773 F.3d 257
D.C. Cir.2014Background
- Rehabilitation Act §503 requires government contracts >$10,000 to take affirmative action to employ and advance qualified individuals with disabilities.
- Pre-2014 OFCCP regulations required contractors to maintain affirmative action programs and to invite job-offer recipients to indicate coverage under the Act.
- In 2013 OFCCP Final Rule added two major changes: (i) extend the invitation to all job applicants and require data analysis; (ii) introduce a 7% utilization goal for individuals with disabilities.
- ABC, a trade association representing federal contractors, challenged the Final Rule as beyond OFCCP’s authority and arbitrary and capricious; the district court upheld the Rule.
- The D.C. Circuit reviews under Chevron two-step framework; upholds Final Rule as a reasonable construction of §503 and not arbitrary and capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Final Rule exceeds OFCCP authority under §503 | ABC argues 'qualified' limits action to those offered jobs. | OFCCP argues 'qualified' describes beneficiaries; data collection and goals advance employment of qualified individuals. | Within OFCCP authority |
| Chevron step one: does statute unambiguously foreclose OFCCP’s approach | ABC claims statute unambiguously limits action to pre-offer data or no data collection. | OFCCP contends statute allows broad action to promote employment of qualified individuals. | Statute not unambiguous; agency interpretation permissible |
| Whether data collection from all applicants and utilization goal are arbitrary and capricious | Data from applicants is irrelevant to post-offer qualifications and goals lack justification. | Data enables monitoring, tailoring outreach, and the goal targets disparities. | Rational connection; not arbitrary and capricious |
| Whether construction industry exemption is warranted | Industry-specific burdens and case-by-case hiring in construction justify exemption. | No exemption; rule allows case-by-case hiring and exemptions already exist for small contractors. | No exemption required |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (U.S. 1984) (establishes two-step framework for reviewing agency interpretations)
- Fox Television Stations, Inc. v. Clinton, 556 U.S. 502 (U.S. 2009) (requires reasoned explanation when changing policy based on conflicting facts)
- Allen v. Heckler, 780 F.2d 64 (D.C. Cir. 1985) (agency need not show discriminatory status quo in every case)
- WorldCom, Inc. v. FCC, 238 F.3d 449 (D.C. Cir. 2001) (agency need not identify optimal threshold with pinpoint precision; rational connection suffices)
- Morton Salt Co. v. United States, 338 U.S. 632 (U.S. 1950) (description of agency deference and statutory interpretation principles)
- Motor Vehicle Mfrs. Ass'n of United States, Inc. v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (U.S. 1983) (requires rational basis and articulation of the connection between facts and decision)
- Village of Barrington, Illinois v. Surface Transportation Board, 636 F.3d 650 (D.C. Cir. 2011) (administrative agency interpretation not automatically foreclosed by silence)