In 2012, the EEOC issued enforcement guidance on how employers should handle arrest and conviction records. It wasn't a regulation. It never went through notice and comment. It said an across-the-board exclusion of everyone with a record screens people out by race and national origin, and that employers generally can't justify it. Texas barred convicted felons from every job in its Department of Public Safety, and parts of Texas law forbid exactly the individualized assessment the guidance treated as the safe route. So Texas sued the EEOC before anyone could sue Texas.
The government's first answer wasn't that the guidance was correct. It was that nobody could challenge it, because guidance isn't final agency action, and because the EEOC lacks authority to issue binding interpretations of Title VII in the first place. That argument bought almost six years and two trips to the Fifth Circuit.
Gwen and Marc use the case to work through finality: the gate that stands between having an injury and having something to sue over. The test comes from Bennett v. Spear and asks two things, whether the agency is done and whether legal consequences flow from what it did. Agencies have a lot of control over how both questions get answered, because they decide what the document looks like long before any court applies the test.
In this episode:
- APA section 704, and why preliminary steps can be reviewed only alongside a final action
- Bennett v. Spear, the Klamath biological opinion, and Scalia's point that a document labeled advice can still function as a command
- Why the final judgment rule is the same instinct but not the same problem, since a trial court can't decline to ever enter judgment
- FDA warning letters, Holistic Candlers, and why real pressure isn't the same as legal consequences
- Sackett v. EPA: a compliance order, $75,000 a day under the government's reading, and the answer to "efficiency of regulation conquers all"
- Army Corps v. Hawkes, where a determination that ordered nobody to do anything was still final, because a definitive document cuts both ways
- The 2019 executive order conceding that non-binding guidance carries an implicit threat of enforcement, while creating no right to challenge it
- Texas v. EEOC: sovereign interest in a state's own laws, safe harbors, and a document that binds agency staff
- Why the Fifth Circuit held the same document can't be final for a private employer and non-final for a state
- The 2011 Dear Colleague letter on campus sexual assault: six years of nationwide effect, withdrawn before any court reached the merits
- The case against all of this, that guidance binds nobody and an employer who ignores it gives up nothing it had a right to do
- Rescission as the mirror image, including the EEOC's June vote on the 1979 affirmative action guidelines and the section 713 good-faith defense that went with them
Next week: ripeness, exhaustion, and mootness, three more ways of asking when, with the Sacketts again.
00:00:13 --> 00:00:15 Welcome to Administrative Remedies, because you
00:00:15 --> 00:00:17 can't fix what you don't understand. Brought
00:00:17 --> 00:00:19 to you in part by the University of Tulsa College
00:00:19 --> 00:00:22 of Law's Mabee Legal Information Center. I'm
00:00:22 --> 00:00:24 Gwendolyn Savitz, an associate professor here
00:00:24 --> 00:00:26 at TU. And I'm Marc Roark, a professor at the
00:00:26 --> 00:00:29 College of Law. We'll be breaking down complex
00:00:29 --> 00:00:31 doctrines with real-life analogies and examples
00:00:31 --> 00:00:33 to demystify the world of administrative law
00:00:33 --> 00:00:35 for everyone trying to understand how government
00:00:35 --> 00:00:38 actually works. Agencies are the main way the
00:00:38 --> 00:00:40 federal government gets things done. It's not
00:00:40 --> 00:00:42 through Congress, for reasons we'll be addressing
00:00:42 --> 00:00:47 over the course of the series. Marc, the last
00:00:47 --> 00:00:48 couple of weeks, we've been talking about the
00:00:48 --> 00:00:51 threshold question of standing. Are you hurt
00:00:51 --> 00:00:53 enough to be in court at all? This week, we assume
00:00:53 --> 00:00:55 that you are, but there's still another gate.
00:00:55 --> 00:00:58 Has the agency actually done enough for you to
00:00:58 --> 00:01:00 challenge it? Meaning the agency can take a position
00:01:00 --> 00:01:03 that affects you and still say you sued too early.
00:01:04 --> 00:01:06 Yes, exactly. Finality asks whether the agency
00:01:06 --> 00:01:09 is done, and what done means turns out to be
00:01:09 --> 00:01:12 much harder than it sounds. As an example, 13
00:01:12 --> 00:01:15 years ago, the Texas Department of Public Safety
00:01:15 --> 00:01:17 didn't hire convicted felons. It didn't hire
00:01:17 --> 00:01:19 them as troopers. It didn't hire them for any
00:01:19 --> 00:01:21 job in the department. This was a total ban.
00:01:22 --> 00:01:25 In November 2013, a man who'd been turned down
00:01:25 --> 00:01:28 for a Department of Public Safety job filed a
00:01:28 --> 00:01:30 charge with the Equal Employment Opportunity
00:01:30 --> 00:01:32 Commission saying that the bar violated Title
00:01:32 --> 00:01:36 VII. On what theory was he bringing this claim?
00:01:36 --> 00:01:39 A felony bar isn't a racial classification. He
00:01:39 --> 00:01:42 was claiming disparate impact. A year and a half
00:01:42 --> 00:01:44 earlier, the EEOC had issued enforcement guidance
00:01:44 --> 00:01:47 on arrest and conviction records. This wasn't
00:01:47 --> 00:01:49 a regulation. They hadn't gone through notice
00:01:49 --> 00:01:52 and comment to do it. This was just guidance.
00:01:52 --> 00:01:55 And it said that an automatic, across-the-board
00:01:55 --> 00:01:57 exclusion of everyone with a record from any
00:01:57 --> 00:01:59 sort of job disproportionately screens people
00:01:59 --> 00:02:01 out by race and national origin, and the employer
00:02:01 --> 00:02:05 probably can't justify it. Like in Griggs v.
00:02:05 --> 00:02:08 Duke Power, a power company had a diploma requirement
00:02:08 --> 00:02:11 and adopted an aptitude test the day Title VII
00:02:11 --> 00:02:14 took effect. The Court struck them both down,
00:02:14 --> 00:02:17 even if there was no bad intent. A neutral practice
00:02:17 --> 00:02:20 that screens out Black applicants violates
00:02:20 --> 00:02:23 Title VII unless the employer shows that it's
00:02:23 --> 00:02:27 job-related. Seems to fit the disparate impact
00:02:27 --> 00:02:29 test, but applied instead to background checks?
00:02:30 --> 00:02:32 Yeah, this idea isn't a new one at the agency.
00:02:32 --> 00:02:35 The EEOC's first policy statement on conviction
00:02:35 --> 00:02:38 records came out in 1987. And at that point,
00:02:38 --> 00:02:42 the chair was Clarence Thomas. So the 2012 document
00:02:42 --> 00:02:44 was just consolidating and updating those. Which
00:02:44 --> 00:02:47 makes it hard to call the theory a partisan invention.
00:02:47 --> 00:02:50 What changed in 2012 was the document, not the
00:02:50 --> 00:02:53 idea. Right. What changed was how specific it
00:02:53 --> 00:02:56 got. The 2012 version was a playbook. It told
00:02:56 --> 00:02:59 employers what the EEOC would accept. It was
00:02:59 --> 00:03:01 a targeted screen that looks at the offense,
00:03:01 --> 00:03:04 how long ago it happened, and the job, and then
00:03:04 --> 00:03:06 an individualized look at anybody the screen
00:03:06 --> 00:03:08 excluded. The guidance said it wasn't required
00:03:08 --> 00:03:10 in every case, but it was plainly the safest
00:03:10 --> 00:03:13 route. And parts of Texas law forbid exactly
00:03:13 --> 00:03:16 that kind of individualized assessment. Texas's
00:03:16 --> 00:03:18 own complaint put the choice this way. Start
00:03:18 --> 00:03:20 considering felons for trooper, jailer, and teacher
00:03:20 --> 00:03:22 jobs, or ignore the EEOC and risk an enforcement
00:03:22 --> 00:03:27 action. And as they say, sometimes the best defense
00:03:27 --> 00:03:30 is a good offense. It chose to sue before anyone
00:03:30 --> 00:03:33 could sue it. Yes. So it sued the EEOC and the
00:03:33 --> 00:03:35 Attorney General. And the government's first
00:03:35 --> 00:03:37 answer wasn't that the guidance was right. It
00:03:37 --> 00:03:39 was that nobody could challenge it. Guidance
00:03:39 --> 00:03:42 isn't final agency action. The EEOC went even
00:03:42 --> 00:03:45 further. It argued that the document couldn't
00:03:45 --> 00:03:47 carry legal consequences. That's part of the
00:03:47 --> 00:03:49 analysis about whether something is final. Because
00:03:49 --> 00:03:52 the EEOC has no authority to issue binding interpretations
00:03:52 --> 00:03:54 of Title VII in the first place. So basically
00:03:54 --> 00:03:57 the agency was saying, look, we don't even have
00:03:57 --> 00:03:59 the power to do the thing that you said that
00:03:59 --> 00:04:02 we did, which is kind of an unusual thing to
00:04:02 --> 00:04:04 lead with. It definitely isn't how they generally
00:04:04 --> 00:04:06 start. But this did buy the government almost
00:04:06 --> 00:04:08 six years. This was two trips to the Fifth Circuit.
00:04:09 --> 00:04:13 The core of it is one sentence in the APA. Agency
00:04:13 --> 00:04:15 action made reviewable by statute and final agency
00:04:15 --> 00:04:18 action for which there is no other adequate remedy
00:04:18 --> 00:04:21 in a court are subject to judicial review. Right.
00:04:21 --> 00:04:24 Unless some other statute makes action reviewable,
00:04:24 --> 00:04:26 that's two requirements. It needs to be final,
00:04:27 --> 00:04:28 and there needs to be no other adequate remedy.
00:04:29 --> 00:04:32 The next sentence of § 704 matters, too. Preliminary
00:04:32 --> 00:04:34 or intermediate steps aren't reviewable on their
00:04:34 --> 00:04:36 own, but they can be reviewed along with the
00:04:36 --> 00:04:39 final action. The APA was passed in 1946. For
00:04:39 --> 00:04:41 half a century, final got decided case by case.
00:04:42 --> 00:04:46 Abbott Labs in 1967 set the mood. Review is presumed.
00:04:46 --> 00:04:49 Finality is read pragmatically. But it wasn't
00:04:49 --> 00:04:53 a test. The test came in 1997 over water rights
00:04:53 --> 00:04:55 for the Klamath Irrigation Project. This is on
00:04:55 --> 00:04:57 the Oregon-California line. The Fish and Wildlife
00:04:57 --> 00:04:59 Service had issued a biological opinion telling
00:04:59 --> 00:05:02 the Bureau of Reclamation that they needed to
00:05:02 --> 00:05:04 keep lake levels up to protect two endangered
00:05:04 --> 00:05:07 species of sucker fish. Ranchers who were about
00:05:07 --> 00:05:09 to lose irrigation water sued. And the government
00:05:09 --> 00:05:12 said the biological opinion was only advice.
00:05:12 --> 00:05:15 The Bureau of Reclamation made the actual decision.
00:05:16 --> 00:05:18 Yes, that was the argument, that this was just
00:05:18 --> 00:05:22 an advisory opinion by the agency, and that
00:05:22 --> 00:05:23 the Bureau of Reclamation was free to ignore
00:05:23 --> 00:05:25 it. Scalia's answer was that agencies very rarely
00:05:25 --> 00:05:28 ignore one. The government's own brief admitted
00:05:28 --> 00:05:30 this, because departing from a biological opinion
00:05:30 --> 00:05:33 creates serious legal exposure. So the label
00:05:33 --> 00:05:35 said advice, but the effect was actually a command.
00:05:35 --> 00:05:38 So Scalia opening the courthouse to ranchers
00:05:38 --> 00:05:42 suing under the Endangered Species Act, not the
00:05:42 --> 00:05:44 lineup anyone would have predicted. And it was
00:05:44 --> 00:05:47 unanimous, too. This is Bennett v. Spear. Most
00:05:47 --> 00:05:49 people meet Bennett v. Spear in a standing course.
00:05:49 --> 00:05:51 This is the zone of interests holding that we
00:05:51 --> 00:05:54 talked about before, but it matters for finality,
00:05:54 --> 00:05:56 too. Here's the important part. As a general
00:05:56 --> 00:05:59 matter, two conditions must be satisfied for
00:05:59 --> 00:06:01 agency action to be final. First, the action
00:06:01 --> 00:06:04 must mark the consummation of the agency's decision-
00:06:04 --> 00:06:07 making process. It must not be of a merely tentative
00:06:07 --> 00:06:10 or interlocutory nature. And second, the action
00:06:10 --> 00:06:12 must be one by which rights or obligations have
00:06:12 --> 00:06:15 been determined, or from which legal consequences
00:06:15 --> 00:06:20 will flow. So as a general matter, Scalia here
00:06:20 --> 00:06:22 is hedging a little bit. The hedge leaves room in
00:06:22 --> 00:06:24 both directions, and courts have used it both
00:06:24 --> 00:06:27 ways. But in practice, these two prongs are the
00:06:27 --> 00:06:30 test, whether it's the consummation of the agency's
00:06:30 --> 00:06:33 decision-making process and whether legal consequences
00:06:33 --> 00:06:35 flow. For something to be final, you need both
00:06:35 --> 00:06:38 of them. And every litigator already lives with
00:06:38 --> 00:06:41 some version of this story, right? The final
00:06:41 --> 00:06:43 judgment rule, you can't appeal until the
00:06:43 --> 00:06:46 trial court is done unless you fit within a short
00:06:46 --> 00:06:49 list of exceptions for interlocutory orders.
00:06:49 --> 00:06:52 And this seems like it's following the same instinct.
00:06:52 --> 00:06:54 It is the same instinct, but they play out differently.
00:06:54 --> 00:06:56 The final judgment rule protects a trial judge's
00:06:56 --> 00:06:59 process. Finality protects an agency, and there
00:06:59 --> 00:07:01 are reasons for it. An agency in the middle of
00:07:01 --> 00:07:03 a decision could change its mind. The record
00:07:03 --> 00:07:05 isn't built yet. But the difference here is that
00:07:05 --> 00:07:08 a trial court can't decide to just never enter
00:07:08 --> 00:07:10 a judgment. And agencies can potentially decide
00:07:10 --> 00:07:14 to never make something final. And so consummation
00:07:14 --> 00:07:18 here sounds like the easy half. A proposed rule
00:07:18 --> 00:07:22 isn't consummated. A final rule is. Or an appeal
00:07:22 --> 00:07:24 taken as far as the agency lets you take it is.
00:07:25 --> 00:07:27 At the end, yes. But this gets harder in the
00:07:27 --> 00:07:30 middle. If FDA inspects a manufacturer and sends
00:07:30 --> 00:07:33 a warning letter saying your product is misbranded,
00:07:33 --> 00:07:35 fix it within 15 days or face enforcement action.
00:07:36 --> 00:07:38 This letter goes up on the FDA's public website.
00:07:39 --> 00:07:41 Distributors read it. Retailers pull the product.
00:07:41 --> 00:07:43 And that company isn't going to litigate whether
00:07:43 --> 00:07:46 it had to comply. It's just going to comply.
00:07:47 --> 00:07:49 Yes, almost always. And when companies have litigated,
00:07:49 --> 00:07:52 they mostly lost. One of the leading cases here
00:07:52 --> 00:07:55 is Holistic Candlers from the D.C. Circuit in
00:07:55 --> 00:07:57 2012. This was saying that warning letters are
00:07:57 --> 00:08:00 informal. FDA isn't bound by them. FDA can still
00:08:00 --> 00:08:02 decide not to bring enforcement action, so they
00:08:02 --> 00:08:05 aren't final. But the pressure is real. However,
00:08:06 --> 00:08:07 the court said pressure isn't the same thing
00:08:07 --> 00:08:11 as legal consequences. OK, a warning letter looks
00:08:11 --> 00:08:13 more like a prosecutor's letter than a judgment
00:08:13 --> 00:08:17 does. Nobody gets to sue a prosecutor for sending
00:08:17 --> 00:08:20 a warning letter. Yes. That's why warning letters
00:08:20 --> 00:08:22 are where this label-versus-effect argument usually
00:08:22 --> 00:08:25 loses. The D.C. Circuit there held they failed
00:08:25 --> 00:08:27 both prongs. They weren't the agency's last word
00:08:27 --> 00:08:30 and there were no legal consequences. So then
00:08:30 --> 00:08:33 legal consequences will flow. So having legal
00:08:33 --> 00:08:35 consequences flow is absolutely critical to
00:08:35 --> 00:08:38 finality. Yes. For informal documents
00:08:38 --> 00:08:40 that do represent the agency's settled position,
00:08:40 --> 00:08:43 the fight usually turns on the second prong.
00:08:43 --> 00:08:47 An interpretive letter, an FAQ page, a guidance
00:08:47 --> 00:08:49 document that the agency calls non-binding
00:08:49 --> 00:08:51 but then uses in every investigation. The Supreme
00:08:51 --> 00:08:55 Court cases define the second prong, and both
00:08:55 --> 00:08:58 come out of the Clean Water Act. So we have
00:08:58 --> 00:09:01 Chantell and Michael Sackett, who bought a lot
00:09:01 --> 00:09:03 near Priest Lake, Idaho, and they wanted to build
00:09:03 --> 00:09:05 a house on it. In 2007, they started putting
00:09:05 --> 00:09:08 gravel and dirt in it. The EPA issued a compliance
00:09:08 --> 00:09:11 order saying that's a wetland. You've discharged
00:09:11 --> 00:09:13 fill into the wetland without a permit. You need
00:09:13 --> 00:09:15 to restore the property. Give us access to your
00:09:15 --> 00:09:17 land and your records. And they asked for a hearing
00:09:17 --> 00:09:20 and EPA said no. And with penalties that were
00:09:20 --> 00:09:23 attached to it. Right. This Act allowed up to
00:09:23 --> 00:09:26 $37 a day per violation by the time the
00:09:26 --> 00:09:28 case had reached the Supreme Court. That was
00:09:28 --> 00:09:31 because the amounts kept ratcheting up with time.
00:09:31 --> 00:09:33 The government's position was that ignoring the
00:09:33 --> 00:09:35 compliance order was a second violation on top
00:09:35 --> 00:09:37 of the first. So you could double that. They
00:09:37 --> 00:09:42 were facing $75 a day. $75 a day usually
00:09:42 --> 00:09:45 ends most fights before they start. EPA's position
00:09:45 --> 00:09:48 here is the one you'd predict. The compliance
00:09:48 --> 00:09:50 order isn't final agency action. If you don't
00:09:50 --> 00:09:52 think it's a wetland, wait for us to sue you
00:09:52 --> 00:09:56 with the meter running the whole time. And nobody's
00:09:56 --> 00:09:59 going to make that choice. Right. Nobody would
00:09:59 --> 00:10:01 call it a choice, and the Court didn't. This
00:10:01 --> 00:10:04 wasn't a partisan position. The order went out
00:10:04 --> 00:10:06 in 2007 under the Bush EPA, and the Obama Justice
00:10:06 --> 00:10:09 Department was defending it at the Supreme Court.
00:10:09 --> 00:10:12 The Court rejected it unanimously in 2012, but
00:10:12 --> 00:10:14 the reasoning was narrower than the headline.
00:10:14 --> 00:10:17 The penalties existed before the order, but what
00:10:17 --> 00:10:19 the order did was change the Sacketts' legal position.
00:10:19 --> 00:10:22 Under the government's own reading, it doubled
00:10:22 --> 00:10:24 their potential exposure going forward, and it
00:10:24 --> 00:10:26 made an after-the-fact permit from the Army
00:10:26 --> 00:10:29 Corps of Engineers harder to get. But the EPA
00:10:29 --> 00:10:31 also had a policy argument the agencies still
00:10:31 --> 00:10:34 make, that compliance orders get problems fixed
00:10:34 --> 00:10:37 fast through voluntary compliance, make them
00:10:37 --> 00:10:40 reviewable, and the EPA will use them less. Which
00:10:40 --> 00:10:43 is probably true. And Scalia conceded it might
00:10:43 --> 00:10:46 be. That may be true, but it will be true for
00:10:46 --> 00:10:48 all agency actions subjected to judicial review.
00:10:48 --> 00:10:51 The APA's presumption of judicial review is a
00:10:51 --> 00:10:53 repudiation of the principle that efficiency
00:10:53 --> 00:10:56 of regulation conquers all. And there is no reason
00:10:56 --> 00:10:58 to think that the Clean Water Act was uniquely
00:10:58 --> 00:11:00 designed to enable the strong-arming of regulated
00:11:00 --> 00:11:03 parties into voluntary compliance, without the
00:11:03 --> 00:11:06 opportunity for judicial review. Even judicial
00:11:06 --> 00:11:08 review of the question whether the regulated
00:11:08 --> 00:11:12 party is within the EPA's jurisdiction. So this
00:11:12 --> 00:11:14 idea that efficiency of regulation conquers all,
00:11:14 --> 00:11:17 that every agency makes some version of that
00:11:17 --> 00:11:20 argument about every kind of review, it seems.
00:11:20 --> 00:11:23 Well, it's pretty much true every time. Review
00:11:23 --> 00:11:26 will always slow an agency down. If that were
00:11:26 --> 00:11:28 a reason to deny review on its own, nothing would
00:11:28 --> 00:11:31 be reviewable. Army Corps of Engineers v. Hawkes
00:11:31 --> 00:11:34 pushed the same idea into a case with no order
00:11:34 --> 00:11:37 at all. Hawkes mines peat in Minnesota, and they
00:11:37 --> 00:11:40 wanted to expand onto land that they owned. The
00:11:40 --> 00:11:42 Corps issued an approved jurisdictional determination
00:11:42 --> 00:11:44 saying that the property contained waters of
00:11:44 --> 00:11:47 the United States. That jurisdictional determination
00:11:47 --> 00:11:50 doesn't order anyone to do anything. It tells
00:11:50 --> 00:11:52 you whether you need a permit. And the Corps
00:11:52 --> 00:11:55 said, if you disagree, apply for the permit and
00:11:55 --> 00:11:58 challenge a denial or go ahead without one and
00:11:58 --> 00:12:00 then defend the enforcement action. The Chief
00:12:00 --> 00:12:03 Justice took this apart with numbers. He said
00:12:03 --> 00:12:06 it is often difficult to determine whether a
00:12:06 --> 00:12:08 particular piece of property contains waters
00:12:08 --> 00:12:10 of the United States, but there are important
00:12:10 --> 00:12:13 consequences if it does. The costs of obtaining
00:12:13 --> 00:12:16 such a permit are significant. For a specialized
00:12:16 --> 00:12:18 individual permit of the sort at issue in this
00:12:18 --> 00:12:21 case, for example, one study found the average
00:12:21 --> 00:12:28 applicant spends 788 days and $271 in completing
00:12:28 --> 00:12:31 the process without counting costs of mitigation
00:12:31 --> 00:12:35 or design changes. So more than two years and
00:12:35 --> 00:12:37 a quarter of a million dollars just to put the
00:12:37 --> 00:12:39 question in front of a judge. That led the Court
00:12:39 --> 00:12:41 to say that that route really isn't an adequate
00:12:41 --> 00:12:44 alternative. And the enforcement route fared
00:12:44 --> 00:12:46 no better. A landowner doesn't have to expose
00:12:46 --> 00:12:49 themselves to serious criminal and civil penalties
00:12:49 --> 00:12:51 just to get a judge to look at the question.
00:12:51 --> 00:12:53 So on the first prong, there was no fight at
00:12:53 --> 00:12:56 all. The Corps conceded that. This jurisdictional
00:12:56 --> 00:12:58 determination was the consummation of its process.
00:12:58 --> 00:13:01 It's a formal written product. It's good for
00:13:01 --> 00:13:03 five years. And under an agreement between the
00:13:03 --> 00:13:06 agencies, EPA also treats it as binding. The
00:13:06 --> 00:13:08 only Bennett prong in dispute was the second,
00:13:08 --> 00:13:11 whether legal consequences flow. And the Court
00:13:11 --> 00:13:14 found that there were legal consequences because
00:13:14 --> 00:13:17 a negative jurisdictional determination works
00:13:17 --> 00:13:19 as a five-year safe harbor from enforcement.
00:13:19 --> 00:13:21 And a positive jurisdictional determination takes
00:13:21 --> 00:13:26 that safe harbor away. The Corps built a definitive, reliable
00:13:26 --> 00:13:29 document because definitive and reliable is useful.
00:13:30 --> 00:13:32 Useful to landowners and useful to the Corps.
00:13:33 --> 00:13:36 But that definiteness is what made it reviewable.
00:13:37 --> 00:13:39 It couldn't have it both ways. Right. This was
00:13:39 --> 00:13:42 eight to nothing. So across both cases, the question
00:13:42 --> 00:13:45 moved from what the agency called the thing to
00:13:45 --> 00:13:47 what the thing did to the person holding it.
00:13:50 --> 00:13:53 Sackett had an order. Hawkes had this formal determination.
00:13:54 --> 00:13:57 But let's finally circle back to Texas. That
00:13:57 --> 00:14:00 Texas case at the beginning is harder. The EEOC
00:14:00 --> 00:14:03 hadn't ordered Texas to do anything. It hadn't
00:14:03 --> 00:14:05 made a determination about Texas. It had just
00:14:05 --> 00:14:07 published a guidance document for employers generally.
00:14:07 --> 00:14:11 Which isn't supposed to be binding. So why would
00:14:11 --> 00:14:14 guidance ever be a final agency action? And that's
00:14:14 --> 00:14:17 the problem. Guidance lets the agency tell
00:14:17 --> 00:14:20 the public how it's reading the law and how it
00:14:20 --> 00:14:22 intends to enforce it without going through the
00:14:22 --> 00:14:24 notice and comment process. There's no proposed
00:14:24 --> 00:14:26 rule. There's no obligation to take comments
00:14:26 --> 00:14:29 and answer the significant ones. There's no final
00:14:29 --> 00:14:31 rule at the end. That's part of what makes guidance
00:14:31 --> 00:14:33 useful. It's faster and more flexible. But if
00:14:33 --> 00:14:36 I'm the regulated party, non-binding may not
00:14:36 --> 00:14:40 mean I can safely ignore it. The people who wrote
00:14:40 --> 00:14:42 the guidance are also the people who decide whether
00:14:42 --> 00:14:45 to investigate me. Yes. And in 2019, the first
00:14:45 --> 00:14:48 Trump administration said that explicitly in
00:14:48 --> 00:14:51 an executive order about guidance. So they said,
00:14:51 --> 00:14:53 even when accompanied by a disclaimer that it
00:14:53 --> 00:14:56 is non-binding, a guidance document issued by
00:14:56 --> 00:14:59 an agency may carry the implicit threat of enforcement
00:14:59 --> 00:15:02 action if the regulated public does not comply.
00:15:03 --> 00:15:05 That's basically the regulated party's argument.
00:15:05 --> 00:15:08 You call it guidance. I experience it as a command.
00:15:09 --> 00:15:11 Yeah, but look at what the order did with that
00:15:11 --> 00:15:13 problem. It didn't say that coercive guidance
00:15:13 --> 00:15:16 is now judicially reviewable. It told agencies
00:15:16 --> 00:15:19 to make guidance public, to identify it as non-
00:15:19 --> 00:15:21 binding, and generally put significant guidance
00:15:21 --> 00:15:23 through a public comment process. And the order
00:15:23 --> 00:15:25 expressly said it created no rights that anyone
00:15:25 --> 00:15:28 could enforce in court. So the executive branch
00:15:28 --> 00:15:32 was willing to say, yeah, supposedly non-binding
00:15:32 --> 00:15:33 guidance can pressure people into compliance
00:15:33 --> 00:15:36 without giving those people a new way to challenge
00:15:36 --> 00:15:39 that guidance. Yes. That puts us back at Bennett,
00:15:40 --> 00:15:42 which is why finality still gets decided one
00:15:42 --> 00:15:45 lawsuit at a time. OK, back to Texas. So the
00:15:45 --> 00:15:48 district court dismissed. In 2016, a divided
00:15:48 --> 00:15:50 Fifth Circuit panel reversed. It said the guidance
00:15:50 --> 00:15:53 was final and Texas had standing. And then the
00:15:53 --> 00:15:56 panel withdrew its own opinion. OK, I have to
00:15:56 --> 00:15:59 ask why. That Hawkes case that we were talking
00:15:59 --> 00:16:01 about, the panel sent the case back down so that
00:16:01 --> 00:16:04 the district court could apply Hawkes first. When
00:16:04 --> 00:16:06 the case came back in 2019, the Fifth Circuit
00:16:06 --> 00:16:09 didn't look mainly at how aggressively the EEOC
00:16:09 --> 00:16:11 had used the guidance. It looked at what the
00:16:11 --> 00:16:14 guidance told the EEOC's own people to do. So
00:16:14 --> 00:16:17 why was it that Texas brought this in the first
00:16:17 --> 00:16:21 place and not some trucking company with a no-
00:16:21 --> 00:16:23 felons policy? The Fifth Circuit said that states
00:16:23 --> 00:16:25 have a sovereign interest in making and enforcing
00:16:25 --> 00:16:28 their own laws, and that this guidance put direct
00:16:28 --> 00:16:30 pressure on Texas to change its hiring laws and
00:16:30 --> 00:16:34 policies. One Texas agency had already had to
00:16:34 --> 00:16:38 respond to an EEOC charge as well. So actually
00:16:38 --> 00:16:41 being a state here matters, kind of like in Massachusetts
00:16:41 --> 00:16:45 v. EPA's special solicitude for states. Yes.
00:16:45 --> 00:16:46 A sovereign's interest in its own legal code
00:16:46 --> 00:16:49 counts, although the regulatory burden alone
00:16:49 --> 00:16:52 could have been enough. Once Texas was in the
00:16:52 --> 00:16:54 door, the finality question's waiting. Texas
00:16:54 --> 00:16:57 wasn't just predicting that somebody might enforce
00:16:57 --> 00:16:59 it someday. The guidance applied to state employers,
00:16:59 --> 00:17:02 and it condemned the kind of policy Texas was
00:17:02 --> 00:17:05 actually using. And it put Texas's own law on
00:17:05 --> 00:17:07 one side of the conflict. The first time up,
00:17:07 --> 00:17:10 the court took standing first. But on that second
00:17:10 --> 00:17:13 round, it started with whether it was actually final
00:17:13 --> 00:17:15 agency action. In that case, the Fifth Circuit
00:17:15 --> 00:17:18 said the guidance indicates that it binds EEOC
00:17:18 --> 00:17:21 staff to an analytical method in conducting Title
00:17:21 --> 00:17:24 VII investigations and directs their decisions
00:17:24 --> 00:17:27 about which employers to refer for enforcement
00:17:27 --> 00:17:30 actions. Finality, however, cannot vary depending
00:17:30 --> 00:17:33 on who sued the agency. It depends on the rule
00:17:33 --> 00:17:37 itself. And that second sentence of the reading
00:17:37 --> 00:17:40 is aimed at the argument that the EEOC can't
00:17:40 --> 00:17:43 sue a state. Yes, EEOC can investigate a state
00:17:43 --> 00:17:45 employer, but it can't bring the federal government's
00:17:45 --> 00:17:47 enforcement suit. That has to come from the Attorney
00:17:47 --> 00:17:50 General. So the EEOC's position was whatever
00:17:50 --> 00:17:52 this guidance does to private employers, it has
00:17:52 --> 00:17:55 no legal consequences for Texas because we can't
00:17:55 --> 00:17:58 enforce anything against Texas. The court's answer
00:17:58 --> 00:18:00 was that the same document can't be final for
00:18:00 --> 00:18:02 a private company and non-final for a state.
00:18:02 --> 00:18:05 And the safe harbors? Now we're talking about
00:18:05 --> 00:18:08 Hawkes again. Yeah, the guidance described two
00:18:08 --> 00:18:10 ways that employers would consistently meet the
00:18:10 --> 00:18:13 business necessity defense. The court treated
00:18:13 --> 00:18:16 these like safe harbors. That was the same feature
00:18:16 --> 00:18:18 that made that jurisdictional determination final.
00:18:18 --> 00:18:20 And then it took the next step. A document that
00:18:20 --> 00:18:23 binds agency staff and that creates safe harbors
00:18:23 --> 00:18:25 isn't guidance. It is a substantive rule. And
00:18:25 --> 00:18:28 Title VII gives the EEOC power to only write
00:18:28 --> 00:18:31 procedural rules. So then the EEOC couldn't have
00:18:31 --> 00:18:33 issued it through notice and comment either.
00:18:33 --> 00:18:36 The court rewrote the injunction. The district
00:18:36 --> 00:18:38 court had barred enforcement against Texas until
00:18:38 --> 00:18:40 the EEOC went through notice and comment. The
00:18:40 --> 00:18:42 Fifth Circuit struck that because there was no
00:18:42 --> 00:18:44 process that could fix it and ordered that the
00:18:44 --> 00:18:46 EEOC and the Attorney General could not treat
00:18:46 --> 00:18:49 the guidance as binding in any respect. And then
00:18:49 --> 00:18:52 Texas wins outright. Yeah, Texas wins. So for
00:18:52 --> 00:18:55 Texas, this injunction is protecting it. The
00:18:55 --> 00:18:57 guidance itself, though, is still posted on the
00:18:57 --> 00:19:00 EEOC's website. It's still there right now. And
00:19:00 --> 00:19:02 it's marked as remaining in effect until rescinded
00:19:02 --> 00:19:04 or superseded. So for every other employer in
00:19:04 --> 00:19:08 the country covered by Title VII. And the man whose
00:19:08 --> 00:19:10 charge started all of this isn't even named
00:19:10 --> 00:19:13 in the opinion. So by 2019, the case had become
00:19:13 --> 00:19:15 almost entirely about Texas and the guidance.
00:19:16 --> 00:19:19 Partly. In January 2018, the Associate Attorney
00:19:19 --> 00:19:21 General issued a memo that was supposed to tell
00:19:21 --> 00:19:23 Justice Department lawyers they couldn't use
00:19:23 --> 00:19:26 enforcement to turn agency guidance into binding
00:19:26 --> 00:19:28 rules. And the government also told the court
00:19:28 --> 00:19:30 it no longer shared the EEOC's approach in several
00:19:30 --> 00:19:33 respects. Its argument was that Texas had nothing
00:19:33 --> 00:19:35 left to fear from the Attorney General. The court
00:19:35 --> 00:19:37 then raised mootness on its own because nobody
00:19:37 --> 00:19:40 else had. That's the idea of voluntary cessation.
00:19:40 --> 00:19:44 But here the defendant is free to return to
00:19:44 --> 00:19:46 his old ways. So the burden was on the government
00:19:46 --> 00:19:48 to make it absolutely clear it couldn't recur.
00:19:48 --> 00:19:52 And a general memo didn't do that. Okay. And
00:19:52 --> 00:19:54 I think there's something that's really telling
00:19:54 --> 00:19:57 here, right? That the court reached for it, even
00:19:57 --> 00:20:01 though the government had not. And that a policy
00:20:01 --> 00:20:04 change isn't a promise, especially one the next
00:20:04 --> 00:20:07 administration can just undo. In April 2011,
00:20:08 --> 00:20:10 the Education Department's Office for Civil Rights
00:20:10 --> 00:20:12 sent a Dear Colleague letter about campus sexual
00:20:12 --> 00:20:15 assault. And among other things, it told schools
00:20:15 --> 00:20:17 to use the preponderance of the evidence standard
00:20:17 --> 00:20:20 in Title IX discipline. It never went out for
00:20:20 --> 00:20:22 comment, and schools across the country rewrote
00:20:22 --> 00:20:24 their procedures to match it because federal
00:20:24 --> 00:20:27 funding sits behind Title IX compliance. And
00:20:27 --> 00:20:30 then a student and a university sued in 2016,
00:20:30 --> 00:20:33 arguing it was a substantive rule issued without
00:20:33 --> 00:20:35 notice and comment. The Department withdrew the
00:20:35 --> 00:20:38 letter in September 2017, and the parties stipulated
00:20:38 --> 00:20:41 to dismissal five months later. No court ever
00:20:41 --> 00:20:44 reached the merits. So you had six years of nationwide
00:20:44 --> 00:20:47 effect and no court ever deciding whether it
00:20:47 --> 00:20:50 was a rule. Yes, that's the structure here. The
00:20:50 --> 00:20:53 agency controls the drafting. It controls whether
00:20:53 --> 00:20:55 this document is issued as a rule or a letter
00:20:55 --> 00:20:58 or frequently asked questions or framework, and
00:20:58 --> 00:21:01 whether to treat it as binding in practice. And
00:21:01 --> 00:21:03 each one of those choices feeds the finality
00:21:03 --> 00:21:06 analysis. The court decides what final means,
00:21:06 --> 00:21:08 but the agency decides what the document looks
00:21:08 --> 00:21:11 like before anyone's applying the test. I think
00:21:11 --> 00:21:14 you're overstating it, though. Guidance that
00:21:14 --> 00:21:16 isn't binding can't be enforced as if it were
00:21:16 --> 00:21:19 the law. If the EEOC wants to win against an
00:21:19 --> 00:21:21 employer, it has to prove a Title VII violation
00:21:21 --> 00:21:24 to a judge, and the judge decides what the statute
00:21:24 --> 00:21:28 means. The guidance gets only whatever persuasive
00:21:28 --> 00:21:31 weight it earns, and an employer who ignores
00:21:31 --> 00:21:33 the guidance gives up nothing it had a legal
00:21:33 --> 00:21:37 right to do. A lot of guidance exists because
00:21:37 --> 00:21:40 regulated companies ask for it. Yes, industry
00:21:40 --> 00:21:43 really likes guidance. Most companies, if they're
00:21:43 --> 00:21:45 told what to do that is a safe harbor, they will
00:21:45 --> 00:21:50 happily do that. But the fact that it isn't binding
00:21:50 --> 00:21:52 on the employer doesn't answer whether it's final
00:21:52 --> 00:21:54 agency action. Those are different questions.
00:21:54 --> 00:21:57 A guidance document can be the agency's finished
00:21:57 --> 00:21:59 position, even though the agency won't point
00:21:59 --> 00:22:01 to the document itself as law. And if it tells
00:22:01 --> 00:22:03 the agency's own people what position to take,
00:22:04 --> 00:22:06 or what counts as compliance, or when to refer
00:22:06 --> 00:22:08 a case for enforcement, that can produce the
00:22:08 --> 00:22:10 legal consequences that Bennett is looking for.
00:22:10 --> 00:22:13 So calling it guidance doesn't resolve either
00:22:13 --> 00:22:16 prong. Right. You can still ask whether the agency's
00:22:16 --> 00:22:19 done and whether legal consequences flow from
00:22:19 --> 00:22:22 what it did. In Texas, the Fifth Circuit said
00:22:22 --> 00:22:24 the answer is yes, even though the document said
00:22:24 --> 00:22:27 it wasn't binding. Though the EEOC is a special
00:22:27 --> 00:22:31 case because the court held it has no power to
00:22:31 --> 00:22:33 issue substantive rules under Title VII at all.
00:22:33 --> 00:22:36 Yeah, it's true. An agency with substantive rulemaking
00:22:36 --> 00:22:38 authority could potentially take the same document
00:22:38 --> 00:22:40 and issue it after notice and comment and have
00:22:40 --> 00:22:44 it stand. But the more you make these reviewable,
00:22:44 --> 00:22:47 the less likely the agency is to issue them to
00:22:47 --> 00:22:49 begin with. Yes. And that's a tradeoff. It's
00:22:49 --> 00:22:51 one reason not to make all guidance reviewable.
00:22:51 --> 00:22:53 One strong indicator in the Fifth Circuit is
00:22:53 --> 00:22:56 whether the document binds the agency's own staff.
00:22:56 --> 00:22:59 If there's mandatory language or withdrawal of
00:22:59 --> 00:23:02 staff discretion, or it creates safe harbors,
00:23:02 --> 00:23:04 those all point toward legal consequences. A
00:23:04 --> 00:23:07 document that genuinely leaves the agency free
00:23:07 --> 00:23:09 to decide cases differently on a case-by-case
00:23:09 --> 00:23:12 basis looks much more like advice. Agencies can
00:23:12 --> 00:23:14 operate on either side of the line. What they
00:23:14 --> 00:23:17 can't do is write the first kind and label it
00:23:17 --> 00:23:19 the second kind. Okay, it seems to cut in both
00:23:19 --> 00:23:22 political directions, which is what we've seen
00:23:22 --> 00:23:25 this past year. Yeah, the same informality that
00:23:25 --> 00:23:27 lets the EEOC issue that 2012 guidance without
00:23:27 --> 00:23:30 comment lets an agency take guidance down without
00:23:30 --> 00:23:33 comment. So on June 29th, the Commission voted
00:23:33 --> 00:23:36 two to one to rescind its 1979 affirmative action
00:23:36 --> 00:23:38 guidelines and the compliance manual sections
00:23:38 --> 00:23:41 that went with them. Its regulatory agenda, which
00:23:41 --> 00:23:44 it published a week later, put more rescissions
00:23:44 --> 00:23:46 at the final rule stage with no proposed rules
00:23:46 --> 00:23:48 ahead of them. The regulatory agenda is like,
00:23:48 --> 00:23:50 this is what we're planning to do over the next
00:23:50 --> 00:23:52 year. So they're saying, and we're doing this
00:23:52 --> 00:23:55 to more. This included the interpretive portions
00:23:55 --> 00:23:57 of the Uniform Guidelines on Employee Selection
00:23:57 --> 00:24:00 Procedures, which are the validation framework
00:24:00 --> 00:24:02 and the part that tells an employer how to show
00:24:02 --> 00:24:06 a screen is job-related. Final action on this
00:24:06 --> 00:24:08 is projected for November. It'll be effective
00:24:08 --> 00:24:10 in January. And the recordkeeping requirements,
00:24:11 --> 00:24:13 by contrast, are still at the proposed-rule
00:24:13 --> 00:24:16 stage. But none of this is issued yet. This agenda
00:24:16 --> 00:24:18 is just a statement of their intent. And the
00:24:18 --> 00:24:21 premise of the 2012 guidance, disparate impact
00:24:21 --> 00:24:25 under Title VII? So June 9th, the Justice Department's
00:24:25 --> 00:24:27 Office of Legal Counsel concluded that these
00:24:27 --> 00:24:29 disparate impact guidelines are unconstitutional,
00:24:29 --> 00:24:32 and it supplied a much narrower reading of the
00:24:32 --> 00:24:35 statute in their place. The EEOC's own chair
00:24:35 --> 00:24:37 had asked for an opinion. This binds no court,
00:24:37 --> 00:24:40 it binds no employer, but it does change how
00:24:40 --> 00:24:42 the executive branch reads Title VII. So suppose
00:24:42 --> 00:24:46 the EEOC rescinds the 2012 criminal record guidance
00:24:46 --> 00:24:49 outright. Could anyone challenge that? Potentially,
00:24:49 --> 00:24:51 but you still have to identify the legal consequence
00:24:51 --> 00:24:53 of the rescission and somebody injured by it.
00:24:54 --> 00:24:56 Remember, the Fifth Circuit didn't treat the
00:24:56 --> 00:24:57 guidance as final because it was codified. It
00:24:57 --> 00:25:00 wasn't. It found legal consequences because the
00:25:00 --> 00:25:03 guidance bound EEOC staff and created safe harbors
00:25:03 --> 00:25:06 for employers. So taking the guidance away could
00:25:06 --> 00:25:08 matter if taking it away changes one of those
00:25:08 --> 00:25:10 consequences. Yes. And if you compare that with
00:25:10 --> 00:25:12 the affirmative action guidelines that the EEOC
00:25:12 --> 00:25:15 just rescinded, those have even more concrete
00:25:15 --> 00:25:19 consequences. Section 713 of Title VII can protect
00:25:19 --> 00:25:20 an employer from liability or punishment when
00:25:20 --> 00:25:23 it acts in good-faith reliance on a written
00:25:23 --> 00:25:27 EEOC interpretation. And the 1979 guidelines have
00:25:27 --> 00:25:29 been held to expressly qualify for that kind
00:25:29 --> 00:25:32 of protection. So rescinding those takes away
00:25:32 --> 00:25:34 something employers could actually invoke as
00:25:34 --> 00:25:37 a statutory defense. Yes. That's a pretty easy
00:25:37 --> 00:25:39 legal-consequences argument. A lot easier than
00:25:39 --> 00:25:41 simply saying the agency took a guidance document
00:25:41 --> 00:25:44 off its website. I have to say finality doesn't
00:25:44 --> 00:25:47 feel very final. Nothing is final. This is administrative
00:25:47 --> 00:25:50 law. Next week, we have three more timing doctrines.
00:25:50 --> 00:25:53 We're going to do ripeness, exhaustion, and mootness
00:25:53 --> 00:25:56 all in one day. This is three ways of asking
00:25:56 --> 00:25:59 when. And we will, again, be talking about the
00:25:59 --> 00:26:02 Sacketts. So that does it for today's episode
00:26:02 --> 00:26:04 of Administrative Remedies. Thank you for joining
00:26:04 --> 00:26:07 us today. Please, if you enjoy this podcast,
00:26:07 --> 00:26:10 enjoy this episode, give us a like on Spotify,
00:26:10 --> 00:26:13 iTunes, or whatever platform you're listening
00:26:13 --> 00:26:16 on. And be sure to tune in next time where we'll
00:26:16 --> 00:26:18 continue to dive into the contours of administrative
00:26:18 --> 00:26:21 law. Because remember, you can't fix what you
00:26:21 --> 00:26:21 don't understand.