In early 2023, we issued a client alert reminding clients that they had until March 3, 2023 to file objections to the Center for Investigative Reporting’s Freedom of Information Act (FOIA) request that was submitted to the Department of Labor (DOL) and seeks EEO-1 Type 2 report data from federal contractors and first-tier subcontractors who submitted the information to the DOL as part of the Affirmative Action Program. The FOIA request focuses on the reporting years between 2016 and 2020. Notably, data from Component 2 of the EEO-1 reports containing compensation information is not requested by the FOIA request.
The FOIA request has been the subject of litigation in the Federal District Court for the Northern District of California, under case number 3:22-cv-07182. The DOL has consistently objected to the production of the EEO-1 Type 2 report data and also relied on the various objections submitted by contractors to prevent the disclosure of this information. However, the Court has disagreed and ruled that the information is not exempt from disclosure under FOIA.
On December 22, 2023, the court ruled that the EEO-1 Type 2 report data is not protected commercial information under Exemption 4 to FOIA and further ruled that the data is not protected under the Trade Secrets Act, 18 U.S.C. § 19. See Order. Based on its ruling that the information is not protected, the court further ruled that the EEO-1 Type 2 report data must be produced.
Notably, the DOL has requested an extension of time related to the production of this information so that it can consider whether to appeal the decision. The extension request was granted and the DOL must decide by February 20, 2024 whether to appeal the decision or just comply with the order. If the DOL appeals the decision, it is likely that it will also seek a stay of the court’s order requiring production in order to prevent the release of the information during the pending appeal.
The court’s ruling is significant and could result in the production of substantial amounts of EEO-1 Type 2 report data from government contractors. A government prime contractor with more than 50 employees and a single federal government contract worth at least $50,000 must comply with the federal affirmative action regulations, which includes establishing a written Affirmative Action Program (“AAP”) for each of its establishments. See 41 CFR 60 1.20(e). Similarly, a subcontractor must also comply with the federal affirmative action regulations and establish a written AAP if it has more than 50 employees and a single contract (i.e., subcontract or supplier agreement) of at least $50,000 to provide goods or services that are necessary for the performance of an ultimate federal government contract, or that fulfills a part of the prime contractor’s agreement with the federal government. Therefore, unless it is reversed, several types of government contractors’ EEO-1 Type 2 report data will be released under this ruling.
If you have any questions about this issue or about the affirmative action obligations of federal contractors and subcontractors, please contact the authors of this alert or your regular Womble Bond Dickinson attorney. Womble Bond Dickinson’s Government Solutions Team has extensive experience assisting government contractors in complying with various regulations applicable to their businesses, including the Federal Acquisition Regulation (“FAR”), Defense Federal Acquisition Regulation Supplement (“DFARS”), other agency acquisition regulations, and affirmative action obligations.