Background

Over the last several years, the U.S. Department of Labor (DOL) – represented by the U.S. Department of Justice (DOJ) – has battled in federal court with The Center for Investigative Reporting (CIR) over CIR’s Freedom of Information Act (FOIA) request to OFCCP for all federal contactor EEO-1 Reports for the years 2016 through 2020. 

After a California District Court ruled in late 2023 that these EEO-1 Reports are not protected from FOIA disclosure, DOL appealed that decision to the 9th Circuit Court of Appeals.

• DOJ/DOL now must decide whether to appeal the 9th Circuit’s decision to the United States Supreme Court.

• Until that decision is made and announced, federal contractors do not need to take any action. We will provide an Employer Alert update after DOJ/DOL decision regarding the potential appeal is announced.

9th Circuit Says EEO-1 Reports Not "Commercial" Information Exempt from FOIA

As we explained in a previous Employer Alert, the District Court for the Northern District of California ruled that the EEO-1 Reports at issue contain no Exemption 4 “commercial” information because they lack commercial value – information in the EEO-1 Reports would not reveal commercially significant insights about the contractors. Thus, disclosure of the Reports would not result in competitive harm to contractors.

The 9th Circuit arrived at the same conclusion – EEO-1 Reports contain no “commercial” information – via a different route. The court reasoned that information can be “commercial” under Exemption 4 in two specific ways –

[I]t is the object of commerce (designed to [be] profitable), or it has the subject of commerce(pertaining to commerce). In both usages, commerce has its plain meaning of “the exchange of goods or services or the making of a profit.” First, information is the object of commerce—serves a commercial function—and is therefore “commercial” if it is designed to be profitable…That is, if it was made to [be] bought and sold.

Second, information has the subject of commerce — is of a commercial nature — and is therefore“ commercial” if it pertains to business or trade…This includes “records that . . . ‘actually reveal basic commercial operations, such as sales statistics, profits and losses, and inventories…”

The 9th Circuit held that “nothing in the text of Exemption 4 imposes any commercial-value or competitive-harm requirement…Instead, whether information is ‘commercial’ under Exemption 4turns only on whether ‘in and of itself’ it serves a ‘commercial function’ or is of a ‘commercial nature.”

Based on this logic, the court concluded that EEO-1 Reports are not “commercial” under either usage.

The information in the…EEO reports does not have a “commercial” subject within the meaning of Exemption 4. The workforce-composition data in the reports at issue do not describe “the exchange of goods or services or the making of a profit.” They do not disclose any details about the services provided by federal contractors . . .”

The decision goes on to state that –

[The] Department has shown only an attenuated connection between the job-category data and the contractors’ commercial activity. And aggregating such indirect data over multiple years does not make the connection any more direct. (emphasis added)

This final statement appears conclusory and may not appreciate how five consecutive years of changing workforce trends by EEO-1 category may divulge commercial information related to, for example, the ability/capacity for a contractor to provide products or services. Thus, DOL/DOJ may consider appealing the 9th Circuit decision based on this and perhaps for other reasons.

Contractors Do Not Need to Do Anything at This Time

There is nothing for contractors to do currently because the decision to appeal the 9th

Circuit’s ruling to the U.S. Supreme Court, seek a hearing before the entire 9th Circuit, or seek a rehearing is up to DOL.

We will update this Employer Alert as the litigation develops. If you have any questions regarding the release of your EEO-1 Reports, please contact the Silberman Law attorney with whom you work or simply reply here.