ALJ Rules that OFCCP Exceeded its Authority in Demanding Certain Employee Compensation Data from Google

by FordHarrison
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Executive Summary: In January, the OFCCP filed an administrative complaint against Google for denying access to records in violation of applicable federal affirmative action laws and implementing regulations.  The Administrative Law Judge (ALJ) denied OFCCP’s request to compel Google to comply with the request for additional information. 

The OFCCP’s request was for “snapshot” compensation data for each of over 19,000 employees including base salary or wage rate; hours worked in a typical workweek; other compensation or adjustments to salary such as bonuses, incentives, commissions, merit increases, locality pay or overtime; additional data on factors used to determine employee compensation, such as education, past experience, duty location, performance ratings, department or function, and salary level/band/range/grade; and documentation and policies related to compensation practices, particularly those that explain the factors and reasoning used to determine compensation, plus data falling into 38 additional categories including “any other factors related to compensation.”

Importantly, the ALJ stated that the agency’s request for information is akin to an administrative subpoena. Under the Fourth Amendment, such subpoenas must not be unreasonable. The judge held that for purposes of an OFCCP compliance evaluation, reasonableness requires that the data sought be “sufficiently limited in scope, relevant in purpose, and specific in directive so that compliance will not be unreasonably burdensome.”

In evaluating the reasonableness of the OFCCP’s demands, the judge did not limit his analysis to whether such a request was unduly burdensome on a company as large as Google but rather whether the size and scope of the federal contract warranted such a burden.  The ALJ noted that the GSA has paid Google $600,000 on its contract in two and one-half years. Google contended that compliance with the government’s request would cost over $1 million. “If Google is correct and if OFCCP is entitled to an order requiring Google to comply with the full extent of its demands, it begins to appear that the GSA contract had a poison pill that would rob Google of the benefits of the contract: namely, compliance with OFCCP’s demands will far exceed all of Google’s gross revenue under the contract.”

The judge stated that OFCCP’s request that Google supply this extensive information for a second snapshot date (it had already provided information for a different snapshot date) required the agency to make some showing that the request is not unduly burdensome. The judge noted that if “GSA paid Google $600 million on this contract, not $600,000, it would be a different analysis, but that is not the history of this contract.” Further, the judge held that the request that Google add to the database “any other factors related to compensation” was insufficiently specific. “OFCCP must determine what information it wants and describe it with sufficient specificity for [Google] to know what it must do to comply. … Google is not required to anticipate what OFCCP might someday conclude is ‘related to compensation’ and therefore should have been produced.”

Employers’ Bottom Line

While OFCCP has broad discretion in determining the scope of a compliance review, this decision indicates that discretion is not unlimited. Additionally, this decision presents a strong argument that the reasonableness of an information request should be evaluated in the context of the federal contract, not the company’s overall revenue.

This is a welcomed decision for the contractor community and will hopefully put pressure on the OFCCP to evaluate the relevance and necessity of what has become a pattern of extensive “Requests for Additional Information.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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