CENTER FOR REGULATORY EFFECTIVENESS: Public Comments of the Center for Regulatory Effectiveness in Opposition to EEOC's Request for Renewal of Control No. 0346-0007; Preliminary Statement: Emerging Regulatory Issues

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Public Comments of
the Center for Regulatory Effectiveness
in Opposition to EEOC's Request for Renewal of Control No. 0346-0007

Preliminary Statement

The Center for Regulatory Effectiveness ("CRE") hereby submits the following comments in opposition to the request of the Equal Employment Opportunity Commission ("EEOC") for OMB's approval of renewal of control number 0346-0007. OMB is required to disapprove EEOC's request, because:

Virtually all of the purposes for which the information sought would be used are unlawful under the controlling decisions of the U.S. Supreme Court in Adarand Constructors, Inc. v. Pena, 515, U.S. 200, 115 S.Ct. 2097 (1995) and the U.S. Circuit Court for the District of Columbia in Lutheran Church-Missouri Synod v. FCC, 141 F.3d 344, reh'g denied, 154 F.3d 487 (D.C. Cir. 1998).

The regulation pursuant to which the information is currently being collected exceeds the authorization of the statute, which requires the monitoring of compliance with equal employment opportunity laws, not the enforcement of preference programs.

The instructions accompanying the form encourage respondents to collect the information in a manner that produces statistically unreliable data.

The instructions accompanying the form encourage respondents to collect the information in a manner inconsistent with OMB's standards for the classification of Federal data on race and ethnicity. In light of the issues raised in these comments:

As a precondition to approval of this control number or any substantially similar regulation, OMB should require EEOC to open a public proceeding to reconsider EEOC's existing EEO information collection regulations and legitimate compliance monitoring and enforcement procedures as defined in Adarand and Lutheran Church.

As approximately 100 court decisions have construed Adarand and Lutheran Church since 1995, substantial public debate will be required.
OMB should require EEOC to develop an EEOC compliance monitoring regulation that is "narrowly tailored" to the requirements of the Federal civil rights statutes, which are limited to preventing discrimination and, properly interpreted, do not authorize "race-conscious decision-making," as the Adarand and Lutheran Church decisions make clear. A. The Adarand and Lutheran Church-Missouri Synod Decisions.

In Adarand, the U.S. Supreme Court invalidated a Federal highway contracting preference program, holding that "all racial classifications, imposed by whatever federal, state, or local governmental actor, must be analyzed by a reviewing court under strict scrutiny. In other words, such classifications are constitutional only if they are narrowly tailored measures that further compelling governmental interests." 515 U.S. at 227, 115 S.Ct. at 2113.

In Lutheran Church-Missouri Synod v. F.C.C., supra, the District of Columbia Circuit applied Adarand in the equal employment opportunity ("EEO") context, invalidating EEO regulations of the Federal Communications Commission ("FCC") under which radio station hiring results were required to mirror perceived local demographic characteristics. In particular, the D.C. Circuit held that: (i) EEO regulations that pressure employers to engage in "race-conscious hiring decisions" or "race-conscious decision-making" are subject to strict scrutiny; and (ii) a governmental policy in favor of "diversity" is not sufficient to survive strict scrutiny examination. The court reasoned that "equal employment opportunity" regulations "built on the notion that [employers] should aspire to a workforce that attains, or at least approaches, proportional representation," are subject to the strict scrutiny test, because:

[t]he very term "underrepresentation" necessarily implies that if such a situation exists, the station is behaving in a manner that falls short of the desired outcome. The regulations pressure stations to maintain a workforce that mirrors the racial breakdown of their "metropolitan statistical area."

141 F.3d at 352. Significant to this discussion, the court notes that racially- or ethnically-neutral hiring practices do not necessarily result in proportional representation in an employer's workforce. Id. In violation of Adarand, the FCC's EEO program pressured employers to engaged in race- or ethnic-conscious hiring due to the fact that the FCC launched investigations of employers based solely on racial statistical profiles. Id. at 352-53. The court pointed out that even the Federal government was required to characterize this as de facto hiring quotas," and recognized that "broadcasters, in order to avoid the inconvenience and expense of being subject to further review, will treat the guidelines as 'safe harbors.'" Id. at 353. Consequently, the court concluded that:

we do not think it matters whether a government hiring program imposes hard quotas, soft quotas, or goals. Any one of these techniques induces an employer to hire with an eye toward meeting the numerical target. As such, they can and surely will result in individuals being granted a preference because of their race.

Id. at 354. In sum, Lutheran Church stands for the proposition that a Federal agency cannot collect employee ethnicity data for the purpose of monitoring "compliance" of employers' hiring practices, because: (i) unbiased hiring practices do not necessarily result in a workforce that "mirrors" local demographics; and (ii) the use of ethnicity data for compliance monitoring and enforcement purposes pressures employers into committing the very offense the anti-discrimination laws are supposed to eradicate � ethnic-conscious decision-making.
B. EEOC's Use of Employment Data is Unlawful in Light of the Adarand and Lutheran Church Decisions. EEOC's Supporting Statement indicates that the three primary uses of the data collected pursuant to control number 0346-0007 are uses that are plainly unlawful in light of Adarand and Lutheran Church.

1.  Identification of targets for investigations.

According to the Supporting Statement:
"The data are...used as labor market standards for comparing an individual employer's workforce with an industry's EEO profile."

"EEO-1 data are especially crucial to the success of OFCCP's Equal Employment Data Systems (EEDS). This system...is used to select non-construction Federal government contractor establishments for compliance reviews."

"OFCCP uses data from the individual EEO-1 reports to compare contractor establishments in order to develop compliance review priorities."

The Form is being made available in CD format to each EEOC district office "for use by investigators in the resolution of charges of employment discrimination."
These representations by EEOC make it clear that the primary danger identified by the D.C. Circuit in the Lutheran Church decision � that employers are being intimidated or pressured into engaging in unlawful race- or ethnicity-conscious decision-making in order to comply with preconceived demographic expectations of EEOC investigators � is the clear purpose of the EEOC's information collection practices. As explained by the D.C. Circuit, EEOC's regulation, along with the information collections utilized to enforce compliance with the regulation, create a presumption that hiring results not conforming to EEOC's preconceived demographic expectations are being used to trigger costly investigations of employers. In consequence, employers are forced to take race and ethnicity into account in making employment decisions � the very opposite of what is intended by the constitutional requirement of equal protection and our equal employment opportunity laws. In light of these considerations, OMB simply must not approve EEOC's unlawful use of data collected pursuant to control number 0346-0007. OMB is in place to prevent precisely such lawless invasions of the law through data collection schemes.

2.  Transmission of data to States for State investigatory purposes. According to the Supporting Statement, "EEOC is required to supply survey data free of charge to state and local Fair Employment Practices Agencies (FEPAs). Approximately 86 FEPAs have negotiated agreements to share these data to resolve charges of discrimination within their respective jurisdiction and for research." In other words, the unlawfulness at the Federal level is being compounded by the dissemination of the same data to State and local governments, which also use the data in violation of their own obligations under Adarand. 3.  Use in class action lawsuits and other litigation. According to the Supporting Statement, "EEO-1 data are used extensively as a standard of comparison in various stages of investigation in class action cases from the presentation [of] memoranda...to submissions to trial courts..." Once again, EEOC acknowledges that data collected pursuant to control number 0346-0007 is being used at every step of the compliance monitoring, investigation and enforcement process, particularly as supposed justification for classifications which, under Adarand and Lutheran Church, impose illegitimate costs on defendants and the judicial system.

4.  Monitoring of affirmative action programs. According to EEOC, "[t]he OFCCP [Office of Federal Contract Compliance Programs, within the Employment Standards Division of the Labor Department], which annually receives the full EEO-1 data file from EEOC, is responsible for determining whether employers doing business with the Federal government discriminate in employment practices. EEO-1 data are critical in this regard and are used by the OFCCP to monitor affirmative action programs, and as support data for litigation and OFCCP programs." Adarand removes any doubt that, absent a compelling governmental interest (e.g., proven history of unlawful discrimination), the imposition of preferential hiring programs as a condition of participating in government programs are invalId. Therefore, OMB cannot sanction this use of the data by EEOC¹.

C. Absence of "Purpose" and "Statistical Reliability" Under the Paperwork Reduction Act. The fatal constitutional flaws in EEOC's information collection requirements and compliance monitoring and enforcement procedures under the Adarand and Lutheran Church decisions raise serious problems under the Paperwork Reduction Act. In particular, the "purpose" and "statistical reliability" requirements are violated by EEOC's ongoing collection of data pursuant to control number 0346-0007.

1. "Purpose." Renewal of control number 0346-0007 would violate the "purpose" test under the Paperwork Reduction Act, because the data solicited by EEOC exceeds the lawfully interpreted requirements of the statute EEOC purports to implement. That statutory provision, section 709(c) of Title VII of the Civil Rights Act of 1964 (42 U.S.C. � 2000e-8(c)), provides that "every employer...subject to this subchapter shall...make and keep such records relevant to the determinations of whether unlawful employment practices have been or are being committed." Under Adarand and Lutheran Church, EEOC is required to implement this statutory provision in a manner that prevents 'malignant' discrimination against individuals based on race and ethnicity; EEOC is not empowered to impose supposedly 'benign' forms of discrimination on the basis of race or ethnicity absent a compelling governmental need. Because the data collected by EEOC is being used for statutorily invalid purposes, the "purpose" test is not met, and OMB cannot renew its approval of the control number.

2. Statistical unreliability of data collected by EEOC. According to the Supporting Statement, "no probability sampling is used, nor are statistical methods" employed in connection with the EEO-1 Form. This statement reflects a fundamental misunderstanding by EEOC of its obligations under the Paperwork Reduction Act. EEOC seems to be saying that, because EEOC is not itself directly undertaking probability sampling or other statistical methods, EEOC is exempt from any obligation to ensure that the data it collects is "reliable." In fact, the opposite is the case; Federal agencies such as EEOC have an affirmative obligation to ensure that the raw data they collect from the public is statistically reliable, so that analyses based on such data will result in sound decision-making.

According to OMB's draft guidance for implementing the Paperwork Reduction Act, "poor methodology or execution that introduces errors or uncertainties," including "coverage gaps and nonresponse," can render the collected data "unreliable," so that OMB approval would be precluded. Yet the instructions accompanying the EEO-1 Form direct respondents to collect ethnicity data in a manner that is almost guaranteed to produce inaccurate results. For example, in making employee ethnicity determinations, respondents are directed to conduct "visual surveys." To the extent that this "methodology" is unsound, OMB is obligated to disapprove renewal of control number 0346-0007.

D. OMB Standards for the Classification of Federal Data on Race and Ethnicity.

OMB's Standards for the Classification of Federal Data on Race and Ethnicity state that "respondent self-identification" is to be preferred over other methods of ethnic identification, "except in instances where observer identification is more practical (e.g., completing a death certificate)." 62 Fed. Reg. 58,785 (Oct. 30, 1997). In light of this OMB preference, EEOC has failed to demonstrate why it is employing "visual surveys" instead of "respondent self-identification," despite the fact that the latter method produces more accurate results.

Conclusion

These comments demonstrate that EEOC has failed to take Adarand and Lutheran Church into account in its existing regulations, which are not, in any pertinent respect, modified in this extension request. EEOC has failed to address these developments in its public notices, internal debates, or dealings with OMB, despite their obvious direct relevance to the question of renewal of control number 0346-0007. Under these circumstances it would be highly inappropriate for OMB to approve renewal of control number 0346-0007 at the present time. Rather, as is suggested at page 1 above, all of the legal issues raised by the Adarand and Lutheran Church decisions should be noticed for public comment and reconsidered by both EEOC and OMB in the light of comments received. Otherwise, it is respectfully submitted, OMB would join EEOC and OFCCP, and State agencies which utilize the EEO-1, in violation of the equal protection requirements of the Fifth Amendment to the Constitution of the United States and Adarand and Lutheran Church.

¹ EEOC identifies three additional subsidiary uses of data collected pursuant to control number 0346-0007 (i.e., dissemination to the public pursuant to individual requests, research, and monitoring the development of voluntary affirmative action programs by large employers). While these uses may not violate Adarand and Lutheran Church to the extent that they reflect voluntary, private-sector activities, these uses are clearly not central to EEOC's main purpose in colleting the data, i.e., monitoring compliance with regulations that are no longer constitutionally valId. In any event, voluntary programs do no constitute waivers of Adarand and Lutheran Church rights.

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