WSJ December 28, 2019

Equal Opportunity Discrimination

Oracle is fighting back against a dubious Obama-era complaint.

By The Editorial Board | 500 words

Protecting the constitutional separation of powers is back in political fashion as more businesses challenge abuses of administrative agencies. One case worth watching is Oracle’s lawsuit arguing that the Labor Department has usurped the federal judiciary and other executive agencies.

Labor’s Office of Federal Contract Compliance Programs (OFCCP) filed a discrimination complaint against Oracle in the waning days of the Obama Administration. During a routine audit, the OFCCP in 2014 conducted a statistical analysis of Oracle’s workforce. And what do you know? The agency says it discovered disparities based on race and sex that it claimed were prima facie evidence of discrimination.

For instance, Labor found that Asians were over represented in some technical positions relative to Oracle’s applicant pool but were underpaid relative to whites in others. The agency alleged that Oracle hired fewer whites than Asians for certain positions, but paid them more than blacks in other jobs.

In sum, the agency said Oracle discriminated against every class of worker in one way or another. It demanded that Oracle lose current and forgo future federal contracts plus pay up to $400 million in restitution to its alleged victims. Yet its case all but collapsed at an administrative trial this month.

The Labor office presented no evidence of intentional discrimination or even witnesses who claimed as much. One former worker said she had heard a senior VP say, “Well, if you hire a woman, she will work harder for less money,” but the incident occurred 19 years ago and the accused denied making the comment. There was no evidence that women or racial minorities were treated worse than comparably situated white men or that Oracle preferred to hire Asians. While some women were paid less than men who held the same generic title, they performed different jobs. Labor witnesses testified that they deserved to be paid more, but who doesn’t think that?

Labor should have dropped this case long ago, though a source says the Trump Administration fears being accused of absolving a company whose founder is a Republican donor. The regulator has also continued a dubious discrimination complaint against Google that began at the end of the Obama Administration.

Businesses in the Trump era are shaking their fear of challenging regulators, and Oracle is suing the OFCCP for violating the Administrative Procedure Act and separation of powers. According to Oracle, the OFCCP has created an “administrative trial system wherein agency officials prosecute and adjudicate discrimination claims against government contractors and then award broad injunctive.”

In other words, the agency investigates, prosecutes, tries and punishes businesses even though it has no legislative authority to do so. Established by the Labor Department in 1965, the agency over four decades has seized power from federal courts, the Justice Department and the Equal Employment Opportunity Commission, which Congress established to enforce civil-rights laws.

The Trump Administration once proposed eliminating the agency, but courts may have to slay this regulatory rogue if new Labor Secretary Eugene Scalia lacks the political will.

Wall Street Journal