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D.C. Circuit Upholds OFCCP's Disability Affirmative Action Rules

    Client Alerts
  • January 09, 2015

Last year, the Department of Labor’s Office of Federal Contract Compliance Programs issued final regulations requiring that federal contractors subject to Section 503 of the Rehabilitation Act adopt new measures intended to promote hiring of persons with disabilities. In December, the U.S. Circuit Court of Appeals for the D.C. Circuit affirmed a lower court decision rejecting a challenge to the rules filed by a construction industry interest group.

In Associated Builders & Contractors, Inc. v. Shiu, the group argued that two provisions of the regulations exceed OFCCP’s rulemaking authority. First, the plaintiff contended that Section 503 only requires employers to request that persons offered employment self-identify as disabled. The new OFCCP rules call for disclosure by all applicants. Second, the group contended that OFCCP has no statutory authority to set the seven percent hiring goal for disabled persons contained in the regulations.

The D.C. Circuit rejected both challenges. It found that Section 503 is essentially silent on both of these measures. In the absence of evidence of contrary Congressional intent, federal courts generally defer to administrative agencies’ interpretations of their governing legislation. Second, the court concluded that the new rules were not arbitrary or capricious because they are both reasonable, and based on legitimate reasons articulated by OFCCP.

Given these two consistent federal court decisions, the Supreme Court will most likely decide not to overturn these findings. Federal contractors and other parties subject to Section 503 should prepare to comply with the new disability affirmative action provisions in their written plans, and anticipate questions about their efforts in this area when faced with OFCCP compliance audits.