Tanya Chutkan Judge Tanya S. Chutkan, U.S. District Court for the District of Columbia (Photo: Diego M. Radzinschi/ALM)

Updated at 7 p.m.

The U.S. Justice Department on Friday said it was appealing a Washington trial judge's order that reinstated an Obama-era rule requiring companies with more than 100 employees to report wage information based on race, ethnicity and sex.

U.S. District Judge Tanya Chutkan had spurned the Trump administration's efforts to stop the rule, which the U.S. Equal Employment Opportunity Commission adopted as one measure to help the agency police workplace pay inequities. Business advocates have countered that the broader collection of data will be burdensome and that the information could be subject to misinterpretation.

Chutkan, ruling last month, set a Sept. 30 deadline for the EEOC to collect pay-data information for fiscal years 2017 and 2018. The EEOC on Friday said it planned to post a statement to its website informing companies that are required to submit pay data “that the notice of appeal filed today has no effect on the requirement that they submit 2017 and 2018 EEO-1 Component 2 data by September 30, 2019.”

The EEOC has said it was taking steps to comply with the judge's order, which the agency said raised “significant practical challenges.” Chutkan showed no sympathy to the employer community, saying companies—and regulatory agencies—were long on notice that the pause in enforcing the pay-data rule could be overturned.

The Justice Department's appeal notice, filed in U.S. District Court for the District of Columbia, will push the case to the U.S. Court of Appeals for the D.C. Circuit.

Newly confirmed D.C. Circuit judge Neomi Rao, who made her debut Friday on the court, would be recused from hearing the case. Rao, formerly the Trump administration's regulatory czar, played a central role in stopping the Obama-era pay collection rule. The Office of Management and Budget, or OMB, was the named defendant in the suit, brought by the National Women's Law Center in 2017.

In an April 26 client advisory, Morgan, Lewis & Bockius partners W. John Lee in Philadelphia and Sharon Perley Masling in Washington said “employers should start thinking about what processes they need to put in place in order to be ready to report the pay and hours data, as well as the implications of submitting such data.”

They added: “We presume that DOJ will appeal the judge's order and seek a stay of the order. If the appeals court stays the judge's order and reinstates OMB's original stay, then employers would not have to report the data until the appeal was resolved. There are no guarantees, however—either with respect to whether DOJ will file an appeal or whether the appeals court will grant a stay.”

Littler Mendelson shareholder James Paretti Jr. in Washington said in an advisory on Thursday: “There is, of course, the possibility that the government may appeal and/or seek a stay of the court's decision. Absent such action, however, it appears that covered employers may be required to report this compensation data, at least for the periods of time covered by the court's order.”

A team from Orrick, Herrington & Sutcliffe noted in an advisory that there's no certainty any appeal would soon pause enforcement of the pay-data rule. The Orrick lawyers encouraged employers to “visit the EEOC website regularly for update” on an area of the law that is “rapidly evolving.”

 

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