United States Department of Labor
Office of Administrative Law Judges Law Library

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.

Return to Table of Topics, 503 Index

The DOL and the Employment Standards Administration are both agencies under the APA definition. OFCCP v. E.E. Black, Ltd., 77-OFCCP-7R, Assistant Secretary for Employment Standards Order Denying Motion to Disqualify the Secretary of Labor, the Assistant Secretary and the U.S. Department of Labor, February 26, 1979, slip op. at 5.

It was specifically intended that the regulations and not the Act define the specific affirmative action duties of contractors. OFCCP v. Burlington Northern Railroad, 81-OFCCP-21, ALJ Order Granting Motion for Summary Judgment and Dismissing Complaint, June 12, 1980, slip op. at 3.

The Act was not automatically implemented on its stated effective date, September 26, 1973. The effective date was June 11, 1974, when the Secretary of Labor issued the implementing regulations. Id. at 4.

The regulations promulgated on June 11, 1974, will be applied prospectively only, not retrospectively. Id. at 5.

DOL has no authority to exercise its enforcement power under the Act prior to promulgation of implementing regulations. OFCCP v. Western Electric Co., 80-OFCCP-29, ALJ Order Granting Defendant's Motion to Dismiss, March 4, 1981, slip op. at 4, rev'd and remanded on other grounds, Deputy Under Secretary for Employment Standards, April 24, 1985.

The Act covers actions taken "in employing persons" which encompasses both applications for employment and current employees. Id. at 5, rev'd and remanded on other grounds, Deputy Under Secretary for Employment Standards, April 24, 1985.

A decision to refuse to hire, to layoff, to terminate or to put on disability are actions that come under the purview of Section 503. Id. at 5, rev'd and remanded on other grounds, Deputy Under Secretary For Employment Standards, April 24, 1985.

Section 503 was modeled on Executive Order 11246 and a Federal contractor's obligations are parallel under both. Id. at 9, rev'd and remanded on other grounds, Deputy Under Secretary for Employment Standards, April 24, 1985.

The validity of the waiver provision of former 20 CFR 741.25(a) must be assumed. OFCCP v. Western Electric Co., 80-OFCCP-29, Deputy Under Secretary for Employment Standards, Remand Dec.and Order, April 24, 1985, slip op. at 13, rev'g and remanding, ALJ Rec. Dec. March 14, 1981.

The regulations at 41 CFR 60-741.26(g)(2) and 60-741.28(a) are written in mandatory form and require that some sort of conciliatory effort be made. OFCCP v. Southern Pacific Transportation Co., 79-OFC-10A, ALJ Rec. Dec. and Order, November 9, 1982, slip op. at 18; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

Legislative intent of the Act was to exclude small, occasional contracts because of administrative costs of applying the statute to minimal, essentially trivial, business relationships, but to include substantial business relationships in the applicability of the Act. Id. at 31; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

The intent of Congress in enacting this statute was to encourage the widest possible participation of its people in the governing, learning, producing and enjoyment that occurs in the country and to enable individuals to have the widest feasible opportunity to exercise their talents. Id. slip op. at 42; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

The strictures of the statute extend to promotion situations as well as initial hire and retention. Id. at 47; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

Section 504 and Section 503 are to be administered in such a manner that a consistent, uniform, and effective Federal approach to discrimination against handicapped persons would result. Id. at 48; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

The ultimate goal of the Rehabilitation Act is to increase the employment of handicapped workers. OFCCP v. American Commercial Barge Line, 84-OFC-13, ALJ Rec. Dec. and Order, September 30, 1986, slip op. at 20, rev'd on other grounds, Special Assistant to the Assistant Secretary for Employment Standards Final Decision and Order, April 15, 1992.

Section 503 contains a liberal grant of remedial authority to the Department of Labor and a particular form of relief can be awarded under the Act if no other form of relief can better serve the purposes of the Act and the relief is compatible with both the Act's regulations and the terms of the contract. OFCCP v. Yellow Freight Systems, Inc., 82-OFC-2, ALJ Rec. Dec., September 30, 1986, slip op. at 28-29; remanded on other grounds, Acting Assistant Secretary Decision and Order of Remand, October 6, 1993; Consent Decree, January 31, 1994.

The Department of Transportation's statutes on qualifications of drivers for motor carriers overlap with DOL rehabilitation statutes and they must be constructed together. OFCCP v. Yellow Freight Systems, Inc., 79-OFCCP-7, Associate Deputy Under Secretary for Employment Standards Dec. and Order of Remand, April 8, 1987, remanding on other grounds, ALJ Rec. Dec., July 30, 1982, slip op. at 7, ALJ Rec. Dec. on Remand, August 26, 1988, rev'd, Special Assistant to the Assistant Secretary for Employment Standards, August 24, 1992; Consent Decree, February 2, 1993.

The Congressional policy to encourage employment of qualified handicapped individuals, embodied by the Rehabilitation Act, is not overridden by the fact that DOT was given the power to prescribe qualifications of interstate truck drivers. OFCCP v. Yellow Freight Systems, 79-OFCCP-7, Associate Deputy Under Secretary for Employment Standards Decision and Order of Remand, April 8, 1987, slip op. at 14, ALJ Rec. Dec. on Remand, August 26, 1988, rev'd, Special Assistant to the Assistant Secretary for Employment Standards, August 24, 1992; Consent Decree, February 2, 1993.

To grant the DOT exclusive jurisdiction to rule on qualifications for drivers under a carriers' additional, more stringent, requirements would deprive complainants of remedies only available under the Rehabilitation Act and would be contrary to the Congressional intent that handicapped individuals be assured "full and fair consideration." Id. at 17, ALJ Rec. Dec. on Remand, August 26, 1988, rev'd, Special Assistant to the Assistant Secretary for Employment Standards, August 24, 1992; Consent Decree, February 2, 1993.

Although Congress did amend the definition of handicapped individual for purposes of employment under Sections 503 and 504, nothing in the Civil Rights Restoration Act of 1987 or its legislative history indicates Congress intended any change in existing agency and judicial interpretations of the scope of Section 503 and the operation of Department of Labor regulations which, in this respect, had been unchanged since 1974. OFCCP v. PPG Industries, Inc., 86-OFC-9, Deputy Assistant Secretary for Employment Standards Final Dec. and Remand Order on Remedy, January 9, 1989, slip op. at 9; dismissed on APA review, PPG v. United States, C.A. No. 89-0757 JGP (D.D.C.); reversed and remanded, 52 F 3d. 362 (D.C. Cir. 1995); Consent Decree, September 24, 1996.

If any inferences can be drawn from Congressional inaction on Section 503 when it considered and passed the Civil Rights Restoration Act, they are that Congress was satisfied with the current administration and enforcement of Section 503 and intended no changes. Id. at 9-10; dismissed on APA review, PPG v. United States, C.A. No. 89-0757 JGP (D.D.C.); reversed and remanded, 52 F 3d. 362 (D.C. Cir. 1995); Consent Decree, September 24, 1996.

When OFCCP seeks enforcement of one of the contract-related civil rights laws it administers, it is vindicating the government's interest in performance of one of the terms of the contract, not suing or initiating enforcement on behalf of private individuals. Section 503 is, in this respect, indistinguishable from Executive Order 11246. OFCCP v. WMATA, 84-OFC-8, Assistant Secretary for Employment Standards Order Denying Motion to Amend August 23 Order, November 17, 1989, slip op. at 4, vacated on other grounds, WMATA v. DeArment, 55 EPD ¶40,507 (D.D.C. 1991).

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. 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 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.

Although the definition of disability in the Americans with Disabilities Act, 42 U.S.C. 12101 et seq. (1990), is based on the same definition in the Rehabilitation Act, it does not necessarily follow that the regulations governing the ADA apply to the Rehabilitation Act. OFCCP v. Delta Airlines, Inc., 94-OFC-8, ALJ Recommended Decision and Order on Cross-Motions for Summary Judgment, March 20, 1996, at 9; exceptions pending, Administrative Review Board.

If it was the intent of Congress to prohibit the consideration of mitigating devices when analyzing a substantial impairment, then the language of the Rehabilitation Act could have been changed given that the Act has twice been amended since its enactment in 1973. Id. at 9.

Under the EAJA, an "adversary adjudication" is defined as "an adjudication under section 554" of the Administrative Procedure Act in which the position of the United States is represented by counsel. Section 554 applies in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing. While the Department's regulations afford an opportunity for a formal hearing, Section 503 of the Rehabilitation Act does not require an adjudication under the APA or any hearing for that matter. Instead, it requires the Department to investigate a complaint, and take such action thereon as the facts and circumstances warrant. OFCCP v. Jacobi-Lewis Company, Inc., 88-OFC-18, Assistant Secretary forEmployment Standards, Final Decision and Order, May 2, 1995, at 6.

To determine the applicability of the Equal Access to Justice Act ("EAJA"), 5 U.S.C. §504 (1988), to a particular proceeding, the starting point is the language of the Act itself. Id. at 7.

The Supreme Court has held that because the Equal Access to Justice Act ("EAJA"), 5 U.S.C. §504 (1988), amounts to a partial waiver of the sovereign's immunity, it must be strictly construed. Furthermore, the meaning of the phrase "an adjudication under section 554" is unambiguous in the context of the EAJA. Thus, proceedings must be specifically "subject to" or "governed by" section 554 to be considered "adversary adjudications." Id. at 7-8.

The fact that a statute affords "an opportunity for a hearing" and that its implementing regulations enlarged upon the statute to "include essentially the same procedural components as those prescribed in Section 554 of the APA" does not transform proceedings under said statute to adversary adjudications. What counts is whether the statute indicates that Congress intended to require full agency adherence to all section 554 procedural components. Section 503 of the Rehabilitation Act does not expressly invoke the APA, hence hearings conducted under the Rehabilitation Act are not required by statute and are not subject to the EAJA. Id. at 8.

The Assistant Secretary found that Section 503's operative language requiring covered government contractors to "take affirmative action to employ and advance in employment" qualified disabled individuals has not changed over two decades and through several amendments. The Assistant Secretary also affirmed that the Act directed the President to implement its provisions by promulgating regulations, which the President delegated to the Secretary of Labor. OFCCP v. American Airlines, Inc., 94-OFC-9, Assistant Secretary For Employment Standards Decision and Remand Order, April 26, 1996 at 1-2.

As a simple matter of logic, the concept of "affirmative action" must include a duty not to discriminate against members of the class protected by Section 503. Nondiscrimination is the starting point, the first step required of any contractor, in fulfilling its affirmative action obligation. If a contractor were free to discriminate against employees and applicants for employment on the grounds that they are disabled and without regard to their ability to perform the job, the contractor could avoid any responsibility for affirmative action. Id. at 5.

The starting point for interpretation of any legislation is the words of the statute itself. But the term "affirmative action" is not defined in the Rehabilitation Act. If it has any "plain meaning" at all that does not reduce it to an absurdity, it must clearly prohibit discrimination. Id. at 6.

The Assistant Secretary held that, while the term "affirmative action" is not defined by the Rehabilitation Act, the legislative history of the Act dispels any doubt of Congressional intent not to permit government contractors to discriminate against the disabled while at the same time requiring them to take affirmative action to hire the disabled. Id. at 6.

The Assistant Secretary's review of Section 503 legislative history, including direct references to Section 503 as a nondiscrimination program, revealed that Congress intended Section 503 to be a nondiscrimination program and that the phrase "affirmative action" includes the obligation not to discriminate and more. Ibid.at 7-8.

When Congress passed the Americans with Disabilities Act it recognized and ratified the Department of Labor's enforcement of an antidiscrimination requirement under Section 503. Id. at 9.

Congress' amendment of the Rehabilitation Act in 1978, to add private rights of action to Section 501 and 504, but not 503, did not imply that Section 503 does not prohibit discrimination. Id. at 12.

The Assistant Secretary held, that because Section 503 obligates covered contractors not to discriminate against qualified disabled individuals, that obligation would be meaningless if contractors could violate it and not provide relief to victims of their illegal discrimination. Id. at 16.

The Assistant Secretary held that Section 503 has always provided an administrative avenue for individuals to seek remedies, and Congress made clear its intention that the Department of Labor vigorously enforce the Act to obtain relief for victims of discrimination and impose sanctions on contractors that refuse to comply. Id. at 17.

The Assistant Secretary held that it would be incongruous and inconsistent with Congressional intent if persons discriminated against by recipients of federal financial assistance in violation of Section 504 were entitled to complete relief, but individuals subjected to discrimination by government contractors had no recourse. Id. at 18.

When OFCCP seeks enforcement of Section 503, it is vindicating the government's interest in performance of one of the terms of the contract, not suing or initiating enforcement on behalf of private individuals. Id. at 18-19, n.10.

The Assistant Secretary held irrelevant history of OFCCP's failed attempts to amend existing regulations to include specific references to back pay. Case law holding that legislative history of failed efforts to amend legislation carries no significance, also applies to proposed regulations, which were never adopted. Id. at 19-20.

The Assistant Secretary held, that as part of Congress' grant of broad legislative rule making authority to the Secretary to implement the provisions of Section 503 by promulgating regulations, the Secretary has the authority under the Act itself to establish a program of regular compliance reviews. Id. at 22.

The Assistant Secretary held that the Department of Labor had the authority to conduct compliance reviews and complaint investigations in light of Section 503 regulations which provide, that OFCCP has responsibility for undertaking such investigations of complaints and other matters as well as evaluations of contractor and agency performance as may be necessary; that require contractors to maintain records regarding complaints and actions taken under the regulations, and such other records as may be required by OFCCP or these regulations; that require contractors to permit OFCCP access to its premises and records for purposes of complaint investigations and investigations of performance under the affirmative action clause; and which prohibit retaliation and discrimination against any person for assisting or participating in a compliance review. Id. at 23-25.

The Assistant Secretary held that the legislative history of Section 503 shows that Congress intended the Department of Labor to conduct compliance reviews. Id. at 28-29.

One of the general purposes of the Act is to insure that any qualified handicapped individual shall be given full and fair consideration for employment by any contractor who seeks to contract with the Federal government. Therefore, OFCCP's interpretation of Section 503's affirmative action obligation as including a nondiscrimination component is reasonably within the contemplation of the statutory grant of authority. OFCCP v. American Airlines, Inc., 94-OFC-9, ALJ Dec. and Order on Defendant's Motions for Summary Judgment, September 19, 1995, at 4, rev'd on other grounds, Assistant Secretary of Labor, Decision and Remand Order, April 19, 1996.

OFCCP does not have statutory authority to conduct compliance reviews under section 503. Several attempts to provide such authority by explicit regulatory amendments have not been successful, and OFCCP has nonetheless brought the instant action based on such an unauthorized compliance review without any complaint having been filed. Further, as distinguished from the issue of OFCCP's authority to proceed in behalf of discriminatees where at least one timely complaint was filed, the Assistant Secretary has expressly reserved judgment whether OFCCP may seek relief on behalf of alleged discriminatees following such compliance review in the absence of any individual complaints. Id. at 9-10, reversed, Assistant Secretary of Labor, Decision and Remand Order, April 19, 1996.

The Assistant Secretary held that language employed by an ALJ which paraphrased exceptions to the Rehabilitation Act's definition of an "individual with handicaps" is overly broad in that it can be read to include . . . past substance abusers, previously contagious or infected persons, or persons with contagious diseases or infections who do not pose a direct threat to the health and safety of others. OFCCP v. Mt. Bell Telephone Co., 87-OFC-25, Assistant Secretary for Employment Standards, Order Denying Motion to Strike; Decision and Order of Remand, August 25, 1994, at 4-5; Consent Decree, February 9, 1995.

Remedial statutes such as Section 503 should be interpreted liberally. OFCCP v. Norfolk Southern Corporation, 89-OFC-31, Assistant Secretary for Employment Standards Decision and Order of Remand, October 3, 1995, at 9.

Since Section 503 contains no wording from which a retroactive application of the regulations may be inferred, Congress intended no such retroactivity. OFCCP v. Burlington Northern, Inc., 80-OFCCP-6, Special Assistant to the Assistant Secretary for Employment Standards, Final Decision and Order of Dismissal, December 11, 1991, at 17.

[Section 503's implementing regulations] do not provide for retroactivity. Rather, they indicate only a prospective application. Id. at 17.

Even had the arbitrator's decision not been made pursuant to a collective bargaining agreement, OFCCP may still bring an action in its role as a Government agency. The principles of res judicata or collateral estoppel do not apply to such an action based on an arbitrator's decision. OFCCP v. American Telephone and Telegraph Company (AT&T), 92-OFC-5, ALJ Order Denying Defendant's Motion for Summary Judgment and Granting in part Defendant's Motion in Limine, April 23, 1995, at 7.