The Courts

In Oracle Lawsuit, Labor Department Defends Agency Trump Admin Tried to Shut Down

Oracle Makes Hostile Bid For Rival Peoplesoft
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A lawsuit now unfolding in a Washington, D.C., federal court is putting the Trump administration in an awkward position, forcing government lawyers to defend an agency the White House has tried to shutter against a constitutional challenge from the tech giant Oracle.

Oracle is suing the Department of Labor and its Office of Federal Contract Compliance Programs (OFCCP), an agency that ensures companies that do business with the federal government comply with lofty equal opportunity and non-discrimination standards. Oracle claims the agency's enforcement process is unconstitutional. The lawsuit stems from an OFCCP enforcement action that accuses the company of pay discrimination and privileging Asian workers in recruitment.

If OFCCP finds that a federal contractor is violating the civil rights of its employees, it can bring an enforcement action against the offender in a trial before a Labor Department official. If the agency prevails, it can force the contractor to make workers whole with remedies such as back pay. Oracle and its attorneys say the process goes far beyond what Congress and the president have authorized. They also object that the department effectively serves as "judge and jury" during the process.

The Labor Department's defense of the agency is in tension with White House priorities, as OFCCP has been a persistent target for bloodletting by top administration officials. The White House's proposed budget for fiscal year 2018 axed the office altogether and assigned its duties to a different agency. While that proposal was never adopted, the office's operational capacities have significantly receded due to staffing cuts approaching 20 percent. As a general matter, the administration has waged a concerted campaign to curb agency power, the precise subject at issue in Oracle's case.

A leading employment lawyer expressed disappointment in an interview with the Washington Free Beacon, saying the Labor Department's position is disturbing "in the face of Secretary [Eugene] Scalia's commitment to the rule of law."

"Many in the legal community had hoped for a more legally principled approach by this solicitor's office," the source added. The solicitor is the top legal officer at the Labor Department.

A coalition of labor unions and flagship civil rights groups including the NAACP, the ACLU, and the Southern Poverty Law Center are also supporting OFCCP against Oracle’s lawsuit. In their own legal filings, those groups warn that the result the company seeks would have "a devastating impact on OFCCP’s ability to achieve its anti-discrimination mission."

Though the OFCCP sounds like a backwater unit, its far-reaching mandate covers all federal contractors. Those employers include marquee American companies such as Boeing, Google, and General Electric. Federal contractors collectively employ one-fifth of the labor force or about 32 million people.

OFCCP operates under an executive order President Lyndon Johnson issued in 1965. Oracle argues that OFCCP's enforcement process should be terminated because it has no basis in that order or federal law.

As Oracle tells it, the 1965 order gives the agency modest powers. It can direct other departments to terminate a contract if it finds a contractor is discriminating against workers, publish the names of offending companies, and refer violators to the Department of Justice for a possible breach of contract suit. What it can't do, Oracle claims, is haul violators before a DOL officer for a trial on alleged violations and force them to pay out damages.

"Without authority from any act of Congress—indeed, in contravention of congressional legislation—a group of unelected, unaccountable, and unconfirmed administrative officials have cut from whole cloth this adjudicative agency-enforcement scheme," Oracle's complaint reads.

In its own legal filings, the Trump administration said Oracle's suit should be dismissed for technical reasons. The enforcement process the company is challenging was established in 1977, the government notes, meaning the time for a legal challenge has long since passed. Even if such a case could proceed, the government says the company has to wait until this particular administrative proceeding is complete.

The government's response is carefully crafted—by defending the agency on technical grounds, it sidesteps the substance of Oracle's argument, which is likely to attract the sympathy of legal conservatives with whom the administration often makes common cause.

The government's lead attorney on the Oracle case, Rebecca Kopplin, made headlines when she withdrew from a case challenging the constitutionality of the Affordable Care Act. Kopplin withdrew from the ACA case after the administration decided it would no longer defend the law in court, in what was widely perceived as an act of protest.

OFCCP's case against Oracle is one of a flurry of "midnight" lawsuits and regulatory actions begun in the waning days of the Obama administration. Though Trump and congressional Republicans successfully quashed most of those late-breaking efforts, the Labor Department's suit against Oracle has curiously survived.

The Department of Labor did not respond to the Free Beacon‘s inquiry by press time.

The case is Oracle America Inc. v. U.S. Department of Labor in the U.S. District Court for the District of Columbia.