Baker DC, LLC v. Secretary, Department of Labor et al
Filing
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ORDER that Defendants Motion for Summary Judgment, (Doc. 12), is DENIED as to Plaintiffs Fourth Amendment claim and GRANTED as to Plaintiffs PRA Claim. The Plaintiffs Motion for Summary Judgment, (Doc. 13), is GRANTED on the Fourth Amendment claim and DENIED on the PRA claim. Signed by Judge Susan J. Dlott on 4/6/18. (wam)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
BAKER DC, LLC.,
Plaintiff,
v.
R. ALEXANDER ACOSTA, Secretary,
United States Department of Labor, et al.,
Defendants.
Case No. 1:17-cv-530
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Judge Susan J. Dlott
ORDER ON CROSS MOTIONS FOR
SUMMARY JUDGMENT
This matter is before the Court on cross motions for summary judgment. Defendants
filed a Motion for Summary Judgment, (Doc. 12), which Plaintiff opposed, (Doc. 17). Plaintiff
filed a Motion for Summary Judgment, (Doc. 13), which Defendants opposed (Doc. 16). All
parties filed replies. (Docs. 18, 19.)
For the reasons set forth below, the Defendants’ Motion for Summary Judgment, (Doc.
12), is DENIED as to Plaintiff’s Fourth Amendment claim and GRANTED as to Plaintiff’s
Paperwork Reduction Act Claim. The Plaintiff’s Motion for Summary Judgment, (Doc. 13), is
GRANTED on the Fourth Amendment claim and DENIED on the Paperwork Reduction Act
claim.
I.
BACKGROUND
A. Facts1
The United States Department of Labor, Office of Federal Contractor Compliance
Programs (“OFCCP”) ensures that covered federal contractors and subcontractors comply with
1
The facts are taken from the ALJ’s Recommended Decision and Order Enforcing Onsite Review. (ALJ Decision,
Doc. 9-2 at PageID 1440–61.)
1
legal requirements under Executive Order 11246, Section 503 of the Rehabilitation Act of 1973,
29 U.S.C. § 793, and the Vietnam Era Veterans’ Readjustment Assistant Act, 38 U.S.C. § 4212,
to take affirmative action and not discriminate based on race, color, sex, sexual orientation,
gender identity, religion, national origin, disability, or status as a protected veteran. (PageID
1454.) Through its Mega Construction Project (“MCP”) program, OFCCP attempts to maximize
limited resources by inspecting and reviewing federal and federally-assisted construction
contractor and subcontractor compliance on particular projects.2
OFCCP gathers “prescheduling information” including information related to “the
current projects underway, number of employees, duration of the projects, and other basic
information . . . to determine if OFCCP has jurisdiction for scheduling a construction review.”
(PageID 1449.) Once jurisdiction is confirmed, OFCCP conducts an onsite review, beginning
with an entrance conference with a top company official or delegate “to educate the
subcontractor on what is expected during the compliance evaluation.” (PageID 1448.) OFCCP
interviews management personnel, and “[t]hen using a list of current projects where there are
employees, OFCCP determines which construction sites to visit to conduct employee
interviews.” (PageID 1451–52.) OFCCP also requests documents and establishes a date the
documents will be submitted. (PageID 1452.)
On September 30, 2014, the General Services Administration awarded Grunley
Construction Company a $139 million contract to renovate a building on the St. Elizabeths West
Campus in Washington, D.C. (PageID 1442.) OFCCP selected this project as a MCP, and
Grunley Construction agreed to participate in OFCCP’s MCP program. (Id.) For selected
MCPs, the prime contractor is always scheduled for a compliance review, and the subcontractors
2
To be selected as a MCP, the project must have a value of at least $25 million and a duration of at least one year.
(PageID 1442, fn. 4.)
2
become eligible for scheduling once they have worked on the MCP for three months. (PageID
1450.) Subcontractors are scheduled for compliance review in the order in which they reach the
three month mark “unless [OFCCP] had received credible reports of discrimination, in which
case they would move up the list.” (PageID 1451.)
At an OFCCP outreach event on February 9, 2015, some individual attendees complained
to OFCCP Assistant District Director Tanya Bennett about Baker DC’s treatment of African
American employees. (PageID 1446.) In addition, one person telephoned Ms. Bennett after the
event to make five specific allegations of discrimination, (id.), but no formal complaints were
filed against Baker DC by any of the oral complainants. (PageID 1451.)
In June and September 2015, Grunley Construction awarded federal subcontracts to
Baker DC—a concrete construction contractor—for the St. Elizabeths project for $100,000 and
$15 million, respectively. (PageID 1442.) Baker DC began working on the project in November
2015, and reached its three-month date at the end of January 2016. (PageID 1450.)
In February 2016, OFCCP began scheduling compliance reviews for the relevant phase
of the St. Elizabeths MCP. (PageID 1444.) OFCCP provided a partially-redacted chart3
identifying the order in which construction contractors would be eligible for review, as follows:
#
Contractor
1
2
3
4
5
6
7
8
Grunley Construction Co., Inc.
Contractor #2
Contractor #3
Contractor #4
Contractor #5
Contractor #6
Contractor #7
Contractor #8
Month Reached 3
Months’ Work
Prime Contractor
May 2015
May 2015
June 2015
June 2015
August 2015
August 2015
January 2016
3
Date Scheduled for
Review
2/29/16
8/1/16
8/1/16
2/29/16 (received
credible verbal
The chart OFCCP provided appropriately redacted the names of other subcontractors. For clarity, we reproduce
the chart here using “Contractor #x” in place of redactions. (See PageID 1444.) There were four other contractors
who reached three months’ work in January 2016 who would have been listed below Baker DC on the chart. (Id.)
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complaints followed by a
formal complaint)
9 Contractor #9
10 Baker DC
January 2016
January 2016
3/17/16 (received
credible verbal
complaints)
According to Tom Wells, the Director of the OFCCP Baltimore District Office, OFCCP
scheduled Grunley Construction first because it was the prime contractor. (PageID 1450.)
Contractor #8 and Baker DC were scheduled for review next because OFCCP received “credible
complaints of discrimination.” (Id.) Contractors #2 and #3 were scheduled after that “because
they were the next contractors to reach three months of work on the Mega Project.” (Id.) “Mr.
Wells explained that OFCCP schedules contractors for whom it receives credible complaints out
of order because such companies are of concern to OFCCP and its procedures.” (Id.) “OFCCP
has never received credible complaints of discrimination against a contractor and not moved
them up the list.” (PageID 1450–51.)
Although no “formal complaints” had been filed with OFCCP regarding Baker DC, Mr.
Wells found the complaints made at and shortly after the outreach event “to be credible based on
the fact that OFCCP received the information from several people and there was specificity to
the complaints.” (PageID 1451.) He defined “credible” to mean “good reason to believe that the
statements could be true.” (Id.) Mr. Wells acknowledged that he did not speak to any of the oral
complainants, did not make any notes at the time of the complaints, and “does not know if any of
the complainants, besides one, worked for” Baker DC. (PageID 1452.) Mr. Wells did not
investigate the complaints at the time because “such determination would have been done
through the compliance review OFCCP sought to conduct.” (Id.)
OFCCP notified Baker DC it had been selected for compliance review, and Baker DC’s
attorney contacted Mr. Wells “to obviate the need for an entrance conference.” (PageID 1442.)
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At OFCCP’s request, Baker DC’s attorney arranged for an OFCCP compliance officer to
interview Baker DC’s Corporate Compliance Manager and two other managers via telephone.
(Id.) OFCCP then requested specific documents4 “as part of an on-site review and on-site
employee interviews to be conducted,” but Baker DC—through counsel—denied those requests.
(Id.) OFCCP issued a “Notice to Show Cause” for its denial of access to its Washington, D.C.
worksites, but Baker DC refused to allow entrance. (Id.)
B. Procedural Posture
On January 13, 2017, OFCCP filed a complaint with the United States Department of
Labor, Office of Administrative Law Judges, alleging that Baker DC refused to supply records
and permit an on-site compliance review in violation of Executive Order 11246, Section 503 of
the Rehabilitation Act of 1973, 29 U.S.C. § 793, and VEVRA, 38 U.S.C. § 4212. The ALJ
conducted a hearing on May 23, 2017, and issued a Recommended Decision and Order
Enforcing Onsite Review. (Doc. 9-2 at PageID 1440–61.) The ALJ resolved all legal issues in
OFCCP’s favor, and concluded that an onsite compliance review had begun on May 11, 2016,
with OFCCP’s telephone interview of Baker DC’s managers. (PageID 1458.) Baker filed
exceptions to the ALJ’s Recommended Decision before the Department of Labor’s
Administrative Review Board. (PageID 1505–33.) The Administrative Review Board did not
issue a final order within 30 days of the time for filing exceptions so the ALJ’s Recommended
Decision and Order became a final administrative order on the 31st day, pursuant to 41 C.F.R. §
60-30.37. Baker then appealed the final administrative order to this Court pursuant to the APA.
This matter is now before the Court on Plaintiff’s and Defendants’ Motions for Summary
Judgment (Docs. 12 and 13).
4
The requested documents included an employee roster, list of active projects, payroll records, and applicant
tracking data. (PageID 1442, fn. 5.)
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II.
STANDARD OF REVIEW
When reviewing a final administrative order under the APA, “the usual rules governing
summary judgment do not apply.” Integrity Gymnastics & Pure Power Cheerleading, LLC v.
U.S. Citizenship and Immigration Servs., 131 F.Supp.3d 721, 725 (S.D. Ohio 2015) (citing City
of Cleveland v. Ohio, 508 F.3d 827 (6th Cir. 2007)). Rather, a district court is to determine only
whether the agency’s decision was “arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with the law.” 5 U.S.C. § 706(a)(2). “A determination of whether an agency’s
action was arbitrary, capricious, or an abuse of discretion must be made on the basis of the
administrative record.” Integrity Gymnastics, 131 F.Supp.3d at 726; 5 U.S.C. § 706; Trinity
Industries, Inc. v. Occupational Safety and Health Review Comm’n., 16 F.3d 1455 (1994).
“[O]ur review of the ALJ’s factual determinations is limited to determining whether those
determinations are supported by substantial evidence on the record as a whole—not whether
there was substantial evidence in the record for a result other than that arrived at by the ALJ.”
Steeltech, Ltd. v. United States E.P.A., 273 F.3d 652, 657 (6th Cir. 2001). The Court reviews
“questions of law de novo, though some deference may be owed where the agency is reasonably
interpreting the statutes it is charged with administering.” R/T 182, LLC v. F.A.A., 519 F.3d 307,
309 (6th Cir. 2008)
III.
ANALYSIS
A. Fourth Amendment Right to be Free from Unreasonable Searches and Seizures
Plaintiff appeals the ALJ’s Order Enforcing Onsite Review alleging that the warrantless
search violates Plaintiff’s Fourth Amendment right to be free from unreasonable searches and
seizures. Defendants counter that Plaintiff was selected for review using a neutral administrative
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plan applicable to all subcontractors working on federally-funded mega construction projects,
and, therefore, the Fourth Amendment requirements have been satisfied.
“[T]he Fourth Amendment prohibition against unreasonable searches protects against
warrantless intrusions during civil as well as criminal investigations.” Marshall v. Barlow’s,
Inc., 436 U.S. 307, 312, 98 S.Ct. 1816 (1978). “The businessman, like the occupant of a
residence, has a constitutional right to go about his business free from unreasonable official
entries upon his private commercial property.” Id. However, “probable cause in the criminal
law sense is not required.” Id. at 320. Rather, administrative probable cause may be based on
either “specific evidence of an existing violation” or on a showing that “reasonable legislative or
administrative standards for conducting an . . . inspection are satisfied with respect to a particular
establishment.” Barlow’s, 436 U.S. at 325. A business chosen for inspection “on the basis of a
general administrative plan for the enforcement of the Act derived from neutral sources . . .
would protect an employer’s Fourth Amendment rights.” Trinity Indus., Inc. v. Occupational
Safety and Health Review Comm’n., 16 F.3d 1455, 1460 (6th Cir. 1994) (quoting Barlow’s, 436
U.S. at 320–21). Thus, “[a] permissible administrative plan relies on ‘either random selection or
selection by relevant statistics that have no individual human component for the reason that
searches flowing from these types of plans could not be the product of an agency’s arbitrary
decision.’” Eng’g. & Mfg. Servs., LLC v. Ashton, 387 Fed. App’x. 575, 585 (6th Cir. 2010)
(citing Trinity Indus., 16 F.3d at 1463 (Batchelder, J., concurring)).
The key requirement, as the parties agree, is that the administrative plan be “derived from
neutral sources.” See Trinity Ind., 16 F.3d at 1460. “Because administrative and legislative
guidelines ensure that employers selected for inspection pursuant to neutral administrative plans
have not been chosen simply for the purpose of harassment, courts have held that administrative
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plan searches may properly extend to the entire workplace.” Id. (citing Donovan v. Sarasota
Concrete Co., 683 F.2d 1061, 1068 (11th Cir. 1982) (emphasis added)).
An administrative plan that selects companies for inspection based solely on working on
a federally-funded contract for three months would be “derived from neutral sources.” To the
contrary, a plan triggered by an employee complaint would not meet the neutrality requirement.
Trinity Industries, 16 F.3d at 1460. The issue here, then, is whether a plan that selects companies
for inspection based on the neutral criteria of three months’ work loses the required neutrality by
inspecting first those companies against whom a “credible complaint” has been made. The Court
concludes that the answer to that question depends on whether all of the eligible companies are
actually inspected.
In the case at bar, OFCCP uses neutral selection criteria—three months’ work on a
MCP—to compile a list of contractors eligible for full compliance review. Those companies are
inspected based on the date upon which each contractor reaches the three months’ work mark.
At that point the process is still neutral. However, an individual enforcement officer moves any
contractors against whom a “credible complaint” has been made to the earliest possible
inspection dates. (PageID 1450–52.)
If, as in Indus. Steel Prod. Co. v. Occupational Safety & Health Admin., 845 F.2d 1330,
1334 (5th Cir. 1988), “[a]ll firms within a cycle will be inspected in the space of several months
in any case,” then “[r]earranging their order within the cycle is not discriminatory.” However,
the facts of this case—as determined by the ALJ—do not demonstrate that all subcontractors
within a project will ultimately be inspected. To the contrary, OFCCP’s brief acknowledges that
it “has not yet had the resources available to schedule all subcontractors who had worked for
three or more months on the St. Elizabeths project.” (PageID 1661.) Indeed, the evidence before
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the ALJ indicated that only four of the 13 eligible subcontractors had been scheduled for review.
(PageID 1444.)
This case, therefore, is similar to Eng’g. & Mfg. Servs., 387 Fed. App’x. at 575. There, a
legislative plan to ensure fire safety called for inspection of commercial buildings annually—a
neutral source requirement. However, the evidence indicated that while annual inspections were
a goal, only a small number of commercial buildings were actually inspected annually due to
limited resources, leaving enforcement officers to select the specific buildings to be inspected
each year. Id. at 585. The Court concluded, “[T]he Fire Department’s administrative plan for
annual inspections has human input and components and is thus not neutral.” Id.
In the case at bar, OFCCP—like the Fire Department in Engineering & Mfg. Services—
has a laudable goal and a facially neutral administrative plan. However, because neither OFCCP
nor the Fire Department in Engineering & Mfg. Servs. has the resources to inspect every
company that qualifies for a compliance review, the order in which the businesses are scheduled
for inspection actually determines whether the business will be selected for inspection at all.
OFCCP bases the order on which a contractor will be inspected—once it has qualified for
inspection by working three months on an MCP—entirely on an enforcement officer’s
determination that a “credible complaint” has been filed against it. (PageID 1450–51.) An
individual enforcement officer moves any contractors against whom a “credible complaint” has
been made (whether that complaint is formal or informal, oral or written, verified or unverified,
from an employee or an outsider, or before or after the contract was awarded) to the earliest
possible inspection dates, thereby effectively selecting the contractor for review. (PageID 1450–
52.) In practice, the administrative officer in the field enjoys the “almost unbridled discretion . . .
as to when to search and whom to search,” that the United States Supreme Court sought to limit
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in Barlow’s. Accordingly, OFCCP’s administrative plan—as administered—is not sufficiently
neutral to comply with Fourth Amendment requirements, and the Plaintiff is entitled to summary
judgment on this issue.
B. The Paperwork Reduction Act Does Not Apply
Plaintiff’s second count alleges that OFCCP’s request to review documents violated the
Paperwork Reduction Act (“PRA”), 44 U.S.C. § 3501, et seq. The PRA “gives the Office of
Management and Budget the responsibility for ensuring that certain agency information requests
are not unduly burdensome.” United Space Alliance, LLC v. Solis, 824 F.Supp. 2d 68, 94
(D.D.C. 2011). The PRA provides, in relevant part:
(a) Notwithstanding any other provision of law, no person shall be
subject to any penalty for failing to comply with a collection of
information that is subject to this subchapter if-(1) the collection of information does not display a valid control
number assigned by the Director in accordance with this
subchapter; or
(2) the agency fails to inform the person who is to respond to the
collection of information that such person is not required to
respond to the collection of information unless it displays a valid
control number.
44 U.S.C.A. § 3512(a). The PRA specifically exempts agency administrative actions or
investigations involving specific entities. 44 U.S.C.A. § 3518(c)(1)(B)(ii).
Quite simply, OFCCP’s document requests are not “a collection of information” within
the meaning of the PRA. OFCCP attempted to begin the administrative audit as usual where a
“compliance officer interviews the CEO or facility director and HR personnel and asks for
records pertaining to employment activity.” (PageID 1449.) OFCCP District Director “wrote an
email requesting several items from [Baker DC]; the document request was made by email
because [Baker DC] notified OFCCP that there would not be anyone at the physical location and
so the onsite phase of the review was initiated telephonically.” (PageID 1452.) An OFCCP
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compliance officer “conducted a ‘virtual’ onsite via telephone on May 11, 2016 during which
she interviewed” Baker DC management and human resources personnel. (PageID 1449.) The
compliance officer requested specific documents during the May 11, 2016 interview “because
[Baker DC] told us not to come onsite.” (Id.)
Baker DC makes much of the fact that an “onsite” review never began because OFCCP
personnel did not physically enter its property, but that argument is irrelevant to its PRA claim.
There is no question from the record before the ALJ that OFCCP requested the documents
specifically of Baker DC as part of its attempted administrative compliance review. Thus, the
PRA does not apply, and the Defendants are entitled to summary judgment on Plaintiff’s PRA
claim.
IV.
CONCLUSION
For the foregoing reasons, the Defendants’ Motion for Summary Judgment, (Doc. 12), is
DENIED as to Plaintiff’s Fourth Amendment claim and GRANTED as to Plaintiff’s PRA
Claim. The Plaintiff’s Motion for Summary Judgment, (Doc. 13), is GRANTED on the Fourth
Amendment claim and DENIED on the PRA claim.
IT IS SO ORDERED.
Dated: April 6, 2018
S/Susan J. Dlott_______________________
Judge Susan J. Dlott
United States District Court
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