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Nature of Suit Code: 899
Nature of Suit: Other Statutes - Administrative Procedure Act/Review or Appeal of Agency Decision
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 3, 2014 Decided December 12, 2014

No. 14-5076

ASSOCIATED BUILDERS AND CONTRACTORS, INC.,

APPELLANT

v.

PATRICIA A. SHIU, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:13-cv-01806)

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.

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Before: GARLAND, Chief Judge, TATEL, Circuit Judge, 

and GINSBURG, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: 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.

I.

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 

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“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 

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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) (to be 

codified at 41 C.F.R. pt. 60–741) (“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–

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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 

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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, 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).

II.

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 (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.

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 

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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] and advance[ment] in employment [of] 

qualified individuals.” 29 U.S.C. § 793 (emphasis added).

Undaunted by the statute’s plain language, ABC invokes

other evidence to make its case. Observing that “Congress 

repeatedly amended the Act without expressing any 

disapproval of OFCCP’s implementation of ” the statute, it 

argues that “[b]oth the Supreme Court and this Court have 

repeatedly held that Congressional re-enactment of a statute 

without pertinent change to an agency’s longstanding 

interpretation of it is persuasive evidence that the 

interpretation is the one intended by Congress.” Appellant’s 

Br. 28 (citation and internal quotation marks omitted). 

Although this is certainly true in principle, in this case

OFCCP never issued a limiting “interpretation” that Congress 

could have endorsed via silence. Although the previous 

regulations included neither a pre-job-offer data-collection 

requirement nor a utilization goal, OFCCP never said it 

lacked authority to include such requirements or that it would 

not do so in the future. In other words, although OFFCP did 

not make use of its full panoply of powers with the earlier 

regulations, “powers . . . are not lost by being allowed to lie 

dormant.” Altman v. SEC, 666 F.3d 1322, 1327 (D.C. Cir. 

2011) (quoting United States v. Morton Salt Co., 338 U.S. 

632, 647 (1950)). Indeed, were ABC correct, agencies would 

be unable to strengthen regulations implementing statutes that 

Congress has amended. This is simply not how administrative 

law works.

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ABC grounds its next argument in the Vietnam Era 

Veterans Readjustment Assistance Act (VEVRAA), also 

administered by OFCCP, which expressly requires contractors 

to report data on the veteran status of new hires. According to 

ABC, this “expression of Congressional intent to delegate 

authority to an agency to engage in an activity . . . in very 

similar legislation to the statute at issue, combined with the 

Congressional failure to include such authorization in the 

challenged statute itself, [is] compelling evidence as to 

Congressional intent.” Appellant’s Br. 30. But that situation 

differs from the one we face here. Nothing in VEVRAA's

original language called for data reporting, but OFCCP 

required it nonetheless. Only after OFCCP discontinued the 

requirement did Congress amend VEVRAA with language 

“motivated by Congress’s desire to restore OFCCP’s prior 

practice of requiring similar reports by regulation.” 

Associated Builders & Contractors, 2014 WL 1100779 at *8. 

The VEVRAA amendment thus tells us nothing about the 

issue in this case. 

In a footnote, ABC also offers a Chevron step two

argument, but it is the same as its step one argument. It fails 

for the same reason. 

III.

Turning to ABC’s arbitrary and capricious challenge, we 

must first consider the association’s argument that these 

regulations are subject to heightened review under FCC v. 

Fox Television Stations, Inc., 556 U.S. 502 (2009). There, the 

Supreme Court held that when a change in agency policy 

“rests upon factual findings that contradict those which 

underlay its prior policy . . . a reasoned explanation is needed 

for disregarding facts and circumstances that underlay” the 

prior policy. Fox, 556 U.S. at 515–16. According to ABC, 

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OFCCP has found “that the ACS survey data was somehow 

sufficient” to set a utilization goal, and this conflicts with its 

earlier finding that it had insufficient data to set such a goal. 

Appellant’s Br. 37. This is inaccurate. Prior to the challenged 

rulemaking, OFCCP never found that setting a utilization goal 

was infeasible; indeed, nothing in the administrative record 

suggests that it even considered setting such a goal. In other 

words, no prior factual finding conflicts with the finding 

underlying the challenged Rule, i.e., that the ACS provides a

feasible basis for calculating a utilization goal. Given this, we 

shall proceed in accordance with the normal arbitrary and 

capricious standard. See 5 U.S.C. § 706(2)(A). “The scope of 

review . . . is narrow and a court is not to substitute its 

judgment for that of the agency. Nevertheless, the agency 

must examine the relevant data and articulate a satisfactory 

explanation for its action including a rational connection 

between the facts found and the choice made.” Motor Vehicle 

Manufacturers Association of the United States, Inc. v. State 

Farm Mutual Automobile Insurance Co., 463 U.S. 29, 43 

(1983) (citation and internal quotation marks omitted).

ABC advances several arbitrary and capricious 

challenges. For purposes of our analysis, we have grouped 

them into four categories.

ABC first argues that OFCCP has failed to explain the 

need for the Final Rule. Specifically, “OFCCP does not claim 

that the lack of improvement [in the employment of 

individuals with disabilities] exists among government 

contractors . . . but only that a continuing disparity exists in 

the workforce population as a whole.” Appellant’s Br. 35. But 

OFCCP had no obligation to make such a particularized 

finding. Rather, it was permitted to infer the existence of 

employment barriers from its analysis of the workforce as a 

whole without “a finding in each case that the status quo is 

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discriminatory,” Allen v. Heckler, 780 F.2d 64, 68 (D.C. Cir. 

1985).

Next, ABC challenges the requirement that contractors 

collect data from all job applicants instead of from just those 

offered jobs. According to ABC, although “newly hired 

employees are presumably qualified for the positions to which 

they have been hired,” the “new data collection on mere job 

applicants is meaningless, because there is no way to tell 

whether the applicants measured are qualified or not.” 

Appellant’s Br. 33. If this argument sounds familiar, that’s 

because it reprises the statutory argument we have already 

rejected. As explained above, supra at pp. 5–6, the word 

“qualified” refers to the beneficiaries of affirmative action; it 

does not limit the kind of affirmative action OFCCP can 

require. In a related argument, ABC contends that OFCCP 

failed to explain how the new data collection “will enable 

anyone to better monitor or evaluate contractors’ hiring of 

qualified individuals with disabilities.” Appellant’s Br. 33–34. 

But doing just that, OFCCP explained that “[m]aintaining this 

information will provide meaningful data to assist the 

contractor in evaluating and tailoring its recruitment and 

outreach efforts.” Final Rule at 58,701. Absent such data, it is 

“nearly impossible for the contractor and OFCCP to perform 

even rudimentary evaluations of the availability of individuals 

with disabilities in the workforce, or to make any sort of 

objective, data-based assessments of how effective contractor 

outreach and recruitment efforts have been in attracting 

individuals with disabilities as candidates.” Id. OFCCP has 

more than satisfied its obligation to provide a reasoned 

explanation and to draw a connection between the problem 

(the low workforce participation of individuals with 

disabilities) and the regulatory solution (more refined data 

collection).

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ABC next challenges the utilization goal, pointing out 

that the ACS does “not use the same definition of disabilities 

as the new Rule,” does not break down the data by industry or 

geography, and “could not possibly have surveyed whether 

the disabled workers in question were ‘qualified’ for jobs in 

different industries in any particular percentages.” Appellant’s 

Br. 35–36. Of course, OFCCP knew all of this. As to ABC’s 

first point, OFCCP acknowledged that “[t]he definition of 

disability used by the ACS . . . is clearly not as broad as that 

of the Rehabilitation Act,” Final Rule at 58,703, and, if 

anything, this difference would result in an underestimate of 

the size of the population with disabilities. OFCCP also 

explained that its decision to set a single national goal rested 

on the fact that since “the ACS disability data is based on 

sampling, and because the percentage of that sample who 

identify as having a disability is [small], it cannot be broken 

down into as many job titles, or as many geographic areas as 

the data for race and gender.” Id. at 58,704. What’s more, 

based on the geographic data that OFCCP did have, it 

observed that there was an “almost uniform distribution” of 

individuals with disabilities and explained that “[t]his general 

uniformity is consistent with the use of a single national 

goal.” Id. at 58,704 n. 24.

With respect to ABC’s complaint that the ACS is 

incapable of measuring the number of qualified individuals 

with disabilities in particular industries, we are unsure how 

the survey could do that since job qualifications vary from 

position to position and industry to industry. ABC believes 

this means that the use of any survey data is inappropriate, 

since it could include individuals who are unqualified for 

particular jobs. Of course, there may be fewer individuals 

with disabilities who are qualified to perform certain jobs, just 

as there are fewer individuals without disabilities who are 

qualified to fill some positions because skills are unevenly 

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distributed across the labor force. As mentioned above, 

OFCCP determined that, based upon the ACS data, 5.7 

percent of the civilian labor force has a disability. See supra

p. 5. OFCCP also determined that an additional 1.7 percent of 

the population has a disability and an occupation, but is not 

presently seeking employment. See supra p. 5. It reasoned 

that many people who are working, actively looking for work, 

or identify as having an occupation are qualified to perform at 

least some jobs that might be offered by a federal contractor. 

Final Rule at 58,705–06. Although both ABC and OFCCP 

might prefer a utilization goal that accounts for variations in 

the number of qualified individuals with a disability by 

industry or job type, the agency adequately explained why the 

best available data did not allow it to create a tailored goal 

and why the uniform goal advances its regulatory objective.

See WorldCom, Inc. v. FCC, 238 F.3d 449, 461–62 (D.C. Cir. 

2001) (“[T]he [agency] is not required to identify the optimal 

threshold with pinpoint precision. It is only required to 

identify the standard and explain its relationship to the 

underlying regulatory concerns.”).

ABC also challenges the way in which OFCCP 

calculated the utilization goal. Specifically, it objects to the 

“discouraged worker effect” because, it says, OFCCP 

“rejected without any evidence the likelihood that a 

significant number of such workers were unable to work 

because of the disqualifying nature of their disabilities.” 

Appellant’s Br. 38. But OFCCP knew that the 

underemployment of individuals with disabilities could have 

different causes and concluded “that at least a portion of this 

gap is due to discrimination.” Final Rule at 58,706. 

Furthermore, OFCCP recognized that “[w]hile not perfect, the 

goal will provide a yardstick against which contractors will be 

able to measure the effectiveness of their equal employment 

opportunity efforts.” Id.

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Finally, ABC argues that, for several reasons, OFCCP 

should have exempted the construction industry from the 

Final Rule. Explaining that the industry is “uniquely 

hazardous and physical compared to other industries,” ABC 

insists that “[i]n this environment, decisions to hire and/or 

employ disabled individuals must be made on a case by case 

basis, without regard to statistics, in order to determine the 

ability of each individual to perform the essential functions of 

particular construction jobs.” Appellant’s Br. 40. ABC 

believes the construction industry will find it especially 

difficult to comply with the Final Rule because the fluid and 

transitory nature of its workforce makes it hard to perform 

utilization-goal analysis on a job-group basis. Construction 

contractors, ABC also tells us, have “no experience” with 

job-group analysis because under Executive Order 11246, 

which requires affirmative action in the hiring of women and 

minorities, construction contractors are required to perform 

utilization-goal analysis only on an employer-wide basis. Id.

at 39–40.

None of these arguments demonstrates that OFCCP acted 

arbitrarily and capriciously by failing to exempt the 

construction industry from the Final Rule. For one thing, the 

Final Rule does not prohibit employers from making 

case-by-case hiring decisions based on the qualifications of 

each individual. As OFCCP emphasized, nothing in the Final 

Rule “require[s] a contractor to hire an individual who cannot 

perform the essential functions of [a] job.” Final Rule at 

58,707. ABC, moreover, never explains how the fluidity of 

the construction industry workforce makes job-group analysis 

so burdensome as to require an industry exemption, especially 

given that the Final Rule exempts small contractors from the 

job-group requirement. Id. at 58,709. And ABC’s final 

argument proves too much, as the “no experience” claim

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would doom virtually any regulation that imposes new 

obligations on regulated entities. 

We end as we began by emphasizing that our review of 

an agency’s exercise of its rulemaking authority is narrow. 

Judicial review exists to ensure that agency actions are the 

“product of reasoned decisionmaking.” Fox v. Clinton, 684 

F.3d 67, 75 (D.C. Cir. 2012). Here, ABC points to nothing in

the rulemaking that suggests OFCCP flunked this highly 

deferential standard.

IV.

For the foregoing reasons, we affirm.

So ordered.

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