Tuesday September 22, 2020: OFCCP Loses Oracle Case At Trial
The case is OFCCP v. Oracle, Case # 2017-OFC-00006.
USDOL Office of Administrative Law Judges (OALJ) Judge Richard M. Clark handed down a 280-page Recommended Decision and Order in a crushing defeat of OFCCP’s ill-fated three-year odyssey to prove that Oracle allegedly engaged in:
- intentional compensation discrimination (wage rate, salary, and total compensation) against female employees at its headquarters offices in Redwood City, California in the Product Development, Information Technology, and Support job functions or against Asian and African American employees in its Product Development job function; and
- unlawful discrimination in assignment and job classification (i.e. “steering”) against female employees at its headquarters offices in Redwood City, California in the Product Development, Information Technology, and Support job functions or against Asian and African American employees in its Product Development job function; and
- a policy or practice at its headquarters facility relying on prior pay in salary setting and also allegedly having a policy or practice which had an “adverse impact” on women in the Product Development, Information Technology, and Support job functions and against Asian and African American employees in its Product Development job function.
This was a series of statistical cases none of which raised individual claims. As such, OFCCP’s statistical cases then necessarily relied almost exclusively on its outside expert, Dr. Janice Madden. Judge Clark faulted her statistical analyses as to each of OFCCP’s three claims.
As to the first claim (compensation), Judge Clark found:
“Dr. Madden’s analysis is highly aggregated and not attuned to potentially important differences between groups within job functions. Dr. Madden’s analysis does not similarly situate employees with respect to the work performed.”
* * * *
“Dr. Madden’s measures of experience and education are very rough estimates and poorly capture the sort of education and experience that matters for compensation at Oracle. Dr. Madden’s analysis relies largely on assumption about aggregation and the view that it is unnecessary to control for variances between employees at a group level, but this assumes away the important question about potential explanations for the raw disparities and thus undermines the inferential power of the model.”
As to the second claim (assignment and steering), Judge Clark found:
“Dr. Madden’s model is poorly constructed to draw inferences about potential steering since it does not attempt to study steering and does not account for the major factor influencing the job the employee holds. The statistical evidence that might support an inference to discrimination could not support an inference to the systemic discrimination alleged by OFCCP.”
As to the third claim (adverse impact in compensation), Judge Clark found:
“Oracle did not have a policy or practice at its headquarters facility during the relevant time period of relying on prior pay in salary setting and OFCCP did not show a disparate impact attributable to such a policy on female employees…or on Asian employees… .”
* * * *
“OFCCP’s disparate impact claim must be denied because it did not establish the relevant policy or practice or causation. In addition, the underlying disparities that would reflect the disparate impact are based on Dr. Madden’s analysis and given the deficiencies in these models, the record could not support this claim.”
Judge Clark ended his opinion with a simple order recommending that OFCCP’s Second Amended Complaint be dismissed with prejudice. NOTE: Administrative Law Judges like Judge Clark issue a “Recommended Decision and Order.” If neither party timely appeals, the recommended decision and Order automatically convert into a Final Decision and Final Order. If OFCCP appeals to the ARB (see below), the Recommended Decision and Order is held in suspense awaiting a Final Decision and Final Order from the ARB.
OFCCP may appeal to the court of last administrative resort within the USDOL known as the Administrative Review Board (“ARB”). OFCCP’s Rules give OFCCP 14 calendar days from the date of receipt of the Recommended Decision and Order to file what OFCCP’s Rules call “Exceptions” (i.e. an appeal) of the Recommended Decision and Order. Typically, the parties would graciously agree to extend the other side’s time to consider an appeal since 14 days is TYPICALLY preposterously short a period of time to consider an appeal of complex cases like OFCCP brings these days and which these 1990-era Rules NEVER envisioned. Given the rancor between both the parties and their lawyers in this case, however, it is most likely that OFCCP will need to file a Motion with the ARB to extend the time to determine whether OFCCP wishes to file an appeal, should it wish extra time to consider its next move.
On the other hand, this was a case which OFCCP should have never filed and it is very easy to discern that the trial record supports only a (very) low likelihood of success on appeal for OFCCP. Also, Judge Clark left OFCCP little to challenge in his Recommended Decision and Order. This is especially true since Judge Clark rested his opinion on utterly failed statistical models which OFCCP’s expert advanced but which failed to follow and analyze the pay and assignment systems Oracle used in fact. Judge Clark’s Recommended Decision and Order also catalogues an utter lack of proof of critical and necessary elements of proof necessary to prove up Title VII compensation and assignment claims. These findings also echo a pattern which has developed in the last several years at OFCCP that it simply does not follow Title VII case law in its audits or litigation cases despite now hollow claims to the contrary.
USDOL might nonetheless feign an appeal as leverage to help persuade Oracle to now voluntarily dismiss Oracle’s unrelated lawsuit against USDOL pending in the federal District Court in Washington D.C. That case challenges USDOL’s creation of the OALJ and the ARB as unlawful administrative law divisions unconstitutional in their creation because the Congress did not delegate legal authority to USDOL to create them. OFCCP would surely have to now view it as a “win” at this point of this three-year saga if it did not appeal in exchange for Oracle’s agreement to voluntarily dismiss its lawsuit against USDOL in the federal District Court. Dismissal of that case, even if it is a long shot for Oracle to win, should be considered a valuable result worth achieving from OFCCP’s point of view because Oracle’s case raises OFCCP enterprise-threatening issues: i.e. no administrative law forum for any of OFCCP’s enforcement programs. As litigators and battle veterans are often wont to say: better to retreat now and live to fight another day.