81

Id. at 64.

82

Id. at 45.

83

Id. at 45.

22

WMS’s attempts to rebut OFCCP’s case do not actually rebut the case.
Importantly, many of its theories are not supported. For example, WMS says it only
hired licensed asbestos workers, but the record evidence directly contradicts WMS’s
assertions.84 Indeed, WMS’s own managers testified that they hired anyone “able to
work” and with no experience.85 Further, WMS was affiliated with a training school
and provided employees with the opportunity for asbestos certification. With regard
to its assertion that Hispanic workers are more interested in asbestos removal than
workers in the general population, WMS failed to provide evidence to support this
conclusion, other than the incomplete licensure data that did not include race. WMS
similarly only provided incomplete data to show that Hispanics are more likely to be
licensed upon hire.86 In short, WMS’s arguments center on data that is incomplete
(the asbestos licensure data) and data that is not available (client preferences,
worker preferences, worker experience, and credentials).
WMS also argues that the ALJ required it to sustain the burden of proof to
show that it did not discriminate, rather than requiring OFCCP to carry the
burden. According to WMS, “the [ALJ] subjected the statistical evidence to a burden
shifting analysis which imposed the ultimate burden of persuasion on WMS[.]’” 87
WMS continued, “The [ALJ] subjects the OFCCP’s statistics to the minimal burden
of raising an inference of discrimination. It then intensely challenges every aspect of
WMS’s response […], before ultimately concluding that ‘WMS failed to rebut the
OFCCP prima facie case.’”88
WMS misunderstands both the burden-shifting framework and the ALJ’s
application of it. WMS is correct in asserting that OFCCP always has the burden of
proof. Decades of legal precedent consistently demonstrate that OFCCP carries the
burden throughout the entire proceeding. WMS’s job is to rebut the evidence
OFCCP puts on—as in any typical civil case. Rebuttal in a case relying on statistical
evidence is not as simple as articulating possible reasons OFCCP’s statistical
analysis may be flawed. WMS needed to show that curing the flaws in the analysis
would change the resulting disparity.89 Here, it failed to do so. Instead, WMS
merely offered piecemeal explanations that either lacked evidence or were directly
contradicted by uncontested evidence in the record.
84

Id. at 65.

85

Id. at 4, 65.

Id. at 45 (stating that Dr. White was only able to obtain data from Virginia and
Maryland); id. at 67 (discussing that WMS’s data had inaccuracies and missing data).
86

87

WMS Br. at 3 (citations omitted).

88

Id.

Recommended D. & O. at 71; see also EEOC v. Gen. Tele. Co. of Northwest, Inc., 885
F.2d 575, 579 (9th Cir. 1989); Hemmings v. Tidyman’s, 285 F.3d 1174, 1188 (9th Cir. 2004).
89

23

On the other hand, the ALJ specifically found that OFCCP provided
sufficient evidence to sustain its burden and that WMS failed to provide evidence to
rebut it. Simply put, OFCCP’s evidence met the preponderance of the evidence
burden, and WMS failed to show how that evidence was flawed, unreliable or
otherwise undermined OFCCP’s case. We note in particular that WMS never
proffered legitimate, nondiscriminatory reasons for its hiring practices. After a
thorough review of the record and available evidence, we conclude that the ALJ’s
holding is supported by the record and consistent with the law.
B. Discrimination Against Female and Non-Hispanic Employees
i. OFCCP’s Prima Facie Case of Intentional Disparate Treatment
Dr. Madden’s second finding was that women and non-Hispanics of both
genders were assigned fewer weekly hours than male and Hispanic workers during
the review period.90 According to her analysis, a gender neutral assignment process
would give women 13.9% more hours each week than they were assigned. This
difference is 7.98 standard deviations. When reviewing the data on a project basis,
it was clear “that most of these differences are being generated by Hispanics and
men being assigned to the projects that offer more hours.”91 Among non-Hispanic
employees as a whole, the total discrepancy was 9.6% and 3.10 standard deviations.
Dr. Madden’s third finding was that female laborers at WMS received lower
hourly wages than male laborers during the review period.92 A gender neutral wage
assignment process would result in women being paid 14.1% more per hour. This
difference is 18.68 standard deviations. She assumed that “men and women in the
same job category for the same company, working at the same time period,
should . . . have the capacities to be paid the same wages.”93
In addition to Dr. Madden’s analysis, OFCCP offered testimony to support
her findings. The ALJ noted that Ortega confirmed that clients asked for men
instead of women at job sites because the work is “too heavy, too hard” for women.94
There was also testimony that clients requested more men than women.95 Women
would not be assigned to the job sites because “a woman would go to the bathroom
90

Recommended D. & O. at 35.

91

Id. at 37.

92

Id. at 38.

93

Id. at 38.

94

Id. at 69.

95

Id. at 15-16 (testimony of Gonzales).

24
two or three times a day and that that was a loss of time, time and money, because
every time you went in, you had to take suit off and then put on a new one to go
back to the job.”96 Using this data and testimony, the ALJ determined that OFCCP
met its burden to establish a prima facie case by a preponderance of the evidence
that WMS discriminated against non-Hispanic workers in hours and women in pay
and hours. A thorough review of the record and the ALJ’s decision supports this
finding.
ii. WMS’s Rebuttal of Pay and Hour Discrimination
WMS’s rebuttal case again focuses on Dr. Madden’s analysis and argues that
women and other workers were not interested in working as many hours. The ALJ
rejected WMS’s assertions because it failed to: 1) call into question the validity of
Dr. Madden’s statistical conclusions about its discriminatory compensation
practices; and 2) provide any reasonable supporting evidence that would result in a
different conclusion. WMS also failed to articulate how client preferences factor into
rebutting a prima facie showing of discrimination. After a thorough review of the
record and available evidence, we find that the ALJ’s findings are supported by the
record and consistent with the law.
4. Damages
A. Standard of Review of Damages
The ARB generally adopts the ALJ’s methodology for awarding damages if
the ALJ exercised reasonable discretion given the complexity of determining back
pay compensation.97
B. Damages Calculations
After a finding of discrimination, the remedy is damages “to make persons
whole for injuries suffered on account of unlawful employment discrimination.”98
Back pay is one element of the “make whole” relief analysis, which may be awarded
to an individual or to a class of individuals affected by the unlawful
discrimination.99 Rather than individual assessments of the loss of each victim,

96

Id.

97

BOA, ARB No. 2013-0099, slip op. at 21.

98

Albemarle Paper Co. v. Moody, 422 U.S. 405, 418 (1975).

41 C.F.R. § 60-1.26 (a)(2); OFCCP v. Greenwood Mills, Inc., ARB Nos. 2000-0044,
2001-0089, slip op. at 5.
99

25
class-wide procedures may be used in calculating back pay.100 If the case is complex,
the class is large, or the illegal practices continued over an extended period of time,
a class-wide approach to measure back pay may be necessary.101
In Greenwood Mills, the Board discussed back pay awards. While recognizing
they are imprecise and may not fully compensate the aggrieved, the Board
highlighted federal case law that outlined three basic principles of back pay awards:
“(1) [U]nrealistic exactitude is not required; (2) [A]mbiguities in what an employee
or group of employees would have earned but for discrimination should be resolved
against the discriminating employer; and (3) [T]he [trier of fact] . . . must be granted
wide discretion in resolving ambiguities.”102 Interest is paid on back pay awards to
compensate the discriminatee for the loss of the use of her money.103
On appeal, OFCCP argues that the ALJ erred in his damages calculations by
failing to order offers of employment, back pay that extended to the date of the trial
due to ongoing discrimination, and interest on back pay until the date of the
decision. WMS argues against damages altogether, and specifically objects to the
issuance of class-based damages.
Dr. Madden concluded that the racially discriminatory hiring process
resulted in damages in the amount of $926,298. Including interest until the date of
the hearing, that totaled $1,081,473. She determined the amount of lost wages by
calculating the average actual WMS earnings of the group multiplied by the group’s
hiring shortfall. The ALJ altered this total to $780,998, to account for the difference
between Dr. Madden’s rehire number and WMS’s rehire number.
Dr. Madden concluded that women were underpaid by $74,875, due to their
lower hourly pay rate. Adding interest yields total damages of $87,418.104 She
calculated the damages by taking the average actual hours worked by women, the
shortfall in hours, their average hourly wage, and the shortfall in their hourly wage.
She calculated the damages for non-Hispanic workers assigned fewer hours and
determined that total to be $16,900. For women assigned fewer hours, the total was

Greenwood Mills, Inc., ARB Nos. 2000-0044, 2001-0089, slip op. at 5. See Segar v.
Smith, 738 F. 2d 1249 (D.C. Cir. 1984).
100

McClain v. Lufkin Indus., 519 F.3d 264, 280-81 (5th Cir. 2008); Pettway v. Am. Cast
Iron Pipe Co., 494 F.2d 211, 261 (5th Cir. 1974).
101

Greenwood Mills, Inc., ARB Nos. 2000-0044, 2001-0089, slip op. at 6 (citing Stewart
v. General Motors Corp., 542 F.2d 445, 452 (7th Cir. 1976) (citations omitted).
102

103

OFCCP Compliance Manual, § 7F07(e) (1998).

104

Recommended D. & O. at 86.

26
$75,985. The ALJ adopted Dr. Madden’s findings. In total, the ALJ awarded
$179,907 in damages due to compensation disparities.105
We find that the ALJ’s award of damages is reasonable. The ALJ damages
award is appropriately designed to make the class of discrimination victims whole.
The ALJ carefully outlined the eligible class of workers in his decision. WMS fails to
offer a credible reason to disrupt this award, other than WMS’s belief that it should
not be liable at all. OFCCP’s arguments against the ALJ’s damages award are also
flawed. While OFCCP is correct to emphasize that in EO 11246 and Title VII cases,
the courts have substantial remedial powers, including equitable remedies, such
remedies must be practical and possible. Here, the ALJ’s reasoning is thorough and
sensible—that the appropriate remedy for the class of non-Hispanic workers is back
pay calculated on a class-wide basis. We have previously held that “‘exactitude’ is
not required in calculating the amount of back wage damages.”106 We find that the
ALJ neither abused his discretion, nor clearly erred in determining the amount of
the back pay award. As WMS does not contest them, we also find that the ALJ did
not abuse his discretion or clearly err in ordering additional affirmative remedies.
After the ALJ issued his decision, OFCCP asked the ALJ to clarify several
points, including asking the ALJ to award interest to the date of the decision as
opposed to the ALJ’s award of interest to the hearing date. The ALJ denied this
motion in a supplemental order.107 OFCCP filed a petition for review asking us to
reverse the ALJ. We defer to the ALJ’s discretion on this matter.108

105

Id. The parties do not challenge these calculations.

106

BOA, ARB No. 2013-0099, slip op. at 21.

Supplemental Recommended Decision and Order Granting in Part and Denying in
Part Plaintiff’s Motion for Clarification (ALJ July 21, 2020).
107

See U.S. v. Brennan, 650 F.3d 65, 138 (2d Cir. 2011) (“Our function is not to exercise
our own discretion, but to determine . . . whether the [] judge has abused his”) (internal
citations omitted). In Brennan the Court stated: “In any event, we need not and do not
decide exactly what remedy the district court should impose (or to what extent the district
court should find the liability on which any remedy would necessarily be premised). It is for
the district court to decide what, if any, is the scope of the City Defendants’ liability, and
then to exercise appropriate equitable discretion in imposing a remedy. In doing so, the
district court should explain why it exercised its discretion in the way that it did, so that
a reviewing court can determine whether that discretion has been abused.” Id. at 139-140.
108

27
CONCLUSION
We conclude the ALJ’s findings that WMS engaged in a pattern or practice of
intentional discrimination against non-Hispanic applicants, non-Hispanics, and
women in determining hours, and women in hourly wages are supported by the
record and are AFFIRMED.
In addition, we conclude that the ALJ’s damages award and other affirmative
relief is reasonable. Therefore, the ALJ awards of $780,998 in back pay damages to
the defined class of non-Hispanic workers, $179,907 in back wages for women and
non-Hispanic workers who were assigned less hours and paid lower wages, and
other affirmative relief are AFFIRMED.
SO ORDERED.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Adol%3Aa779edee750aef63. Public record. Not legal advice.