State of Texas v. EEOC et al

Filing 25

RESPONSE filed by State of Texas re: 15 MOTION to Dismiss (Attachments: # 1 Exhibit(s) Vance v. Ball State, # 2 Exhibit(s) UT v. Nassar) (Mitchell, Jonathan)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
LUBBOCK DIVISION
STATE OF TEXAS,
Plaintiff,
vs.

Case No. 5:13-cv-00255-C

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
JACQUELINE A. BERRIEN,
in her official capacity as Chair of the Equal
Employment Opportunity Commission,
and
ERIC H. HOLDER,
in his official capacity as Attorney General
of the United States,
Defendants.

PLAINTIFF ’S OPPOSITION TO MOTION TO DISMISS

TABLE OF CONTENTS
Table of Authorities........................................................................................................................................... ii
Introduction ........................................................................................................................................................ 1
Background ......................................................................................................................................................... 1
Summary of Argument...................................................................................................................................... 3
Argument ............................................................................................................................................................ 4
I.

The State Has Standing .......................................................................................................... 4
A.
B.

II.

The State’s Injuries Are Concrete, Traceable, and Redressable ......................... 4
EEOC’s Counterarguments Are Meritless ............................................................ 6

The State’s Claims Are Ripe.................................................................................................. 8
A.

The State’s Claims Are Presumptively Reviewable, And EEOC Does
Not Attempt To Rebut That Presumption ........................................................... 8
1.
2.

B.
III.

The State’s claims are fit for review .......................................................... 9
The balance of hardships tips decidedly in the State’s favor ..............11

EEOC’s Counterarguments Lack Merit ..............................................................14

The Felon-Hiring Rule Constitutes Final Agency Action ..............................................16
A.

The Felon-Hiring Rule Is Reviewable Under Section 704................................17

B.

EEOC’s Counterarguments Lack Merit ..............................................................23

Conclusion ........................................................................................................................................................25
Certificate of Service
Exhibits

TABLE OF AUTHORITIES
Cases
Abbott Labs. v. Gardner,
387 U.S. 136 (1967) .................................................................................................................. 8, 9, 13, 15
Alaska v. United States Dep’t of Transp.,
868 F.2d 441 (D.C. Cir. 1989).................................................................................................................. 8
Alfred L. Snapp & Son, Inc. v. Puerto Rico,
458 U.S. 592 (1982) ................................................................................................................................... 8
American Bus Ass’n v. United States,
627 F.2d 525 (D.C. Cir. 1980)......................................................................................................... 18, 22
Appalachian Power Co. v. EPA,
208 F.3d 1015 (D.C. Cir. 2000).................................................................................... 18, 19, 22, 23, 24
AT&T v. EEOC,
270 F.3d 973 (D.C. Cir. 2001)................................................................................................................24
Atchison, Topeka & Santa Fe Ry. v. Pena,
44 F.3d 437 (7th Cir. 1994) ....................................................................................................................20
Barrick Goldstrike Mines v. Browner,
215 F.3d 45 (D.C. Cir. 2000) ..................................................................................................... 19, 22, 23
Bennett v. Spear,
520 U.S. 154 (1997) .................................................................................................................................17
Better Gov’t Ass’n v. Department of State,
780 F.2d 86 (D.C. Cir. 1986) ........................................................................................................... 19, 23
Board of Trs. Univ. of Ala. v. Garrett,
531 U.S. 356 (2001) .................................................................................................................................16
Christopher v. SmithKline Beecham Corp.,
132 S. Ct. 2156 (2012) .............................................................................................................................10
Ciba-Geigy Corp. v. EPA,
801 F.2d 430 (D.C. Cir. 1986)......................................................................................................... 14, 24
City of Boerne v. Flores,
521 U.S. 507 (1997) .................................................................................................................................16
City of Dania Beach v. FAA,
485 F.3d 1181 (D.C. Cir. 2007)..............................................................................................................24
ii

Clean Air Implementation Project v. EPA,
150 F.3d 1200 (D.C. Cir. 1998)..............................................................................................................13
Cohen v. United States,
578 F.3d 1 (D.C. Cir. 2009) ................................................................................................ 17, 18, 20, 22
Cohen v. United States,
650 F.3d 717 (D.C. Cir. 2011) (en banc) ..............................................................................................17
CSI Aviation Servs. v. DOT,
637 F.3d 408 (D.C. Cir. 2011)................................................................................................................24
Eagle-Picher Indus., Inc. v. EPA,
759 F.2d 905 (D.C. Cir. 1985).................................................................................................................. 9
EEOC v. Peoplemark, Inc.,
732 F.3d 584 (6th Cir. 2013) ........................................................................................ 1, 2, 7, 11, 12, 15
El v. SEPTA,
479 F.3d 232 (3d Cir. 2007)............................................................................................................... 2, 14
Federal Express Corp. v. Holowecki,
552 U.S. 389 (2008) .......................................................................................................................... 24, 25
Illinois Dep’t of Transp. v. Hinson,
122 F.3d 370 (7th Cir. 1997) .................................................................................................................... 8
Kimel v. Florida Bd. of Regents,
528 U.S. 62 (2000) ...................................................................................................................................16
Lujan v. Defenders of Wildlife,
504 U.S. 555 (1992) ........................................................................................................................ 4, 5, 24
Manufactured Housing Institute v. EPA,
467 F.3d 391 (4th Cir. 2006) ........................................................................................................... 20, 22
McLouth Steel Prods. Corp. v. Thomas,
838 F.2d 1317 (D.C. Cir. 1988)..............................................................................................................23
NRDC v. EPA,
643 F.3d 311 (D.C. Cir. 2011).................................................................................................. 19, 20, 22
Ohio Forestry Ass’n v. Sierra Club,
523 U.S. 726 (1998) ............................................................................................................................ 9, 13
Owner-Operator Indep. Drivers Ass’n v. Federal Motor Carrier Safety Admin.,
656 F.3d 580 (7th Cir. 2011) .............................................................................................. 6, 7, 9, 13, 15

iii

Reckitt Benckiser v. EPA,
613 F.3d 1131 (D.C. Cir. 2010)..............................................................................................................13
Roark & Hardee LP v. City of Austin,
522 F.3d 533 (5th Cir. 2008) ..................................................................................................................12
Sabre, Inc. v. Department of Transp.,
429 F.3d 1113 (D.C. Cir. 2005)...................................................................................... 9, 11, 12, 14, 16
Safe Extensions v. FAA,
509 F.3d 593 (D.C. Cir. 2007)................................................................................................................24
Seminole Tribe of Florida v. Florida,
517 U.S. 44 (1996) ...................................................................................................................................16
Shaughnessy v. Pedreiro,
349 U.S. 48 (1955) ..................................................................................................................................... 9
Shays v. FEC,
414 F.3d 76 (D.C. Cir. 2005) ..................................................................................................................10
Stilwell v. Office of Thrift Supervision,
569 F.3d 514 (D.C. Cir. 2009)............................................................................................................. 6, 7
Student Loan Marketing Ass’n v. Riley,
104 F.3d 397 (D.C. Cir. 1997)................................................................................................................24
Syncor Int’l Corp. v. Shalala,
127 F.3d 90 (D.C. Cir. 1997) ........................................................................................................... 18, 22
Teva Pharms. USA, Inc. v. Sebelius,
595 F.3d 1303 (D.C. Cir. 2010)..............................................................................................................10
Texas v. United States,
497 F.3d 491 (5th Cir. 2007) ..................................................................................................................13
United States v. Mead Corp.,
533 U.S. 218 (2001) .................................................................................................................................23
United States v. Texas,
143 U.S. 621 (1892) .................................................................................................................................16
Whitman v. American Trucking Ass’ns,
531 U.S. 457 (2001) ................................................................................................................................... 9
Wyeth v. Levine,
555 U.S. 555 (2009) ................................................................................................................................... 7

iv

Statutes
42 U.S.C. § 2000e-2(k)....................................................................................................................................... 7
5 U.S.C. § 704 ..................................................................................................................................4, 16, 17, 20
Other Authorities
Robert A. Anthony, Interpretative Rules, Policy Statements, Guidances, Manuals, and the Like—Should
Federal Agencies Use Them to Bind the Public?, 41 DUKE L.J. 1311 (1992)............................................23
Br. of the United States as Amicus Curiae,
University of Texas Sw. Med. Ctr. v. Nassar, 133 S. Ct. 2517 (2012), No. 12-484 ...............................25
Br. for the United States as Amicus Curiae,
Vance v. Ball State, 133 S. Ct. 2434 (2012), No. 11-556 ................................................................ 24, 25
Notice 2006-50, 2006-25 I.R.B. 1141, 2006-1 C.B. 1141, 2006 WL 1452787 (June 19, 2006).............18
6 Charles Alan Wright, et al.,
FED. PRAC. & PROC. CIV. § 1476 (3d ed. 2013 supp.) .......................................................................... 1

v

INTRODUCTION
Defendants want to have their cake and eat it too. On the one hand, they want to bully
employers into hiring felons on the basis of an unlawful interpretation of Title VII that the Equal
Employment Opportunity Commission (“EEOC” or “Commission”) adopted in contravention of
the Administrative Procedure Act (“APA”). If an employer refuses to fall in line, it faces abusive
investigations, sanctionable litigation tactics, and allegations of discrimination under the EEOC’s
Felon-Hiring Rule1 that the Sixth Circuit recently described as “frivolous” and “groundless.” EEOC v.
Peoplemark, Inc., 732 F.3d 584, 592 (6th Cir. 2013) (emphasis in original); see also id. at 595 (affirming
sanctions against EEOC for its abusive enforcement of the Felon-Hiring Rule).
Of course, EEOC would like to retain the coercive effects of the Felon-Hiring Rule without
risking another stinging rebuke on the merits. So it has mustered the audacity to tell the State of
Texas that the timing of this suit is “far from impeccable,” and that the largest employer in the
second-largest State in the Nation should be forced to wait until it too suffers the abusive and
sanctionable conduct that EEOC has unleashed on other violators of the rule.

MTD at 1.

Thankfully, fifty years of precedent under the APA and the ripeness doctrine foreclose the
Commission’s attempt to dodge judicial review of its administrative overreaching. The motion to
dismiss should be denied.
BACKGROUND
EEOC promulgated the Felon-Hiring Rule on April 25, 2012. See FAC Ex. A. The 2012
rule represents EEOC’s first attempt to formalize its felon-hiring policy in a standalone document.
Before 2012, the Commission’s view that Title VII somehow prohibits employers from refusing to
1 See EEOC, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII
of the Civil Rights Act of 1964, No. 915.002 (Apr. 25, 2012) (“Felon-Hiring Rule,” attached as Exhibit A to
the First Amended Complaint, “FAC”). The State construes EEOC’s motion to dismiss, ECF No. 16
(“MTD”), to apply equally to the FAC. See 6 CHARLES ALAN WRIGHT, ET AL., FED. PRAC. & PROC. CIV.
§ 1476 (3d ed. 2013 supp.). The FAC and this opposition together constitute the State’s response to that
motion.

hire felons was relegated to the 605th section of the EEOC “Compliance Manual.” See El v.
SEPTA, 479 F.3d 232, 243 (3d Cir. 2007) (recounting that fact). And the courts routinely held that
the “Compliance Manual” was “not . . . entitled to great deference.” Id. at 244. That was so because
the manual was “terse” and rested on nothing more than EEOC’s administrative say-so, which it
asserted “without explanation, analysis, or authority.” Id. at 248.
So EEOC promulgated the Felon-Hiring Rule, which purports to afford the explanation and
analysis that the Third Circuit found lacking. The rule announces that “[a] policy or practice
requiring an automatic, across-the-board exclusion from all employment opportunities because of
any criminal conduct is inconsistent with the [various factors enumerated in the rule] because it does
not focus on the dangers of particular crimes and the risks in particular positions.” FAC Ex. A at
16. Instead of “across-the-board exclusion[s],” the Felon-Hiring Rule holds that employers must
afford felons “individualized assessments.” Id. at 18–20. If an employer fails to do so, the rule
binds EEOC’s staff to find that the no-felon policy is an unlawful employment practice. Id. at 3.
And the Commission expressly ruled that its interpretation of Title VII preempts any state law that
requires employers to apply across-the-board exclusions for felons. Id. at 24.
The State of Texas employs hundreds of thousands of people, and many of them are
employed by agencies (like the Texas Department of Public Safety, “DPS”) that impose across-theboard no-felon policies pursuant to state law.

See FAC ¶¶ 23–31.

DPS’s no-felon policy is

materially identical to the one that the Federal Bureau of Investigation uses. See FAC ¶ 24; id. Ex. B;
n.2, infra. But because DPS is a state law-enforcement agency rather than a federal one, it either
must violate state law or risk “frivolous” and “groundless” allegations of racial discrimination under the
Felon-Hiring Rule. Peoplemark, 732 F.3d at 592. And that risk is far from theoretical: EEOC
already has filed a “charge of discrimination” against DPS for applying the across-the-board nofelon policy required by state law. See FAC ¶ 37 & Ex. C.
2

SUMMARY OF ARGUMENT
EEOC cannot seem to make up its mind. It desperately wants to force employers to
abandon their categorical no-felons policies, and it wants federal courts to afford deferential effect
to the thoroughness of its “enforcement guidance.” But when confronted with an APA suit by an
employer that cannot be bullied into compliance, EEOC all of sudden wants this Court to believe
that its Felon-Hiring Rule is just a bunch of precatory musings that cannot have more than a
contingent effect on anyone. Whatever else might be said about the Commission’s tactics, they do
not sum to a valid jurisdictional objection.
I.

The State has standing for two reasons. First, Texas employs hundreds of thousands

of people, and it receives thousands of job applications every year.

In processing those job

applications, the State’s agencies routinely apply the no-felons policies required by state law and
prohibited by the Felon-Hiring Rule. That conflict makes the State an “object” of the Commission’s
administrative action and easily satisfies the standing requirements of Article III. Any doubt about
the concreteness of the State’s injury is resolved by the fact that EEOC already has launched a
“charge of discrimination” against DPS for categorically refusing to hire felons.
Second, the State has standing because EEOC cannot attempt to both change the State’s
hiring policies and nonetheless object to the State’s standing to challenge that attempt. Both the
D.C. Circuit and the Seventh Circuit have rejected EEOC’s have-and-eat-its-cake strategy, and this
Court should do so too.
II.

The State’s claims are ripe. This is a facial challenge to EEOC’s rule, and as such, it

is quintessentially fit for review. The Commission’s principal argument to the contrary is that
further factual development is necessary to differentiate between the State’s lawful no-felons policies
(for example, those barring “a child predator [from] working at a school”) and its unlawful ones.
MTD at 16. But it is far too late to rehabilitate the Felon-Hiring Rule by suggesting that the EEOC
3

was willing to recognize any exceptions — even commonsense exceptions — to its expansive view
of disparate impact. In fact, the Felon-Hiring Rule held that a preschool cannot impose Texas’s
across-the-board policy against hiring child predators. Factual development will do nothing to ease
the conflict between EEOC’s atextual interpretation of the law and Texas’s refusal to follow it.
III.
§ 704.

Finally, the Felon-Hiring Rule is a “final agency action” made reviewable by 5 U.S.C.

An unbroken line of cases dating back decades holds that “guidance” documents are

reviewable to the extent they bind the agency’s staff or force regulated entities to change their
behavior. The Felon-Hiring Rule does both.
The Commission’s sole counterargument is that the Felon-Hiring Rule is unreviewable
because it is not a “binding” “legislative rule.” In a decision that EEOC oddly neglects to mention,
the D.C. Circuit repudiated that argument. And the Commission cites no decision from any court
that ever has agreed with it. This Court should not be the first.
ARGUMENT
I.

THE STATE HAS STANDING
A.

The State’s Injuries Are Concrete, Traceable, and Redressable

The State easily satisfies the constitutional minimum for standing to challenge EEOC’s
Felon-Hiring Rule. Article III requires only an injury, caused by the agency, which a court can
redress. See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992). And when the plaintiff is
“an object of the [agency’s] action,” “there is ordinarily little question that the action . . . has caused
him injury, and that a judgment preventing . . . the action will redress it.” Id. at 561–62. Here, there
is no doubt that the State of Texas is “an object of the [EEOC’s] action.” The State employs
hundreds of thousands of people, see FAC ¶¶ 23–30, and as an employer, the State is squarely the
“object” of the Felon-Hiring Rule, see, e.g., FAC Ex. A at 8–20 (purporting to prohibit all employers
from using categorical no-felons policies). In fact, EEOC singled out employers like the State of
4

Texas who categorically refuse to hire felons pursuant to state “laws and/or regulations that restrict
or prohibit the employment of individuals with records of certain criminal conduct.” Id. at 24.
Because the State-qua-employer is an “object” of the EEOC’s action, all three of the constitutional
standing requirements are easily satisfied. See Lujan, 504 U.S. at 561–62.
Those injuries could not be more concrete and certain. Cf. MTD at 12 (arguing the State’s
injury is “speculative”). For example, the Texas Department of Public Safety categorically refuses to
hire anyone convicted of any felony (and some misdemeanors). See FAC ¶ 24. And on November 1,
2013, EEOC sent a “charge of discrimination” to DPS for categorically refusing to hire a convicted
felon named William R. Smith. See id. ¶ 37 & Ex. C.
Mr. Smith applied to work as a DPS “Customer Service Representative,” a position that
would have given him access to a statewide database containing identifying information for 26
million Texans (including their names, addresses, dates of birth, social security numbers, and copies
of their birth certificates). FAC ¶ 37. In his job application, Mr. Smith disclosed a previous felony
conviction for the unauthorized use of a motor vehicle. FAC Ex. C at 2. Consistent with state law
and its policy judgment that convicted felons never should have access to sensitive information
regarding every man, woman, and child in the State, DPS categorically refused to consider Mr.
Smith’s application and rejected it without using any of the “individualized” factors that EEOC’s
rule commands. FAC ¶ 37. And because DPS refused to accede to EEOC’s unlawful interpretation
of Title VII, the State is presently on the receiving end of a “charge of discrimination.” Id.
Moreover, EEOC authorized Mr. Smith to bring a private lawsuit against DPS. See id.; FAC Ex. D.
That is more than sufficient to constitute a concrete “injury” that was caused by the unlawful FelonHiring Rule.

5

B.

EEOC’s Counterarguments Are Meritless

1.

In all events, it does not matter whether EEOC, Defendant Holder, or a private

individual is threatening to enforce the Commission’s Felon-Hiring Rule. Compare MTD at 11–13
(arguing the opposite), with Owner-Operator Indep. Drivers Ass’n v. Federal Motor Carrier Safety Admin.,
656 F.3d 580, 58–86 (7th Cir. 2011) (considering and rejecting the same standing argument that
Defendants raise here). In Owner-Operator, truck drivers challenged a rule that regulated the number
of hours they could operate their vehicles, and the agency argued that the plaintiffs’ injury was
“speculative” because they were not presently subject to an enforcement action. Id. at 586. The
court of appeals rejected the agency’s standing objection because it was part of the federal agency’s
strategy to eat cake and have it too:
The Agency’s standing argument . . . ignores the very idea that it advances to justify
adopting the [ ] rule in the first place: a punitive stick (it says) is necessary to increase
compliance with [the agency’s] regulations. The [agency’s] rule aims to alter truck
drivers’ behavior now to avoid a remedial directive in the future. . . . In the end, it
strikes us as odd that the Agency is arguing that it must have a strict rule now to get
truck drivers to be more compliant with [the agency’s] rules, but at the same time it is
asserting that these rules are not meant to change anyone’s immediate behavior
enough to confer standing to challenge that regulation.
Id. at 586 (emphasis in original); see also Stilwell v. Office of Thrift Supervision, 569 F.3d 514, 518 (D.C.
Cir. 2009) (finding it “more than a little ironic” that a federal agency “would suggest Petitioners lack
standing and then, later in the same brief,” label the petitioner a “prime example” of the “very
problem the [r]ule was intended to address” (internal quotation marks omitted)).
So too here. EEOC apparently thinks that Texas’s categorical refusal to hire felons for
certain jobs — like those allowing access to statewide databases containing sensitive personal
information for all 26 million men, women, and children in the State — necessitated a rule to
condemn the practice as “unlawful.” See FAC Ex. A. The Commission asserts an urgent “interest”
in stopping the State from following state law insofar as it categorically bars felons from
employment, id. at 6, 24, and the Commission wields “a punitive stick . . . to increase compliance
6

with” its Felon-Hiring Rule, Owner-Operator, 656 F.3d at 586; see FAC ¶¶ 17–22 (listing examples of
EEOC’s punitive enforcement tactics). It is “more than a little ironic,” Stilwell, 569 F.3d at 518, to
claim that the State nonetheless incurs no injury from the EEOC’s efforts to preempt Texas law and
to change the hiring policies for the State’s police officers, youth-correction officers, statesupported-living-center employees, General Land Office employees, lottery officials, game wardens,
and school teachers.
2.

For at least three independent reasons, it is facile to suggest that Title VII, not

EEOC’s Felon-Hiring Rule, preempts Texas’s no-felons policies. Cf. MTD at 10–11. First, Title
VII says nothing about an employer’s categorical refusal to hire felons.

To the extent that

categorical refusal constitutes an unlawful employment practice, it is solely on account of EEOC’s
say-so in the Felon-Hiring Rule. Compare FAC Ex. A at 9, 18–20 (purporting to prohibit categorical
no-felon policies and requiring “individualized assessments” of all felons for all jobs), with 42 U.S.C.
§ 2000e-2(k) (discussing disparate impact without mentioning categorical no-felon policies or
requiring “individualized assessments” of felons’ job applications).
Second, Title VII says nothing about whether EEOC’s staff should impose abusive and
sanctionable litigations tactics — under the guise of an administrative “investigation” — when an
employer categorically refuses to hire felons.

Again, that binding directive comes solely from the

Felon-Hiring Rule and its enforcement by EEOC staff. It is the Commission’s effort to launch
“frivolous” and “groundless” allegations against employers, Peoplemark, 732 F.3d at 592 — and its
promise to bring similar suits in the future, see FAC ¶ 35 — that injures the State.
Third and finally, it is always true that Congress’s statute — rather than the agency’s
interpretation of it — carries preemptive force. See, e.g., Wyeth v. Levine, 555 U.S. 555, 573 (2009)
(rejecting “an overbroad view of an agency’s power to pre-empt state law” because congressional
intent to preempt is all that matters); MTD at 11 (asserting that obvious fact). But that does not
7

mean that regulated entities lack standing when agencies nonetheless purport to promulgate rules
that preempt state law. See, e.g., Illinois Dep’t of Transp. v. Hinson, 122 F.3d 370, 372 (7th Cir. 1997)
(State has standing where it “complains that a federal regulation will preempt one of the state’s
laws”); Alaska v. United States Dep’t of Transp., 868 F.2d 441, 443 (D.C. Cir. 1989) (agreeing that the
State has standing to seek declaratory and injunctive relief “because DOT claims that its rules
preempt state consumer protection statutes, [and therefore] the States have suffered injury to their
sovereign power to enforce state law”); cf. Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592,
607–08 (1982) (stating, in the context of state standing in parens patriae actions, that States have an
“interest in securing observance of the terms under which it participates in the federal system”).
The bottom line is that the federal agency has arrogated to itself the power to divine a Felon-Hiring
Rule that has no basis in the text of Title VII, and that federal agency has directed the State to
disregard duly enacted state laws and conform its behavior to the federal rule. See FAC Ex. A at 24.
That is more than sufficient to create an “injury” that confers standing.
II.

THE STATE’S CLAIMS ARE RIPE
A.

The State’s Claims Are Presumptively Reviewable, And EEOC Does Not
Attempt To Rebut That Presumption

EEOC’s ripeness objections also are easily dismissed. For at least fifty years, the Supreme
Court has held that it is the agency’s burden to prove that a statute precludes pre-enforcement
review of its rule:
The first question we consider is whether Congress . . . intended to forbid preenforcement review of this sort of regulation promulgated by the [agency]. The
question is phrased in terms of ‘prohibition’ rather than ‘authorization’ because a
survey of our cases shows that judicial review of a final agency action by an aggrieved
person will not be cut off unless there is persuasive reason to believe that such was
the purpose of Congress.
Abbott Labs. v. Gardner, 387 U.S. 136, 139–40 (1967). The Court emphasized that the agency’s
burden is particularly heavy because the availability of pre-enforcement review “ha[s] been
8

reinforced by the enactment of the Administrative Procedure Act, which embodies the basic
presumption of judicial review.” Id. at 140. The Court further held that the APA “manifests a
congressional intention that [its judicial-review provisions] cover a broad spectrum of administrative
actions,” and that the APA’s “ ‘generous review provisions’ must be given a ‘hospitable’
interpretation.” Id. at 140–41 (quoting Shaughnessy v. Pedreiro, 349 U.S. 48, 51 (1955)).
Where as here Congress did nothing to prohibit the State from seeking pre-enforcement
review of the Felon-Hiring Rule, the ripeness inquiry all but disappears, and pre-enforcement review
is “the norm.” See, e.g., Owner-Operator, 656 F.3d at 586 (“In the decades since Abbott Laboratories,
pre-enforcement review of final rules has become the norm.”). To create an exception to that norm,
EEOC must prove that the issues somehow are not fit for judicial review and that the balance of
hardships somehow tips in EEOC’s favor. Abbott Labs., 387 U.S. at 149; Sabre, Inc. v. Department of
Transp., 429 F.3d 1113, 1119–20 (D.C. Cir. 2005); Owner-Operator, 656 F.3d at 586–87.

The

Commission cannot meet that standard.
1.
a.

The State’s claims are fit for review

First, the State’s claims are fit for review because they are purely legal, facial

challenges to the Felon-Hiring Rule. The fitness-for-review question turns on whether the case
“would benefit from further factual development” and “whether judicial intervention would
inappropriately interfere with further administrative action.” Ohio Forestry Ass’n v. Sierra Club, 523
U.S. 726, 733 (1998); see also Whitman v. American Trucking Ass’ns, 531 U.S. 457, 479–80 (2001). These
considerations protect “the agency’s interest in crystallizing its policy before that policy is subjected
to judicial review and the court’s interests in avoiding unnecessary adjudication and in deciding
issues in a concrete setting.” Eagle-Picher Indus., Inc. v. EPA, 759 F.2d 905, 915 (D.C. Cir. 1985).
Here, Texas is not seeking a declaration that its no-felon policies “are, and always will be,
lawful hiring practices” because they never create statistical disparities in “the relevant labor market.”
9

MTD at 14–15. Rather, the State is seeking a declaration that no-felon policies never can create
unlawful disparate impacts because (a) they always are justified by business necessity and jobrelatedness (Count I); (b) Congress specifically disclaimed EEOC’s authority to promulgate a
contrary rule (Count II); and (c) the private-party disparate-impact suits contemplated by EEOC’s
Felon-Hiring Rule are unconstitutional (Count III). None of those claims “require[ ] the Court to
answer various factual questions.” MTD at 15.
To the contrary, there are only two facts that matter. First, state law and policy require many
Texas employers to impose categorical bans against convicted felons who apply for jobs. See FAC
¶¶ 23–31. And second, the Defendants believe that the State’s policies are unlawful because they
never allow the State to make “individualized” and race-conscious assessments of job applicants that
EEOC somehow thinks Title VII requires. See FAC Ex. A at 18–20. Thus, the case poses a conflict
of two mutually incompatible interpretations of Title VII. As the D.C. Circuit held in the same
situation:
[T]he substantive issues [plaintiff] raises are undoubtedly ‘purely legal’ in the relevant
sense. They turn on questions of statutory construction, and the interpretations
chosen by the [agency] and proposed by [plaintiff] both constitute bright-line rules,
impervious, so far as appears, to factual variation. This in itself largely answers the
question whether delay might afford additional ‘concreteness’; it would not.
Teva Pharms. USA, Inc. v. Sebelius, 595 F.3d 1303, 1308–09 (D.C. Cir. 2010) (internal citation and
alteration omitted); see also, e.g., Shays v. FEC, 414 F.3d 76, 95 (D.C. Cir. 2005).
b.

It is too late for the EEOC’s lawyers to manufacture the need for further factual

development by asserting nuances that the Commission itself rejected in the Felon-Hiring Rule. See
Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156, 2166–67 (2012) (rejecting the agency’s
interpretation of its own rule as “nothing more than a convenient litigating position,” and a “post hoc
rationalization advanced by an agency seeking to defend past agency action against attack” (internal
quotation marks and alteration omitted)). For example, the Commission’s motion to dismiss asserts
10

(at 16) that “[n]o one wants a child predator working at a school” — presumably in an effort to
seem reasonable and offer one (if only one) safe harbor for Texas’s categorical no-felon policies.
But EEOC’s Felon-Hiring Rule says the exact opposite.
The rule offers the hypothetical example of “Elijah,” an African American man who wants
to bring a disparate-impact suit against a preschool for refusing to hire him on account of his felony
conviction for “indecent exposure two years ago.” FAC Ex. A at 24. Even on those facts, the
Felon-Hiring Rule says that the preschool cannot impose a categorical ban against hiring convicted
sex offenders like Elijah. Id. at 18–20. To the contrary, EEOC would “conduct[ ] an investigation”
— thus raising the specter of the Commission’s frivolous and sanctionable enforcement tactics, see
Peoplemark, 732 F.3d at 592 — and force the preschool to carry its burden to prove “the exclusion is
job related for the position in question and consistent with business necessity because it addresses
serious safety risks of employment in a position involving regular contact with children.” FAC Ex.
A at 24. And if the preschool cannot carry its burden to show that (a) Elijah would have “regular
contact” with the children and that (b) Elijah’s indecent-exposure conviction is sufficiently recent to
be probative of his riskiness as a child predator, EEOC staff would be bound by the Felon-Hiring
Rule to find an unlawful employment practice. See id. at 15, 17, 24. While EEOC’s lawyers now
appear to recognize the commonsense proposition that “[n]o one” would want Elijah to work in the
preschool under any set of circumstances, MTD at 16, the Felon-Hiring Rule says otherwise.
2.
a.

The balance of hardships tips decidedly in the State’s favor

EEOC has pointed to no institutional interest in delaying resolution of this case.

“[T]he court has — in accordance with the [APA’s] presumption of reviewability — repeatedly held
that absent institutional interests favoring the postponement of review, a petitioner need not show
that delay would impose individual hardship to show ripeness.” Sabre, 429 F.3d at 1120. In Sabre,
the Department of Transportation asserted jurisdiction over certain “ticket agents,” and it stated that
11

it would take “appropriate actions” in the future to enforce the law against unlawful “ticket agents.”
Id. at 1117. Sabre sought pre-enforcement review, and the department objected on ripeness grounds
because it was unclear whether Sabre was covered by the rule, and even it if was, what “appropriate
actions” the department might want to take. Id. at 1119. The D.C. Circuit rejected the ripeness
objection because “[t]he Department has failed to offer plausible reasons why it has an institutional
interest in postponing review.” Id. at 1120. While Sabre had no obligation to show “hardship,” it
nonetheless could do so: in particular, Sabre claimed that “a high probability of adverse government
action” against it as a “ticket agent” would force Sabre to abandon “marketing plans, which it could
otherwise implement presumably at considerable profit.” Id. at 1118–20.
This is an a fortiori case. There is no dispute whether the State of Texas is regulated by the
Felon-Hiring Rule. Cf. Sabre, 429 F.3d at 1118 (noting whole dispute was whether Sabre fell within
the ambit of department’s “ticket agent” rule). There is no dispute whether the State of Texas is in
violation of the Felon-Hiring Rule. Cf. id. at 1117 (noting department’s view that Sabre remained
“free to operate its business as it wishes”). Plus, there is no dispute that the State of Texas stands to
lose much more than Sabre did, and that the State’s “hardship” is thus much higher. While Sabre
faced only the potential for “appropriate actions” from a department that threatened an unspecified
portion of the company’s profit margins, id., the State faces the promise of investigations by an
EEOC with a proven track record of “frivolous” and “groundless” enforcement tactics, Peoplemark, 732
F.3d at 592; the reputational harm associated with allegations of racial discrimination; and
unconstitutional damages actions by individuals like William R. Smith, which infringe Texas’s
sovereign immunity.
b.

Moreover, the Felon-Hiring Rule places the State and its constituent agencies on the

horns of a dilemma, which is more than sufficient to obviate any ripeness concerns. For example, in
Roark & Hardee LP v. City of Austin, 522 F.3d 533 (5th Cir. 2008), the Fifth Circuit held that the
12

challenged ordinance was ripe for judicial review because it forced owners and operators of public
places to choose between complying with an allegedly invalid law or to risk a $2000 fine. See also
Abbott Labs., 387 U.S. at 152 (“These regulations purport to give an authoritative interpretation of a
statutory provision that has a direct effect on the day-to-day business of all prescription drug
companies; its promulgation puts petitioners in a dilemma that it was the very purpose of the
Declaratory Judgment Act to ameliorate.”); Ohio Forestry, 523 U.S. at 734 (“hardship” can arise from
purely legal harms or the harm of being “force[d] . . . to modify [one’s] behavior in order to avoid
future adverse consequences”); Texas v. United States, 497 F.3d 491, 499 (5th Cir. 2007) (“If Texas
cannot challenge the Procedures in this lawsuit, the State is forced to choose one of two undesirable
options: participate in an allegedly invalid process that eliminates a procedural safeguard promised
by Congress, or eschew the process with the hope of invalidating it in the future, which risks the
approval of gaming procedures in which the state had no input.”); Reckitt Benckiser v. EPA, 613 F.3d
1131, 1136–41 (D.C. Cir. 2010) (holding ripe agency’s letter asserting authority to bring future
enforcement proceedings because it creates “compliance ‘dilemma’ ” for the company).
The dilemma caused by the Felon-Hiring Rule is even starker because EEOC is trying to do
much more than levy a $2,000 fine. The whole point of its Felon-Hiring Rule is to coerce the State
into abandoning the hiring policies adopted by the Texas Legislature by threatening frivolous
allegations of discrimination and abusive enforcement actions in “high-profile” cases. FAC ¶ 35; see
Owner-Operator, 656 F.3d at 586–87 (finding ripeness where whole point of rule is to force regulated
entities to change their behaviors); Clean Air Implementation Project v. EPA, 150 F.3d 1200, 1205 (D.C.
Cir. 1998) (finding ripeness where agency action forces petitioners to “change their behavior or risk
costly sanctions”). That effort to modify the State’s behavior independently suffices to make the
case ripe.

13

c.

Against all of that, EEOC can point to no “institutional interest” in delaying

resolution of this case. Sabre, 429 F.3d at 1120. An agency plausibly can invoke the ripeness
doctrine if its rule is tentative or preliminary: “the [ripeness] doctrine enables agencies to deliberate
and craft policy free of judicial interference until administrative action has a direct and immediate
impact. Judicial intervention into agency decisionmaking at an earlier stage denies the agency an
opportunity to correct its own mistakes and to apply its expertise.” Ciba-Geigy Corp. v. EPA, 801
F.2d 430, 434 (D.C. Cir. 1986). But those concerns are inapposite here. EEOC admits that it
already has deliberated and (by a formal 4-1 vote) formalized its policy choice in the Felon-Hiring
Rule. And far from “correct[ing] its own mistakes,” EEOC has doubled down on the rule after the
Third Circuit dismissed the Commission’s interpretation of Title VII as “terse” and “provid[ing]
nothing of substance.” El, 479 F.3d at 248. Thus, there is no evidence that EEOC will recognize
the error of its ways and rescind the Felon-Hiring Rule without this Court’s intervention.
B.

EEOC’s Counterarguments Lack Merit

EEOC offers three counterarguments, each of which is easily dismissed.
1.

First, EEOC shrugs off the pre-enforcement hardships that the Felon-Hiring Rule

imposes on the State of Texas. Don’t worry, it says, because it is possible that the State’s no-felons
policies do not “ha[ve] a statistically significant differential effect . . . on a protected class.” MTD at
15. And even if the policies create a disparate impact based on race, EEOC says that it is possible
that its staff could conduct “a fact-specific inquiry” for job-relatedness and business necessity and
determine, in its administrative grace, that it can bless Texas’s policies anyway. Id. at 17.
Talk about cold comfort. What EEOC cannot bring itself to acknowledge is that the
answers to its “fact-specific inquir[ies]” are knowable only after the Commission brings the full
weight of its enforcement apparatus down on employers’ shoulders. That is why the Commission
refuses now to approve any of the State’s categorical no-felons policies — even for jobs like State
14

Troopers.2 And that means employers like Texas have to decide whether to keep their no-felon
policies and risk EEOC enforcement actions — replete with “frivolous” and “groundless” allegations of
racial discrimination, Peoplemark, 732 F.3d at 592 — or instead to jettison the policies and save
themselves from bruising run-ins with the Commission and its staff. Staring down the barrel of the
Commission’s Felon-Hiring Rule, many employers would choose the latter. But either way, EEOC
cannot put employers to that choice while also claiming that the dispute is not ripe.
2.

Next, EEOC argues that Count III is unripe because “[n]umerous contingencies

would have to come to pass for [the State] to face” a private-damages suit from a felon who alleges
that Texas’s categorical no-felons policies violate the Felon-Hiring Rule. MTD at 19. Again, that
perversion of the ripeness doctrine runs against 50 years of Supreme Court precedent:
[A]s Abbott Laboratories itself demonstrated, hardship need not take the form of an
actual enforcement action; the threat of enforcement is sufficient because the law is
in force the moment it becomes effective and a person made to live in the shadow of
a law that she believes to be invalid should not be compelled to wait and see if a
remedial action is coming.
Owner-Operator, 656 F.3d at 586 (citing Abbott Labs., 387 U.S. at 150–54). And in all events, as noted
above, the State faces a “concrete threat” of litigation from William R. Smith. MTD at 20; see supra
p.5; FAC ¶ 37 & Exs. C–D.
3.

Finally, EEOC argues that Count III is unripe because, even without damages

actions by individuals like William R. Smith, the State of Texas could be sued under the FelonHiring Rule by others (like the EEOC itself). MTD at 20–21. That proves far too much because
That refusal is particularly noteworthy because EEOC has no problem with federal law-enforcement
agencies that apply categorical no-felons policies. For example, the FBI says that “conviction of a felony”
“will automatically disqualify” applicants for all jobs with the Bureau. FAC Ex. B at 1 (emphasis added). That
means that any felony — of any degree of seriousness, of any age, and of any degree of job-relatedness —
“will automatically disqualify” the applicant from the most menial job in an agency with 36,000 employees.
And the Felon-Hiring Rule says that is ok. See FAC Ex. A at 20–23. But somehow, the same rule says that
the State of Texas cannot impose the FBI’s hiring policy on the men and women charged with carrying
firearms and serving as peace officers on the front line of the State’s public-safety battlefield. See MTD at 16–
17 (arguing that the State cannot impose categorical no-hiring policies against felons convicted of “unlicensed
acupuncture” and “littering in a cave,” even though the FBI presumably can).
2

15

the exact same objection would render unripe every comparable violation of the Eleventh
Amendment. For example, in Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996), the Court held
that the Eleventh Amendment barred private damages actions against the State of Florida under the
Indian Gaming Regulatory Act. The Court went out of its way to recognize that “[t]he Federal
Government can bring suit in federal court against a State” under the Act, id. at 71 n.14 (citing
United States v. Texas, 143 U.S. 621, 644–45 (1892)) — and that fact did nothing to render unripe the
State’s objections to the private party’s suit under the same statute. The federal government likewise
can sue the States to enforce the Religious Freedom Restoration Act, the Age Discrimination in
Employment Act, and the Americans with Disabilities Act. But again, that did nothing to render
unripe the State’s objections to private parties’ suits under all three statutes, nor did it prevent the
Court from holding that those suits were unconstitutional. See City of Boerne v. Flores, 521 U.S. 507
(1997) (RFRA); Kimel v. Florida Bd. of Regents, 528 U.S. 62 (2000) (ADEA); Board of Trs. Univ. of Ala. v.
Garrett, 531 U.S. 356 (2001) (title I of the ADA); accord Sabre, 429 F.3d at 1121 (finding irrelevant fact
that Sabre had independent obligation not to commit deceptive trade practices). If EEOC’s ripeness
objection was correct, all of those landmark Eleventh Amendment decisions would be wrong.
III.

THE FELON-HIRING RULE CONSTITUTES FINAL AGENCY ACTION
Finally, the Felon-Hiring Rule constitutes “final agency action” reviewable under 5 U.S.C.

§ 704 (“Section 704”). EEOC does not dispute that the rule is an “agency action,” which it took
through a formal 4-1 vote. See FAC ¶ 10. And it does not dispute that the rule is “final” in every
conceivable meaning of the word; the Felon-Hiring Rule undisputedly represents the culmination of
the Commission’s decisionmaking process and hence the EEOC’s “final” (if misguided)
pronouncement on the issue. Instead, the Commission appears to think that the Felon-Hiring Rule
does not constitute “final agency action” because “no ‘legal consequences’ flow from it.” MTD at 7.

16

Again, the Commission wants to have its cake and eat it too. Employers like Peoplemark —
that have been on the receiving end of EEOC’s sanctionable conduct and frivolous allegations of
racial discrimination under the Felon-Hiring Rule — obviously would disagree that “no ‘legal
consequences’ flow[ed]” from EEOC’s deeply flawed interpretation of Title VII.

And the

Commission routinely goes into federal court and demands “deference” for its interpretation of Title
VII; just last Term for example, EEOC twice urged the Supreme Court of the United States to afford
legal effect to guidance documents that were materially identical to the Felon-Hiring Rule. But when
it comes to defending a facial challenge to its actions, EEOC all of a sudden thinks its work isn’t
worth the paper it was printed on. Its gamesmanship runs contrary to decades’ worth of precedent
under the APA and should be rejected.
A.

The Felon-Hiring Rule Is Reviewable Under Section 704

The Supreme Court has held that agency actions are “final” and hence reviewable under
Section 704 where they mark the “consummation” of the agency’s decisionmaking progress, and
“legal consequences will flow” from what the agency did. Bennett v. Spear, 520 U.S. 154, 177–78
(1997). The Commission does not contest that its Felon-Hiring Rule marks the “consummation” of
its rulemaking process, see MTD at 7; accordingly, its Section 704 objection boils down to whether
the rule generates “legal consequences.” It does.
1.

The courts long have held that agency “guidance” documents like the Felon-Hiring

Rule constitute final and reviewable agency actions under Section 704. For example, in Cohen v.
United States, 578 F.3d 1 (D.C. Cir. 2009), the court held that an IRS “guidance” document entitled
“Notice 2006-50” constituted final agency action.3

That document “announce[d]” the IRS’s

interpretation of the Tax Code and “provide[d] related guidance to taxpayers and collectors.”

The D.C. Circuit subsequently granted rehearing en banc on other grounds and affirmed the panel’s
decision. See 650 F.3d 717 (D.C. Cir. 2011) (en banc); see also id. at 735 (noting that the en banc court saw no
need to reconsider the panel’s analysis under Section 704).
3

17

Notice 2006-50, 2006-25 I.R.B. 1141, 2006-1 C.B. 1141, 2006 WL 1452787 (June 19, 2006). That
“guidance” included instructions on how taxpayers could seek certain refunds, it established a “safe
harbor” for refunds, and it created administrative procedures for aggrieved taxpayers.

See id.

Critically, legal consequences flowed from the IRS’s “guidance” insofar as it used “mandatory words
like ‘will’ instead of permissive words like ‘may’ ” to describe how the agency’s staff would process
refund claims. Cohen, 578 F.3d at 7; see also Syncor Int’l Corp. v. Shalala, 127 F.3d 90, 94 (D.C. Cir.
1997) (“The primary distinction between a substantive rule — really any rule — and a general
statement of policy . . . turns on whether an agency intends to bind itself to a particular legal
position.”); American Bus Ass’n v. United States, 627 F.2d 525, 532 (D.C. Cir. 1980) (similar). Like the
EEOC here, the IRS tried to insulate its rule from judicial review by backing away from it and
disclaiming it as nothing more than worthless words; but the D.C. Circuit held “[t]hat’s just mean”
because it “places taxpayers in a virtual house of mirrors” where they can’t figure out which of the
agency’s instructions to heed. Cohen, 578 F.3d at 9.
Likewise, the court held that an agency’s “guidance” document constituted final agency
action in Appalachian Power Co. v. EPA, 208 F.3d 1015 (D.C. Cir. 2000). There the agency used its
guidance to announce a “multi-factor, case-by-case analysis” that EPA’s staff would apply to
determine the adequacy of States’ air-quality monitoring standards. Id. at 1022. The court found
irrelevant that answers to EPA’s “case-by-case analysis” turned on facts that were unknowable ex
ante. Id. at 1022–23. All that mattered, the court held, is that the agency directed States to search
their laws and policies, to find standards that conflicted with EPA’s analysis of the Clean Air Act,
and to replace them in accordance with the “guidance” document. Id. at 1023. The court also
found irrelevant the fact that EPA included the following disclaimer at the end of its document:
“ ‘The policies set forth in this paper are intended solely as guidance, do not represent final Agency
action, and cannot be relied upon to create any rights enforceable by any party.’ ” Id. (quoting
18

guidance document). Even that disclaimer did nothing to render the guidance non-final under
Section 704 because legal consequences nonetheless flowed from it:
Insofar as the “policies” mentioned in the disclaimer consist of requiring State
permitting authorities to search for deficiencies in existing monitoring regulations
and replace them through terms and conditions of a permit, “rights” may not be
created but “obligations” certainly are — obligations on the part of the State
regulators and those they regulate. At any rate, the entire Guidance, from beginning
to end — except the [disclaimer] paragraph — reads like a ukase. It commands, it
requires, it orders, it dictates. Through the Guidance, EPA has given the States their
“marching orders” and EPA expects the States to fall in line.
Id.
The court of appeals yet again held that an administrative guidance document constituted
final and reviewable agency action in Barrick Goldstrike Mines v. Browner, 215 F.3d 45 (D.C. Cir. 2000).
There the agency’s guidance interpreted an environmental statute to allow metal-mining companies
to release a de minimis level of toxic chemicals without triggering various statutory reporting
requirements.

If Barrick and other mines failed to conform to the statutory interpretation

announced in the guidance, the agency could bring enforcement actions against them. Id. at 47–48.
EPA tried to avoid Barrick’s facial challenge to the guidance by walking away from it as nonbinding, but the D.C. Circuit sternly rebuked that about-face: “That the issuance of a guideline or
guidance may constitute final agency action has been settled in this circuit for many years.” Id. at 48
(citing, inter alia, Better Gov’t Ass’n v. Department of State, 780 F.2d 86 (D.C. Cir. 1986)); see also Better
Gov’t, 780 F.2d at 93 (rejecting proposition that agency can escape judicial review under Section 704
by labeling its rule an “informal” guidance document). And the court concluded that Section 704’s
final-agency-action requirement was satisfied because the guidance bound the agency’s staff in its
application of the de minimis exception to Barrick’s chemicals. 215 F.3d at 48 (“Here there is no
doubt that EPA will refuse to apply the de minimis exception to Barrick’s waste rock and that its
refusal to do so has legal consequences — namely, that Barrick is bound to keep track of its
movement of waste rock and report the movements as releases of toxic substances.”); see also NRDC
19

v. EPA, 643 F.3d 311, 319–20 (D.C. Cir. 2011) (“guidance” document constitutes final agency action
reviewable under Section 704 insofar as it restrains administrative staff ’s discretion).
And, at the risk of belaboring the point, the regional circuits uniformly have interpreted
Section 704 likewise to extend to “guidance” documents like the Felon-Hiring Rule. For example, in
Manufactured Housing Institute v. EPA, 467 F.3d 391 (4th Cir. 2006), the court of appeals held that a
“policy” “memorandum” was reviewable as final agency action based on the agency’s threatened
enforcement of it. The policy memorandum enunciated a list of factors that States should use to
determine, on a “case-by-case” basis, whether a particular housing complex is “large” and thus
excludable from a general ban on selling water to tenants. Id. at 397. Following a familiar pattern,
the agency tried to walk away from the policy in court, shrugging off its guidance as “just a
suggestion” that carries no binding effect and that “leaves decisions to the States on a case-by-case
basis.” Id. The court rejected the agency’s backpedalling out of hand because “EPA’s threats levied
against at least two States regarding their [water] oversight programs prove that States are not free to
treat this EPA policy as a mere suggestion.” Id. Given those threats — and the home-builders’
“fear of subjecting themselves to EPA regulations” — the court found it “self-evident” that the
guidance document “gives rise to legal rights and consequences.” Id. at 398; see also Atchison, Topeka
& Santa Fe Ry. v. Pena, 44 F.3d 437, 441 (7th Cir. 1994) (holding that a letter from the agency’s chief
counsel constituted final agency action because it “made absolutely clear that [agency staff] would
enforce the Act in accordance with its new interpretation, thereby compelling the railroads to alter
their operations to comply with the [agency’s] directive or face stiff penalties for noncompliance”).
2.

Compared to Cohen, Syncor, American Bus, Appalachian Power, Barrick, NRDC,

Manufactured Housing, and Atchison, this is an easy case. The Felon-Hiring Rule includes page after
page of the unconditional and “mandatory” language that so often is “decisive” of the Section 704
issue. Cohen, 578 F.3d at 7; see, e.g., FAC ¶ 13; FAC Ex. A at 8 (“EEOC would find reasonable cause
20

to believe that discrimination occurred.”); id. at 10 (EEOC “will” “investigate” “criminal record
exclusions”); id. (“The Commission will assess relevant evidence when making a determination of
disparate impact, including [various specific factors].”); id. (“An employer’s evidence of a racially
balanced workforce will not be enough to disprove disparate impact.”); id. (“[I]n determining
disparate impact, the Commission will assess the probative value of an employer’s applicant data.”);
id. (“[T]he Commission will closely consider whether an employer has a reputation in the community
for excluding individuals with criminal records.”); id. (“The Commission will determine the
persuasiveness of such evidence on a case-by-case basis.”); id. at 12 (“[A]n exclusion based on an
arrest, in itself, is not job related and consistent with business necessity.”); id. (“[E]mployers [may]
not [ ] rely on arrest records” as “proof of criminal conduct.”); id. (“[A]n arrest record standing alone
may not be used to deny an employment opportunity.”); id. (“EEOC would find reasonable cause to
believe that his employer violated Title VII.”); id. at 14 (“To establish that a criminal conduct
exclusion that has a disparate impact is job related and consistent with business necessity under Title
VII, the employer needs to show that the policy operates to effectively link specific criminal
conduct, and its dangers, with the risks inherent in the duties of a particular position.”); id. (“Such a
screen would need to be narrowly tailored to identify criminal conduct with a demonstrably tight
nexus to the position in question.”); id. at 15 (“Absent a validation study that meets the Uniform
Guidelines’ standards, the [specifically enumerated] factors provide the starting point for analyzing
how specific criminal conduct may be linked to particular positions.”); id. (“Careful consideration of
the nature and gravity of the offense or conduct is the first step in determining whether a specific
crime may be relevant to concerns about risks in a particular position.”); id. (“Whether the duration
of an exclusion will be sufficiently tailored to satisfy the business necessity standard will depend on
the particular facts and circumstances of each case.”); id. at 16 (“[I]t is important to identify the
particular job(s) subject to the exclusion.”); id. at 17 (“EEOC concludes that there is reasonable
21

cause to believe that the [employer’s] policy” violates the Felon-Hiring Rule.); id. at 20 (“EEOC
finds reasonable cause to believe that Title VII was violated.”); id. at 21 (“EEOC finds that the
policy is” unlawful.). And the EEOC went out of its way to condemn categorical no-felons policies
like Texas’s in mandatory terms: “A policy or practice requiring an automatic, across-the-board
exclusion from all employment opportunities because of any criminal conduct is inconsistent with
the [enumerated] factors because it does not focus on the dangers of particular crimes and the risks
in particular positions.” Id. at 16; see also id. (“EEOC would find reasonable cause to believe that the
blanket exclusion was not job related and consistent with business necessity.”). And an entire
section of the Felon-Hiring Rule prohibits Texas from disqualifying felons under state law, even
when the exact same hiring policy would be lawful if imposed under federal law. See id. at 24; FAC
¶ 14; supra n.2. In short, “the entire Guidance, from beginning to end . . .[,] reads like a ukase. It
commands, it requires, it orders, it dictates.” Appalachian Power, 208 F.3d at 1023.
But the legal consequences that flow from the Felon-Hiring Rule do not end there. The
Commission expressly intended the rule to bind “EEOC staff who are investigating discrimination
charges involving the use of criminal records in employment decisions.” FAC Ex. A at 3; see Cohen,
578 F.3d at 7 (agency’s intent to bind staff makes rule reviewable under Section 704); Barrick, 215
F.3d at 48; Appalachian Power, 208 F.3d at 1023 (same); NRDC, 643 F.3d at 319–20 (same); Syncor,
127 F.3d at 94 (same); American Bus, 627 F.2d at 532 (similar). Moreover, EEOC’s rule has direct
legal consequences — that bind both the Commission’s staff and the Nation’s employers — because
it creates two safe harbors. See Ex. A at 2; 14; Cohen, 578 F.3d at 7 (finding safe harbors probative of
finality of agency action). The fact that the Felon-Hiring Rule directs employers to apply a list of
enumerated factors, which EEOC will review on a “case-by-case basis,” FAC Ex. A at 10, further
supports reviewability of the Commission’s final agency action, Appalachian Power, 208 F.3d at 1022–
23; Manufactured Housing, 467 F.3d at 397. Finally, EEOC could not avoid the finality of the Felon22

Hiring Rule even if it had included a boilerplate disclaimer or an inaccurate label for its action, see
Appalachian Power, 208 F.3d at 1023; Barrick, 215 F.3d at 48; Better Government, 780 F.2d at 93; but the
fact that the rule does not attempt that feint makes it even easier than the cases above.
B.

EEOC’s Counterarguments Lack Merit

Against all of that, EEOC offers a single, solitary counterargument: it says the Felon-Hiring
Rule is not “final” because it is not “binding.” To be clear, the Commission does not contest that its
rule is “binding” in the practical sense — that is, that the rule binds EEOC’s staff and the Nation’s
employers. See Part III.A, supra. Rather, EEOC contends that the Felon-Hiring Rule is not
“binding” in the sense that it does not carry the “force of law.” MTD at 6–10. But the D.C. Circuit
expressly has rejected the argument that Section 704 is limited to agency actions that carry the force
of law — a fact that the Commission oddly but conveniently neglects to mention.
In Appalachian Power, the agency made the exact same argument under Section 704 that
EEOC makes here. See 208 F.3d at 1020. It argued that its guidance document was not a “binding”
“legislative rule” because it had not gone through notice-and-comment rulemaking, cf. United States v.
Mead Corp., 533 U.S. 218, 229–31 (2001), and that Section 704 withholds judicial review from any
agency action that does not qualify as a “legislative rule.” That argument has no basis in the text of
Section 704, and the D.C. Circuit rejected it in emphatic terms:
[W]e have . . . recognized that an agency’s other pronouncements can, as a practical
matter, have a binding effect. If an agency acts as if a document issued at
headquarters is controlling in the field, if it treats the document in the same manner
as it treats a legislative rule, if it bases enforcement actions on the policies or
interpretations formulated in the document, if it leads private parties or State
permitting authorities to believe that it will declare permits invalid unless they
comply with the terms of the document, then the agency’s document is for all
practical purposes “binding.”
Appalachian Power, 208 F.3d at 1021 (citing McLouth Steel Prods. Corp. v. Thomas, 838 F.2d 1317, 1321
(D.C. Cir. 1988); Robert A. Anthony, Interpretative Rules, Policy Statements, Guidances, Manuals, and the
Like—Should Federal Agencies Use Them to Bind the Public?, 41 DUKE L.J. 1311, 1328–29 (1992)).
23

For the same reason, AT&T v. EEOC, 270 F.3d 973 (D.C. Cir. 2001), does nothing to help
EEOC here. In that case, AT&T conceded that it could point to no specific action (like the FelonHiring Rule) that EEOC had taken.

Id. at 975 (noting that AT&T instead relied on the

Commission’s “entire course of . . . actions with respect to the Company’s service credit policy”); cf.
Lujan, 504 U.S. at 568 (parties cannot bring “generalized” and “programmatic” challenges to
government action). Much less could AT&T point to anything that EEOC had done that bound its
staff ’s discretion; anything that “shed light upon the Commission’s intentions” to enforce its views
against AT&T; or anything that forced employers to change their policies. Id. at 975–76. In fact,
the court relied on Appalachian Power for the proposition that a guidance document does constitute
final and reviewable agency action under Section 704 where it “inflicts injury or forces a party to
change its behavior.” Id. at 976 (citing Appalachian Power, 208 F.3d at 1022). The court simply held
that AT&T failed to plead such injuries4 — a holding that is both unremarkable and unhelpful for
EEOC given that it does not dispute that its Felon-Hiring Rule does force employers to change their
behaviors and does bind the Commission’s staff “for all practical purposes.” Appalachian Power, 208
F.3d at 1021.
Finally, there is a good reason that EEOC is unwilling to dispute in this Court that the
Felon-Hiring Rule is binding for all practical purposes. That’s because it routinely goes into other
courts and urges deference for its guidance documents, and it can succeed in that endeavor only if it
can show that its staff has taken a “consistent position” in its “enforcement actions” under the
guidance document at issue. Br. for the United States as Amicus Curiae at 28, Vance v. Ball State, 133
S. Ct. 2434 (2012), No. 11-556 (“EEOC’s Vance Br.,” attached as Ex. A); see Federal Express Corp. v.
4 EEOC is wrong to the extent it implies that AT&T can be read to hold that all “letters of
determination” are not final agency actions. See MTD at 9. The D.C. Circuit repeatedly has held the
opposite. See, e.g., CSI Aviation Servs. v. DOT, 637 F.3d 408 (D.C. Cir. 2011); City of Dania Beach v. FAA, 485 F.3d 1181

(D.C. Cir. 2007); Safe Extensions v. FAA, 509 F.3d 593 (D.C. Cir. 2007); Student Loan Marketing Ass’n v. Riley, 104 F.3d 397
(D.C. Cir. 1997); Ciba-Geigy, 801 F.2d at 435–37. And in all events, that implication is irrelevant here because the FelonHiring Rule bears no resemblance to the interim letter at issue in AT&T.

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Holowecki, 552 U.S. 389, 399 (2008) (affording some deference to a guidance document that had
“been binding on EEOC staff for at least five years”). In fact, just last Term, EEOC twice urged the
Supreme Court to afford legal effect to positions that the Commission took in its “guidance”
documents, and both times, EEOC emphasized that its guidance documents “consistently” bind its
staff and their enforcement decisions. See EEOC’s Vance Br. at 26–29; Br. of the United States as
Amicus Curiae at 28–30, University of Texas Sw. Med. Ctr. v. Nassar, 133 S. Ct. 2517 (2012), No. 12-484
(“EEOC’s Nassar Br.,” attached as Ex. B).
The fact that EEOC wants to retain the ability to tell other courts in other contexts that its
guidance deserves deference and legal effect makes it all the more untenable for the Commission to
tell this Court the opposite. The Commission is not the first agency to eats its cake while attempting
to keep it. But as Cohen, Syncor, American Bus, Appalachian Power, Barrick, NRDC, Manufactured Housing,
and Atchison all make clear, the courts reject that strategy every time an agency is bold enough to try
it. This Court should do the same.
CONCLUSION
Defendants’ motion to dismiss should be denied.

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Respectfully submitted.
GREG ABBOTT
Attorney General of Texas
DANIEL T. HODGE
First Assistant Attorney General
JONATHAN F. MITCHELL
Solicitor General
/s/ Andrew S. Oldham
ANDREW S. OLDHAM
Deputy Solicitor General
ARTHUR C. D’ANDREA
RICHARD B. FARRER
DUSTIN M. HOWELL
Assistant Solicitors General
209 West 14th Street
P.O. Box 12548
Austin, Texas 70711-2548
[phone]
Dated: March 18, 2014

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CERTIFICATE OF SERVICE
I hereby certify that, on March 18, 2014, a true and correct copy of the foregoing was served
by CM/ECF on:
Justin M. Sandberg, Trial Attorney
U.S. Department of Justice
Civil Division, Federal Programs Branch
20 Mass. Ave. NW, Rm. 7302
Washington, D.C. 20001
[e-mail]

/s/ Andrew S. Oldham
Andrew S. Oldham

EXHIBITS
Tab
Br. for the United States as Amicus Curiae,
Vance v. Ball State, 133 S. Ct. 2434 (2012), No. 11-556 ......................................................................... A
Br. of the United States as Amicus Curiae,
University of Texas Sw. Med. Ctr. v. Nassar, 133 S. Ct. 2517 (2012), No. 12-484 .................................. B

2