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National Women's Law Center v. Office of Management and Budget

United States District Court, District of Columbia

March 4, 2019

NATIONAL WOMEN'S LAW CENTER, et al., Plaintiffs,



         Pending before the court are Defendants' Motion to Dismiss, ECF No. 11; Plaintiffs' Motion for Summary Judgment, ECF No. 22; and Defendants' Motion for Summary Judgment, ECF No. 27. Having reviewed the parties' filings, the record, and the relevant case law, the court, for reasons set forth below, hereby DENIES Defendants' Motion to Dismiss, GRANTS Plaintiffs' Motion for Summary Judgment, DENIES Defendants' Motion for Summary Judgment, and VACATES the Office of Management and Budget's stay of the Equal Employment Opportunity Commission's revised EEO-1 form and the September 15, 2017 Federal Register Notice (Stay the Effectiveness of the EEO-1 Pay Data Collection, 82 Fed. Reg. 43362) announcing the same. It is further ORDERED that the previous approval of the revised EEO-1 form shall be in effect.

         I. BACKGROUND

         A. The Paperwork Reduction Act

         The Paperwork Reduction Act of 1995, 44 U.S.C. § 3501 et seq. (“PRA”), was established to “minimize the paperwork burden” that the federal government may require “for individuals, small businesses, educational and nonprofit institutions, Federal contractors, State, local and tribal governments, and other persons resulting from the collection of information by or for the Federal Government.” 44 U.S.C. § 3501(1). The statute also strives to “improve the quality and use of Federal information to strengthen decisionmaking, accountability, and openness in Government and society.” Id. § 3501(4).

         In striking the balance between minimizing the burden on the public and obtaining useful information for the government, Congress established a procedure in which federal agencies must obtain approval from the Office of Management and Budget (“OMB”) to collect certain types of information from the public. Under the PRA, an agency that proposes to collect information first conducts its own “evaluation of the need for the collection of information” and the burden collecting such information would create. Id. § 3506(c)(1)(A)(i). Frequently, the agency is also required to publish a “sixty-day notice” in the Federal Register to solicit comments on the agency's proposal. Id. § 3506(c)(2)(A). After considering comments and making any revisions, the agency submits the proposed collection of information to OMB and publishes a second Federal Register notice. This notice announces the start of OMB's review and begins a 30-day comment period. Id. § 3507(a)-(b). “In [this] notice, the agency must set forth (1) a title for the collection of information, (2) a summary of the collection of information, (3) a brief description of the need for the information and the proposed use of the information, (4) a description of the likely respondents and proposed frequency of response to the collection of information, and (5) an estimate of the burden that shall result from the collection of information.” United to Protect Democracy v. Presidential Advisory Comm'n on Election Integrity, 288 F.Supp.3d 99, 102 (D.D.C. 2017) (citing 44 U.S.C. § 3507(a)(1)(D)(ii)(I)-(V)). OMB may not act on the agency's request until after the comment period has closed. 44 U.S.C. § 3507(b).

         Upon completion of its review, OMB, through the Office of Information and Regulatory Affairs (“OIRA”), makes one of three determinations: it (1) approves the collection of information; (2) disapproves the collection of information; or (3) instructs the agency to make changes to the collection of information. Id. § 3507(c)(1), (e)(1). Before approving a proposed collection, OMB must “determine whether the collection of information by the agency is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility.” Id. § 3508. Once OMB grants approval, the agency may proceed with its collection, and OMB issues a control number that must be displayed on the collection-of-information form. Id. § 3507(a)(2), (3). An OMB approval is for three years, after which the agency must seek an extension from OMB. Id. §§ 3507(g), (h)(1).

         At any point before the approval period expires, OMB “may decide on its own initiative, after consultation with the agency, to review the collection of information.” 5 C.F.R. § 1320.10(f). This review can be started only “when relevant circumstances have changed or the burden estimates provided by the agency at the time of initial submission were materially in error.” Id. OMB may also stay the prior approval of a collection of information not contained in a current rule, but only for “good cause.” Id. § 1320.10(g).

         B. The EEO-1

         Pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., employers are required to “make and keep such records relevant to the determination[] of whether unlawful employment practices have been or are being committed, . . . preserve such records” and produce reports as mandated by EEOC. 42 U.S.C. § 2000e-8(c)(1)-(3). Since 1966, EEOC has required that employers with one hundred or more employees file with EEOC the “Employer Information Report EEO-1” (“EEO-1”). 29 C.F.R. § 1602.7.[1] The EEO-1 requires employers to report the number of individuals employed by job category, sex, race, and ethnicity. Agency Information Collection Activities: Revision of the Employer Information Report (EEO-1) and Comment Request, 81 Fed. Reg. 5113 (Feb. 1, 2016) (“Sixty-Day Notice”). EEOC makes aggregate EEO-1 information for major geographic areas and industry groups publicly available on an annual basis. Compl. ¶ 59.

         C. Revision of EEO-1 - Component 2

         In 2010, the EEOC “joined other federal agencies . . . to identify ways to improve enforcement of federal laws prohibiting pay discrimination.” 81 Fed. Reg. at 5114. Subsequently, the EEOC “commissioned a study, and the NAS [National Academy of Sciences] convened a Panel on Measuring and Collecting Pay Information from U.S. Employers by Gender, Race, and National Origin.” Id. NAS issued a report which “recognized the potential value for enforcement of collecting pay data from employers by sex, race, and national origin through a survey such as the EEO-1, and emphasized the importance of a definitive plan for how the data would be used in coordination with other equal employment opportunity (EEO) enforcement agencies.” Id. NAS also “recommended that the EEOC conduct a pilot to inform the parameters for any pay data collection.” Id. (footnote omitted). Following NAS's recommendation, “EEOC commissioned an independent Pilot Study to identify the most efficient means to collect pay data.” Id. The Pilot Study “made technical recommendations about several central components of a data collection, including: The unit of pay to be collected; the best summary measures of central tendency and dispersion for rates of pay; appropriate statistical test(s) for analyzing pay data; and the most efficient and least costly methods for transmitting pay data from employers.” Id. It “also estimated employer burden-hour costs and the processing costs associated with the recommended method of collection.” Id.

         In 2012, the EEOC held a two-day meeting with “employer representatives, statisticians, human resources information systems (HRIS) experts, and information technology specialists (work group).” Id. at 5114-15. This group “reviewed the current data collection procedures, provided feedback on future modernization of the EEO surveys, and engaged in brainstorming that led to ideas submitted individually by group participants on a number of topics, including collecting pay data as well as multiple-race category data on the EEO-1.” Id. at 5115. The report from this group “reflect[ed] feedback from participants that the burden of reporting pay data would be minimal for EEO-1 filers.” Id.

         On February 1, 2016, following this interagency process, EEOC, in accordance with the PRA, published a Federal Register notice announcing its intention to seek a three-year approval from OMB of “a revised Employer Information Report (EEO-1) data collection.” 81 Fed. Reg. at 5113. The notice explained that the “revised data collection has two components. Component 1 collects the same data that is gathered by the currently approved EEO-1: Specifically, data about employees' ethnicity, race, and sex, by job category. Component 2 collects data on employees' W-2 earnings and hours worked, which EEO-1 filers already maintain in the ordinary course of business.” Id. EEOC proposed “collect[ing] aggregate W-2 data in 12 pay bands for the 10 EEO-1 job categories.” Id. at 5117. The notice provided a weblink to a sample data collection form. Id. at 5118 (“An illustration of the data to be collected by both Components 1 and 2 can be found at [link].”).[2] The notice also anticipated that employers would provide the information either through online filing or by uploading an electronic file. Id. at 5120. EEOC estimated that the new pay data collection would increase the reporting time per filer by 3.4 hours. Id. at 5119. On March 16, 2016, EEOC held a public hearing on its proposed pay data collection. Agency Information Collection Activities; Notice of Submission for OMB Review, Final Comment Request: Revision of the Employer Information Report (EEO-1), 81 Fed. Reg. 45479, 45480 (July 14, 2016).

         On July 14, 2016, EEOC published a second Federal Register notice (“Thirty-Day Notice”) seeking a three-year approval from OMB of a revised EEO-1 data collection. 81 Fed. Reg. 45479. This notice explained that EEOC had to revise the EEO-1 for the enforcement of equal pay laws. Id. at 45481-83. EEOC intended to maintain its earlier “proposal to collect W-2 income and hours-worked data in the twelve pay bands . . . for each of the 10 EEO-1 job categories.” Id. at 45489. The filings of EEO-1 reports would be done “either by digital upload or by data entry onto a password-protected, partially pre-populated digital EEO-1.” Id. at 45493. For those employers who filed through data uploads, EEOC would post online the new data file specifications “for Components 1 and 2 of the modified EEO-1 as soon as OMB approve[d] the information collection.” Id. at 45487. EEOC further explained that “[t]he EEO-1 data file specifications will be for data uploads (submitting EEO-1 data in one digital file), but they also will describe the formatting of data for direct data entry onto the firm's secure EEO-1 account with the Joint Reporting Committee.” Id. “For reference, ” EEOC provided a link to a website with the then-current EEO-1 data file specifications. Id. EEOC estimated that the addition of Component 2 would increase the filing cost for each EEO-1 filed by $416.58. Id. At 45493-94. The collection of pay data would begin with the 2017 reporting cycle, and EEO-1 respondents would be required to submit their reports by March 31, 2018. Id. at 45484. On September 28, 2016, EEOC provided its Final Supporting Statement for the EEO-1 report to OMB for review. Link Decl. ¶ 12, Ex. I. OMB approved the proposed collection on September 29, 2016 and issued an OMB control number for the revised EEO-1. Id. ¶ 11, Ex. H.

         EEOC subsequently released an instruction booklet for the March 2018 EEO-1 survey, along with information about the revised EEO-1, including data file specifications for employers who planned to file through data upload. Id. ¶¶ 5, 6. The data file specifications included a sample EEO-1 form for pay data collection and a “data file layout” form. Id. ¶ 5. The data file layout form was a spreadsheet with instructions for formatting pay data submissions to EEOC. Id. ¶ 7, Ex. D.

         D. OMB's Decision to Review and Stay Component 2

         Just under a year after OMB approved the data collection, on August 29, 2017, Neomi Rao, the OIRA Administrator, sent a memorandum to Victoria Lipnic, the Acting Chair of the EEOC, stating that OMB had decided to initiate a review and stay of EEOC's new collection of pay data under Component 2. In support of this decision, the memorandum stated in pertinent part:

The PRA authorizes the Director of OMB to determine the length of approvals of collections of information and to determine whether collections of information initially meet and continue to meet the standards of the PRA. In this context, under 5 CFR 1320.10(f) and (g), OMB may review an approved collection of information if OMB determines that the relevant circumstances related to the collection have changed and/or that the burden estimates provided by EEOC at the time of initial submission were materially in error. OMB has determined that each of these conditions for review has been met. For example, since approving the revised EEO-1 form on September 29, 2016, OMB understands that EEOC has released data file specifications for employers to use in submitting EEO-1 data. These specifications were not contained in the Federal Register notices as part of the public comment process nor were they outlined in the supporting statement for the collection of information. As a result, the public did not receive an opportunity to provide comment on the method of data submission to EEOC. In addition, EEOC's burden estimates did not account for the use of these particular data file specifications, which may have changed the initial burden estimate.
OMB has also decided to stay immediately the effectiveness of the revised aspects of the EEO-1 form for good cause, as we believe that continued collection of this information is contrary to the standards of the PRA. Among other things, OMB is concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.

         Memorandum from Neomi Rao, Adm'r, OIRA, to Victoria Lipnic, Acting Chair, EEOC (Aug. 29, 2017); JA020, ECF No. 44 (“Rao Memorandum”).

         The memorandum further directed EEOC to publish a notice in the Federal Register “announcing the immediate stay of effectiveness of the” pay data collection but “confirming that businesses may use the previously approved EEO-1 form in order to comply with their report obligations for FY 2017.” Id. EEOC published this notice on September 15, 2017. Stay the Effectiveness of the EEO-1 Pay Data Collection, 82 Fed. Reg. 43362 (Sept. 15, 2017).

         This stay remains in effect nearly a year and a half later.

         E. Plaintiffs' Lawsuit

         Plaintiff National Women's Law Center (“NWLC”) is “a 46-year-old nonpartisan, nonprofit organization that advocates for the rights of women and girls at school, at work, at home, and in their communities.” Johnson Decl. ¶ 3. “[C]losing the gender wage gap, and in particular the race and gender wage gaps experienced by women of color, ” is “[o]ne of NWLC's primary and longstanding priorities.” Id. ¶ 4. As part of its mission, NWLC strives to “educate employers, the public, and policymakers about race and gender wage gaps, ” id. ¶ 5, and “has published numerous analyses and reports about workplace pay disparities.” Id. Many of these reports “cite data on pay inequality across a number of factors and reflect time-consuming analysis of Bureau of Labor Statistics and Census data undertaken by NWLC staff.” Id.

         Plaintiff Labor Council for Latin American Advancement (“LCLAA”) is “a national 501(c)(3) representing the interests of approximately 2 million Latino/a trade unionists throughout the United States and Puerto Rico, as well as other non-unionized Latino workers, ” and “has 52 chapters around the country.” Sanchez Decl. ¶ 3. LCLAA's “mission is to assist workers to advance their rights in their workplace and convince employers to take steps to improve working conditions, both through advocacy and through training and counseling workers and union members.” Id. ¶ 4. Recently, “[c]losing the pay gap has been an increasing focus of LCLAA's work.” Id. ¶ 5. For example, in 2012 “LCLAA created the Trabajadoras Initiative which specifically seeks to protect and advance the interests of Latina workers on issues that impact them, including seeking to eradicate the persistent pay gap.” Id. ¶ 6. LCLAA's activities include educating its members, chapter presidents, and the public about the pay gap. Id. ¶¶ 7, 8. Starting in 2016, LCLAA has “host[ed] an annual National Latina Equal Pay Summit, which provides information, education and solutions to closing the pay gap.” Id. ¶ 8. Moreover, as part of its education efforts, “LCLAA periodically issues reports . . . about the challenges encountered by Latinos and Latinas in the workforce. The reports discuss data compiled and published by the Government on income and employment—including EEO-I data. LCLAA uses these reports in advocating for policy change and enforcement of equal pay laws, and in educating its members on ways to negotiate with employers and encourage them to follow practices that reduce workforce discrimination.” Id. ¶ 9.

         On November 15, 2017, two months after the Rao Memorandum and the subsequent notice in the Federal Register staying the effectiveness of the EEO-1 pay data collection, Plaintiffs sued, naming as defendants: OMB; John Michael Mulvaney, Director of OMB; Neomi Rao, Administrator of OIRA; EEOC; and Victoria A. Lipnic, Acting Chair of EEOC. Plaintiffs ask this court to: 1) declare that OMB Defendants violated the PRA and Administrative Procedure Act (“APA”) and exceeded their statutory authority in reviewing and staying the collection of pay data as part of the EEO-1; 2) declare that the stay announced in the Rao Memorandum and the September 15, 2017 Federal Register notice was a nullity, and that the revised EEO-1 remains in effect; 3) vacate the stay and reinstate the revised EEO-1 reporting requirements; 4) order EEOC Defendants to publish a Federal Register notice announcing this reinstatement or take equivalent action necessary to immediately reinstate the pay data collection; 5) award Plaintiffs their costs, reasonable attorneys' fees, and other disbursements incurred in this action; and 6) grant such other relief as the court may deem just and proper. Compl. at 34-35.

         NWLC claims, among other injuries, that if OMB had not stayed the pay data collection NWLC “would have been able to make its reports and advocacy more robust with additional data and analysis.” Johnson Decl. ¶ 6. Possession of the aggregate EEO-1 pay data would allow NWLC to “focus its resources, analysis, and advocacy on the jobs, industries, and regions where intervention is most urgent.” Id. ¶ 7. LCLAA similarly claims injury from OMB's decision to stay the pay data collection. With the information that otherwise would have been collected, LCLAA would “have presented statistics on pay equity within industries and across the nation, based on this data. This information would have materially improved LCLAA's and its members' ability to negotiate with and educate employers and to fulfill LCLAA's mission of improving the condition of Latinos and Latinas in the workforce.” Sanchez Decl. ¶ 11.

         Defendants have moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), on the grounds that Plaintiffs lack standing, and pursuant to Federal Rule of Civil Procedure 12(b)(6), because Plaintiffs have not challenged a final agency action. Both sides have moved for summary judgment.


         A. Legal Standard

         A motion pursuant to Federal Rule of Civil Procedure 12(b)(1) “presents a threshold challenge to the court's jurisdiction.” Haase v. Sessions, 835 F.2d 902, 906 (D.C. Cir. 1987). “[T]he core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). The plaintiff bears the burden of establishing the elements of standing, id. at 561, and each element “must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.” Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015) (quoting Lujan, 504 U.S. at 561). The plaintiff must “show a ‘substantial probability' that it has been injured, that the defendant caused its injury, and that the court could redress that injury.” Sierra Club v. EPA, 292 F.3d 895, 899 (D.C. Cir. 2002) (citation omitted). With respect to a facial 12(b)(1) motion to dismiss, the court must “accept the well-pleaded factual allegations as true and draw all reasonable inferences from those allegations in the plaintiff's favor.” Arpaio, 797 F.3d at 19. At the summary judgment stage, the plaintiff “must support each element of its claim to standing by affidavit or other evidence.” Scenic Am., Inc. v. U.S. Dep't of Transp., 836 F.3d 42, 48 n.2 (D.C. Cir. 2016) (quotation marks and citation omitted).

         “To survive a motion to dismiss” under Federal Rule of Civil Procedure 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation marks and citation omitted). However, a court “is not bound to accept as true a legal conclusion couched as a factual allegation.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation marks and citation omitted).

         B. Informational and Organizational Standing

         Because Plaintiffs are two organizations seeking to sue on their own behalf, i.e., seeking organizational standing, “like an individual plaintiff” they must show “[1] actual or threatened injury in fact [2] that is fairly traceable to the alleged illegal action and [3] likely to be redressed by a favorable court decision.” People for the Ethical Treatment of Animals ...

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