United States: Court Rules EEO-1 Reports Are Not Exempt "Commercial" Information Under FOIA; Department Of Labor May Appeal

Seyfarth Synopsis: Many federal contractors and subcontractors treat their EEO-1 reports as confidential because they contain detailed demographic data and workforce information. A lawsuit brought by the Center for Investigative Reporting and reporter Will Evans seeks to force a mass disclosure of EEO-1 Reports by the OFCCP. The litigation reached a critical juncture recently when a federal judge in California ruled that EEO-1 Reports are not protected from disclosure under "Exemption 4" of the Freedom of Information Act, which protects confidential "commercial" information. The Court concluded that EEO-1 Reports are not fundamentally "commercial" in nature. The Department of Labor is deciding whether to appeal the decision to the Ninth Circuit.

For more than a year, thousands of federal contractors have been waiting to see if their objections to a FOIA request for their EEO-1 Reports would be upheld. They may now have an answer. On December 22, 2023, the U.S. District Court for the Northern District of California ruled that EEO-1 Reports do not contain the type of "commercial" information that is protected from disclosure under FOIA.

The current dispute began in August of 2022, when the Department of Labor ("DOL")'s Office of Federal Contract Compliance Programs ("OFCCP") issued a public notice, advising federal contractors and subcontractors that a Freedom of Information Act ("FOIA") request had been made for their "Consolidated" EEO-1 Reports from 2016-2020. The FOIA request was submitted by a reporter named Will Evans and his employer, the Center for Investigative Reporting ("CIR"), an investigative news organization.

The FOIA request encompassed nearly 75,000 EEO-1 Reports, from roughly 24,000 contractors. Approximately 20% of the impacted contractors filed objections to the FOIA request. The objections primarily argue that EEO-1 Reports fall under "Exemption 4" to FOIA, which protects information that is commercial and confidential from mandatory disclosure.

In November of 2022, while the OFCCP was still reviewing thousands of objections, the CIR and Evans filed a lawsuit to force the disclosure of the EEO-1 reports. While the lawsuit was pending, the OFCCP went on to release the EEO-1 Reports of non-objecting contractors.

Both parties then filed motions for summary judgment, asking the Court to rule in their favor (N.D. Cal. Case No. 3:22-cv-07182). The Court issued its ruling on December 22, 2023, granting in part and denying in part both motions. Ctr. For Investigative Reporting v. United States Dep't of Labor, 3:22-cv-07182-WHA (N.D. Cal. Dec. 22, 2023).

On a threshold procedural question, the Court found in favor of the DOL. The Court ruled the DOL was not collaterally estopped (barred) from relitigating the status of EEO-1 Reports under FOIA because of an earlier 2019 decision from the same court, which ruled in favor of disclosure. The current Court held that collateral estoppel cannot be used against a governmental defendant. As such, the Court proceeded to rule on the merits.

The Court considered the "commerciality" requirement of Exemption 4, and evaluated whether EEO-1 Reports contain "intrinsically valuable information such as 'business sales statistics, inventories, customer lists, and manufacturing processes.'" The Court concluded that the reports were not commercial information, because:

(1) the "broadly sweeping" job categories in the EEO-1 Reports are not industry-specific and cannot yield "any commercial insight that is specific to the operations of the federal contractor;"

(2) the employee counts alone do not reveal company staffing strategies;

(3) employee demographic data "does not speak to the commercial contributions of a company's workforce;" and

(4) there is no commercial gain to be found in five years of employee headcount and demographic data and, in any event, "that data would probably be stale by the time it was disclosed."

Given this finding, the Court did not decide whether the EEO-1 Reports are "confidential," as also required by Exemption 4.

Contractors may take issue with several aspects of the Court's ruling. First, it would allow the disclosure of EEO-1 reports en masse, which is inconsistent with Congressional intent; the EEOC is prohibited from making public any data derived from its compliance surveys, including EEO-1 reports. See 42 U.S.C. §2000e-8(e) and EEO-1 Component 1 FAQs (eeocdata.org) ("The confidentiality requirements allow the EEOC to publish only aggregated data, and only in a manner that does not identify any particular filer..."). Second, while OFCCP jointly collects the exact same EEO-1 reports from federal contractors, the confidentiality protections found under Title VII have not been incorporated by OFCCP under its regulatory framework. That puts employers who do business with the government on unequal footing with their non-contractor competitors.

The Court ordered the DOL to produce the EEO-1 Reports within 28 days of the order, or by January 19, 2024. However, on December 27, 2023, the Parties to the case submitted a Stipulation asking the Court to stay the production deadline, while the DOL decides whether to appeal the Court's decision. See 3:22-cv-07182 [52]. The Court granted the Stipulation the next day and extended the DOL's deadline for producing the EEO-1 Reports to February 20, 2024. See 3:22-cv-07182 [53] (entered Dec. 28, 2023).

We will continue to monitor the case closely. If the government appeals the Court's decision, the status of EEO-1 Reports under Exemption 4 of FOIA will remain uncertain until the appeal concludes.

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