Court Enjoins Labor Department From Enforcing E.O. 11246 Claim Against Federal Contractor

October 31, 2024

What's New

A federal district court has temporarily blocked the Labor Department’s Office of Federal Contract Compliance Programs from continuing enforcement proceedings against a janitorial services company that allegedly violated Executive Order 11246 by engaging in racially discriminatory hiring. The September 9 ruling by the U.S. District Court for the Southern District of Texas came in ABM Industry Groups v. U.S. Department of Labor.

The court reasoned that ABM is likely to succeed in proving that OFCCP’s administrative enforcement regime is unconstitutional and therefore barred OFCCP from continuing its enforcement proceedings while the court considers the case’s merits. Relying on the Fifth Circuit’s decision in Jarkesy v. Securities and Exchange Commission, the district court reasoned that restrictions on removing ALJs from their jobs appear inconsistent with the President’s duty to control executive branch functions. DOL will have an opportunity to appeal.

What It Means

The injunction applies only to this matter between OFCCP and ABM, but it likely will deter OFCCP from continuing with or initiating new enforcement actions while the injunction remains in place. While less than 1% of OFCCP investigations result in enforcement proceedings, the threat of such proceedings often encourages federal contractors to reach financial settlements with the agency.

Interestingly, DOL can refer cases to the U.S. Department of Justice for enforcement, although it rarely does so. The preliminary injunction in this case would not impede DOL’s ability to refer a case to DOJ for enforcement.

What You Should Do

Follow CWC as we monitor this case.

RELATED CONTENT

Subscribe to CWC's Updates and Events

CLICK TO SIGN UP