Google Fought the Labor Department, and Google Won

March 28, 2017, 2:09 AM

By Chris Opfer, Bloomberg BNA

Google Inc.'s preliminary victory in a Labor Department lawsuit already has some government contractors rethinking the way they respond to federal pay discrimination investigations.

A DOL administrative law judge ruled earlier this month that Google doesn’t for the time being have to give the Office of Federal Contract Compliance Programs pay information dating back to the company’s formation and the names and contact information for some 20,000 workers at its California headquarters requested as part of a random audit. While the OFCCP has broad power to seek information during compliance reviews, the decision draws something of a line in the sand that other contractors facing audits are likely to test.

“OFCCP is still very much entitled to some information relating to compensation,” Alissa Horvitz, a partner at Roffman Horvitz who represents companies doing business with the federal government, told Bloomberg BNA. “Government contractors and their attorneys need to examine the reasonableness and the scope of the request before deciding whether to push back.”

That’s especially true for contractors working on smaller projects. Judge Steven Berlin in his ruling emphasized that Google has a $600,000 contract with the General Services Administration and that the company estimated that compiling requested job interview notes alone would cost it more than $1 million.

Berlin denied the Labor Department’s request for summary judgment in the DOL’s lawsuit seeking to force Google to turn over the information. He said the department’s request—which included job and salary histories among 38 categories of data — was not reasonable.

Companies do more than $447 billion in business with the federal government each year, with Lockheed Martin Corporation ($36.3 billion), Boeing ($16.6 billion) and General Dynamics Corporation ($13.6 billion) raking in the most contract cash in 2015. The OFCCP audits federal contractors — identified in a “neutral selection process”— to ensure compliance with pay discrimination regulations and other worker protections.

Next Steps Not Clear

It’s not clear whether the Labor Department will continue to fight the case or withdraw the lawsuit before an April 7 hearing.

Berlin said the department didn’t prove that it was entitled to summary judgment ordering Google to turn over the requested information generally. However, he also said he would give the DOL another chance to justify the request.

The Labor Department didn’t immediately respond to Bloomberg BNA’s requests for comment.

A Google spokesman directed Bloomberg BNA to the statement the company put out after the DOL filed the lawsuit in January.

Google said it had already turned over “hundreds of thousands of records” but that the additional requests were “overbroad in scope, or reveal confidential data.”

Google complied with an initial information request and made more than 20 company managers available for interviews during an OFCCP on-site inspection, according to Berlin.

Limits Uncertain

Berlin didn’t specify which information the DOL is authorized to collect, instead saying that he couldn’t determine at the summary judgment stage that the requests were justified.

The judge also said it was “unreasonably burdensome” for the department to expect Google to turn over pay data dating back to the company’s incorporation in 1998.

“Although a worker’s starting salary—and later adjustments to that salary — obviously relate to compensation, OFCCP has not shown how a starting salary 19 years ago — and 16 years before the government contract — is relevant to its proper purpose in a compliance review,” Berlin wrote.

The DOL also went overboard in the type of information it requested, according to the judge. The department asked for base salaries, bonuses, overtime compensation, average hours, performance ratings and an explanation of the factors used to determine compensation for the company’s headquarters employees.

Annette Tyman is a partner at Seyfarth Shaw who represents employers faced with OFCCP audits. She said Berlin also made clear that the reasonableness of any data request may depend at least in part on the amount of business a company does with the federal government.

“The ALJ was balancing the benefits of the contract against the burden of the request,” Tyman said. “But even if the contract amount had been $600 million, there’s still some question as to whether it’s reasonable to go back to 1998 requesting that information.”

Google is currently the prime contractor on five contracts with the federal government, with a total value of $758,600, according to Bloomberg Government’s database of publicly reported government contracts. Google also is the subcontractor on at least five additional federal contracts worth an additional $2.8 million, according to the database.

Meanwhile, FordHarrison attorney Linda Cavanna-Wilk said the decision is a welcomed check on the OFCCP’s investigative power.

She said she also expects the Labor Department to reconsider enforcement strategies under President Donald Trump.

“I think there is going to be some shifting of the tides because of this decision,” Cavanna-Wilk said. “It’s probably a healthy one that’s going to make OFCCP think twice about the scope of their requests.”

To contact the reporter on this story: Chris Opfer in New York at copfer@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

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