Notice & Comment

“Equal Pay for Equal Work” & Overturning Close to “Midnight” Actions

Summary: In National Women’s Law Center v. OMB, 2019 WL 1025867 (D.D.C. March 4, 2019), a District Judge overturned the Trump Administration’s effort to stay a reporting requirement, approved by the outgoing Obama Administration, designed to uncover pay disparities based on gender, race, and ethnicity.  OMB had invoked the Paperwork Reduction Act to stay the data collection.  The District Judge found OMB’s actions “arbitrary and capricious.”

I. The Pay Equity Problem

Pay equity has been an endemic problem.  Historically, many employers have paid female and minority employees less than their male counterparts.   Efforts to address gender-based disparities began in the Nineteenth Century, and culminated in enactment of the Equal Pay Act, Pub. L. 88–38, 77 Stat. 56 (1963)(codified at 29 U.S.C. §206).  The Equal Pay Act prohibited employers from paying male and female employees at different rates for jobs that “require[] equal skill, effort, and responsibility, . . . performed under similar working conditions.”   Id., §3.  The photograph above shows the signing of the Equal Pay Act.[1]  The following year Title VII of the Civil Rights Act of 1964, Pub. L. 88–352; 78 Stat. 241, prohibited discrimination “against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”  Id., §703(a)(1)(codified at 42 U.S.C. 2000e–2)(Emphasis added.).

The case of Lily Ledbetter brought the continued existence of gender disparities in compensation to the forefront as a national political issue in the first decade of this Century.  After working 19 years as an area manager for Goodyear, she learned, via an anonymous note, that her pay was substantially less than Goodyear’s other area managers, who were all male.  The Supreme Court ultimately determined that Title VII’s 180-day period for asserting a discrimination claim, 42 U.S.C. § 2000e–5(e)(1), began when Goodyear first began paying Ledbetter lower compensation, and that later paychecks, which merely reflected the earlier discriminatory decision to against her, did not restart the 180-day period.  Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007).  Ledbetter’s wage discrimination claim was time barred.  Id.  Democrats made the plight of Ledbetter and others like her an issue in the 2008 presidential and congressional elections.  In 2009, Congress enacted Lily Ledbetter Fair Pay Act, Pub. L. 111-2, 123 Stat. 5 (2009), which specified that Title VII’s 180-day limitations complaint period restarted with each paycheck that reflected discriminatory compensation.

In the current Congress, companion proposals have been introduced to further address pay disparities.  The Paycheck Fairness Act, H.R. 7; [2] The Paycheck Fairness Act, S. 270.   The bills would, inter alia, require the EEOC to “issue regulations to provide for the collection from employers of compensation data and other employment-related data . . . disaggregated by the sex, race, and national origin of employees.”  H.R. 7, §8.

In 2016, the EEOC concluded that “persistent pay gaps . . . correlated with sex, race, and ethnicity continued to exist.”  EEOC, Notice of Submission for OMB Review, Final Comment Request: Revision of the Employer Information Report (EEO-1), 81 Fed. Reg. 45479, 45481 (July 14, 2016).  As of 2014, full-time female employees’ median annual pay was $39,621, while that of men was $50,383.  Id.  African-American women were paid approximately 20% less than white women, and approximately 18% less than African American men.  Id.  Latina women were paid approximately 44% less than white men, and 27% less than white women.  Id.  The wage gap meant that over a 40-year career the average Latina would receive approximately $1,007,000 less than the average white male.  The EEOC also found a significant wage gap between male employees of color and white men.

The EEOC decided to expand the data collected from employers to enhance its efforts to enforce the anti-discrimination laws relating to compensation.  But this required the agency to grapple with the Paperwork Reduction Act of 1995, 44 U.S.C. § 3501 et seq. (“the Paperwork Reduction Act”).

II. The Paperwork Reduction Act

The Paperwork Reduction Act, like its predecessors,[3] seeks to establish a process that will lead to the optimal balancing of the burden of government-imposed record-keeping and reporting requirements on both regulated entities and the general public and the government’s need for information to “uncover[] problems, reach[] decisions, enforce[] laws, deliver[] services, and inform[]s the public.  H. REP. NO. 104-37 at *5.

Federal agencies must obtain approval from the Office of Management and Budget (“OMB”) to impose new record-keeping and reporting requirements.  OMB has assigned its responsibilities under the Act to the Office of Information and Regulatory Affairs (OIRA).  First, the agency seeking to add a record-keeping or reporting requirement must conduct its own “evaluation of the need for the collection of information” and the burden collecting such information would impose. 44 U.S.C. §3506(c)(1)(A)(i). Generally, that evaluation process must include publishing notice of its proposal and providing a sixty-day public comment period.  Id. at §3506(c)(2).  If the agency decides the new information requirement are warranted, it must submit its proposal to OMB and publish another notice in the Federal Register.[4]  The notice must: (1) summarize the proposed information collection plan, (2) describe the need for and proposed use of the information, (3) identify the likely respondents and frequency of required responses, and (4) estimate of the record-keeping and reporting burdens imposed.  5 C.F.R. §1320.5(a)(1)(iv).  Upon “determin[ing] [that] the proposed information collection is necessary for the proper performance of the functions of the agency, [and will] have practical utility,” 44 U.S.C. §3508, OIRA can approve the collection.

OIRA’s authorization remains in effect for three years, after which it must be reviewed.  OIRA “may decide on its own initiative . . . to review the collection of information” before the end of the three-year period, 5 C.F.R. §1320.10(f), but only “when relevant circumstances have changed or the burden estimates provided by the agency at the time of initial submission were materially in error.” Id. OMB may also stay the prior approval of a collection of information, but only for “good cause.” Id. §1320.10(g).[5]

III.  Factual Background: Will You Still Love Me in the Morning?  … That Would Be A Big No.

OMB’s actions regarding the EEOC’s efforts to collect data on pay equity reflects the “midnight” rules phenomenon and the conflicting philosophies of a Democratic and a Republican Presidential Administrations.  Granted, the timing of the Obama Administration’s final action does not meet the definition of “midnight rules” in the report the Administrative Conference of the United States (“ACUS”) prepared on the subject (here), and the initiative had begun long before the end of the Obama Administration.

A. Obama OMB: It’s 11 PM, Do You Know Where Your Reporting Proposal Is?

Since 1966, EEOC has required each employer with at least one hundred employees to complete and file a report describing the composition of its work force by job category, sex, race, and ethnicity, denominated the “Employer Information Report EEO-1” (“EEO-1”).[6]  In 2010 the EEOC began a process of consulting with the National Academy of Sciences and a working group of “employer representatives, statisticians, human resources information systems experts, and information technology specialists” regarding supplementing the EEO-1 to collect wage data relevant to assess pay equity issues.   The EEOC determined that the traditional EEOC data would be designated as Component 1 and a supplemental data collection that would require employers to report data on employees’ W-2 earnings and hours worked would be designated Component 2.

On February 1, 2016, the EEOC published a sixty-day notice, as specified by the Paperwork Reduction Act, and provided a weblink to a sample data collection form.  The agency estimated that the new Component 2 data collection would increase the reporting time per EEO-1 filer by 3.4 hours.  On July 14, 2016, the EEOC published a second Federal Register notice seeking a three-year approval from OMB of the revised EEO-1 data collection.  In that notice, the EEOC estimated that the addition of Component 2 would increase the filing cost for each EEO-1 filed by $416.58. Id. at 45493-94.  OMB approved the proposed collection on September 29, 2016.

B.  Trump OMB: I’m Shocked, SHOCKED To Find There’s Gambling Going On Here!

The EEOC released an instruction booklet for the March 2018 EEO-1 survey, along with information about the revised EEO-1. The information included data file specifications for employers who planned to file the EEO-1 survey through data upload.  Id. at *4.  But, on August 29, 2017, the Trump Administration’s OIRA Administrator, notified the EEOC that OIRA was initiating a review the EEOC’s collection of pay data, and would stay the requirement in the interim.  Memorandum from Neomi Rao, Adm’r, OIRA, to Victoria Lipnic, Acting Chair, EEOC (Aug. 29, 2017).  OIRA asserted that a post-approval change in the relevant circumstances had occurred and/or that the burden estimates provided by EEOC at the time of initial submission were materially in error.  Id.  More specifically, OIRA asserted that the data file specifications employers were to use in submitting EEO-1 data had neither been included in the Federal Register notices as part of the public comment process nor outlined in the EEOC’s supporting statement for the collection of information.  Id.

OMB explained its decision to stay implementation of data collection by asserting its belief that “some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”    Id.  At OIRA’s direction, on September 15, 2017 the EEOC published notice of OIRA’s suspension of its Component 2 information collection. EEOC, Stay the Effectiveness of the EEO-1 Pay Data Collection, 82 Fed. Reg. 43362 (Sept. 15, 2017).

The National Women’s Law Center and others challenged OIRA’s decision to review the pay equity data collection and stay it in the interim as “arbitrary and capricious” and in excess of statutory authority, in violation of the Administrative Procedure Act.  The parties cross-moved for summary judgment.  NWLC v. OMB, at *1, *4-*5.

As of the date of the District Court’s decision OIRA had not issued any decision regarding approval, disapproval, or revision of the previously-approved data collection.  Id. at *4.

IV. The District Court’s Decision: A Stinging Rebuke

The Court found inadequate OIRA’s assertions (1) that “the public did not receive an opportunity to comment on the method of data submission to EEOC,” and (2) that “EEOC’s burden estimates may have been inaccurate.”  Id. at *15.

It characterized the first claim as “misdirected, inaccurate, and ultimately unpersuasive.”  Id.  The claim was misdirected because the formatting instructions “did not change the content of the information collected,” which had been fully described in the two Federal Register notices.  Id.  Even with respect to the formatting requirements, “employers not only knew that the data file specifications would be posted after OMB’s approval, but also knew what the specifications would look like.” Id.  The EEOC’s Sixty-Day Notice had directed employers to a website exhibiting sample data collection forms, and the ultimate data file specification matched the sample in all material respects.  Thus, employers had been “in a good position to comment” on formatting issues were they so inclined.  Id.  Moreover, OIRA had approved the collection knowing that the file data specifications would be finalized and posted at some later date.  Id.

As to the second claim, that the burden estimates may have been inaccurate because they did not account for the burden resulting from the post-approval formatting specifications, the Court noted that file specifications were entirely consistent with the descriptions the EEOC had provided in its two Federal Register notices.  Id. at *16.  Indeed, it noted, “OMB did not actually find that the data file specifications would change the initial burden estimates,” only that they “may change the initial burden estimate.”  Id.  It found OMB’s “equivocation” unsurprising, given that OMB’s assertion was unsupported by any analysis.”  Id.  Indeed, “OMB’s unsupported conjecture [fell] short of showing any prior error, let alone a material one.”  Id.

OMB had also failed to establish “good cause” for staying the data collection, providing no credible explanation of Component 2’s departure from the applicable Paperwork Reduction Act substantive standards.  In approving the data collection less than a year before, OIRA had explicitly found that the data collection had practical utility, minimized the burden on reporting employers, and provided adequate privacy and confidentiality protections.  Id, (citing 81 Fed. Reg. at 45481-83, 45492-95). OIRA failed to justify its reversal of those conclusions.  Id.  (Of course, OIRA had made the earlier findings during the concluding months of the Obama Administration.)

OMB invoked Chevron and Auer deference,[7] argued that it interpretation of its own regulations governing unscheduled reviews and stays of data collections was entitled to deference,” and should be upheld unless “plainly erroneous or inconsistent with the regulation.”  Id. at *17.  OMB noted that “neither the [Paperwork Reduction Act] nor OMB’s regulations define when ‘relevant circumstances have changed,’ what constitutes a ‘material error’ in the burden estimates initially provided, or when ‘good cause exists.’ ” Id. (quoting defendant summary judgment brief).

However, in its preamble to the Paperwork Reduction Act regulation promulgated in 1982, OMB had explained that good cause “exists when continued collection of information would be significantly contrary to the standards of the Act.” Notice of Proposed Rulemaking, Controlling Paperwork Burdens on the Public, 47 Fed. Reg. 39515, 39522 (Sept. 8, 1982).[8] It explained that in determined whether the good cause standard had been met, OMB must “take into consideration any disruption such reconsideration would create in the agency’s program.” Id.  OMB argued that preambles to rules are generally not considered binding.  NWLC v. OMB, at *17.[9]  The Court concluded it need not resolve the issue. Id.  Even without holding OMB to those requirements, the Court found OMB’s proffered justification inadequate, because courts “do not defer to an agency’s conclusory or unsupported suppositions.” Id. (quoting Nat’l Shooting Sports Found., Inc. v. Jones, 716 F.3d 200, 214 (D.C. Cir. 2013)).

The Court noted the government’s reliance on four letters OMB received after the EEOC’s posting of the file specifications.  The letters “expressed concern about the lack of adequate notice and comment.”  Id.  However, the Court observed, in her August 29, 2017 memo, the OIRA Administrator had not cited the statements.  Id.  Indeed, one of the four letters did not even raise an issue regarding EEOC’s data file specifications.  Id.  The three letters that addressed the data file specifications failed to provide any analysis or conclude that the data formatting specifications would increase the burden on EEO-1 filers.  Id.  The Court explained that “an agency cannot simply rely on the speculation of commenters,” but must engage in “a critical examination of comments on which it relies.”  Id.[10]  Moreover, OMB had also received letters applauding the file data specifications, one signed by the National Women’s Law Center and 82 other groups.  Id.  OMB could not rely on letters opposing the data specifications while leaving unexplained it failure to consider comments expressing the opposite viewpoint.  Id.[11]

The Court concluded its analysis with the following paragraph:

The government’s position rests on hyper-technical formatting changes that have no real consequences for employers. While there may be instances when formatting changes could be burdensome, that is not the case here. Similarly, it is conceivable that the government could impose formatting requirements that made the presentation of collected information far more difficult for employers. But in this case, OMB and the regulated entities knew what the formatting would look like before OMB gave its approval to the Component 2 collection, and the government has failed to demonstrate any likelihood that the data file specifications meaningfully increase the burden on employers. Indeed, neither the Rao Memorandum nor the administrative record as a whole demonstrates that before issuing its stay, OMB ever analyzed the data file specifications in an effort to determine whether they meaningfully changed the burden of collecting Component 2 information.

 Id. at *18 (emphasis added).[12]

V. Conclusion

This appears to be another instance in which a lack of attention to detail confounds the Trump Administration’s efforts to make abrupt changes in policy.  (See, Bernard Bell, Citizenship and the Census: State of New York v. U.S. Department of Commerce (Round One), a four-part series available here, here, here, and here.)  The State Farm doctrine, see Motor Vehicles Manufacturers Association v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 42-43 (1983), once again means that if an agency reaches a conclusion in a prior Administration, the agency must engage in reasoned decision-making to reverse those findings.  And indeed, OMB’s efforts to reverse Obama Era policies with respect to pay disparity data collection are particularly ironic given that OMB could re-evaluate the data collection policy after three years in any event.  Though the State Farm doctrine would presumably still constrain OIRA, surely OIRA would enjoy greater leeway to reverse course in a legislative scheme that presumes that authorizations of data collections are not indefinite, and indeed can never be indefinite.[13]  Of course, if the data collection goes smoothly and is helpful, a record would be built that would complicate any effort to discontinue the data collection.

Moreover, OMB’s action may well be an effort to thwart the substantive initiative on addressing pay equity issues.  Thus, OMB may be seeking to, in effect, negate the EEOC’s obligation to enforce employment discrimination statutes outlawing pay disparities by refusing to allow the agency to collect the information necessary to enforce the statute.  Such a low-profile attempt to undermine the efficacy a statute’s efficacy is concerning in and of itself.  Indeed, if the Trump Administrative gives a lower priority to pay equity issues as an ideological matter, it should say so openly and subject itself to accountability for that choice.

It is unclear whether this decision will spur other challenges to OMB’s exercise of its authority under the Paperwork Reduction Act.[14]

* * * * * * * * *


[1] President Kennedy’s signing statement accompanying the Equal Pay Act June 3, 1963 can be accessed at

[2] Among other things, the Paycheck Fairness Act would add precision to the “bona fide” factor defense that allows employees to defend gender-based pay disparities and would increase the requirements for successfully interposing such a defense.   H.R. 7, §3(a).  It would also enhance remedies for pay discrimination and prohibit retaliation against workers who disclose their wages to co-workers.  H.R. 7, §3(b).  See generally, Beth Pearsall, 50 Years after the Equal Pay Act, Parity Eludes Us (March 18, 2013).

[3] The Act was initially enacted in 1980, Paperwork Reduction Act of 1980, Pub. L. 96–511, 94 Stat. 2812, and reauthorized in 1986, Paperwork Reduction Reauthorization Act of 1986, Pub. L. 99–500, Tit. VIII], 100 Stat. 1783–335 (Oct. 18, 1986).  For a history of the genesis of the 1980 Act and the Act’s implementation up to passage of the 1995 Act, see H. REP. NO. 104-37, 104th Cong., 1st Sess. 7-34 (February 15, 1995).

[4] Apparently, the Act does not reduce the paperwork burdens on government agencies themselves.

[5] For an overview of the Paperwork Reduction Act, see JEFFREY S. LUBBERS, A GUIDE TO FEDERAL AGENCY RULEMAKING 140-48 (5th ed. 2012).

[6] A substantial number of employers, employing one-third of the national workforce, are thus exempt from the reporting requirement.  As of 2016, employer with fewer than 100 employees account for 33.4 percent of people employed in the private sector.  Small Business & Entrepreneurship Council, Facts & Data on Small Business and Entrepreneurship.

[7] Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984); Auer v. Robbins, 519 U.S. 452 (1997).  Auer deference is now being reconsidered by the Supreme Court, Kisor v. Wilkie, Dkt No. 18-15, and Chevron deference has been criticized by some of the Court’s conservative members, see, e.g., BNSF Ry Co. v. Loos, 2019 WL 1005830 *11 (March 4. 2019)(Gorsuch, J. dissenting).

[8] In particular, OMB explained:

Paragraph (d) of § 1320.11 establishes the procedure for reconsideration of OMB’s approval of a collection of information prior to the expiration date of the control number. This procedure is analogous to an agency reconsideration proceeding and is necessary when circumstances have significantly changed or when the agency’s original estimate of the burden of the collection of information turns out to have been significantly understated. In such cases, waiting to review the collection of information until the expiration of the control number would be contrary to the statutory goal of continuing paperwork oversight and burden reduction. For “good cause,” OMB will stay the effectiveness of its approval of information collection requests, pending completion of the review. “Good cause” in this context exists when continued collection of information would be significantly contrary to the standards of the Act. OMB will take into consideration any disruption such reconsideration would create in the agency’s program.

Id. at 39521-22.

[9] After all, who reads them anyway?  My wry observation, not the Government’s.

[10] The Court cited National Ass’n of Regulatory Utility Comm’rs v. FCC, 737 F.2d 1095, 1125 (D.C. Cir. 1984) (agency must apply its “expert evaluation” to comments), and American Great Lakes Ports Ass’n v. Zukunft, 296 F. Supp. 3d 27, 39 (D.D.C. 2017).

[11] The Court cited AARP v. EEOC, 267 F. Supp. 3d 14, 32 (D.D.C. 2017).  In that case, the District Court had observed that “[a]n agency must explain why it chose to rely on certain comments rather than others.” (Emphasis in original.)

The government also argued that August 29, 2017 memo “simply summarizes the four months of meetings, emails, and conference calls between OMB and EEOC during which each issue underlying the Administrator’s decision to review and stay was discussed.”  NWLC v. OMB, at *17.  The Court found the claim baseless.

[12] The Court engaged in a lengthy discussion of remand without vacatur, ultimately concluding that use of the technique in the case was unwarranted.  Id. at *19.

[13] Consider a key passage from State Farm: “A ‘settled course of behavior embodies the agency’s informed judgment that, by pursuing that course, it will carry out the policies committed to it by Congress. There is, then, at least a presumption that those policies will be carried out best if the settled rule is adhered to.’ Atchison, T. & S.F.R. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 807–808 . . . (1973).”  463 U.S. at 42-43.

[14] Section 3507(d)(6) of Title 44, which provides that “the decision by the Director to approve or not act upon a collection of information contained in an agency rule shall not be subject to judicial review,” limits the circumstances under which OMB’s decisions can be challenged.  In the D.C. Circuit, there appear to be only three cases since 1995 that challenge OMB’s actions or inaction under the Paperwork Reduction Act:  (1) United to Protect Democracy v. Presidential Advisory Commission on Election Integrity, 288 F.Supp.3d 99 (D.D.C. 2017); (2) Tozzi v. EPA, 148 F.Supp.2d 35 (D.D.C. 2001); (3) Public Citizen v. Lew, 127 F.Supp.2d 1 (D.D.C. 2000).

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