Just a few weeks before President Trump took office, the Obama administration rolled out a series of discrimination lawsuits that lack congressional authority and make use of sly statistical reasoning to bludgeon technology companies.
The lawsuits against Oracle, Google, Palantir Technologies, and Dell are based solely on highly subjective, skewed readings of hiring practices and compensation figures. This was done on the part of Obama-era bureaucrats who failed to account for a wide variety of variables. While Palantir and Dell have quietly capitulated, Google and Oracle are pushing back against the Department of Labor and its Office of Federal Contract Compliance Programs.
Under the guise of “affirmative action,” the Labor Department continues to push what can aptly be described as an unconstitutional power grab that opens the door to litigation based on statistical analysis without any real evidence of discrimination. The Office of Federal Contract Compliance Programs is a politically potent office that has the authority to bar and disqualify companies from obtaining future federal contracts if they don’t play ball. For this reason, corporate leaders are often reticent to resist the office’s unreasonable document requests, overreaching investigations, and specious allegations of discrimination.
Unless the Trump administration moves decisively to reform the Office of Federal Contract Compliance Programs, federal agents will continue to be in a position to massage data for political purposes. The good news is that the handful of companies willing to take a principled stand against abusive litigation practices have the law on their side.
The Supreme Court has already ruled that evidence of intent is needed to prove actual discrimination, which Obama administration officials, and Obama holdovers in the current administration, have failed to demonstrate. The gender pay gap, for instance, is one obvious example of how incomplete data can be used to coerce desired political outcomes. In a recent report, the Heritage Foundation describes some of the key factors that are overlooked in discrimination allegations that give rise to litigation.
“When accounting for measurable, relevant factors, the statistical pay gap between men and women all but disappears,” the report says. “And because current research has limitations in what factors are included, any remaining gap should not simply be interpreted as reflecting discrimination. Women have shown a strong preference for in-kind benefits over cash wages in polls, for example, which is not included in studies that explore the reasons for the gender wage gap.”
The Heritage report also makes the point that differentiated pay is a “crucial mechanism for attracting and retaining qualified employees.” The rigid, inflexible pay structures federal litigants seek have a distorting influence on labor markets that subtract from economic growth to the detriment of all workers.
The lawsuits could cost the companies millions in federal contracts, according to press releases from the Labor Department that detail the Office of Federal Contract Compliance Programs’ legal actions. There’s nothing subtle about the federal agency’s tactics. “If Oracle fails to provide relief as ordered in the lawsuit, OFCCP, requests that all its government contracts be canceled and that it be debarred from entering into future federal contracts,” the Obama Labor Department declared.
Allowing rogue, politically charged lawsuits to move forward in an effort to harass businesses and extort payments for perceived, but not real, discrimination runs counter to the whole idea of free markets. But under former Labor Secretary Alex Acosta, the Trump administration continued to pursue these same legal complaints against the companies. There’s an opportunity here for Eugene Scalia, who became labor secretary in September, to step into the breach and implement long-overdue reforms in the spirit of originalist jurisprudence.
In a countersuit that Oracle filed against the Labor Department in November, the company makes the powerful point that the status quo approach enables federal bureaucrats to avoid an Article III court without any consideration toward due process and without congressional authorization.
For this reason, the Labor Department is permitted to operate as its own investigator, prosecutor, judge, jury, and appellate court. In doing so, the agency has usurped the authority of the Justice Department, the courts, and the Equal Opportunity Commission. That’s called executive overreach.
The U.S Chamber of Commerce has performed a valuable public service in calling attention to the Office of Federal Contract Compliance Programs’ many transgressions in a report titled: “Right Mission, Wrong Tactics – Recommendations for Reform.” The chamber finds that the “OFCCP is too often antagonistic toward the regulated community, ignores the myriad and effective diversity efforts undertaken by contractors, engages in overly broad and unreasonable fishing expeditions for employment data, and pursues take it or leave it conciliation efforts.” The report goes on to describe several possible reforms that Scalia could consider.
Oracle’s laudable efforts to pull the case into federal court would allow the company to have a fair trial and an opportunity to litigate the allegations beyond the orbit of the executive branch. But there is no substitute for the reforms the Chamber of Commerce has advocated and the need for neutral, detached regulatory efforts that uphold the principles of affirmative action as it was originally defined in an executive order from President John F. Kennedy in 1961.
Kevin Mooney (@KevinMooneyDC) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is an investigative reporter in Washington, D.C., who writes for several national publications.
