United States Department of Labor Office of Administrative Law Judges Law
Library
UNITED STATES DEPARTMENT OF LABOR *
OFFICE OF THE SOLICITOR * CIVIL RIGHTS DIVISION
INDEX TO ADMINISTRATIVE DECISIONS UNDER SECTION
503 OF THE REHABILITATION ACT OF 1973
TOPIC 177: SANCTIONS
NOTICE: THIS INDEX WAS PREPARED BY THE CIVIL RIGHTS
DIVISION, OFFICE OF THE SOLICITOR, U.S. DEPARTMENT OF LABOR, FOR
INTERNAL USE. IT IS NOT AN OFFICIAL INTERPRETATION OF THE CASES,
AND WAS LAST REVISED IN NOVEMBER, 1996.
The remedies of debarment, contract termination and denial of contract payment are viable
methods of relief only when defendant has not voluntarily chosen to obey the mandate of the
Act.
None of these three remedies will advance the employment of handicapped persons.
OFCCP v. Yellow Freight Systems, Inc., 82-OFC-2, ALJ Rec. Dec., September
30, 1986, slip op. at 29; remandedonothergrounds, Acting
Assistant Secretary Decision and Order of Remand, October 6, 1993; ConsentDecree, January 31, 1994.
When an act of handicap discrimination is not per se illegal, but must be decided on a case
by
case basis, the remedies of debarment, contract termination and denial of payment are
inappropriate remedies. OFCCP v. American Commercial BargeLine,
84-OFC-13, ALJ Rec. Dec., September 30, 1986, slip op. at 38-39, rev'donothergrounds, Special Assistant to the Assistant Secretary for Employment
Standards Final Decision and Order, April 15, 1992.
Debarment is a permissive sanction and should not be imposed when there is no evidence of
intent to violate the Act. OFCCP v.Exide Corp., 84-OFC-11, ALJ Rec. Dec.,
April 28, 1986, slip op. at 12, aff'd, Acting Assistant Secretary for Employment
Standards
Decision and Final Order, April 30, 1991, vacatedonothergrounds, ExideCorporation v. Martin, C.A. No. 91-242 (E.D.
Ky. 1992).
Sanction of debarment is an appropriate remedy for failure to submit a written affirmative
action program. OFCCP v. Bruce Church, Inc., 87-OFC-7, Secretary Final
Decision and Order, June 30, 1987, slip op. at 5-6, aff'g, ALJ Rec. Dec., May 18, 1987.
Government contractor is ordered to provide OFCCP with access to its premises for the
purpose of conducting compliance reviews. If UNC fails to comply then UNC government
contracts will be canceled and UNC will be debarred from future government contracts.
OFCCP v. University of North Carolina, 84-OFC-20, Acting Secretary of Labor
Dec. and Final Administrative Order, January 23, 1989, aff'd, Secretary of Labor Order
Denying Stay, April 25, 1989, aff'd, Board of Governors of the University ofNorth Carolina v. United States Department of Labor, 917 F. 2d 812 (4th Cir.
1990), cert. denied, 500 U.S. 916 (1991).
The regulations authorize contract cancellation and debarment for failure to comply with the
provisions of the affirmative action clause. OFCCP v. Louisville Gas & Electric
Co., 88-OFC-12, ALJ Rec. Dec. and Order, January 29, 1990, slip op. at 16, aff'd,
Special Assistant to the Assistant Secretary for Employment Standards Final Dec. and
Administrative Order, January 14, 1992; ConsentDecree, May 28, 1992.
The regulations permit reinstatement when the contractor has shown that it has established
and will carry out employment policies and practices in compliance with the affirmative action
clause. Ibid., aff'd, Special Assistant to the Assistant Secretary for Employment
Standards Final Dec. and Administrative Order, January 14, 1992; ConsentDecree, May 28, 1992.
Debarment is not appropriate where the contractor rejected complainant because it perceived
him to have lumbar lordosis but reinstated him during conciliation once it discovered that the
perception was incorrect. Id. at 17, rev'dinpart, Special
Assistant to the Assistant Secretary for Employment Standards Final Dec. and Administrative
Order, January 14, 1992, slip op. at 9; ConsentDecree, May 28, 1992.
Assistant Secretary grants OFCCP's Motion to Amend Final Order to contain a requirement
that contractor's failure to comply with the order shall result in contract cancellation and/or
debarment. OFCCP v. Texas Industries, Inc., 80-OFCCP-28, Assistant Secretary
for Employment Standards Order of Remand and Stay of Enforcement, September 27, 1990, slip
op. at 10, ALJ Dec. and Order on Remand, March 11, 1991, remanded on other grounds,
Assistant Secretary for Employment Standards Decision and Order of Remand, January 27,
1995,
ConsentDecree, June 21, 1996.
Where Assistant Secretary finds that contractor violated Section 503, it is appropriate to
provide for debarment in the event the contractor fails to comply with the final order in the case
within 60 days. Ibid. ; ALJ Dec. and Order on Remand, March 11, 1991, remanded
on other grounds, Assistant Secretary for Employment Standards Decision and Order of
Remand, January 27, 1995, ConsentDecree, June 21, 1996.
Because Exide has been found in violation of the Act, it is appropriate to provide for
debarment if it fails to comply with the Assistant Secretary's Order. OFCCP v. Exide
Corporation, 84-OFC-11, Acting Assistant Secretary for Employment Standards Dec. and
Final Order, April 30, 1991, slip op. at 27, vacatedonothergrounds, Exide Corporation v. Martin, Civil Action No. 91-242, (E.D.
Ky. 1992).
OFCCP's request for sanctions -- debarment of contractor until it is compliance with Section
503 -- is unduly broad. An administrative order should not prohibit contractor from violating the
law in general. Rather, the order should be reasonably related to the violations demonstrated in
the administrative proceeding. Thus, ALJ orders debarment and contract cancellation until
OFCCP is satisfied that the contractor is in compliance with the terms of this order and the
regulations found to have been violated in this case. OFCCP v. Norfolk and Western
Railway Co., 90-OFC-1, ALJ Rec. Dec. and Order, June 26, 1991, slip op. at 39;
ConsentDecree, November 22, 1991.
Once a final administrative decision has been issued, the threat of debarment, should
contractor fail to comply with the final order, is the established means for obtaining enforcement
under Section 503. OFCCP v. Louisville Gas & Electric Co., 88-OFC-12,
Special Assistant to the Assistant Secretary for Employment Standards Final Dec. and
Administrative Order, January 14, 1992, slip op. at 9; ConsentDecree, May 28,
1992.
Although debarment is considered a severe or significant sanction, it is an appropriate
remedy
when a contractor fails to comply with its affirmative duties under the statute and the regulations.
OFCCP v. Cissell Manufacturing Co., 87-OFC-26, ALJ Rec. Dec. and Order,
May 22, 1992, slip op. at 17, affirmed, Acting Assistant Secretary for Employment
Standards Final Decision and Order, February 14, 1994; finaldecisionvacatedsub.nom., Cissell Manufacturing Co., v. U.S.
Department of Labor, No. 94-0184 (W.D. Ky. May 24, 1994), appealpending.
Although a complete and immediate debarment of contractor seems unjustified where
contractor violated Section 503 by failing to accommodate complainant's handicap and
discharging him, debarment is warranted if contractor refuses to comply with order requiring
reinstatement of complaint with full retroactive seniority and benefits, payment of full back pay
and interest, and requiring contractor to cease applying its "no light duty" policy to
complainant and other qualified handicapped individuals. Ibid.; affirmedonothergrounds, Acting Assistant Secretary for Employment Standards
Final Decision and Order, February 14, 1994, at 14; finaldecisionvacatedsub.nom., Cissell Manufacturing Co., v. U.S. Department of
Labor, No. 94-0184 (W.D. Ky. May 24, 1994), appealpending.
Contractor's failure to comply with the terms of a conciliation agreement, in which
contractor
agreed to correct AAP violations under the Executive Order, Section 503 and VEVRA, was not
merely a failure to comply with "paperwork" rules, nor merely a failure to file
routine
reports on time, but rather a deliberative, complete violation of that agreement and of substantive
equal employment opportunity law. OFCCP v. Disposable Safety Wear, Inc.
(Executive Order, Section 503 and VEVRA), 92-OFC-11, ALJ Recommended Dec. and Order,
August 20, 1992, slip op. at 13, rev'donothergrounds,
Secretary of Labor Dec. and Final Administrative Order, September 29, 1992.
Contractor's violation of a conciliation agreement would warrant debarment and contract
cancellation but for the following special factors: 1) contractor's persuasive promises that it will
comply with its affirmative action obligations in the future; and 2) the plant manager's
"concern" for loss of jobs by employees at the plant should sanctions be imposed.
Id. at 13-14, rev'd, Secretary of Labor Dec. and Final Administrative Order,
September 29, 1992.
The Secretary has authority to order debarment and cancellation of contracts under the
Executive Order, Section 503 and VEVRA. OFCCP v. Disposable Safety Wear,
Inc. (Executive Order, Section 503 and VEVRA), 92-OFC-11, Secretary of Labor Dec. and
Final Administrative Order, September 29, 1992, slip op. at 4.
Although the Secretary's usual practice is to give a contractor a reasonable period of time in
which to come into compliance before imposing sanctions, the Secretary has imposed immediate
sanctions where the facts are not in dispute and the law is settled. Id. at 5.
Debarment of contractor for violation of a conciliation agreement is appropriate because, by
entering into the conciliation agreement, the contractor had the opportunity to demonstrate
compliance for almost four years and failed to do so. Id. at 6-7.
It is appropriate to impose sanctions where a clear violation of the Executive Order has
occurred and impairment of the Government's monitoring and enforcement of the Order has
resulted. Id. at 6-7.
The Secretary rejected contractor's argument that she should not impose debarment sanction
due to possible impact on contractor's business and the jobs of current employees. Id. at
7-10.
In determining which sanctions are appropriate, cases arising under the Service Contract Act
are not analogous to the Executive Order, Section 503 and VEVRA because of significant
differences in those laws regarding the scope of the Secretary's discretion to impose sanctions
after a violation has been found. Id. at 7-8, n.3.
In determining which sanctions are appropriate, FLSA cases are analogous to the Executive
Order, Section 503 and VEVRA, and hold that financial hardship caused by an administrative
order is not a valid basis on which to deny employees their remedy or to allow a wrong against
the public to go uncorrected. Id. at 8-10.
Contractor should bear the burden of showing that sanctions would so adversely affect their
business as to threaten their existence. Id. at 11.
Purpose of debarment is to encourage compliance and immediate imposition of sanctions can
be an appropriate step in achieving that purpose. Id. at 11.
Effective enforcement of the Executive Order, Section 503 and VEVRA depends on
voluntary compliance and meaningful sanctions when voluntary compliance is repeatedly not
forthcoming. Id. at 12.
The Secretary orders debarment of contractor for a period of 90 days for contractor's
repeated violations of a conciliation agreement in which contractor agreed to correct AAP
violations under the Executive Order, Section 503 and VEVRA. After 90 days, contractor may
petition for reinstatement in accordance with 41 CFR 60-1.31. Id. at 13-14.
Because regulations governing administrative proceedings under Section 503 are silent as to
whether sanctions are appropriate for failure to comply with discovery orders, the Federal rules
of
Civil Procedure apply. OFCCP v. Rowan Companies, Inc., 89-OFC-41, ALJ
Rec. Dec. and Order on Remand, January 4, 1993, slip op. at 5, n.7; remandedonothergrounds, Assistant Secretary for Employment Standards Order of Partial
Remand, April 11, 1995; Second ALJ Decision and Order on Remand, March 11, 1996;
pending, Administrative Review Board.
A judgment by default as a sanction for failure to comply with a discovery order is a drastic
remedy and should be applied only in extreme cases. However, where only the coverage issue
was remanded and a disposition on the merits has already been recommended in favor of the
contractor, a judgment by default on the issue of coverage is appropriate where contractor fails to
comply with ALJ discovery order. Id. at 6; remandedonothergrounds, Assistant Secretary for Employment Standards Order of Partial Remand, April
11, 1995; Second ALJ Decision and Order on Remand, March 11, 1996; pending,
Administrative Review Board.
Because contractor failed to comply with ALJ discovery order requiring contractor to
respond "fully" to OFCCP's interrogatories regarding coverage, ALJ imposes
sanction resembling judgment by default under FRCP 37(b)(2)(c): i.e., ALJ holds that,
under the principles set forth in WMATA, each complainant would have performed work
on defendant's Government contracts, subcontracts, or oil leases. Id. at 6-7;
remanded, Assistant Secretary for Employment Standards Order of Partial Remand,
April
11, 1995; Second ALJ Decision and Order on Remand, March 11, 1996; pending,
Administrative Review Board.
Section 503 rules of procedure at 41 CFR Part 60-30 contain no provision pertaining to
sanctions for counsel's failure to appear at a scheduled deposition. Therefore, the Federal Rules
of Civil Procedure apply. OFCCP v. Mississippi Power Co., 92-OFC-8, ALJ
Order Partially Granting Motion for Sanctions, July 16, 1993, slip op. at 2; reversed,
Assistant Secretary for Employment Standards Order, July 19, 1995.
Rule 37(d) of the Federal Rules of Civil Procedure grants court authority to impose sanctions
for defense counsel's failure to appear at a scheduled deposition. Id. at 2;
reversed, Assistant Secretary for Employment Standards Order, July 19, 1995.
In determining whether sanctions are appropriate for defense counsel's failure to appear at a
scheduled deposition, ALJ must analyze 1) the nature and consequences of the misconduct; 2)
the
purpose to be served by the sanction; and 3) must choose the least severe penalty consonant with
the purpose to be achieved. Id. at 2; reversed, Assistant Secretary for
Employment Standards Order, July 19, 1995.
Although defense counsel should be sanctioned for failure to appear for a scheduled
deposition, the defendant contractor should not be sanctioned because the deponent (a company
official) did appear for the deposition. Id. at 2; reversed, Assistant Secretary for
Employment Standards Order, July 19, 1995.
Defense counsel's failure to appear for a scheduled deposition constitutes a failure to comply
with an obligation under rules of procedure. Id. at 2; reversed, Assistant
Secretary for Employment Standards Order, July 19, 1995.
The imposition of sanctions against defense counsel for her failure to appear for a scheduled
deposition was not dependent on a finding of willful misconduct but upon the mere fact of
noncompliance. Id. at 2-3; reversed, Assistant Secretary for Employment
Standards Order, July 19, 1995.
ALJ concludes that sanctions against defense counsel for her failure to appear at a scheduled
deposition are warranted, despite extenuating circumstances which precluded counsel's
attendance; defense counsel's failure to appear was to the detriment of plaintiff's schedule and
caused unwarranted expenses. Id. at 3; reversed, Assistant Secretary for
Employment Standards Order, July 19, 1995.
ALJ imposes sanctions against defense counsel for her failure to appear at a scheduled
deposition. Counsel must reimburse plaintiff for court reporter and transcript costs; must pay
reasonable attorney's fees to plaintiff associated with services performed on the day defense
counsel failed to appear; and must make the deponent available at defense counsel's expense in
Washington D.C., or if deposition has been completed, must reimburse plaintiff for reasonable
costs associated therewith. Id. at 3; reversed, Assistant Secretary for
Employment Standards Order, July 19, 1995.
There is no provision in Department of Labor regulations governing administrative
proceedings under Section 503, [for] an appeal of an ALJ order imposing or denying sanctions
for
alleged misconduct of an attorney. The only provision for review of ALJ orders in Section 503
cases permits any party to file exceptions to an ALJ recommended decision after the hearing.
OFCCP v. Mississippi Power Co., 92-OFC-8, Assistant Secretary for Employment
Standards Order, July 19, 1995; at 2.
Neither an ALJ nor the Secretary has the authority, absent an explicit grant by statute, to
impose the personal sanctions provided for in the Federal Rules of Civil Procedure, e.g.,
requiring
payment of attorneys' fees and costs or holding an individual in contempt for failure to comply
with a subpoena. Ibid.
The ALJ had no authority to issue the sanctions order, rather, his authority to regulate
discovery and the conduct of parties and their representative is limited to that provided in the
regulations. Id. at 3.
The Assistant Secretary does have the authority to review an ALJ's order imposing sanctions
for failure to comply with the regulations where it is material to the issues decided in a
recommended decision. Id. at 3, n.1.
The Assistant Secretary may review the propriety of the sanction or take other action
provided for in the regulations. The Assistant Secretary may debar a contractor for refusal to
comply with the discovery regulations. Ibid.
Contract cancellation and debarment are not necessarily imposed automatically. OFCCP
v. Yellow Freight System Inc., 89-OFC-40, Administrative Law Judge Recommended
Decision and Order, May 17, 1994, at 33; Consent Decree, February 29, 1996.
Cancellation and debarment was recommended as an appropriate sanction where the
defendant's use of x-ray data had previously been held to violate Section 503, yet the defendant
persisted in such use; and where the defendant's persistence reflected a general corporate policy
contrary to the purposes of the Rehabilitation Act and antithetical to the duties imposed on
government contractors under the Act. Id. at 33-34.
Cancellation and debarment pending the contractor's full compliance is appropriate where
the
defendant's past conduct suggests a likelihood of a continued noncompliance with directives
issued by the Department of Labor in the future. Id. at 34.
The Assistant Secretary held that, if Commonwealth fails to comply with any provision of
his
order within the specified periods, Defendant, its officers, subsidiaries, and successors shall be
ineligible for the award of any government contracts or subcontracts, and shall be ineligible for
extensions or other modifications of any existing government contracts or subcontracts, until
Defendant has satisfied him that it is in compliance with the provisions of Section 503 and the
regulations which have been found to have been violated in this case. OFCCP v.
Commonwealth Aluminum Corp., 82-OFC-6, Assistant Secretary for Employment
Standards Final Decision and Order, February 10, 1994, at 28-29; remandedsub.nom., CommonwealthAluminum Corp., v. United States Department
of Labor, No. 94-0071-0(c)(W.D. Ky. September 6, 1996).
Sanctions are imposed under each of the contract compliance programs administered by
OFCCP only after a finding that a contractor has violated the relevant law and has been given an
opportunity to remedy its noncompliance. OFCCP v. American Airlines, Inc.,
94-OFC-9, Assistant Secretary For Employment Standards Decision and Remand Order, April
26,
1996 at 18.
Given the absence of authority permitting a contractor found in violation of Section 503 an
indefinite period to come into compliance, Cissell has the burden to demonstrate its compliance
as
ordered within a time certain or suffer appropriate sanctions. "Nothing so focusses the
mind
and stirs the will to act as an immediate threat to one's livelihood." OFCCP v.
Cissell Manufacturing Co., 87-OFC-26, Acting Assistant Secretary for Employment
Standards Final Decision and Order, February 14, 1994, at 20-21; finaldecisionvacatedsub.nom., Cissell Manufacturing Co., v. U.S.
Department of Labor, No. 94-0184 (W.D. Ky. May 24, 1994), appealpending.
The ALJ reserved ruling on plaintiff's request for an award of expenses and attorneys fees for
the time spent in the preparation of the response to defendant's motion for order of protection
until "after the opportunity for hearing" on such matter on a date certain in
accordance with Rule 37(a)(4) of the Fed. R. Civ. P. And 41 CFR § 60-30.1. The ALJ
ordered plaintiff's counsel to prepare by said scheduled hearing an affidavit setting forth the
expenses incurred by the plaintiff with respect to its previous motion to compel and its
subsequent
response to defendant's motion for protective order. OFCCP v. United Airlines,
94-OFC-1, August 7, 1995, ALJ Order at 4-5.
In light of defendant counsel's contention that plaintiff's counsel was aware that her client
was
not the proper party to file a motion to quash subpoenas on a third party witness, the ALJ
reserved ruling on defendant's request for expenses and attorney's fees for the time spent in the
preparation of its response to the plaintiff's motion to quash until after the plaintiff's opportunity
for hearing on such matter on [a date certain] in accordance with Rule 37(a)(4) of Fed. R. Civ. P.
and 41 CFR § 60-30.1. The ALJ also ordered defendant's counsel to provide an affidavit
setting forth the expenses incurred by the defendant with respect to its response to plaintiff's
motion to quash the subpoenas in question at the scheduled hearing. OFCCP v.
United Airlines, 94-OFC-1, August 21, 1995, ALJ Order at 1-2.
Neither party has demonstrated that it has suffered prejudice because of an opposing party's
failure to totally comply with discovery requests. Consequently, the ALJ denied plaintiff's
request
for sanctions against defendant because of what the plaintiff's counsel perceives to be
sanctionable
conduct on behalf of defendant by hindering discovery and violating the ALJ's orders.
OFCCP v. United Airlines, 94-OFC-1, August 30, 1995, ALJ Order at 3.
Even if Rowan is correct that subject matter jurisdiction may not be deemed established as a
discovery sanction, all the usual sanctions provided for in the regulations at 41 CFR 60-741.28,
including debarment and termination of contracts, are available as sanctions, under
[circumstances
in which an ALJ has found that a contractor has not complied with his order compelling
discovery
and had failed to timely resist OFCCP's motion to compel]. OFCCP v. Rowan
Companies, Inc., Marine Division, 89-OFC-41, Assistant Secretary for Employment
Standards, Order, April 11, 1995,at 4-6; ALJ Second Recommended Decision and Order on
Remand, March 11, 1996; exceptionspending, Administrative Review Board.
The ALJ held, that absent a violation of a court order compelling responses to OFCCP's
discovery requests and given that American's opposition to the requests is substantially justified,
OFCCP's request to award expenses and attorney's fees incurred by OFCCP in seeking this order
is denied. OFCCP v. American Airlines, Inc., 94-OFC-9, ALJ Order on
Plaintiff's
Motion to Compel Responses and for Admissions, January 19, 1995, at 11.