United Space Alliance, LLC v. Solis, Civil Action 11-746 (RCL)
| Decision Date | 14 November 2011 |
| Docket Number | Civil Action 11-746 (RCL) |
| Parties | UNITED SPACE ALLIANCE, LLC, Plaintiff, v. HILDA L. SOLIS, in her official capacity as United States Secretary of Labor, et al., Defendants. |
| Court | United States District Courts. United States District Court (Columbia) |
This case involves a dispute between the Office of Federal Contract Compliance Programs and United Space Alliance, LLC. OFCCP, an agency within the Department of Labor, is responsible for ensuring that federal contractors comply with their nondiscrimination obligations. United Space, a federal contractor that works in human space operations, refuses to provide OFCCP with information that the agency has requested and that the Department of Labor has now ordered United Space to produce. United Space challenges the lawfulness of that order on the basis of its Fourth Amendment right to be free from unreasonable searches and seizures, the government's obligations under the Administrative Procedure Act, and several other grounds. Before the Court are the government's motion to dismiss the complaint or, in the alternative, for summary judgment [Dkt. # 18], and United Space's cross-motion for summary judgment [Dkt. # 21]. Upon consideration of the motions, the oppositions thereto, and the record of this case, the Court concludes that the government's motion should be granted and United Space's motion denied.
Under Executive Order 11246, federal contractors whose contracts exceed a certain value must agree that they "will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin," and "will furnish all information and reports required by [the executive order] and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to [the contractor's] books, records, and accounts by the contracting agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders." Exec. Order No. 11246, § 202.1 These terms must be included in every government contract that is not expressly exempted from the requirement. Id. § 204. As authorized by the executive order, id. § 401, the Secretary of Labor has delegated her authority and responsibility for enforcing these agreements to the Deputy Assistant Secretary for Federal Contract Compliance, who directs the Office of Federal Contract Compliance Programs. 41 C.F.R. § 60-1.2; see also 74 Fed. Reg. 58,834 (Nov. 13, 2009).
The regulations implementing Executive Order 11246 authorize OFCCP to conduct compliance evaluations of a covered contractor "to determine if the contractor maintains nondiscriminatory hiring and employment practices." 41 C.F.R. § 60-1.20(a). These evaluations may take the form of a "compliance review," which can itself involve a "desk audit" in which OFCCP analyzes contractor-provided data at its own office, an on-site review conducted at thecontractor's establishment, id. § 60-1.20(a)(1)(i)-(ii), "an off-site analysis of information supplied by the contractor or otherwise gathered during or pursuant to the on-site review," id. § 60-1.20(a)(1)(iii), or all three. Id. § 60-1.20(a)(1). When OFCCP has reasonable cause to believe that a contractor has violated the executive order or its implementing regulations, the agency may issue a notice to show cause why enforcement proceedings should not be initiated, id. § 60-1.28, and, after reasonable attempts at conciliation, may refer the matter to the Solicitor of Labor to initiate such proceedings. Id. § 60-1.26(b). Enforcement proceedings are held before an administrative law judge. Id. § 60-1.26(b)(2). Although these proceedings usually allow for normal civil discovery, including interrogatories, depositions, document requests, and requests for admission, id. § 60-30.9-30.11, when a contractor "has refused to give access to or to supply records or other information as required by the equal opportunity clause[,] or has refused to allow an on-site compliance review to be conducted," id. § 60-30.31, the proceeding may be expedited. In expedited enforcement proceedings, discovery is limited to requests for admissions, an exchange of witness lists, and depositions, if good cause is shown by the party seeking the deposition. Id. § 60-30.33. After discovery is completed, an administrative law judge holds a hearing on the record and recommends findings, conclusions, and a decision to the Administrative Review Board of the Department of Labor. Id. § 60-30.35. The parties may submit exceptions to those recommendations. Id. § 60-30.36. After considering the recommendations and any exceptions to them, the Administrative Review Board issues a final administrative order. Id. § 60-30.37. If the Board does not issue a final administrative order within thirty days of the administrative law judge's recommended decision, that recommendation becomes the final administrative order. Id. Failure to comply with a final order exposes the contractor to the cancellation of its current government contracts and debarment from futurecontracts. Id. § 60-30.30.
On August 7, 2009, OFCCP initiated a compliance evaluation of the United Space facility in Cape Canaveral, Florida. AR 1071-75.2 The evaluation began with a desk audit. As relevant to this case, OFCCP requested that United Space submit for its review annualized compensation data broken up by race, gender, and the employees' "salary range, rate, grade, or level." AR 1075. Because these data were the eleventh and final item in a list of OFCCP requests, the parties refer to them as "Item 11 data." United Space submitted the compensation data, AR 1077-94, and OFCCP analyzed them. AR 800-10. This dispute arises from the way in which OFCCP performed that analysis.
First, an OFCCP compliance officer entered the United Space compensation data into a spreadsheet provided by the national office. That spreadsheet contained an algorithm that the national office had developed to compare the earnings of certain groups—here, men and women. As described on the OFCCP website, the algorithm determined whether a certain percentage of the men or women in the United Space workforce worked in job groups in which their gender earned on average a certain percentage less than the other gender. If the pay gaps within job groups negatively affected enough members of either gender by a large enough amount, then the algorithm compared the percentage of women working in a job group in which a pay disparity above the threshold level disfavored women to the percentage of similarly situated men. If that ratio exceeded a certain threshold, the algorithm indicated potential compensation discrimination. AR 1165. The parties refer to this algorithm as the "threshold test."
Applied to the data submitted by United Space, the threshold test did not indicate potential compensation discrimination. AR 805. However, the OFFCP compliance officer found patterns in the data that he believed to be indications of troubling disparities between the pay of men and women. His supervisor, Miguel Rivera, agreed that "it appeared that women were earning less more frequently than men," AR 758-59, and performed a series of additional calculations. The supervisor's calculations revealed that 75.7% of the women in the United Space workforce worked in job groups in which women earned, on average, less than men, while only 17.7% of men worked in job groups in women earned, on average, more. AR 770-71, 777, 1090. The parties often refer to this calculation as the "pattern analysis." Mr. Rivera then eliminated from that calculation any job group with fewer than thirty workers, or fewer than five members of either gender, and found that 76.3% of the remaining women worked in job groups in which women earned, on average, less than men, while only 13.5% of the remaining men worked in job groups in which women earned, on average, more. AR 772-78, 1090. The parties refer to this calculation as the "30-5 test."
Based on these analyses, OFCCP decided to request additional data from United Space. The agency sent a letter to United Space stating that it had found "unexplained differences in average compensation that require further investigation of your company's compensation practices." AR 1095. OFCCP requested that United Space provide more detailed data on its employee compensation. AR 1095-96. United Space responded that, based on its own analysis of the data that it had submitted, it believed that the OFCCP request was unjustified. United Space indicated that it had performed its analysis by referring to the publicly-available description of the threshold test and the "actual audit experiences of many contractors," based on which "it has been widely reported that the specified percentage thresholds" for the thresholdtest "is [sic] 5% average differences, affecting at least 10% of the protected class population, and that the percent protected class affected is three times the percent non-affected class." AR 1097. OFCCP responded by reiterating and slightly altering its data request. AR 1099-1100. The agency also noted that the publicly-available description of the threshold test stated that the thresholds were "not static, but rather . . . subject to change as OFCCP continues to evaluate its targeting methodology." AR 1099 (quoting AR 1165) (internal quotation mark omitted). OFCCP also made clear that it could not endorse any third-party analysis that claimed to replicate an agency analysis. Id. After United Space continued to challenge the basis for OFCCP's second data request, AR 1496-1501, the agency sent a letter noting that it had not received the requested information and scheduling an on-site review of United Space records. AR 1503-06. United Space responded that it would agree to provide additional data in a format different than that requested by OFCCP, would only provide it under certain...
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