The EEO-1 compensation data appeal: What we know now

By: Robin Shea

May 14, 2019

We know the EEOC has appealed. What does that mean for employers?

As I noted on Friday night, the Office of Management and Budget and the Equal Employment Opportunity Commission appealed the two court orders regarding EEO-1 compensation data reporting.

The government is asking the U.S. Court of Appeals for the District of Columbia Circuit to reverse rulings issued by Judge Tanya Chutkan on March 4 and on April 25.

From what I've been able to tell today, the D.C. Circuit has not yet assigned a docket number to the appeal, so I can't view what's going on there yet, but I should be able to tomorrow or soon afterward.

Meanwhile, here are some FAQs:

What did the court's orders say?

The order issued on March 4 lifted a "stay" (suspension) of the EEO-1 compensation data reporting requirement that had been imposed by the OMB in September 2017.

The EEOC decided in 2016 to require employers to include compensation information by race, sex, and ethnicity, for each of the 12 EEO categories, with their annual EEO-1 reports. The EEOC submitted a proposed form to the (Obama) OMB, which was approved in 2016. In 2017, after the election, the (Trump) OMB stayed the requirement, so it never took effect, and employers were never required to report compensation data. Judge Chutkan's March 4 order said that the stay was not legally justified and directed the EEOC to put the compensation reporting requirement in place.

On April 25, after receiving information from the EEOC about its capacity to collect and handle the information (or the lack thereof), Judge Chutkan issued another order with more specific directions. She gave the EEOC until September 30 to receive the compensation information for calendar year 2018, plus either calendar year 2017 or 2019. If the EEOC chose 2017, the compensation data would be due by the September 30, 2019, deadline. If the EEOC chose 2019, the compensation data for that year would not be due until 2020, although the 2018 data would still be due on or before September 30, 2019.

The April 25 order also included publication requirements. The EEOC was required to post on its website the deadline for submission of 2018 data no later than April 29 and to submit essentially the same information for publication in the Federal Register. Judge Chutkan also directed the EEOC to make a decision regarding whether it would require 2017 data or 2019 data no later than May 3, and to post something on its website to that effect by the same date. The same information would have to be submitted for publication in the Federal Register.

Finally, the EEO-1 compensation data reporting requirement -- having been originally issued in 2016 -- was due to expire on September 30, 2019. Judge Chutkan's order said that the OMB stay "tolled" (paused) the time from running, meaning that the requirement would not expire until April 5, 2021.

The EEOC has met all of the deadlines set by the court, and, as we know, selected 2017 as the other year. That means all compensation data for 2017 and 2018 is due on September 30.

Why is the government appealing?

All we really know at this point is that the government respectfully disagrees with Judge Chutkan's orders and would like to have a higher court reverse them. The government won't be required to provide specific reasons until later.

That said, we can speculate that the government will argue, among other things,

  • That the EEOC does not have the capacity to collect the information (it is having to use an outside contractor affiliated with the University of Chicago).
  • That the compensation data requested will not be helpful in determining which employers are engaging in pay discrimination.
  • Given the fact that the information will not be helpful to the agency, that the cost of collecting compensation data is not justified.
  • That the requirement will burden the EEOC and employers without producing any countervailing benefit.

Does the appeal mean that I can quit trying to collect compensation data?

No! The EEOC has specifically said that the appeal has no impact on the September 30 compensation reporting deadline. The following comes straight from the EEOC's website:

On May 3, 2019, the Department of Justice filed a Notice of Appeal in National Women's Law CenterThe filing of this Notice of Appeal does not stay the district court orders or alter EEO-1 filers' obligations to submit Component 2 data. EEO-1 filers should begin preparing to submit Component 2 data as described above.

(Red font added by me. For emphasis.)

But shouldn't the appeal mean that the "stayed stay is stayed"?

No. The appeal has no immediate impact on Judge Chutkan's orders. As the EEOC correctly says, those orders are still in effect. If the government wants to stay Judge Chutkan's orders until the D.C. Circuit has a chance to rule in the appeal, it would have to file a motion with the D.C. Circuit. The plaintiffs would no doubt vigorously oppose such a motion. But IF the motion were filed, and IF the D.C. Circuit granted it (no telling when that would be), then and only then could employers stand down.

Too many "ifs." Prudent employers should prepare for the worst and continue gathering their data.

Does any of this have an effect on my "regular" EEO-1 data?

No. This applies only to the compensation data. Your regular EEO-1 data is due May 31, only 25 short days from today.

How do you think the D.C. Circuit will ultimately rule?

It is impossible to say. The case will be heard by a three-judge panel. That panel could consist of Trump/Bush/Reagan appointees, in which case I'd feel pretty good about the government's chances. Or the panel could consist of Obama/Clinton/Carter appointees, in which case I'd feel pretty good about the plaintiffs' chances. Or the panel could be a mix of Republican and Democrat appointees, in which case -- who knows?

The only thing I feel confident in predicting is that Judge Neomi Rao, a recent Trump appointee to the D.C. Circuit, will have to recuse herself from the case because she was the OMB Administrator who issued in the stay in 2017.

So don't stop gathering that data!

Are there any other "politics" involved in this case?

Yes. President Trump's nominee for EEOC chair, Janet Dhillon, is expected to be confirmed by the Senate this week. That will give the EEOC its quorum back, and presumably put the pay data opponents in the majority. 

Acting EEOC Chair Victoria Lipnic, a Republican Obama appointee, voted against the pay data requirement back in 2016. Ms. Dhillon has said that she believed the compensation data reporting requirement should have been subject to more public debate before it was adopted. Here's what I wrote in 2017 about Ms. Dhillon and the pay data proposal:

Ms. Dhillon said that she thought the agency’s EEO-1 pay data collection requirement — now on hold — should have been subjected to more rigorous public comment. She would consult with career agency employees and try to determine “what additional data the agency needs to improve the agency’s enforcement of equal pay laws.”

The only other EEOC commissioner is Obama appointee Charlotte Burrows (D), who I assume favors the pay data proposal.

I think it's possible that, once Ms. Dhillon takes office, a majority of the Commissioners may support a motion to stay the requirement while the government appeals Judge Chutkan's orders.

But the issue is in the hands of the D.C. Circuit, so don't stop gathering that data!

(Have I told you lately that you shouldn't stop gathering that data?)

 

Robin Shea is a Partner with the law firm of Constangy, Brooks, Smith & Prophete, LLP and has more than 20 years' experience in employment litigation, including Title VII and the Age Discrimination in Employment Act, the Americans with Disabilities Act (including the Amendments Act), the Genetic Information Non-Discrimination Act, the Equal Pay Act, and the Family and Medical Leave Act; and class and collective actions under the Fair Labor Standards Act and state wage-hour laws; defense of audits by the Office of Federal Contract Compliance Programs; and labor relations. She conducts training for human resources professionals, management, and employees on a wide variety of topics.