Employment Law Daily Lawsuit challenges rollback of revised EEO-1 report’s pay data collection
Tuesday, November 21, 2017

Lawsuit challenges rollback of revised EEO-1 report’s pay data collection

By Pamela Wolf, J.D.

The National Women’s Law Center (NWLC) and the Labor Council for Latin American Advancement have filed a lawsuit against the Trump Administration for what they see as the unlawful rollback of the revised EEO-1 report, which would have required companies with 100 or more employees to report on how much they pay their workers by race, gender, and ethnicity. The plaintiffs described the revised information collection as “critical pay transparency requirements intended to root out discrimination and close the wage gap.” The suit, which names the Office of Management and Budget (OMB) and the EEOC and corresponding officials as defendants, seeks to reinstate these requirements.

OMB interference. The complaint challenges what the plaintiffs contend is the interference of the OMB and its officials into the EEOC’s ability to enforce the nation’s civil rights laws. These defendants halted “a years-long effort by the EEOC to collect information on employee pay, and did so without legal authority or meaningful analysis,” the complaint alleges. “Despite the facts that OMB had approved such a collection only one year before, and that there was no intervening change in circumstances, OMB Defendants unilaterally stayed employers’ obligation to report pay data for their employees.” To justify their actions, the OMB defendants said the pay data collection “lacked utility, disregarding the EEOC’s conclusion that collecting pay data is necessary to remedy persistent wage gaps correlated with sex, race, and ethnicity,” according to the complaint.

As the NWLC notes, the revised EEO-1 report’s equal pay data collection was the result of a six-year process, which included multiple lengthy public notice and comment periods. Although the EEOC had determined that collecting this pay data was “necessary” to enforce equal pay laws, the Trump Administration claimed it had no “practical utility” and eliminated it with no opportunity for public comment.

“As a result, the roughly 60,886 employers covered by the rule—who collectively employ 63 million workers—are empowered to continue to shield race and gender pay gaps from scrutiny,” The NWLC said in a release.

Unlawful rollback. The plaintiffs contend that the rollback of the pay data collection was unlawful under the Paperwork Reduction Act, asserting that the OMB defendants lacked legal authority to undo the revised information collection that the EEOC determined necessary after complying with PRA requirements.

Nearly a year after the OMB had approved the pay data collection, Neomi Rao, Administrator of the Office of Information, issued a memorandum to the EEOC’s Acting Chair stating that the OMB was initiating a review and immediate stay of the revision to the EEO-1 to collect pay data, with “scant explanation for the decision,” according to the complaint. Among other things, the complaint states that the memorandum “did not address the fact that the EEO-1 is required by EEOC and OFCCP regulations, and that OMB Defendants therefore did not have legal authority to stay it.”

The plaintiffs challenge the actions of the OMB defendants under the Administrative Procedure Act, claiming they exceed the OMB’s authority and are contrary to regulations, arbitrary and capricious, and contrary to statute. They also challenge the OMB defendants’ actions under the PRA as contrary to statute.

Persistent pay gap. It’s no secret that the gender-based pay gap continues. Despite President Trump’s claim that women will “make the same if you do as good a job” as men, U.S. women currently are paid $0.80 for every dollar their white male counterparts make, the NWLC observed. The gap for women of color is even larger, with Latina and African-American women making $0.54 and $0.63 on the dollar, respectively, compared to white, non-Hispanic men.

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