On October 27, 2011, United Space Alliance, LLC (“USA”), the government’s primary contractor for manned space missions, argued to Judge Royce C. Lamberth, the Chief Judge for the Federal District Court for the District of Columbia, that the Office of Federal Contract Compliance Programs’ (“OFCCP’s”) request for compensation data for periods beyond its initial scheduling letter violated the Administrative Procedures Act (“APA”) and the Fourth Amendment.
As we reported in February of this year, a Department of Labor Administrative Law Judge (“ALJ”) held that the OFCCP could collect supplemental compensation information beyond the period covered by the initial scheduling letter during a desk audit. After the ALJ’s decision became final, USA appealed the ruling to the Federal District Court for the District of Columbia requesting a stay of the ALJ’s order. USA argued that the order violates the Fourth Amendment and the APA. Both parties have filed cross-motions for summary judgment.
During oral argument on the motions, USA’s counsel argued that OFCCP’s request for compensation information amounted to an improper prosecution of USA because OFCCP lacked a reasonable belief that there were systemic pay disparities given that OFCCP did not find any statistically significant differences in the compensation of protected and non-protected classes under its “threshold test.” USA explained that without indicators of discrimination, the OFCCP’s demand for more detailed compensation data from USA was arbitrary and capricious.
USA further argued that OFCCP violated the Fourth Amendment by exceeding its own internal agency procedures for reviewing contractors’ records. The OFCCP countered by claiming that OFCCP has discretion to deviate from its internal, nonpublic procedures unless it explicitly indicates that it is bound by these standards. Moreover, the OFCCP argued that it did not need “probable cause” to request the documents because it was not pursuing a criminal prosecution. Instead, it argued that it only needs a “reasonable suspicion” that there was pay discrimination in order to request additional records from USA.
Judge Lamberth questioned the OFCCP on the extent of its authority, asking the OFCCP whether there were any constraints on what it could request in an investigation and whether it could make requests out of “pure curiosity.” The OFCCP responded that it could request any documents that were relevant to its investigation of potential discrimination and were within its legal authority.
Judge Lamberth indicated that he expected to issue a prompt ruling on the parties’ motions. This decision may have significant implications on the scope of OFCCP’s authority to gather compensation information during desk audits. But, even if USA prevails, OFCCP might be able to require contractors to produce a substantial amount of compensation information during the desk audit if the current proposed changes to the itemized listing take effect without change. Those proposed changes to the itemized listing are described in more detail in our October 4 entry.