WASHINGTON (CN) - The Office of Management and Budget must reinstate an Obama-era rule that will require employers to disclose equal pay data to the Equal Employment Opportunity Commission, a federal judge ruled Monday.
U.S. District Judge Tanya Chutkan called the OMB's decision to delay and review the rule "arbitrary" under the Administrative Procedure Act, saying that its "reasoning lacked support in the record."
"OMB’s decision to stay the collection of information totally lacked the reasoned explanation that the APA requires," the 41-page opinion states.
Finding that the National Women's Law Center had organizational standing to sue, Chutkan called OMB’s deficiencies "substantial."
"The court finds it unlikely that the government could justify its decision on remand, despite its assertion that 'OMB could easily cure the defects in its memorandum by further explanation of its reasoning,'" she wrote.
Chutkan said the agency's reason for staying the rule contradicted its own prior findings that the collection of equal pay data was useful, had been designed to minimize the reporting burden on employers and provided ample privacy protections.
"OMB failed to explain these inconsistencies," the ruling states. "The department failed to acknowledge, much less to address, the inconsistency between its current view that those provisions stand on legally questionable footing, and its prior conclusion that they were legally sound."
Undertaken in 2010 and intended to improve enforcement of federal equal pay laws, the Obama-era rule took six years to develop.
While the Equal Employment Opportunity Commission already collected demographic information about employees' gender, race and ethnicity, the 2016 rule expanded the scope of information collected to include aggregated W-2 data and hours worked in 10 job categories.
Set to take effect last March, the OMB pressed pause on the rule in August 2017.
Labor Council for Latin American Advancement joined the National Women's Law Center’s lawsuit, which the advocacy groups brought in November 2017 against the OMB and the EEOC, along with officials in both agencies.
The National Women's Law Center did not immediately return an email seeking comment on the ruling. The Justice Department also did not respond to a request for comment Tuesday.
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