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ARB denies JPMorgan Chase’s request for interlocutory review of ALJ’s refusal to dismiss OFCCP claims of sex bias in pay practices

October 30th, 2017  |  Cynthia L. Hackerott

Concluding that there were no exceptional circumstances warranting mandamus or other means of interlocutory review, a DOL Administrative Review Board (ARB or Board) panel denied JPMorgan Chase & Co.’s petition for interlocutory review of an ALJ’s refusal to dismiss an action in which the OFCCP alleges that the bank discriminated against female employees in certain professional positions by compensating them less than their male counterparts. The panel found that JPMorgan failed to establish any basis for departing from the Board’s general rule against accepting interlocutory appeals. (OFCCP v. JPMorgan Chase & Co, October 5, 2017, slip op)

Pay bias allegations. In January 2017, the OFCCP filed a complaint with the DOL’s Office of Administrative Law Judges (OALJ) alleging that the bank discriminated against female employees in certain professional positions by compensating them less than their male counterparts (DOL ALJ Case No 2017-OFC-007). As the result of a compliance review, the OFCCP concluded that, since at least May 15, 2012, JPMorgan paid at least 93 females employed in Application Developer Lead II, Application Developer Lead V, Project Manager and Technology Director positions within its Investment Bank, Technology & Market Strategies unit, less than comparable men employed in these same positions. This compensation disparity remained after adjusting for differences in legitimate compensation-determining factors, the agency maintains in a January 18, 2017 press release announcing the suit.

The OFCCP also claims that JPMorgan failed to evaluate the compensation systems applicable to these employees and that the bank had an “insufficient affirmative action plan” in that it failed to perform the type of in-depth analysis of its employment practices required by Executive Order (EO) 11246 and its implementing regulations.

The ALJ denied JPMorgan’s motion to dismiss the administrative complaint for failure to state a claim, rejecting the bank’s assertion that the plausibility standard for stating a claim under Fed. R. Civ. P. 8 as set forth in the U.S. Supreme Court’s rulings in Ashcroft v. Iqbal (2009) and Bell Atlantic Corp. v. Twombly, (2007) (Iqbal/Twombly)applies to OFCCP administrative complaints and was not satisfied by the complaint in this case. In addition, the ALJ denied JPMorgan’s motion for reconsideration as well as  its subsequent request to certify the issue for interlocutory review by the ARB as provided by 28 U.S.C. § 1292(b). Nevertheless, JPMorgan filed a petition for interlocutory review with the ARB.

Regulatory mechanism for interlocutory review lacking. As a preliminary matter, the ARB panel found that the OFCCP’s regulations at 41 C.F.R. Part 60-30 (“Rules of Practice for Administrative Proceedings to Enforce Equal Opportunity under Executive Order 11246”), and the cases interpreting them (including the Seventh Circuit’s 1978 ruling in Uniroyal, Inc. v. Marshall and the Secretary’s subsequent ruling in U.S. Department of the Treasury v. Harris Trust & Savings Bank, OALJ No. 1978-OFCCP-002, May 10, 1979), do not provide a mechanism for interlocutory review in EO 11246 administrative proceedings. The regulations in two separate locations41 C.F.R. § 60-30.19(b) and 41 C.F.R. § 60-30.28—provide for the filing of exceptions with the ARB, but only after receipt of the ALJ’s recommended decision.

However, the ARB panel explained that the Secretary of Labor has delegated to the Board, via Secretary’s Order No. 02-2012 § 5(c)(13), the authority to issue final agency decisions upon appeals of decisions of DOL ALJs in cases arising under EO 11246. That order explicitly provides that the ARB may accept interlocutory appeals in “exceptional” circumstances, but it is not their general practice to accept petitions for review of non-final dispositions issued by an ALJ. The Secretary of Labor and the Board have held many times that interlocutory appeals are generally disfavored and that there is a strong policy against piecemeal appeals, the ARB panel here noted. Importantly, the Secretary of Labor noted in the 1993 ruling in OFCCP v. Honeywell, Inc. (OALJ No. 1977-OFCCP-003; June 2, 1993) that the Secretary has never reconciled the language of the regulations with Secretary’s Order No. 02-2012, the ARB panel pointed out.

“Exceptional circumstances” also lacking. Therefore, the ARB assessed whether there were any “exceptional circumstances” warranting interlocutory review under its delegated authority. When a party seeks interlocutory review of an ALJ’s non-final order, the ARB has generally followed one or more of three different approaches for determining what might constitute “exceptional circumstances.”  Here, the court analyzed the three most common approaches, as well a fourth approach advanced by JPMorgan—a writ of mandamus.

The first approach is contained in the interlocutory review procedures at 28 U.S.C. Section 1292(b), which provides for certification of issues involving a controlling question of law as to which there is substantial ground for difference of opinion, an immediate appeal of which would materially advance the ultimate termination of the litigation. But the bank conceded that because the ALJ’s order denying its motion to certify the question of law it raised (failure to state a claim) was not the type of interlocutory order from which an appeal may not be taken pursuant to Section 1292(b).

JPMorgan did not address or argue as to the second approach, consideration of an interlocutory order meeting the ‘collateral order’ exception to finality that the Supreme Court recognized in Cohen v. Beneficial Indus. Loan Corp. (1949). The ARB assumed the bank did not advance this approach because the ALJ’s denial of its motion to dismiss does not involve a collateral order given that the order at issue here was plainly is not separate from the merits.

The third approach was derived from the Secretary of Labor’s ruling in Honeywell, Inc., where the Secretary accepted and ruled on an interlocutory appeal in an EO 11246 case because that unusual case involved many threshold procedural and substantive issues of interpretation of EO 11246 and the parties did not object to the Secretary’s review of the ALJ’s order as an interlocutory appeal. The ARB panel also noted that the Secretary reviewed the interlocutory appeal in Honeywell because it involved threshold legal issues the resolution of which would encourage the parties to engage in voluntary mediation. That was not the case here, the ARB panel stated, noting further that the OFCCP does object to this interlocutory appeal.

Turning to the approach advanced by JPMorgan, the ARB panel first noted that the Secretary’s Order (cited above) delegating authority to the ARB to issue final agency decisions in cases arising under EO 112463 does not specifically delegate mandamus authority to the Board, and the ARB has thus far declined to decide the issue or recognize such authority.

Mandamus authority, even if available, not warranted. Even if mandamus authority were available, the ARB panel found that JPMorgan failed to demonstrate that such review was warranted here. The bank had not demonstrated that the circumstances existed in this case to satisfy the criteria set forth in the U.S. Supreme Court’s 2004 ruling in Cheney v. U.S. District Court for the District of Columbia to warrant interlocutory review through a writ of mandamus. In Cheney, the High Court held that the party seeking such review must meet three criteria: (1) it must have no other adequate means to attain the desired relief,  (2) it must show that its right to issuance of the writ is “‘clear and indisputable,’” and (3) the issuing court, in the exercise of its discretion, must be satisfied that the writ is appropriate under the circumstances.

Since the ALJ denied JPMorgan’s request to certify the issue for interlocutory review, the third criteria was not applicable here. As to the first criteria, although the bank asserted that there is no alternative means to address the ALJ’s denial of its motion to dismiss for a failure to state a claim given that an appeal after discovery and an adjudication on the merits would be futile, it is not uncommon for courts to deny interlocutory review of motions to dismiss, the ARB observed. Second, JPMorgan failed to show that it has a “clear and indisputable” right to issuance of the writ. The ALJ’s rationale in denying the bank’s motion to dismissthat the regulations at 41 C.F.R. § 60-30.5(b) provide an applicable pleading standard for OFCCP complaints filed pursuant to EO 11246was a reasonable interpretation, the ARB panel found. [Wolters Kluwer note: the standard at 41 C.F.R. § 60-30.5(b) is comparable to the “fair notice” standard for pleading in civil rights sanctioned by the U.S. Supreme Court in its 2002 ruling in Swierkiewicz v Sorema NA].

Accordingly, the ARB panel denied JPMorgan’s petition for interlocutory review remanded the case back to the ALJ for further proceedings.

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