Associated Builders & Contractors, Inc. v. Shiu
| Decision Date | 12 December 2014 |
| Docket Number | No. 14–5076.,14–5076. |
| Citation | 773 F.3d 257,30 A.D. Cases 1793 |
| Parties | ASSOCIATED BUILDERS AND CONTRACTORS, INC., Appellant v. Patricia A. SHIU, et al., Appellees. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Maurice Baskin argued the cause and filed the briefs for appellant.
Stephanie R. Marcus, Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Stuart F. Delery, Assistant Attorney General, Ronald C. Machen, Jr., U.S. Attorney, and Marleigh D. Dover, Attorney.
Daniel F. Goldstein was on the brief for amici curiae American Association of People with Disabilities, et al. in support of appellees.
Before: GARLAND, Chief Judge, TATEL, Circuit Judge, and GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
Section 503 of the Rehabilitation Act of 1973 requires that certain government contractors “take affirmative action to employ and advance in employment qualified individuals with disabilities.” Until recently, the Department of Labor's implementing regulations required government contractors to “invite” individuals offered jobs to advise the contractor whether they believed they were covered by the Act. Doubting that the existing regulations were sufficiently advancing the employment of qualified individuals with disabilities, the Department revised the regulations to require contractors to extend this invitation to job applicants, as well as to analyze the resulting data. The revised regulations also adopt a “utilization goal” to serve as a target for the employment of individuals with disabilities. In this case, a trade group representing federal contractors challenges these regulations, arguing that they exceed the Department's statutory authority and are arbitrary and capricious. The district court rejected both challenges, as do we.
Congress enacted the Rehabilitation Act of 1973, 29 U.S.C. § 701, et seq., “to empower individuals with disabilities to maximize employment, economic self-sufficiency, independence, and inclusion and integration into society,” as well as “to ensure that the Federal Government plays a leadership role in promoting the employment of individuals with disabilities.” 29 U.S.C. § 701(b). Section 503 of the Act provides that government contracts for more than $10,000 “shall contain a provision requiring that the party contracting with the United States shall take affirmative action to employ and advance in employment qualified individuals with disabilities.”29 U.S.C. § 793(a). The statute directs the President to implement section 503 through regulations, id., and the President has delegated that authority to the Secretary of Labor, who has in turn delegated it to the Office of Federal Contract Compliance Programs (OFCCP). 41 C.F.R. § 60–1.2.
The regulations in effect prior to the challenged rulemaking required contractors to “prepare and maintain an affirmative action program.” 41 C.F.R. § 60–741.40. Specifically, the regulations required them to ensure that job standards do not improperly exclude individuals with disabilities, to publicize their affirmative-action plan, to engage in steps to recruit qualified individuals with disabilities, and to audit the effectiveness of the program. See Superseded OFCCP Rule on Affirmative Action for Qualified Individuals with Disabilities, 41 C.F.R. §§ 60–741.40 to –.47 (Effective Prior to Mar. 24, 2014). The regulations also required contractors to “invite” individuals offered jobs to inform the contractor if they believed they were covered by the Act. Id.
By 2010, OFCCP had become concerned that the section 503 regulations were not sufficiently advancing the employment of qualified individuals with disabilities. See Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors; Evaluation of Affirmative Action Provisions Under Section 503 of the Rehabilitation Act, as Amended, 75 Fed.Reg. 43,116 (July 23, 2010). OFCCP was especially worried that individuals with disabilities had lower workforce participation rates and higher unemployment rates than those without disabilities. Id. After seeking public comment on how to strengthen the regulations, id., OFCCP issued a Notice of Proposed Rulemaking in December of 2011. See Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Individuals With Disabilities, Notice of Proposed Rulemaking, 76 Fed.Reg. 77,056 (Dec. 9, 2011). In response to hundreds of comments on a variety of issues, OFCCP made some modifications and issued the Final Rule on September 24, 2013. See Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Individuals With Disabilities, Final Rule, 78 Fed.Reg. 58,682, 58,685 (Sept. 24, 2013) () (“Final Rule”).
The Final Rule makes several significant changes, two of which are challenged here. First, it obligates contractors to extend the invitation to self-identify to all job applicants and to analyze the resulting data. This new requirement is implemented by section 741.42(a) of the Final Rule, which requires contractors to invite job applicants to indicate whether they have a disability, 41 C.F.R. § 60–741.42(a), and by section 741.44(k), which requires analysis of the data collected, along with the number of job openings, the total number of applicants, the number of applicants hired, and the number of applicants hired who have disabilities, id. § 60–741.44(k).
Second, section 741.45 of the Final Rule introduces a 7 percent “utilization goal” for the employment of individuals with disabilities. For employers with 100 or fewer employees, the goal applies to the employer's entire workforce, while for employers with more than 100 employees, the goal applies to each job group within the workforce. The goal establishes “a benchmark against which the contractor must measure the representation of individuals” with disabilities. Id. § 60–741.45. “The goal is not a rigid and inflexible quota which must be met” but rather “is intended solely as a tool.” Final Rule at 58,706.
To calculate the utilization goal, OFCCP used data from the American Community Survey (ACS), a detailed view of U.S. households produced by the Census Bureau. See Final Rule at 58,703. OFCCP began by estimating that “5.7% of the civilian labor force has a disability.” Id. at 58,704. (A member of the civilian labor force is either presently working or unemployed and looking for work.) Id. According to OFCCP, this percentage would be higher absent discrimination on the basis of disability. Id. at 58,704 –06. OFCCP therefore compared the percent of the civilian labor force with a disability to the percent of the general population with a disability who identify as having an occupation, from which it derived what it called a “ discouraged worker” effect of 1.7 percent. Id. Adding that figure to 5.7 percent, OFCCP arrived at 7.4 percent, which it rounded down to 7 percent in order to “avoid implying a false level of precision.” Id. at 58,705.
Taken together, these two requirements, OFCCP explained, are “an important means by which the Government can contribute to reducing the employment disparity between those with and without disabilities.” Id. at 58,684. The new provisions “are designed to bring more qualified individuals with disabilities into the Federal contractor workforce and provide them with an equal opportunity to advance in employment.” Id. at 58,685.
Appellant, Associated Builders and Contractors, Inc. (ABC), a “national trade association representing” members from “construction and industry-related firms,” has many members that are government contractors and therefore subject to section 503. Appellant's Br. 15. ABC sued in the United States District Court for the District of Columbia, challenging the Final Rule as both beyond OFCCP's statutory authority and arbitrary and capricious. Id. at 16. Rejecting both arguments, the district court granted summary judgment to OFCCP. Associated Builders & Contractors, Inc. v. Shiu, No. 13–1806, 30 F.Supp.3d 25, 2014 WL 1100779 (D.D.C. Mar. 21, 2014). We review the district court's grant of summary judgment de novo, “according no particular deference to the judgment of the District Court.” Association of Private Sector Colleges and Universities v. Duncan, 681 F.3d 427, 440–41 (D.C.Cir.2012) (citation and internal quotation mark omitted).
Because the Rehabilitation Act vests the executive branch with rulemaking authority, we proceed under the familiar two-step framework of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). In accordance with that decision, we determine first “whether Congress has directly spoken to the precise question at issue,” and “if the statute is silent or ambiguous with respect to the specific issue,” we ask whether the agency's interpretation “is based on a permissible construction of the statute.” Id. at 842–43, 104 S.Ct. 2778.
For ABC “to prevail under Chevron step one, [it] must do more than offer a reasonable or, even the best, interpretation; it must show that the statute unambiguously forecloses” OFCCP's interpretation. Village of Barrington, Illinois v. Surface Transportation Board, 636 F.3d 650, 661 (D.C.Cir.2011). ABC argues that the word “qualified” as used in section 503—“take affirmative action to employ and advance in employment qualified individuals with disabilities”—expressly limits affirmative action to individuals already offered jobs. But that word does no such thing. It does not modify “affirmative action,” nor does anything in section 503 limit “affirmative action” to those offered jobs. Rather, the word “qualified” describes the statute's beneficiaries—“qualified individuals with disabilities.” In fact, the provisions of the final rule ABC challenges are all expressly designed to promote the “employ[ment...
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