Court Opinion

ID: 2658353
Source: CourtListenerOpinion
Date Created: 2014-03-28 18:20:22.816227+00
Date Added: 2024-06-11T13:00:53.103380
License: Public Domain

UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF COLUMBIA
______________________________
                               )
ASSOCIATED BUILDERS &          )
CONTRACTORS, INC.,             )
                               )
               Plaintiff,      )
                               )
          v.                   ) Civil Action No. 13-1806 (EGS)
                               )
PATRICIA A. SHIU, et al.,      )
                               )
               Defendants.     )
______________________________)

                       MEMORANDUM OPINION

  Plaintiff, the Associated Builders and Contractors, brings

this lawsuit to challenge a final rule promulgated by the

Department of Labor’s Office of Federal Contract Compliance

Programs (“OFCCP”). See Affirmative Action and Nondiscrimination

Obligations of Contractors and Subcontractors Regarding

Individuals with Disabilities (“Final Rule”), 78 Fed. Reg.

58,682 (Sept. 24, 2013). The Rule, which goes into effect on

March 24, 2014, implements Section 503 of the Rehabilitation

Act, which requires that government contractors “take

affirmative action to employ and advance in employment qualified

individuals with disabilities.” 29 U.S.C. § 793(a). Plaintiff

asks the Court to enjoin portions of the Rule that it alleges:

(1) are contrary to Section 503; (2) are arbitrary and

capricious in violation of 5 U.S.C. § 706; and (3) violate the

Regulatory Flexibility Act, 5 U.S.C. § 601, et seq. Pending
before the Court are the parties’ cross motions for summary

judgment. Upon consideration of the motions, the responses and

replies thereto, the applicable law, and the administrative

record, the Court DENIES plaintiff’s motion and GRANTS

defendants’ cross motion.

I.               Background

        A.                Section 503 of the Rehabilitation Act

        In 1973, Congress enacted the Rehabilitation Act, 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.” Id. § 701(b).

Section 503 applies this policy to government contractors:

                 Any contract in excess of $10,000 entered into by any
                 Federal department or agency for the procurement of
                 personal property and nonpersonal services (including
                 construction) for the United States 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. The provisions of this section
                 shall apply to any subcontract in excess of $10,000
                 entered into by a prime contractor in carrying out any
                 contract for the procurement of personal property and
                 nonpersonal services (including construction) for the
                 United States. The President shall implement the
                 provisions of this section by promulgating regulations
                 within ninety days after September 26, 1973.

Id. § 793(a).1

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
1
                  The President’s authority under Section 503 has been delegated
to OFCCP. See Exec. Order No. 11,758, 39 Fed. Reg. 2075 (Jan.
17, 1974); 41 C.F.R. § 60-1.2.

                                                                                                                2
  The current regulations implementing Section 503, which are

not challenged here, “apply to every Government contractor that

has 50 or more employees and a contract of $50,000 or more.” 41

C.F.R. § 60-741.40(a). All such contractors must “prepare and

maintain an affirmative action program.” Id. § 60-741.40(b).

This program must include, among other things, a review of job

qualification standards that may exclude qualified individuals

with disabilities; procedures for internal and external

publication of the program; steps to engage in outreach and

recruitment of qualified individuals with disabilities; and

regular audits to measure the program’s effectiveness. See id. §

60-741.44. The regulations also require contractors to invite

newly hired employees “to inform the contractor whether the

applicant believes that he or she may be covered by the act and

wishes to benefit under the affirmative action program.” Id. §

60-741.42(a).

  B.   Executive Order 11,246

  Executive Order 11,246 creates affirmative-action obligations

with respect to race and gender. See Exec. Order 11,246, 30 Fed.

Reg. 12319 (Sept. 28, 1965); Exec. Order 11,375, 32 Fed. Reg.

14,303 (Oct. 17, 1967). OFCCP’s regulations implementing this

Order require most contractors to develop formal affirmative-

action programs, 41 C.F.R. § 60-2.10, but construction

contractors need only take various affirmative-action steps. See

                                3
41 C.F.R. pt. 60-4. The primary reason for this distinction is

“the fluid and temporary nature of the construction workforce.”

Office of Federal Contract Compliance Programs, Technical

Assistance Guide for Federal Construction Contractors at 7

(2009), available at http://www.dol.gov/ofccp/TAguides/

consttag.pdf.

  The regulations, nonetheless, impose similar requirements on

all contractors to strive to meet benchmarks for workforce

diversity. Non-construction contractors must group their

workforce by “job group”—jobs with similar duties and wages—and

use these groups to “compar[e] . . . the representation of

minorities and women in its workforce with the estimated

availability of minorities and women qualified to be employed.”

41 C.F.R. § 60-2.12. Construction contractors must group their

workforce by “construction trade” and use those groups to follow

“goals and timetables for minority and female utilization.” Id.

§ 60-4.6; see also id. § 60-4.2(d). Construction contractors are

also required to engage in various affirmative-action steps

enumerated in the regulations. See id. § 60-4.3(a).

  The regulations also require all contractors to collect and

compile data and records related to the gender and race of

employees and job applicants. See, e.g., id. § 60-1.7(a)

(requiring annual filing of reports containing the number of

employees by gender and race); id. § 60-1.12 (requiring

                               4
contractors to keep “[a]ny personnel or employment record” so

that the contractor is “able to identify . . . [t]he gender,

race, and ethnicity of each employee; and . . . [w]here

possible, the gender, race, and ethnicity of each applicant”).

  C.   The Rulemaking Process

  OFCCP became concerned that the regulations implementing

Section 503 have not sufficiently advanced the employment of

qualified individuals with disabilities because “the percentage

of people with disabilities in the labor force in March 2010 was

22.5 compared with 70.2 for persons with no disability” and

“[t]he unemployment rate for those with disabilities was 13.9

percent, compared with 10.1 percent for persons with no

disability.” See Evaluation of Affirmative Action Provisions of

Contractors and Subcontractors Under Section 503 of the

Rehabilitation Act, 75 Fed. Reg. 43,116, 43,117 (July 23, 2010).

Accordingly, in July 2010, it invited input on ways to

strengthen the regulations. See id. Commenters responded “that

quantitative and measurable analyses similar to those for

minorities and women were needed to make affirmative action for

individuals with disabilities ‘more than a paperwork exercise.’”

Affirmative Action and Nondiscrimination Obligations of

Contractors and Subcontractors Regarding Individuals With

Disabilities, 76 Fed. Reg. 77,056, 77,057 (Dec. 9, 2011).

                                5
  Accordingly, OFCCP proposed three major changes to its Section

503 regulations: (1) requiring contractors to gather information

on the disability status of job applicants; (2) requiring

contractors to compile that data and related data on new

employees, along with the total number of job openings, job

applicants, and jobs filled; and (3) establishing a utilization

goal to provide a benchmark against which contractors can

measure the efficacy of their affirmative-action steps. See id.

at 77,062–77,071. After receiving over 400 comments on these

proposals, OFCCP issued its final rule on September 24, 2013.

Final Rule, 78 Fed. Reg. at 58,682. The Rule becomes effective

on March 24, 2014. Id.

  The Rule clarifies that affirmative action “is more than a

paperwork exercise” and “includes measurable objectives,

quantitative analyses, and internal auditing and reporting

systems that measure the contractor’s progress toward achieving

equal employment opportunity for individuals with disabilities.”

Id. at 58,742. The Rule imposes three major requirements:

  Data Collection: Contractors must “invite applicants to inform

the contractor whether the applicant believes that he or she is

an individual with a disability.” Id. This supplements the

contractor’s preexisting obligation to invite new employees to

do the same. See id.

                               6
  Data Analysis: Contractors must document the number of job

applicants and newly hired employees who self-identify as having

a disability, as well as the total number of job openings, job

applicants, and jobs filled. See id. at 58,745.

  Utilization Goal: Contractors must strive to meet a numerical

goal for the employment of qualified individuals with

disabilities. See id. at 58,745–58,746. This goal “is not a

rigid and inflexible quota which must be met”; the point is “to

establish a benchmark against which the contractor must measure

the representation of individuals [with disabilities].” Id. at

58,745. For employers with 100 or fewer employees, the goal is

7% of the employer’s entire workforce. Id. Employers with over

100 employees should strive to have 7% of employees in each job

group—defined as “the same job groups established for

utilization analyses under Executive Order 11246, either in

accordance with 41 CFR part 60-2, or in accordance with 41 CFR

part 60-4, as appropriate”—be individuals with disabilities. Id.

Contractors must evaluate their utilization annually to identify

any problem areas and must “develop and execute action-oriented

programs designed to correct any identified problem areas,” but

“[a] contractor’s determination that it has not attained the

utilization goal . . . does not constitute either a finding or

admission of discrimination . . . .” Id. at 58,746.

  D.   This Lawsuit

                               7
  Associated Builders and Contractors is a trade association

that represents over 19,000 construction-industry firms. See

Burr. Aff. ¶ 1, ECF No. 9 at 41. Many of its members perform

work on government construction contracts and are subject to

Section 503. Id. Many of them will have to comply with the Rule

because they have more than 50 employees. Id. ¶ 2. Plaintiff

claims that the Rule not only harms its members, but also

violates “one of ABC’s core principles . . . to advance and

protect the free enterprise system and open competition in both

public and private procurements in the construction industry.”

Id. ¶ 5.

  Plaintiff filed this lawsuit on November 19, 2013. See Compl.,

ECF No. 1. The Court granted the parties’ joint request for an

expedited briefing schedule in advance of the Rule’s March 24,

2014 effective date and held oral argument on the parties’ cross

motions for summary judgment on March 14, 2014. These motions

are ripe for the Court’s decision.

II.   Standard of Review

  Pursuant to Federal Rule of Civil Procedure 56, summary

judgment should be granted only if the moving party has shown

that there are no genuine issues of material fact and that it is

entitled to judgment as a matter of law. See Fed. R. Civ. P. 56;

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Courts in

this Circuit have repeatedly recognized that summary judgment is

                               8
an appropriate procedure when a court reviews an agency’s

administrative record. See, e.g., Bloch v. Powell, 227 F. Supp.

2d 25, 30–31 (D.D.C. 2002); AFL-CIO v. Chao, 496 F. Supp. 2d 76,

81 (D.D.C. 2007). “Under the APA, it is the role of the agency

to resolve factual issues to arrive at a decision that is

supported by the administrative record, whereas the function of

the district court is to determine whether or not as a matter of

law the evidence in the administrative record permitted the

agency to make the decision it did.” Sierra Club v. Mainella,

459 F. Supp. 2d 76, 90 (D.D.C. 2006) (quotation marks omitted).

In ruling on cross-motions for summary judgment, the court shall

grant summary judgment only if one of the moving parties is

entitled to judgment as a matter of law upon material facts that

are not genuinely disputed. See Citizens for Responsibility &

Ethics in Wash. v. Dep’t of Justice, 658 F. Supp. 2d 217, 224

(D.D.C. 2009) (citing Rhoads v. McFerran, 517 F.2d 66, 67 (2d

Cir. 1975)).

III. The Plaintiff Has Standing to Challenge the Rule.

  In its opening brief, the plaintiff argued that it has

standing to challenge the Rule under Hunt v. Washington State

Apple Advertising Comm’n, 432 U.S. 333 (1977), which held that

an organization has standing when “its members would otherwise

have standing to sue in their own right[,] the interests it

seeks to protect are germane to the organization’s purpose[,]

                               9
and neither the claim asserted nor the relief requested requires

the participation of individual members in the lawsuit.” Id. at

343; see Pl.’s Mem. at 14–16. While the defendants did not

initially challenge this argument, after questioning by the

Court during oral argument the defendants argued that the

plaintiff may not have standing to challenge the Rule’s

utilization goal. The Court directed the parties to brief the

issue on an expedited basis.2

        To satisfy Article III’s standing requirement, “a plaintiff

ordinarily must establish that (1) he or she has ‘suffered an

injury-in-fact’; (2) there is a ‘causal connection between the

injury and the conduct complained of’; and (3) the injury will

likely be redressed by a favorable decision.” In re Polar Bear

Endangered Species Act Listing, 627 F. Supp. 2d 16, 24 (D.D.C.

2009) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555,

560–61 (1992)). According to defendants, the utilization goal

produces no injury-in-fact because failure to meet the goal does

not subject a contractor to punishment, cannot factor into the

agency’s investigative decisions, and triggers only obligations

that are already required of contractors independently. See
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
2
                  The Court must address this issue even though the defendants
did not raise it in their briefs. See Nat'l Ass'n of Clean Water
Agencies v. EPA, 734 F.3d 1115, 1160 (D.C. Cir. 2013)
(“[b]ecause Article III standing is a prerequisite to a federal
court’s exercise of jurisdiction, [the court] cannot proceed at
all in any cause unless [it] first determine[s] that a party
seeking to be heard” has standing) (quotation marks omitted).

                                                                                                              10
Def.’s Supp. Br., ECF No. 26 at 1–8. The plaintiff counters that

its members must engage in a costly annual utilization analysis

to track their compliance with the goal and to fix any problems

that are identified, and that failure to engage in this analysis

would place them in violation of the Rule and subject to its

penalties. See Pl.’s Supp. Br., ECF No. 27 at 1-8.

  The Court agrees with the plaintiff that the utilization goal

creates an injury-in-fact that is “concrete, particularized, and

actual or imminent.” Clapper v. Amnesty Int’l, 133 S. Ct. 1138,

1147 (2013) (quotation marks omitted). Defendants are correct

that failure to meet the utilization goal cannot form the basis

for a finding that an employer has violated the Rule, Final

Rule, 78 Fed. Reg. at 58,746, but contractors are still required

to “annually evaluate [their] utilization of individuals with

disabilities.” Id. at 58,745. A contractor that finds that it

has not met the utilization goal must then “take steps to

determine whether and where impediments to equal employment

opportunity exist.” Id. at 58,746. Although this is “based on

reviews of the contractor’s personnel processes and affirmative

action efforts that the contractor is already required to

perform,” id. at 58,708, a contractor that identifies an

impediment must “develop and execute action-oriented programs

designed to correct any identified problem areas.” Id. at

58,746. Even if these requirements are also imposed by

                               11
independent portions of the Rule, at a minimum, the utilization-

goal portion of the Rule requires contractors to assess annually

whether they have met the goal. The agency estimated that this

analysis alone will cost the government-contracting industry a

nationwide total of $7 million to $14 million. See id. at

58,716. This creates an injury-in-fact. Because no other portion

of the test for Article III standing under Lujan, 504 U.S. 555,

or the test for organizational standing under Hunt, 432 U.S.

333, is at issue, the Court concludes that plaintiff has

standing to challenge the Rule.

IV.   OFCCP’s Interpretation of Section 503 Was Permissible.

  Plaintiff’s first challenge to the Rule is that it was

promulgated in excess of OFCCP’s authority under Section 503. In

reviewing an agency’s interpretation of a statute it is charged

with administering, the Court follows the two-step framework

provided in Chevron, U.S.A. v. Natural Resources Defense

Council, 467 U.S. 837 (1984). Before applying this framework,

however, the Court must “determin[e] whether Congress has

delegated interpretive authority to the agency.” Prime Time

Int’l Co. v. Vilsack, 930 F. Supp. 2d 240, 248 (D.D.C. 2013).

This so-called Step Zero is satisfied where there is an “express

congressional authorization[] to engage in the process of

rulemaking.” United States v. Mead Corp., 533 U.S. 218, 229

(2001). Of this there can be no real dispute; Section 503 grants

                                  12
the President authority to “implement the provisions of this

section by promulgating regulations.” 29 U.S.C. § 793(a).

       Having determined that Chevron’s two-step framework applies,

the Court proceeds to Step One, which asks “whether Congress has

directly spoken to the precise question at issue.” Chevron, 467

U.S. at 842. If so, “that is the end of the matter; for the

court, as well as the agency, must give effect to the

unambiguously expressed intent of Congress.” Id. at 842–43. If

not, the Court must proceed to Chevron’s Step Two, which

mandates deference to any “permissible construction of the

statute.” Id. at 843. Throughout this analysis, the Court

determines Congress’s intent using the “‘traditional tools of

statutory construction.’” Serono Labs., Inc. v. Shalala, 158

F.3d 1313, 1319 (D.C. Cir. 1998) (quoting Chevron, 467 U.S. at

843 n.9). This “include[s] examination of the statute’s text,

legislative history, and structure, as well as its purpose.”

Bell Atl. Tel. Cos. v. FCC, 131 F.3d 1044, 1047 (D.C. Cir. 1997)

(citations omitted).

       A.   The Text of the Rehabilitation Act Indicates a Broad
            Delegation of Authority to Define How Contractors Must
            “Take Affirmative Action.”
	
  
       Section 503 decrees that covered contracts “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” and directs

                                   13
the President to “implement the provisions of this section by

promulgating regulations.” 29 U.S.C. § 793(a).

  The plaintiff proposes that Section 503 permits the President

to insert into government contracts a requirement that the

contractor “take affirmative action,” but not to define the

phrase. See Pl.’s Reply at 5–6. “This argument confuses ‘plain

meaning’ with literalism.” Bell Atl., 131 F.3d at 1045. In the

absence of a statutory definition of “take affirmative action,”

the agency may define the scope of the affirmative-action

requirement. Otherwise, contractors would have no guidance as to

their legal obligations.

  Plaintiff argues alternatively that Section 503 forbids OFCCP

from using data collection, data analysis, and utilization

goals. See Pl.’s Reply at 6. This argument has no basis in the

language of Section 503 either. The term “affirmative action”

encompasses the use of benchmarks to gauge progress and tools to

gather and analyze data to track such progress. See, e.g.,

Black’s Law Dictionary (9th ed. 2009), affirmative action (“A

set of actions designed to eliminate existing and continuing

discrimination, to remedy lingering effects of past

discrimination, and to create systems and procedures to prevent

future discrimination”); Johnson v. Transportation Agency, 480

U.S. 616, 620–21 (1987) (evaluating a county “Affirmative Action

Plan,” which analyzed data regarding employees by job category

                               14
and sought “to achieve ‘a statistically measurable yearly

improvement in hiring, training and promotion of . . .

minorities and women’”).

        Nor has OFCCP attempted to “presume a delegation of power”

solely because Congress has not expressly withheld the power.

Pl.’s Mem. at 17 (citing Ry. Labor Execs. Ass’n v. Nat’l

Mediation Bd., 29 F.3d 655, 659 (D.C. Cir. 1994) (en banc)).

Section 503 expressly grants the President unqualified authority

to implement the Section by regulation. This is accompanied by

silence on the particular tools that OFCCP should use. “[W]hen a

statute is silent with respect to all potentially relevant

factors, it is eminently reasonable to conclude that the silence

is meant to convey nothing more than a refusal to tie the

agency’s hands.” Catawba Cnty. v. EPA, 571 F.3d 20, 37 (D.C.

Cir. 2009) (quotation marks, alterations, and emphasis omitted).3

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
3
                  The cases plaintiff relies on are easily distinguishable
because they all involved regulations that conflicted with
related statutory provisions. See, e.g., Ry. Labor, 29 F.3d at
658, 664 (agency with “very limited authority to investigate
representation disputes” that arise “among a [railroad]
carrier’s employees” only “upon request of either party to the
dispute” exceeded its authority when it promulgated a rule
giving itself and railroad carriers the ability to initiate such
investigations) (quotation marks omitted); Nat’l Ass’n of Mfrs.
v. NLRB, 717 F.3d 947, 959 (D.C. Cir. 2013) (rule requiring
employers to post an official notice of employee rights and
making failure to do so an unlawful labor practice exceeded
NLRB’s authority in part because the underlying statute
prohibited the Board from finding that noncoercive speech was an
unfair labor practice). By contrast, no other provision of the
Rehabilitation Act forecloses the tools OFCCP has chosen to use.

                                                                                                              15
Indeed, the Fourth Circuit has noted that the President’s

authority under Section 503(a) is “broad rulemaking authority.”

Phillip Morris, Inc. v. Block, 755 F.2d 368, 370 (4th Cir.

1985).

  Plaintiff’s reliance on Chrysler Corp. v. Brown, 441 U.S. 281

(1979) is similarly misplaced. In that case, OFCCP issued

regulations permitting the public disclosure of reports and

affirmative-action plans submitted by contractors pursuant to

Executive Order 11,246. See id. at 286–87. Chrysler brought suit

under a law that would prevent disclosure that was not

“authorized by law.” Id. at 295. In concluding that the

disclosure regulation was not authorized by law, the Supreme

Court noted that the statutory bases for the regulation were

“not concerned with public disclosure of trade secrets or

confidential business information” so “it is simply not possible

to find . . . a delegation of the disclosure authority.” Id. at

306. In this case, OFCCP’s Rule relates directly to Section

503’s affirmative-action mandate because the Rule provides a

benchmark for contractors’ affirmative-action efforts and seeks

to compile data to track their progress.

  Plaintiff argues that the language of Section 503 speaks in

terms of qualified individuals with disabilities and thus bars

any rule that is not tailored to those who are “qualified.” This

argument wrongly assumes that the Rule promotes the hiring of

                               16
individuals with disabilities into jobs for which they are

unqualified. The Rule makes clear that contractors are not

required to hire any unqualified individual, Final Rule, 78 Fed.

Reg. at 58,706, 58,746, and the utilization goal is a benchmark

for the employment of qualified individuals with disabilities.

Id. at 58,745. The data-collection and data-analysis

requirements are not limited to qualified individuals with

disabilities, but this is not because they seek to promote the

employment of unqualified workers. OFCCP wrote the regulations

this way to “enable the contractor and OFCCP to better monitor

and evaluate the contractor’s hiring and selection practices”

and to “provide the contractor and OFCCP with valuable

information regarding the number of individuals with

disabilities who apply for jobs with contractors.” Id. at

58,691.

       B.   The Data-Collection Requirement Does Not Violate the
            Americans with Disabilities Act.
	
  
       Plaintiff next argues that the data-collection requirement

exceeds OFCCP’s authority because it violates the Americans with

Disabilities Act, 42 U.S.C. § 12101, et seq. See Pl.’s Reply at

11. That act prohibits employers from “mak[ing] inquiries of a

job applicant as to whether such applicant is an individual with

a disability . . . .” 42 U.S.C. § 12112(d)(2). This provision,

however, does not apply to “medical information that was

                                   17
voluntarily offered by an employee.” EEOC v. C.R. England, Inc.,

644 F.3d 1028, 1047 (10th Cir. 2011); see also Cash v. Smith,

231 F.3d 1301, 1307 (11th Cir. 2000) (Section 12112(d) “do[es]

not govern voluntary disclosures initiated by the employee”).

  The legislative history of Section 12112(d) confirms that

Congress intended to permit “a covered entity [to] invite

applicants for employment to indicate whether and to what extent

they have a disability . . . when a recipient is taking

affirmative action pursuant to section 503 of the Rehabilitation

Act of 1973.” S. Rep. No. 101-116, at 40 (1989); see also H.R.

Rep. No. 101-485, at 75 (1989). The EEOC also agrees with this

interpretation. See Letter from Peggy R. Mastroianni, EEOC

Office of Legal Counsel, to Patricia A. Shiu, Director, Office

of Federal Contract Compliance Programs, at 1 (Aug. 8, 2013),

available at http://www.dol.gov/ofccp/regs/compliance/sec503/

OLC_letter_to_OFCCP_8-8-2013_508c.pdf.

  Plaintiff conceded at oral argument that no court has

interpreted the Americans with Disabilities Act to the contrary.

Instead, plaintiff argues that the data-collection requirement

is not truly voluntary because employers must ask applicants for

the information. This ignores the legislative history cited

above, which specifically contemplates employers inviting

applicants to volunteer information pursuant to Section 503. It

also misconstrues the Rule’s requirements. Contractors merely

                               18
“invite” applicants to volunteer information. See Final Rule, 78

Fed. Reg. at 58,742. Applicants are free to decline and they

suffer no loss if they do so. Cf. Doe v. U.S. Postal Serv., 317

F.3d 339, 344 (D.C. Cir. 2003) (distinguishing cases involving

voluntary disclosure from a situation where an employer required

an employee to disclose medical information in order to be

eligible for leave under the Family and Medical Leave Act).

        C.                The Legislative History of the Rehabilitation Act and
                          Related Statutes Provides No Contrary Guidance.

        Although the text of Section 503 supports a broad delegation

of authority to the agency to define the affirmative-action

requirement and nothing in the Rehabilitation Act or any other

law forbids the tools OFCCP has chosen, plaintiff directs the

Court to two subsequent congressional actions, which it argues

reveal that Congress understood Section 503 to foreclose the use

of data collection, data analysis, and utilization goals.4

        First, plaintiff argues that Congress has regularly reenacted

Section 503 without mandating the use of data collection, data

analysis, and utilization goals. Plaintiff relies on the canon

that “a court may accord great weight to the longstanding
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
4
                  The direct legislative history of Section 503 provides no help
to either party. See, e.g., Howard v. Uniroyal, Inc., 719 F.2d
1552, 1557 (11th Cir. 1983) (“The legislative history of the
Rehabilitation Act of 1973 contains little reference to
Congress’ intention regarding section 503.”); Rogers v. Frito-
Lay, Inc., 611 F.2d 1074, 1078 (5th Cir. 1980) (“The statute’s
muteness . . . is not given meaning by the voices in the
legislative background.”).

                                                                                                              19
interpretation placed on a statute by an agency charged with its

administration”—“especially so where Congress has re-enacted the

statute without pertinent change.” NLRB v. Bell Aerospace Co.,

416 U.S. 267, 274–75 (1974). By failing to utilize data

collection, data analysis, and utilization goals in the past,

plaintiff claims, OFCCP forfeited those tools and Congress

acceded by reenacting the Rehabilitation Act without requiring

the use of those tools. See Pl.’s Mem. at 22; Pl.’s Reply at 8.

  This argument presumes that Congress ratifies everything it

does not specifically disclaim. That argument is not legally

sustainable. “To freeze an agency interpretation, Congress must

give a strong affirmative indication that it wishes the present

interpretation to remain in place.” AFL-CIO v. Brock, 835 F.2d

912, 916 (D.C. Cir. 1987); see also Beverly Enterprises, Inc. v.

Herman, 119 F. Supp. 2d 1, 9 (D.D.C. 2000) (“there must be a

showing that Congress was aware of, and expressly approved of,

the prior agency position”) (emphasis added). Absent such a

showing, “inferences from congressional silence are treacherous;

oversights are common in the hurly-burly of congressional

enactment; omissions are not enactments; and even deliberate

omissions are often subject to alternative interpretations.”

Alto Dairy v. Veneman, 336 F.3d 560, 566 (7th Cir. 2003). Here,

there is no indication that Congress “considered—let alone

endorsed” OFCCP’s interpretation of Section 503. Koszola v.

                               20
FDIC, 393 F.3d 1294, 1299 (D.C. Cir. 2005). Nor could OFCCP’s

failure to use particular tools be reasonably interpreted as

adopting a position that those tools are forbidden; an agency’s

“‘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)).

  Second, plaintiff argues that Congress’s enactment of data-

collection requirements under the Vietnam Era Veterans’

Readjustment Assistance Act, 38 U.S.C. § 4211, et seq.,

indicates that Congress knows how to grant OFCCP the authority

to require contractors to collect and analyze data but failed to

do so in Section 503. See Pl.’s Mem. at 23; Pl.’s Reply at 8-10.

For this point, plaintiff relies on the doctrine that “[w]here

Congress has consistently made express its delegation of a

particular power, its silence is strong evidence that it did not

intend to grant the power.” Alcoa Steamship Co. v. Fed. Maritime

Comm’n, 348 F.2d 756, 758 (D.C. Cir. 1965).

  Plaintiff misreads the history of the statute it claims is

dispositive. Plaintiff maintains that the version of this law in

existence in 1974 “explicitly required contractors to submit

annual reports called VETS-100 and VETS-100A that contain

specific data on the protected veteran status of applicants and

employees of government contractors” and “expressly states that

the data collection will be required ‘in addition to’ the

                               21
affirmative action requirement set forth in Section (a)(1).”

Pl.’s Mem. at 23. In fact, neither the language of the statute

as enacted in 1972 nor as amended in 1974 contained any such

requirement. See Pub. L. No. 92-540, § 2012(a), 86 Stat. 1097

(1972), reprinted in 1972 U.S.C.C.A.N. 1259; Pub. L. No. 93-508,

tit. IV, § 402(1), (2), 88 Stat. 1578 (1974), reprinted in 1974

U.S.C.C.A.N. 1835.

  Only in 1982 did Congress add a provision requiring

contractors to report annually “the number of employees in the

workforce of such contractor, by job category . . . who are

veterans” and “the total number of new employees hired by the

contractor during the period covered by the report and the

number of such employees who are veterans.” Pub. L. No. 97-306,

tit. III, § 310(a), 96 Stat. 1429, 1442 (1982). This amendment

not only came nearly a decade after Section 503 was enacted, it

was also motivated by Congress’s desire to restore OFCCP’s prior

practice of requiring similar reports by regulation. See S. Rep.

No. 97-550, at 82 (1982), reprinted in 1982 U.S.C.C.A.N. 2933.

Thus, the 1982 amendment does not show that Congress thought

that the previous affirmative-action language foreclosed data

collection. This argument also overstates the utility of such

evidence; it is “a relatively weak aid given that Congress may

well have intended the same word to have a different meaning in

                               22
different statutes.” Firstar Bank, N.A. v. Faul, 253 F.3d 982,

991 (7th Cir. 2001).

                            *   *    *
  The text of Section 503 delegates broad authority to the

President to define the ways in which contractors must engage in

affirmative action. Nothing in Section 503, the remainder of the

Rehabilitation Act, or the Americans with Disabilities Act

precludes the use of benchmarks for workforce diversity or data

collection and analysis to help meet those benchmarks. Nor does

the Rule violate Section 503’s mandate to improve the employment

position of qualified individuals with disabilities. By

delegating broad power to the President to define the scope of

the affirmative-action requirement and placing no limits on the

tools OFCCP has implemented in this Rule, “Congress has directly

spoken to the precise question at issue.” Chevron, 467 U.S. at

842. Accordingly, “that is the end of the matter; for the court

. . . must give effect to the unambiguously expressed intent of

Congress.” Id. at 842–43.

  D.   The Rule is a Permissible Construction of Section 503.

  For the reasons described above, the Rule survives scrutiny

under a Chevron Step One analysis. Moreover, OFCCP’s

interpretation also survives a Chevron Step Two analysis because

it is “a permissible construction of the statute.” Id. at 843.

At Step Two, the Court must defer to OFCCP’s interpretation

                                23
“whether or not it is the only possible interpretation or even

the one a court might think best.” Holder v. Martinez-Gutierrez,

132 S. Ct. 2011, 2017 (2012). The agency’s judgment must be

“respect[ed] . . . so long as its reading is a reasonable one.”

Holly Farms Corp. v. NLRB, 517 U.S. 392, 409 (1996). Only if

Section 503 “cannot bear the interpretation adopted by the

[agency]” will the Rule fail at Step Two. Sullivan v. Everhart,

494 U.S. 83, 92 (1990). Because the text of Section 503 grants

unqualified authority over the scope of the affirmative-action

requirement and nothing in the Rehabilitation Act or any other

statute forbids the tools OFCCP has chosen, OFCCP’s

interpretation is subject to deference. Indeed, even if Section

503 were ambiguous as to the breadth of OFCCP’s authority,

“ambiguities in statutes within an agency’s jurisdiction to

administer are delegations of authority to the agency to fill

the statutory gap in reasonable fashion.” Nat’l Cable &

Telecommunications Ass’n v. Brand X Internet Servs., 545 U.S.

967, 980 (2005).

V.       The Rule is Not Arbitrary and Capricious.
	
  
       The plaintiff’s second argument is that the Rule is arbitrary

and capricious. To determine whether the Rule is arbitrary and

capricious, the Court looks to whether the agency “considered

the factors relevant to its decision and articulated a rational

connection between the facts found and the choice made.” Keating

                                   24
v. FERC, 569 F.3d 427, 433 (D.C. Cir. 2009) (citing Balt. Gas &

Elec. Co. v. Natural Resources Defense Council, 462 U.S. 87, 105

(1983)). In reviewing an agency’s action, the Court engages in a

“thorough, probing, in-depth review” to determine “whether the

decision was based on a consideration of the relevant factors

and whether there has been a clear error of judgment.” Citizens

to Preserve Overton Park v. Volpe, 401 U.S. 402, 415–16 (1971).

While the Court’s inquiry is “searching and careful,” the

standard of review is highly deferential; the agency’s actions

are “entitled to a presumption of regularity,” and the court

cannot “substitute its judgment for that of the agency.” Id. at

415–16.

  This also holds true when an agency reverses a prior policy.

The agency must “supply a reasoned analysis” for its action,

Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463

U.S. 29, 42 (1983), but “if the agency adequately explains the

reasons for a reversal of policy, change is not invalidating,

since the whole point of Chevron is to leave the discretion

provided by the ambiguities of a statute with the implementing

agency.” Brand X, 545 U.S. at 981 (quotation marks omitted). It

is therefore normally the case that “the fact that the new rule

reflects a change in policy matters not at all.” Air Transport

Ass’n v. Nat’l Mediation Bd., 663 F.3d 476, 484 (D.C. Cir.

2011). Agencies must provide “more detailed justification,”

                               25
however, when the “new policy rests upon factual findings that

contradict those which underlay its prior policy.” FCC v. Fox

Television Stations, 556 U.S. 502, 515 (2009).

  A.   Data Collection

  Plaintiff attacks the Rule’s data-collection requirement as an

unjustified departure from past practice. See Pl.’s Mem. at 25.

This argument ignores the current regulations implementing

Section 503, which already require all contractors to invite

newly hired employees to disclose whether they are individuals

with disabilities. See 41 C.F.R. § 60-741.42(a). Applying this

same obligation to the pre-offer stage does not meaningfully

depart from past practice and OFCCP sufficiently explained that

“[t]raditionally, construction and transportation contractors

who meet the basic coverage thresholds . . . of section 503 have

not been exempted from any of its provisions.” Final Rule, 78

Fed. Reg. at 58,701.

  Plaintiff also argues that the data-collection requirement is

arbitrary and capricious because it is not tailored to qualified

individuals with disabilities. See Pl.’s Reply at 23. This

argument misunderstands the point of data collection, which is

to establish robust data regarding the disability status of all

job applicants to “enable the contractor and OFCCP to better

monitor and evaluate the contractor’s hiring and selection

practices” and to “provide the contractor and OFCCP with

                               26
valuable information regarding the number of individuals with

disabilities who apply for jobs with contractors.” Final Rule,

78 Fed. Reg. at 58,691. That a particular applicant may have

been unqualified for a particular job does not undermine the

utility of this data.

  B.   Data Analysis

  Plaintiff claims that the requirement that contractors compile

and analyze data regarding their workforce and applicant pool is

arbitrary and capricious because the agency “[n]ever before”

interpreted Section 503’s affirmative-action requirement to

encompass data analysis and failed to explain why construction

contractors are not exempt. See Pl.’s Mem. at 24–25. The fact

that previous regulations under Section 503 did not require

contractors to compile data regarding their workforce and

applicant pool, however, does not make the new requirement

arbitrary and capricious. Cf. Fox, 556 U.S. at 515 (even an

express reversal of agency policy need only be justified by

“reasoned explanation for its action”). Nor is such a

requirement unprecedented; current regulations under Executive

Order 11,246 require all contractors to compile information

regarding the number of their employees by race and gender as

well as records that may identify the gender, race, and

ethnicity of employees and, where possible, job applicants. See

41 C.F.R. §§ 60-1.7(a), 1.12.

                                27
       OFCCP explained that extending similar requirements for

individuals with disabilities was necessary because the lack of

data “makes it nearly impossible for the contractor and OFCCP to

perform even rudimentary evaluations of the availability of

individuals with disabilities . . . or to make any sort of

objective, data-based assessments of how effective contractor

outreach and recruitment efforts have been.” Final Rule, 78 Fed.

Reg. at 58,701. The agency reasonably declined to exempt

construction contractors because they are not exempted under the

regulations implementing Executive Order 11,246 and have not

traditionally been exempted from other Section 503 regulations.

See id.

       C.        Utilization Goal

       Plaintiff argues that the utilization goal is arbitrary and

capricious because the agency: (1) did not adequately explain

the need for a utilization goal; (2) did not consider the unique

nature of the construction industry; and (3) arrived at the 7%

figure arbitrarily. See Pl.’s Mem. at 26-30; Pl.’s Reply at 12-

23. These arguments are unavailing because the record reflects

that, at each step, OFCCP “considered the factors relevant to

its decision and articulated a rational connection between the

facts found and the choice made.” Keating, 569 F.3d at 433.

            1.     The Failure of Past Regulations Demonstrates the Need
                   for a Utilization Goal.
	
  

                                        28
  Plaintiff argues that OFCCP’s decision to include a

utilization goal in the Rule “reverses nearly four decades of

agency policy implementing Section 503,” a reversal that OFCCP

failed to justify. Pl.’s Mem. at 24, 27. Plaintiff is correct

that the agency has not previously set a utilization goal under

Section 503, but neither has it disclaimed one. Even if OFCCP

had reversed course, “the fact that the new rule reflects a

change in policy matters not at all.” Air Transport Ass’n, 663

F.3d at 484. Such a change would require additional

justification only if it “rests upon factual findings that

contradict those which underlay [the] prior policy,” Fox, 556

U.S. at 515, but plaintiff identified no such findings.

  Regardless, OFCCP explained the need for the change. Although

regulations under Section 503 have been in place since the

1970s, “the intervening years have seen little improvement in

the unemployment and workforce participation rates of

individuals with disabilities.” Final Rule, 78 Fed. Reg. at

58,703; see also id. at 58,682–58,683 (cataloguing the gap

between individuals with and without disabilities regarding

household income, hourly wages, and unemployment rates).

Commenters to the proposed rule agreed that “affirmative action

efforts under Section 503 have been largely meaningless without,

among other things, measurable goals for the employment of

people with disabilities.” Id. at 58,703. OFCCP reasonably

                               29
concluded that “affirmative action process requirements, without

a quantifiable means of assessing whether progress toward equal

employment opportunity is occurring, are insufficient.” Id.

  Plaintiff faults OFCCP for failing to prove that government

construction contractors are part of the problem, Pl.’s Mem. at

27, and that the disparity is “caused by discriminatory barriers

to employment, as opposed to the disadvantages posed by the

disabilities themselves.” Pl.’s Reply at 15 (emphasis omitted).

Plaintiff’s arguments ask the Court to hold the agency to an

overly searching standard of review akin to heightened

constitutional scrutiny. For example, in Contractors Ass’n v.

City of Philadelphia, 6 F.3d 990 (3d Cir. 1993), the Third

Circuit required similar proof to sustain the constitutionality

of government-contracting preferences for businesses owned by

racial minorities and women. See id. at 1003–08, 1010–11. These

preferences, however, were subject to heightened constitutional

scrutiny. See id. at 999-1001. By contrast, preferences for

business owned by individuals with disabilities could be

justified by anecdotal evidence of discrimination under

rational-basis review. See id. at 1001, 1011-12. The Rule here

is subject to arbitrary-and-capricious review, which is

similarly deferential.

  OFCCP relied on statistical evidence showing that the wages

and employment rates of individuals with disabilities have

                               30
largely stagnated and remain significantly behind those of

individuals without disabilities. Additional evidence proving

that government contractors are engaging in widespread

discrimination is not required to make the imposition of a

utilization goal “rational.” Keating, 569 F.3d at 433.

Similarly, although a mix of factors may contribute to the

disparity, OFCCP could reasonably infer that discrimination is

one of them. Cf. Allen v. Heckler 780 F.2d 64, 68 (D.C. Cir.

1985) (“the obligation to assist the handicapped [under Section

501 of the Rehabilitation Act] is not dependent on a finding

that the status quo is discriminatory”).5

                 2.               OFCCP Justified Its Refusal to Exempt the Construction
                                  Industry.
	
  
        Plaintiff’s second argument centers on OFCCP’s refusal to

exempt the construction industry from the utilization goal. See

Pl.’s Mem. at 24–27; Pl.’s Reply at 12–13, 20–23. Plaintiff
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
5
                  This inference is further justified by reports indicating
widespread discrimination against individuals with disabilities.
A recent report by the National Council on Disability found that
“20 percent of private employers say the greatest employment
barriers to people with disabilities are discrimination,
prejudice, or employer reluctance to hire.” Administrative
Record (“AR”) at 2744. Numerous other studies have concluded
that “a substantial part of the wage differential can be
attributed to disability-related discrimination.” Id. (quotation
marks omitted). The Administrative Record also reflects that
studies have found that individuals with disabilities receive
fewer interviews, less favorable recommendations, lower salary
offers, and lower review ratings. Id. The disparity in work-
related recommendations remains even when the individuals “are
rated as equivalent on work qualifications” to co-workers
without a disability. See id.

                                                                                                              31
claims that OFCCP has not explained its decision to reverse its

policy of “expressly exempt[ing] the construction industry from

. . . utilization analysis.” Pl.’s Mem. at 24. According to

plaintiff, it is much harder for construction contractors to

conduct a utilization analysis because “work in the construction

industry is typically project-based, transitory and seasonal,”

“[t]he number of workers . . . varies widely from day to day and

from project to project,” and construction contractors are

“uniquely decentralized.” Id. at 26. The defendants counter

that, in fact, construction contractors already engage in

similar actions under Executive Order 11,246. See Def.’s Mem. at

41-42.

  The regulations implementing Executive Order 11,246 require

construction contractors to group their employees by

construction trade, strive to meet utilization goals for

diversity within those trades, and take various steps—including

the review of hiring processes. See 41 C.F.R. §§ 60-4.2(d), 60-

4.3(a), 60-4.6. While the requirements under the new Rule are

not identical, they are tied to the same construction-trade

groupings, require contractors to meet similar goals, and

utilize similar review requirements. See Final Rule, 78 Fed.

Reg. at 58,745-58,746. Accordingly, OFCCP reasonably declined to

credit arguments that the construction industry is uniquely

unable to comply with the utilization goal.

                               32
        OFCCP also reasonably rejected arguments that construction

work is “uniquely hazardous and physical compared to other

industries,” making it impossible for construction contractors

to find enough qualified individuals with disabilities to hire.

See Pl.’s Mem. at 26. OFCCP found this argument to be

“fundamentally based on the flawed notion that individuals with

disabilities as a group are incapable of working in these jobs.”

Final Rule, 78 Fed. Reg. at 58,707. The fact that a certain

disability might prevent someone from taking a certain job in

the construction industry does not mean that the industry is

significantly less suited to employing individuals with

disabilities. Indeed, many disabilities would have little effect

on employment by construction contractors. For example, “a

person with an auditory processing disorder would typically need

no accommodation to work as [a] carpenter. A person with a

significant stutter would ordinarily need no accommodation to

operate machinery.” Amicus Br. of Disability Rights Orgs., ECF

No. 20 at 7–8.6 These examples are not an exhaustive list and

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
6
                  The same amici noted that census data reflects that individuals
with disabilities already work in physical jobs at a high rate.
See id. at 8–9 (“The United States Census Bureau reports that
nearly three million people with disabilities worked in the
highly-physical job categories ‘craft workers,’ ‘laborers and
helpers,’ ‘operatives,’ and ‘technicians’ between 2008–2010.”)
(citing United States Census Bureau, Disability Employment 3:
EEO-1 Job Categories by Disability Status, Sex, and
Race/Ethnicity, available at http://factfinder2.census.gov/faces

                                                                                                             33
there are many additional disabilities that, with reasonable

accommodation, would not preclude an individual from engaging in

even more construction-industry jobs. Accordingly, OFCCP was

justified in refusing to exempt construction contractors.

                                                      3.                                                    OFCCP’s Methodology for Reaching the 7% Figure is Not
                                                                                                            Arbitrary and Capricious.
	
  
                           The agency’s method for calculating the 7% utilization goal

was also reasonable. In reviewing the agency’s calculation, the

Court is mindful that “[a]n agency has wide discretion in making

line-drawing decisions.” Nat’l Shooting Sports Found. v. Jones,

716 F.3d 200, 214 (D.C. Cir. 2013) (quotation marks omitted).

The Court cannot expect “pinpoint precision,” so long as the

agency “identif[ied] the standard and explain[ed] its

relationship to the underlying regulatory concerns.” WorldCom,

Inc. v. FCC, 238 F.3d 449, 461-62 (D.C. Cir. 2001). “The

relevant question is whether the agency’s numbers are within a

zone of reasonableness.” Id. at 462 (quotation marks omitted).

                           Because no data exists reflecting the number of individuals

with disabilities who work or wish to find work, OFCCP was

forced to estimate. It began with data from the American

Community Survey (“the Survey”) to conclude that “5.7 percent of

the civilian labor force has a disability.” Final Rule, 78 Fed.

Reg. at 58,704; see also AR at 2786, 2790. This figure, however,
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
/tableservices/jsf/pages/productview.xhtml?pid=EEO_10_3YR_DOLALL
3N&prodType=table.

                                                                                                                                                                                                                                                                                                                                                       34
reflects the status quo under which individuals with

disabilities suffer from large income and employment gaps. See

id. at 58,704-58,705. Accordingly, OFCCP estimated the number of

individuals with disabilities who are not currently in the

workforce, but would be if they did not have to face barriers or

discrimination related to their disability. Id. at 58,705. It

did so by assuming that “those . . . who identify as having an

occupation, but who are currently not in the labor force, remain

interested in working should job opportunities become

available.” Id. Using Survey data, OFCCP compared figures on

individuals with disabilities who claim to have an occupation

with those reflecting only those individuals with disabilities

who claim to have an occupation and are in the labor force. See

id. This comparison revealed that the equivalent of 1.7% of the

workforce is an individual with a disability who identified as

having an occupation but is not in the workforce. Id.; see also

AR at 2799-2800.

  Plaintiff challenges OFCCP’s use of the Survey, but points to

no better data on the subject and instead argues that “the only

rational approach” is to “keep[] in place the current . . .

practice.” Pl.’s Reply at 17. While the Survey is not perfect,

it “is the best source of nationwide disability data available

                               35
today.” Final Rule, 78 Fed. Reg. at 58,704.7 Plaintiff is

concerned, however, that the Survey “did not use the same

definition of disabilities as the new Rule,” Pl.’s Mem. at 28,

did not supply industry-specific and location-specific data,

Pl.’s Reply at 16-17, and did not gather data on whether

respondents were qualified individuals with disabilities. See

id. at 16. None of these arguments make OFCCP’s estimate

unreasonable.

        First, while the definition of “disabled” under the Survey “is

. . . not as broad as that of the Rehabilitation Act,” Final

Rule, 78 Fed. Reg. at 58,704, if anything, that makes the goal

slightly low, not irrational.

        Second, OFCCP considered and rejected the use of industry-

specific and location-specific data because no such data exists.

See id. OFCCP did not need such data because nationwide data is

sufficient to meet OFCCP’s goal—providing a benchmark to give

contractors a sense for whether their affirmative-action efforts

are working. While nationwide data may not capture unique

circumstances in specific geographic locations and industries,

there is no indication that the prevalence of qualified

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
7
                  OFCCP asked in its advance notice “what data should be examined
in order to identify the appropriate availability pool of . . .
individuals [with disabilities] for employment?” Advance Notice,
75 Fed. Reg. at 43,117. Most respondents cited the Survey. See
Notice of Proposed Rulemaking, 76 Fed. Reg. at 77,057.

                                                                                                             36
individuals with disabilities varies so widely that a nationwide

goal is unreasonable.

  Third, no survey could capture whether a respondent is

qualified, because qualification is evaluated on a case-by-case

and job-by-job basis. Plaintiff claims that this renders the

goal arbitrary because the data it uses is “irrelevant.” Pl.’s

Reply at 16. This argument is not persuasive. Even if some

individuals with disabilities may not be qualified for

particular occupations by virtue of their disability, it was

reasonable to assume that many individuals with disabilities are

qualified for many different occupations. Therefore, although

data indicating a respondent’s specific qualification status

might provide a more precise figure, it was not unreasonable to

use the data that exists.

  It is also important to note that the utilization goal is not

a quota. Thus, any contractor that engages in significant

affirmative-action efforts, but falls short of 7% because it is

faced with too few qualified applicants with disabilities could

arguably have complied with the Rule. No contractor is required

to hire any unqualified individual and all that occurs if the

benchmark is not met is that the contractor must examine its

hiring practices to determine if they are excluding qualified

individuals with disabilities. See 78 Fed. Reg. 58,745-58,746.

OFCCP is therefore entitled to more leeway because the purpose

                               37
of the goal is itself to serve as an approximation. See

WorldCom, 238 F.3d at 461-62 (D.C. Cir. 2001) (agencies need not

supply “pinpoint precision” so long as they have “identif[ied]

the standard and explain[ed] its relationship to the underlying

regulatory concerns”).

  Plaintiff also challenges the agency’s calculation of the 1.7%

figure, which represents individuals with disabilities who would

enter the workforce in the absence of disability-discrimination

barriers. Plaintiff thinks it likely that many of these

individuals are “unable to work . . . because of the

disqualifying nature of their disabilities.” Mem. at 28. OFCCP

found, however, that “given the acute disparity in the workforce

participation rates of those with and without disabilities, it

is reasonable to assume that at least a portion of that gap is

due to a lack of equal employment opportunity.” Final Rule, 78

Fed. Reg. at 58,705; see also AR 2799–2800. This assumption is

reasonably based on the stark differences between the employment

position of individuals with disabilities and those without

disabilities. See Final Rule, 78 Fed. Reg. at 58,706 (citing

Bureau of Labor Statistics data indicating that 69.7% of

individuals without disabilities were in the workforce, while

20.9% of individuals with disabilities were in the workforce,

and that the unemployment rate for individuals without

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disabilities was 8.7%, while the rate for those with

disabilities was 15%).

  Plaintiff also claims that OFCCP created the 1.7% figure by

comparing apples to oranges because the agency added a

percentage of the current workforce (5.7%) to a percentage of

the population of individuals with disabilities (1.7%) to

conclude, after rounding down, that 7% of the workforce is a

reasonable utilization goal. See Pl.’s Mem. at 28; Pl.’s Reply

at 18-19. OFCCP clarified at oral argument that its calculation

involved a comparison, across each of the job groups measured by

the Survey, between Survey respondents with disabilities who

claimed to have an occupation but were not in the labor force

and the universe of all respondents with disabilities who

claimed to have an occupation. The Court cannot say that the

agency’s method falls outside a zone of reasonableness,

especially since it was used to calculate a utilization goal

that is itself intended to serve as a benchmark for contractors

to assess the progress of their affirmative-action efforts.

  Plaintiff may well be correct that more targeted data and

modified calculations would lead to a more precise utilization

goal, but perfect precision is not what the Administrative

Procedure Act demands. See WorldCom, 238 F.3d at 461-62. None of

plaintiff’s arguments persuade the Court that the 7% figure is

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an unreasonable benchmark figure towards which government

contractors should strive.

VI. The Rule Does Not Violate the Regulatory Flexibility Act.
	
  
     The plaintiff’s final argument is that the Rule does not

comply with the Regulatory Flexibility Act. The Regulatory

Flexibility Act requires agencies to analyze the impact of their

regulations on small businesses. See 5 U.S.C. §§ 603, 604. The

Act exempts agencies from compliance when the agency “certifies

that the rule will not . . . have a significant economic impact

on a substantial number of small entities.” Id. § 605(b). This

certification is reviewed “in accordance with” the judicial

review provisions of the Administrative Procedure Act, id. §

611(a)(2), which are “highly deferential, ‘particularly . . .

with regard to an agency’s predictive judgments about the likely

economic effects of a rule.’” Helicopter Ass’n Int’l v. FAA, 722

F.3d 430, 438 (D.C. Cir. 2013) (alteration in original) (quoting

Nat’l Telephone Coop. Ass’n v. FCC, 563 F.3d 536, 541 (D.C. Cir.

2009)). Ultimately, “[i]f an agency makes a ‘reasonable, good-

faith effort to carry out [the Regulatory Flexibility Act’s]

mandate,’ then its decision will stand.” Fla. Bankers Ass’n v.

U.S. Dep’t of Treasury, __ F. Supp. 2d __, 2014 WL 114519, at

*10 (D.D.C. Jan. 13, 2014) (quoting United Cellular Corp. v.

FCC, 254 F.3d 78, 88 (D.C. Cir. 2001)).

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  OFCCP certified that the Rule will not have a significant

economic impact on small entities. Final Rule, 78 Fed. Reg. at

58,727–58,728. It justified this conclusion by estimating the

expected financial burden of complying with the Rule on all

contractors. See id. at 58,717–58,719, 58,723–58,726 (estimating

the cost involved in reviewing the Rule, complying with the pre-

offer self-identification provision, conducting the data and

utilization analyses, and providing reasonable accommodations to

newly hired employees with disabilities). OFCCP then examined

the costs for smaller entities and concluded that contractors

with 50 to 100 employees would expend $3,318, or .02% of their

average receipts, while contractors with 100 to 500 employees

would spend $5,197, which is .01% percent of their average

receipts. See id. at 58,727-58,728. OFCCP concluded that these

are not “a significant economic impact.” Id. at 58,727.

  Plaintiff argues that this analysis was erroneous because it

wrongly assumed that “contractors already have systems in place

to perform the newly required tasks because they already do so

under Executive Order 11246.” Pl.’s Mem. at 31. As discussed

above, construction contractors are required under the

regulations implementing Executive Order 11,246 to group their

employees by construction trade, use those groups to meet

benchmarks for workforce diversity, and take various actions—

including reviewing employment processes—to meet these

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benchmarks. See supra at 4, 31. The new Rule requires them to

use the same groups for similar purposes. See id. It was thus

reasonable to assume that complying with the new Rule will not

require the creation of costly new systems. Cf. Fla. Bankers,

2014 WL 114519, at *10 (IRS’s certification that a rule would

not have a substantial impact on small businesses upheld in

large part because the affected businesses already “have

developed the systems to perform such withholding and

reporting”). OFCCP’s certification that the Rule will not impose

a significant economic burden was therefore reasonable.

VII. Conclusion

  For the foregoing reasons, the Court hereby DENIES plaintiff’s

motion for summary judgment and GRANTS defendants’ cross motion

for summary judgment. An appropriate Order accompanies this

Memorandum Opinion.

  SO ORDERED.

Signed:   Emmet G. Sullivan
          United States District Judge
          March 21, 2014

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