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Judge Orders OMB to Reinstate EEO-1 Pay Data Collection Tool

2019-03-06

Chances are that OMB will appeal this decision or the Republican EEOC Commissioners will eliminate the pay data requirement

On March 4, 2019, Judge Tanya S. Chutkan of the U.S. District Court for the District of Columbia ordered that EEOC’s EEO-1 pay data collection tool be reinstated immediately.  Judge Chutkan rejected OMB’s argument that the issues related to formatting should halt the plan for businesses to submit detailed worker pay data stating that it was “arbitrary and capricious.” 

The Obama administration proposed adding the new pay data component to require employers to disclose how much worker’s earn in an effort to quantify pay disparities among races and sexes.  EEOC’s expanded proposal was to take effect in 2018 prior to OMB writing to EEOC Acting Chair Lipnic to say that OMB had stopped the rule pending review, citing the Paperwork Reduction Act.

In 2017, the National Women’s Law Center and the Labor Council for Latin American Advancement challenged the OMB’s decision to review the EEOC’s explanation of its EEO-1 pay data inquiry.  In February 2018, the OMB argued that the groups didn’t have the standing to sue because they couldn’t show the decision caused them harm and that decision was not reviewable because it was not a “final agency action.”  Conversely the court found that the decision to stay the data collection was itself a harm and that it was reviewable. 

Judge Chutkan said “while there may be instances when formatting changes could be burdensome, that is not the case here.”  Additionally, she said that the agency didn’t have to review and stay the decision and that it could have reviewed the decision without issuing a stay.  She also stated that OMB’s speculation that the initial estimates of how much burden would be placed on employer’s “may” be wrong since it was not backed up by any analysis. 

With respect to the current administration, Judge Chutkan said “when the Trump administration stayed the pay data collection, the only rationale it gave for blocking this critical equal pay initiative was, in effect, ‘Because I said so.’”  

Employers should hold tight to wait for either OMB to appeal the decision or for a quorum of Republican EEOC Commissions to revise or eliminate the requirement to collect pay data.  However, until Janet Dhillon is confirmed by the Senate EEOC does not have a quorum and cannot act. 

Full court decision in NWLC et al. v. OMB et al 

The foregoing has been prepared for the general information of clients and friends of Workplace Dynamics LLC and is not being represented as being all-inclusive or complete. It has been abridged from legislation, administrative ruling, agency directives, and other information provided by the government. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel.