Frito-Lay, Inc. v. U.S. Dep't of Labor, No. 3:12–cv–1747–B–BN.

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
Writing for the CourtDAVID L. HORAN, United States Magistrate Judge.
Citation20 F.Supp.3d 548
PartiesFRITO–LAY, INC., Plaintiff, v. UNITED STATES DEPARTMENT OF LABOR, et al., Defendants.
Decision Date11 February 2014
Docket NumberNo. 3:12–cv–1747–B–BN.

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FRITO–LAY, INC., Plaintiff

No. 3:12–cv–1747–B–BN.

United States District Court, N.D. Texas, Dallas Division.

Signed Feb. 11, 2014.

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Dan Hartsfield, Karen E. Griffin, Talley Ray Parker, Jackson Lewis LLP, Dallas, TX, for Plaintiff.

John Kenneth Theis, U.S. Department of Justice, Washington, DC, for Defendants.


DAVID L. HORAN, United States Magistrate Judge.

This action has been referred to the United States magistrate judge for pretrial management pursuant to 28 U.S.C. § 636(b) and an order of reference. Pending before the Court are Defendants' Motion to Dismiss, or in the alternative, for Summary Judgment [Dkt. No. 42], Plaintiff's Motion for Summary Judgment on Count Seven: the Final Order is not Supported by Substantial Evidence [Dkt. No. 58], and Defendants' Motion for Voluntary Remand [Dkt. No. 71]. For the reasons stated herein, Defendants' Motion for Voluntary Remand should be granted, the Final Order should be remanded for reconsideration in accordance with these findings, conclusions, and recommendation, and the pending Motions to Dismiss and for Summary Judgment should be denied without prejudice as moot.


Plaintiff Frito–Lay, Inc. (“Plaintiff” or “Frito–Lay”) is a federal contractor. See Dkt. No. 32 at 4 (¶ 12). As such, it is subject to Executive Order (“E.O.”) 11246 and cannot “discriminate against any employee or applicant for employment” and must “take affirmative action to ensure that applicants are employed” without regard to any discriminatory characteristics. E.O. 11246, § 202(1). In furtherance of this effort, the Department of Labor (“DOL”), which is responsible for implementing E.O. 11246, see id. § 201, promulgated

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regulations under which its Office of Federal Contract Compliance (“OFCCP”) enforces compliance, see 41 C.F.R. ch. 60. Under the regulations and E.O. 11246, Frito–Lay, as a government contractor, is required to provide OFCCP with access to its books, records, and accounts “for purposes of investigation to ascertain compliance with such rules, regulations, and orders.” 41 C.F.R. § 60–1.4(a)(5) ; see also E.O. 11246, § 202(5).

On July 13, 2007, OFCCP initiated a compliance review of Frito–Lay's Dallas Baked facility via a “Scheduling Letter.” See Administrative Record [Dkt. No. 17] (“AR”) at 94–98. In the letter, OFCCP asked Frito–Lay to provide data relating to its hiring practices for January 1, 2006 through June 30, 2007, and Frito–Lay complied. See id. at 97–98; Dkt. No. 32 at 9 (¶ 31). After this initial request, OFCCP requested additional data, going back to July 13, 2005, and for the period of July 13, 2007 through December 31, 2007, and Frito–Lay complied with the request. See AR at 20, 167, 260–61; Dkt. No. 32 at 9 (¶ 32).

Upon analyzing the data it received, OFCCP claimed to find a disparity in the hiring rates of females as compared to males, and, on that basis, on November 10, 2009, OFCCP requested additional post-Scheduling Letter data (“2008 and 2009 data”). See AR at 6. Frito–Lay did not comply with this second request. Id. at 22–23. OFCCP claimed that Frito–Lay's refusal to provide the 2008 and 2009 data violated E.O. 11246 and the regulations promulgated pursuant to that order as well as Frito–Lay's contractual obligations to the federal government. See id. at 7.

OFCCP brought an Administrative Complaint against Frito–Lay, seeking an order that Frito–Lay be required to provide the requested information. See id. at 5–10. In its Administrative Complaint, OFCCP described the disparity that prompted the data request as follows:

Relying on the information [Frito–Lay] provided, OFCCP conducted its initial desk audit. The initial analysis of hiring at the Dallas Baked facility for full-time entry level Warehouse/Material Handler positions (“Warehouse”) for the period of June 13, 2006 through December 31, 2007 showed a disparity in the hiring rates of females as compared to males that was statistically significant at 3.26 standard deviations with a shortfall of 9 females.

Id. at 7.

An Administrative Law Judge recommended that a decision be entered in Frito-Lay's favor and that the Administrative Complaint be dismissed. See id. at 174. On appeal, the Administrative Review Board (“ARB”) disagreed and ruled that Frito–Lay should produce the 2008 and 2009 data. Relying, at least in part, on the representation found in the Administrative Complaint related to the disparity and, by extension, the initial analysis, the ARB concluded that:

We conclude that OFCCP has regulatory authority to request the 2008 and 2009 AAP data in furtherance of its 2007 Desk Audit. First, OFCCP was pursuing a concern about a statistically significant disparity in hiring women, specifically finding a ‘disparity in hiring rates of females as compared to males that was statistically significant at 3.26 standard deviations ...’ [citing Administrative Complaint, ¶ 12]. A statistical showing of two standard deviations has long been accepted as significant in adverse impact analysis.

AR at 353.

Frito–Lay seeks review of this decision in federal court. Defendants filed a motion to dismiss or, in the alternative, for

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summary judgment based on the Administrative Record. See Dkt. No. 42; Dkt. No. 45–1. Plaintiff then filed a motion for leave to obtain discovery, which this Court granted in part. See Dkt. No. 52; Dkt. No. 57. Once this Court ruled on the discovery motion, the parties resumed briefing on Defendants' motion to dismiss, and Plaintiff filed its own motion for summary judgment. See Dkt. No. 58. Shortly after Plaintiff filed its motion for summary judgment, Defendants informed Plaintiff, and the Court, of their intention to seek limited remand. See Dkt. No. 61.

It appears that Defendants have reviewed the analysis cited in the Administrative Complaint and discovered potential errors in their analysis. More particularly, Defendants admit that, “[t]hough the Administrative Complaint indicated that the analysis showed a disparity in the hiring rates of females as compared to males at 3.26 standard deviations for ‘full-time’ positions, that figure actually applied to a disparity at that level of standard deviation for both full-time and part-time positions.” Dkt. No. 72 at 10; Dkt. No. 72–1 at 4. Plaintiff identified this error in its motion for summary judgment. See Dkt. No. 59 at 26. Plaintiff also identified other alleged errors in the initial analysis, including the scope of the analysis—it represented two warehouses, not one as claimed—and the job titles—both material handlers and packers were covered. See id. at 12. Plaintiff also asserts that Defendants miscounted the total number of applicants, the number of male and female applicants, and the number of new hires for the full-time material handler position at the Dallas Baked Snack facility. See id. at 13. Both parties, then, agree that an error exists, see Dkt. No. 72 at 11, but Plaintiff contends that the scope of the error is larger than Defendants, see Dkt. No. 59 at 12–15.

Defendants argue that the Court should not make a ruling on the pending dispositive motions but rather should remand the case to the ARB and allow the ARB to make a re-determination based on a corrected complaint and record. See Dkt. No. 72 at 11. Defendants contend that such a result is both consistent with well-established principles of administrative law and in the interest of judicial economy. See id. Plaintiff responds that the case should not be remanded because Defendants have not stated legally-supportable grounds for remand, that the Final Order should be vacated, that court-ordered remand would be either arbitrary and capricious or futile, and that remand at this stage would be premature. See Dkt. No. 74.

The undersigned will first address whether remand is appropriate and, if necessary, then address the arguments raised in the dispositive motions.

Legal Standards

Courts have long recognized the propriety of voluntarily remanding a challenged agency action without judicial consideration of the merits, with or without admission of agency error. See Carpenters Indus. Council v. Salazar, 734 F.Supp.2d 126, 132 (D.D.C.2010). In fact, the United States Court of Appeals for the Fifth Circuit has acknowledged, without explicitly adopting, the generally accepted belief that, “in the absence of a specific statutory limitation, an administrative agency has the inherent authority to reconsider its decisions.” Macktal v. Chao, 286 F.3d 822, 825–26 (5th Cir.2002) (citations omitted); see also ConocoPhillips Co. v. United States EPA, 612 F.3d 822, 832 (5th Cir.2010) (“Embedded in an agency's power to make a decision is its power to reconsider that decision.”).

When an agency action is under review by a federal court, the agency may take one of five positions. See SKF USA,

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