DC Circuit upholds disability hiring rule

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Regulations designed to expand employment opportunities

The U.S. Court of Appeals for the District of Columbia Circuit rejected an industry backed challenge December 12 to new federal regulations for government contractors in hiring people with disabilities.

Section 503 of the Rehabilitation Act of 1973 requires companies receiving government contracts of more than $10,000 to “take affirmative action to employ and advance in employment qualified individuals with disabilities.” As originally implemented, the law prohibited contractors from outright disability discrimination and required them to publicize their affirmative action plans, improve their disability recruitment efforts and audit the effectiveness of their plans.

The Department of Labor’s Office of Federal Contract Compliance Programs expanded these requirements in new regulations, first proposed in December 2011 and finalized in September 2013. The Associated Builders and Contractors Inc. challenged two of these new regulation changes in its lawsuit.

The first challenged provision requires contractors to allow applicants, as opposed to just people who have already been hired, an opportunity to self-identify as having a disability. As the DOL sees it, this requirement is necessary for contractors to track their progress in hiring qualified individuals with disabilities.

The second challenged provision requires contractors to set a hiring goal of having 7 percent of their workforce consist of workers with disabilities. The provision is not a quota, which the Supreme Court ruled in 1978 as unconstitutional in the affirmative action context, but rather a tool for measuring the contractors’ compliance.

The Associated Builders and Contractors filed a lawsuit challenging these provisions in the U.S. District Court for the District of Columbia, which rejected all of its contentions.

The ABC argued that the pre-job-offer data-collection requirement exceeds the DOL’s authority under the Rehabilitation Act. This argument similarly did not find favor at the D.C. Circuit.

“ABC argues that the word ‘qualified’ as used in section 503…expressly limits affirmative action to individuals already offered jobs. But that word does no such thing,” the D.C. Circuit wrote in its opinion. “It does not modify ‘affirmative action,’ nor does anything in section 503 limit ‘affirmative action’ to those offered jobs.

“Rather, the word ‘qualified’ describes the statute’s beneficiaries—’qualified individuals with disabilities.’ In fact, the provisions of the final rule ABC challenges are all expressly designed to promote the “employ[ment] and advance[ment] in employment [of] qualified individuals.”

Next, the lawsuit argued the DOL regulations were arbitrary and capricious, both in regard to the pre-job-offer data-collection requirement and the hiring goal.

In support of its contention, the lawsuit argued, among other reasons, that the DOL failed to explain a need for the change, that it did not sufficiently explain how it came to the 7 percent hiring goal, and that construction jobs should be exempted because of unique hazards in the industry.

The D.C. Circuit rejected all these arguments, noting the wide latitude that federal agencies have when implementing federal statutes.

“ABC points to nothing in the rulemaking that suggests OFCCP flunked this highly deferential standard,” the D.C. Circuit stated.