December 10, 2019: Federal Court Orders OFCCP to Disclose EEO-1 Reports Belonging to 20 Federal Government Contractors
Ho-Hum. Entirely predictable. Federal Government contractors tried unsuccessfully in EVERY case to resist disclosure of EEO-1 Survey reports (Component 1 = race, sex, and ethnicity reporting) in numerous cases in the late 1970s. These cases erupted when the Carter Administration OFCCP started releasing EEO-1 Survey reports wholesale to FOIA requestors, especially from the Press, unions, academic researchers and across-the-street competitors. This “catch and release” program of the Carter Administration OFCCP caused many federal contractors to then go into the federal courts seeking injunctions to stop the agency’s threatened release pursuant to the FOIA and became known as so-called “reverse Freedom of Information Act” cases.
(The results in the courts were different, however, as to FOIA requests for Affirmative Action Plans for Minorities and Women. Indeed, John Fox successfully tried several cases in the federal courts enjoining OFCCP from releasing the AAPs for Standard Oil of Ohio and Indiana (now Chevron), Vistron, Pan American Airways, and the Firestone Tire & Rubber Company, among others, because he was able to show that competitive harm could ensue, were disclosure to occur. No company in the 1970s was ever able to prove, however, that EEO-1 reports were “commercial” or “financial” in nature, a foundation requirement of proof to resist disclosure. Fox did not even try since he observed major law firms in the courts around him losing every one of those battles to the open guffaws of respected federal judges. Proving that the EEO-1 reports were “commercial or financial” documents did not pass the “laugh test,” although some companies fought the battle, they knew they would lose simply to delay access to the information to the Press since “old news is not news.” You just cannot prove, however, at-the-end-of-the-day that EEO-1 Component 1 reports are “commercial” or “financial” information.)
The new case is The Center for Investigative Reporting, et al v. U.S. Department of Labor, Case No. 4:19-cv 01843-KAW federal District Court for the Northern District of California, decided December 10, 2019.
This case moved quickly through the courts, as FOIA cases tend to do since only legal issues (in this case, under Exemption 4 to the FOIA) are typically at-issue. An April 5, 2019 Complaint to the Court resulted in a decision only nine months and five days later.
The case is important as to what it might portend for OFCCP’s release of EEO-1 COMPONENT 2 “hours worked” and “pay data,” should OFCCP take those data into its possession.
WHAT HAPPENED?
A reporter for the Center for Investigative Reporting (CIR) submitted a FOIA request to the U.S. Department of Labor for 2016 EEO-1 (Component 1 = race, sex, and ethnic data) Consolidated Reports for 55 companies. Here is how the CIR reports its case:
“The agency acknowledged receipt of the request and provided an interim response. However, the agency subsequently told CIR that it was delaying its response until the Supreme Court ruled in FMI v. Argus Leader Media, dealing with the standard for determining competitive harm under Exemption 4 (confidential business information). CIR filed an administrative appeal, but after hearing nothing further from the agency, CIR filed suit.”
The EEO-1 reports for only twenty companies were at-issue, nonetheless, in CIR’s court Complaint since only 36 of the companies of interest to CIR were federal Government contractors subject to OFCCP’s jurisdiction, CIR withdrew the name of one company, and fifteen federal Government contractors agreed to the release of their data. The remaining 20 companies objected to disclosure (which objecting companies must do pursuant to the Department of Labor’s Rules (not OFCCP’s Rules): see 29 CFR Section 70) after OFCCP sent two rounds of letters alerting the companies to CIR’s FOIA request and requesting their positions on disclosure. Then, in a unique turn of events as FOIA requests for EEO-1 data go over the last four decades, OFCCP—as the custodian of the EEO-1 reports for these twenty companies—surprisingly supported the EEO-1 filers and withheld release of their EEO-1 reports, and thus provoked CIR’s FOIA Complaint.
THE LEGAL ISSUES
First, the FOIA REQUIRES the disclosure of all documents in the possession of all federal agencies in response to a request, UNLESS one or more of nine exemptions from required disclosure set out in the FOIA attach, AND the federal agency exercises its discretion to invoke one or more of the exemptions to allow it to NOT DISCLOSE.
Second, the only even remotely likely applicable exemption for EEO-1 data would be Exemption 4 to the FOIA. Exemption 4 to the FOIA allows a federal agency to resist otherwise mandatory disclosure of “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” This exemption thus has two parts: “trade secrets” (not applicable to EEO-1 reports) and “commercial” or “financial” information. OFCCP put all of its chips on the “commercial” language and argued that EEO-1 Component 1 Survey reports was “commercial” information.
HERE’S WHAT THE JUDGE RULED:
“At the hearing, the Court asked the Government (OFCCP) how the [EEO-1 Component 1] demographic information was commercial, and the Government argued that the information would reveal each submitting company’s organizational chart, corporate structure, and how it allocates resources. As discussed above, it is impossible to discern a corporation’s structure given the EEO-1s general job categories, and the furnished information is companywide rather than by department.
Accordingly, in light of the absence of information pertaining to specific positions or departments, the Court finds that the Government has failed to make a showing that the demographic information contained in the EEO-1 reports is commercial. As a result, the Government was not justified in applying Exemption 4 to the EEO-1 reports, and they must be produced unredacted.”
It appears OFCCP either confused EEO-1 reports with the Workforce Analysis of AAPs for Minorities and Women or tried to inappropriately stretch the description of EEO-1 reports into the descriptions of commercial information the federal Courts had previously applied to AAPs for Minorities and Women and had found to fall within the ambit of Exemption 4 and had protected from disclosure. OFCCP’s argument reminds us of Alice in Lewis Carroll’s “Through the Looking Glass”:
“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.” “The question is,” said Alice, “whether you can make words mean so many different things.”
WHATEVER DOES THE CIR CASE DECISION FORETELL FOR EEO-1 COMPONENT 2 DATA RELEASE?
Answer: Caution; Care. But it should be ok.
OFCCP has now realized that forced disclosure of those EEO-1 reports in its possession is a potent concern and has intelligently positioned itself in three different ways against a future FOIA request for EEO-1 Component 2 data.
[NOTE: The EEOC does not face this concern since Section 709(e) of Title VII [42 USC Section 2000e-8(e)] makes it a civil and criminal offense for an EEOC employee to release to the “public” any information or documents the Commission receives in the course of its mission. (The federal courts have interpreted the word “public” to NOT INCLUDE Charging Parties and Respondent Employers, which may thus receive each other’s Charge and Statement of Position)].
First, OFCCP has agreed NOT to take possession of the Component 2 data from the EEOC, since it, like the career and political appointee employees at the EEOC, realize they are data useless to the missions of the EEOC and the OFCCP…political chaff chummed in an earlier administration…but now a troublesome legacy, like toxic waste, waiting to be uncovered.
Second, the OFCCP was very careful in the CIR litigation to respond to the CIR as to ONLY those covered federal Government contractors “subject to OFCCP’s jurisdiction.” This is one step away from a related argument at OFCCP’s disposal as to why it need not disclose Component 2 data: that while OFCCP has jurisdiction over many companies which filed Component 2 data, OFCCP lacks jurisdiction over those companies to compel Component 2 Survey reports (since OFCCP did NOT join the EEOC in its “Information Notice” announcing the requirement of “employers” subject to Title VII jurisdiction and employing 100 or more employees to file the Component 2 “hours worked” and “pay data” reports).
Third, if OFCCP were to obtain the Component 2 data pursuant to its 2011 Memorandum of Understanding (MOU) with the EEOC permitting it to share documents between agencies (perhaps in a Democrat Administration following the Trump Administration in a year or 5 years), OFCCP would step into the shoes of the EEOC’s restrictions on disclosure of data the EEOC has obtained pursuant to its legal authority. See the first sentence of para 5 of the MOU which would transmute Section 709(e)’s disclosure prohibitions to OFCCP’s exercise of its authority under Executive Order 11246: “When EEOC provides information to OFCCP, the confidentiality requirements of sections 706(b) and 709(e) of Title VII, apply to that information.”
NOTE: So, why didn’t this argument offer itself in the CIR litigation? Answer: Because the OFCCP obtains EEO-1 Component 1 Survey reports independently of the EEOC pursuant to OFCCP’s Rule at 41 CFR Section 60-1.7…but note that 60-1.7 lacks any Component 2 requirement and thus OFCCP has no way, independently of the EEOC, to compel any company to file Component 2 data. This is not controversial. The OFCCP and EEOC agree. Also see the second sentence of para 5 of the MOU: “When OFCCP receives the same information from a source independent of EEOC, the preceding sentence [i.e. sentence 1 of para 5] does not preclude disclosure of the information received from the independent source.”
Finally, giving company lawyers in future Component 2 litigation a chance to factually distinguish her decision as applicable to only EEO-1 Component 1 Survey reports, Judge Westmore, writing in the CIR case decision, specifically noted that the EEO-1 data at issue before her did NOT include salary information:
“Here, the EEO-1 reports require federal contractors to furnish the composition of the workforce broken down by gender, race/ethnicity, and general job category. (citation omitted) There is no salary information, sales figures, departmental staffing levels, or other identifying information in these reports. Rather, the diversity reports required merely disclose the workforce composition to ensure compliance with Executive Order 11246, which prohibits employment discrimination by federal contractors.”