responsibilities for the ADEA, issued an interpretation explaining section 4(f)(2). The Department's interpretation suggested that employee benefit plans -- including retirement, pension, and insurance plans -- would be in compliance with the ADEA if the employer incurred equal costs in providing benefits for older and younger workers, "even though the older worker may thereby receive a lesser amount of [benefits]." 34 Fed. Reg. 9709 (1969). This interpretation, known as the "equal cost rule," remained in place for nearly a decade.
Two amendments to the ADEA enacted in 1978 raised questions about the scope of the benefits exemption and the equal cost rule. The first of these, now codified at 29 U.S.C. § 631(a), extended the statute's coverage to workers between the ages of 65 and 70. The second amendment, now codified at 29 U.S.C. § 623(f)(2), prohibited benefit plans from requiring the involuntary retirement of any individual because of his or her age.
Together, it was the effect of these amendments to extend the protection of the Age Discrimination in Employment Act to those individuals who continued to be engaged in gainful employment past the age that for many benefit plans would be considered the "normal" retirement age. However, the precise benefit rights of these workers, and the obligations of their employers, were not specified, and several members of Congress called on the Department of Labor to provide prompt guidance in the form of regulations. See 124 Cong. Rec. 8219 (1978) (statement of Senator Javits) (Labor Department "intends to promulgate comprehensive regulations . . . [and] is urged to act as soon as possible").
The Department of Labor responded on May 25, 1979, not by promulgating regulations, but by issuing an interpretation -- the "Interpretative Bulletin" that provides much of the background for this lawsuit. 44 Fed. Reg. 30,648 (1979) (codified at 29 C.F.R. § 860.120(f)(iv)(B) (1986)). The Interpretative Bulletin
takes the position that employers are free to cut off both their own contributions and the accrual of benefits for employees as of the time these workers reach a plan's "normal" retirement age -- even if they continue to work past that age to age 70.
That is where the matter stood when the Department of Labor relinquished jurisdiction over this subject.
On July 1, 1979, one month after the Department of Labor promulgated the Bulletin, the EEOC took over administration and enforcement of the Act. Reorg. Plan No. 1 of 1978, 43 Fed. Reg. 19,807 (1978). The Commission had previously indicated that it would undertake a complete review of all Department of Labor interpretations, including the Interpretative Bulletin in question here, 44 Fed. Reg. 37,974 (1979), and it did, in fact, begin such review. However, the Commission accompanied the start of the review process with two rulings which, as will be seen, were to have far-reaching consequences. First, the Commission stated that, pending completion of the review, all Labor Department interpretations would remain in effect, and second, that employers would be entitled to rely upon these interpretations as a good-faith defense to charges of age discrimination.
These rulings, of course, placed a premium on a rapid conclusion of the review process: without speedy review action, erroneous interpretations of the law would be perpetuated for extended periods of time, and they would continue to serve as "good faith" defenses for employers during those periods. That, as the subsequent history shows, is precisely what occurred in this instance.
In August of 1979 the EEOC's General Counsel advised his Commission that the Interpretative Bulletin was "incorrect and that the Commission should therefore undertake a further amendment" to it. Memorandum from Leroy D. Clark to EEOC Commissioners, Aug. 20, 1979.
During the months that followed, EEOC staff submitted alternate approaches to the Bulletin and solicited comments on these approaches, pursuant to Executive Order 12067. After revision, draft regulations were formally sent to other agencies for comment on April 22, 1980, and on May 2, 1980, EEOC Chairperson Eleanor Holmes Norton stated in an affidavit filed in another court action that, "after receipt and review of these comments, the Commission will publish its proposed modification in the Federal Register for notice and comment by the public."
Proposed final regulations were submitted to the EEOC Commissioners on September 3, 1980,
with a vote on their adoption set for October 22. However, on October 20, two days before the date scheduled for the final vote, the proposal was removed from the agenda. The only explanation that appears ever to have been offered for this extraordinary action was that of Clarence Thomas, current Chairman of the EEOC, who has since informed a Senate committee that the proposed regulations had been "deep-sixed."
U.S. Senate Committee on Labor and Human Resources, Nomination Hearing, July 23, 1986.
Nothing further of significance was done with regard to this matter for the next three years.
Ultimately, on September 15, 1983, the Commission revived the matter by once again asking for public comment, in order to "assist the Commission in analyzing the effects of these interpretive provisions and in order that the Commission will be fully apprised of the consequences of any modifications to these provisions." 48 Fed. Reg. 41,437. In June of 1984, the Commission voted for proposed rules (see Plaintiffs' Exhibit 5 at 1) and to rescind the Interpretative Bulletin and to replace it with its opposite: a requirement of post-normal retirement age contributions and credits. Then, in March of 1985, it voted once more to approve the proposed rules.
Chairman Thomas informed the Congress at that time that, among other things, the Interpretative Bulletin was "not consistent with the stated purposes of the ADEA" (Hearings before the Senate Subcommittee on Aging, Oct. 17, 1985),
and that it was "facially inconsistent with the [Labor] Department's own long-standing administrative interpretation of of the requirements of the ADEA's benefit provisions." Id. at 4. Despite these assertions, however, the proposed pension rule proceeded no further along the bureaucratic path: it was not published in the Federal Register for notice and comment; no "regulatory impact analysis" was submitted to coordinating agencies pursuant to Executive Order 12291;
and the rule was not issued in final form.
On October 10, 1985, the American Association of Retired Persons filed a petition for rulemaking with the EEOC, asking for essentially the same relief it seeks in the instant action. Over eight months later, the EEOC rejected this petition citing the need -- ironically, in view of all that had gone on before -- to allow public comment, to prepare a regulatory impact analysis, and to obtain review by the Office of Management and Budget before initiating rulemaking. The following year,
on November 10, 1986, the Commission retrogressed even further; it voted to terminate the rulemaking and not to rescind the Interpretative Bulletin.
On June 23, 1986, plaintiffs filed their complaint in this Court.
The first question is whether the Court has jurisdiction to review plaintiffs' claims. The EEOC argues that whether, and when, it should proceed with rulemaking under the ADEA is a matter committed by law to its discretion, and that because of that fact its decision with respect thereto is not reviewable in court.
That argument is not well taken.
Under the Administrative Procedure Act it is presumed that there is a right to judicial review of administrative action. See, e.g., WWHT, Inc. v. FCC, 211 U.S. App. D.C. 218, 656 F.2d 807, 815 (D.C. Cir. 1981). However, the Act contains two familiar exceptions to the general availability of that right. The second exception, that relied upon here by the EEOC, precludes judicial review when "agency action is committed to agency discretion by law." 5 U.S.C. § 701(a)(2). The Supreme Court has made it clear that the "committed to agency discretion" exception forecloses judicial review only in the unusual case in which there is "no law to apply." See Heckler v. Chaney, 470 U.S. 821, 84 L. Ed. 2d 714, 105 S. Ct. 1649 (1985).
The "law" that plaintiffs request the Court to apply is that pertaining to undue and improper delay by administrative agencies in deciding matters assigned to them. See Nader v. FCC, 172 U.S. App. D.C. 1, 520 F.2d 182, 206 (D.C. Cir. 1975); Geller v. FCC, 198 U.S. App. D.C. 31, 610 F.2d 973, 979 (D.C. Cir. 1979); Intercity Transportation Co. v. United States, 237 U.S. App. D.C. 321, 737 F.2d 103, 108 (D.C. Cir. 1984). Indeed, as the Court of Appeals for this Circuit has only recently observed, "when an agency's recalcitrance, inertia, laggard pace of inefficiency sorely disadvantages 'the class of beneficiaries Congress intended to protect, judicial review . . . is in order.'" In re American Federation of Government Employees, 252 U.S. App. D.C. 294, 790 F.2d 116 (D.C. Cir. 1986), aff'd, 479 U.S. 801, 107 S. Ct. 43, 93 L. Ed. 2d 6 (1986).
The criteria for determining whether the presumption of review is overcome in the context of delayed agency action were restated in Intercity Transportation Co. v. United States, supra. In that case, the Court of Appeals said that actions "committed to agency discretion" are beyond the reach of judicial scrutiny when three factors are met: (1) there is little need to safeguard petitioner's interests; (2) review would impair the effectiveness of agency administration; and (3) the disputed issue is inappropriately drawn for judicial review. 737 F.2d at 107, citing Natural Resources Defense Counsel v. SEC, 196 U.S. App. D.C. 124, 606 F.2d 1031 (D.C. Cir. 1979).
As in Intercity Transportation, it is clear in the instant case that the general presumption of existence of judicial review is not overcome. First, there is a substantial need to safeguard plaintiffs' interests since as indicated above (note 2, supra), the EEOC itself concedes that the delay in implementing rules on pensions after normal retirement age is costing the older workers of this nation as much as $450 million each year. Second, review can hardly be contended to impair the effectiveness of the EEOC's administration, since at this juncture the scope of that review would have to consider only whether the Commission has acted legally in refusing to issue a rule notwithstanding its repeated completion of all the substantive and almost all the procedural prerequisites to such issuance. As the Intercity Transportation court explained, "limited review of Commission refusals to institute . . . proceedings will not unduly hinder the Commission's regulation" in its field of expertise. 737 F.2d at 108. Third, the disputed issue is drawn in terms entirely appropriate for review. As indicated above, it is not unusual for agency inaction with respect to rulemaking to be subject to judicial review, and this Court is of course capable of applying the standards set by scores of judicial decisions under 5 U.S.C. §§ 555(f) and 706(1) in order to determine what constitutes "agency action unlawfully withheld or unreasonably delayed."
For the reasons stated, the Court finds no basis for concluding that it lacks jurisdiction to hear this case.
Delay and the Rule of Reason
In Telecommunications Research and Action Center v. FCC, 242 U.S. App. D.C. 222, 750 F.2d 70 (D.C. Cir. 1984) (TRAC), the Court of Appeals articulated six factors that courts should consider in deciding whether an agency has unreasonably delayed action, as follows:
(1) the time agencies take to make decisions must be governed by a "rule of reason"; (2) where Congress has provided a timetable or other indication of the speed with which it expects the agency to proceed in the enabling statute, that statutory scheme may supply content for this rule of reason; (3) delays that might be reasonable in the sphere of economic regulation are less tolerable when human health and welfare are at stake; (4) the court should consider the effect of expediting delayed action on agency activities of a higher or competing priority; (5) the court should also take into account the nature and extent of the interest prejudiced by the delay; and (6) the court need not "find any impropriety lurking behind agency lassitude in order to hold that agency action is 'unreasonably delayed.'"
TRAC, 750 F.2d at 80 (citations omitted).
It is thus appropriate to examine the facts of this case with this background and the six TRAC factors in mind.
The Court's first and foremost task, as noted, is to examine the entire history of this matter under a "rule of reason" -- that is, to take a broad and common sense view of what has occurred, in view of all the circumstances.
One obvious ingredient in this analysis must be a determination of how long the EEOC has delayed, a point on which the parties are not in agreement.
In its motions and by way of oral argument, the EEOC has insisted that March 5, 1985 is the determinative date for judging whether it has unreasonably delayed action. It was on that day that the Commission voted to approve new benefit rules, and it is the Commission's view that until that day it had never taken a position on these rules.
Indeed, elsewhere in its submissions, the Commission appears to argue that it has not delayed action at all, because it voted on November 10, 1986, to terminate the rulemaking process and not to rescind the Interpretative Bulletin. Beyond that, the Commission insists that whatever date of original delay is chosen, "the result is the same: the agency has been moving at a reasonable pace in this complex regulatory area."
Even on the most charitable basis, the Commission's view of this matter cannot be characterized other than as absurd: were the Court to subscribe to that view, it would be abandoning the "rule of reason" for one that endorsed utter administrative capriciousness.
Any recapitulation of the fate of pension benefits for post-normal retirement age employees with an eye toward common sense leads to the conclusion that the EEOC began its decisionmaking process not in March 1985, but in August of 1979, nearly eight years ago.
To recapitulate: it was in August 1979 that the EEOC's General Counsel decided that the Labor Department's Interpretative Bulletin needed to be changed because it was in error, and that he initiated the EEO process for the issuance of a lawful rule. The Commission's delay must of course be computed from the time that it learned of the error and began to take steps to rectify it.
Toward the "rectification" objective, the agency did, in fact, solicit comments during a fifteen-month period; pledged that the appropriate changes would "soon" be published for notice and comment; and concluded that the Interpretative Bulletin "result[s] in the discriminatory treatment of employees aged 65 to 70."
But then, suddenly and without explanation the Commission "deep-sixed" the regulations on October 20, 1980, two days before the scheduled final vote.
The ritual began once more (or continued, see note 30, infra, three years later. In September 1983, the Commission sought public comment on the same issues it had considered earlier, and in June of the following year, presumably after further earnest and conscientious consideration, it "voted to rescind" the Interpretative Bulletin. In light of the fact that all the substantive work had been completed prior to October 20, 1980, it is not at all clear on what basis the EEOC Chairman could truthfully testify before a congressional committee in September 1984 that this rescission vote was:
the culmination of more than 4 years of exhaustive study and review.