Oracle fights the federal contract cops in court

Federal administrative agencies are supposed to originate in legislation from Congress if not in the language of the Constitution itself. Ilya Shapiro and William Yeatman:

Yet for decades, the Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) has operated a comprehensive enforcement regime, without any basis in the law.

It started in 1965, when President Lyndon Johnson ordered that all government contracts include a set of anti-discrimination provisions—collectively, an equal-opportunity clause. Since then, the OFCCP leveraged this tenuous foundation into a full-blown regulatory scheme, complete with the power to award monetary damages.

In recent years, OFCCP has wielded its power in increasingly aggressive ways. For example, the agency’s onerous and burdensome demands for information often exceed the value of the underlying government contract. Given the absence of statutory constraints—OFCCP is making this up as it goes along—the agency’s evident overreach is perhaps unsurprising.

In a February post here I noted that even when the agency makes up the rules as it goes along “few big companies are willing to fight back, given the breadth of arbitrary power the agency holds over them as well as the distant threat of debarment or other sanctions,” but that this pattern was beginning to change, with first Google and more recently Oracle pushing back. Now Oracle is challenging the government in court and the Cato Institute has joined an amicus brief on its behalf, arguing that “(1) OFCCP’s scheme is far beyond any statutory authority, and (2) striking it down wouldn’t undermine enforcement of anti??discrimination laws.” [Shapiro and Yeatman on brief in Oracle v. U.S. Department of Labor]

One Comment

  • State agencies are often even worse. The lawlessness is truly breathtaking.

    What needs to happen is a court, under the right circumstances, should simply order that the applicable agency can no longer regulate the affected entity.