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Judge Chastises EEOC While Setting September Deadline for Collecting Enhanced Pay Data

U.S. District Judge Tanya S. Chutkan at her confirmation hearing in 2014. Photo: Diego M. Radzinschi/NLJ

A federal district judge in Washington, D.C., has given the Trump administration until Sept. 30 to start collecting a broader scope of pay data from large U.S. businesses.

In issuing her order from the bench Thursday, U.S. District Judge Tanya Chutkan lambasted the government for illegally attempting to unwind the Obama-era rule and for misleading the court into believing it could start collecting data immediately if the plaintiffs prevailed. The rule expands the scope of compensation data businesses are already required to report to the Equal Employment Opportunity Commission to include information on gender, race and ethnicity.

Chutkan said the plaintiffs and the court agreed to a stay in the case under a “misconception” from the government that it could quickly collect the dated. Chutkan berated the government for later saying it would need until 2021 to start collecting the data, noting that even the government’s own lawyer had doubts.

“This is troubling. Even the EEOC’s lawyers believe the EEOC is not credible,” Chutkan said, at one point noting the government did not have clean hands in the case.

Chutkan also criticized the government for not notifying employers they would have to start reporting the data, and for not filing a notice in the Federal Register. She also set deadlines for the government to do both.

The National Women’s Law Center and the Labor Council for Latin American Advancement sued the Office of Management and Budget in November 2017 after the agency put the new pay-data rule on hold. The rule was supposed to have gone into effect by the annual filing deadline in March 2018.

Business advocates have opposed the implementation of the rule, saying it would lead to administrative hassles and unfairly expose companies to liability based on allegedly misinterpreted data. The rule applies to companies with more than 100 employees and is intended to combat workplace inequity.

Advocates for employees argued the Trump administration didn’t act lawfully in attempting to stop the regulation. The plaintiffs alleged the government and OMB buckled to pressure from business interest groups that have complained about the rule being a potential burden and the collection of data being open to misinterpretation.

Chutkan reinstated the rule last month after finding the Trump administration did not take the proper steps to rescind the regulation. Chutkan said the Trump administration's conclusions were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

The acting chairwoman of the Equal Employment Opportunity Commission, Victoria Lipnic, said in a recent court filing that the agency would need to adjust it’s deadline to Sept. 30 due to the “practical challenges” of collecting the compensation data.

The government told Chutkan it would rely on an outside data and analytics contractor—at a cost of $3 million—to perform the collection of data that employers are now required to report to the EEOC.

Neomi Rao, then the Trump administration’s regulatory czar, played a lead role in freezing the Obama-era rule. She currently sits on the U.S. Court of Appeals for the D.C. Circuit and would recuse from any potential appeal of Chutkan’s ruling.