Associated Builders and Contractors v. Shiu

Section 503 of the Rehabilitation Act was enacted to empower disabled individuals to more fully participate in the workforce, gain economic independence, and integrate into society. Under the statute, certain government contractors were required to take affirmative action to employ and promote qualified disabled individuals. The Office of Federal Contract Compliance Programs (OFCCP) (defendant) was responsible for implementing regulations to enforce § 503. Initial regulations required contractors to actively recruit qualified individuals with disabilities, publish their affirmative-action plans, and audit the effectiveness of the plans. The OFCCP analyzed data on the regulations’ impact on the disabled workforce, and due to concerns about the regulations’ effectiveness, the OFCCP issued new regulations requiring contractors to invite job applicants to self-identify as disabled and to analyze the resulting data. The new regulations also introduced a national utilization goal for the employment of disabled individuals to serve as a benchmark for disabled representation in the workforce. Calculated from the percentage of the civilian labor force with disabilities and the percentage of the general population with disabilities that had an occupation, the utilization goal provided that contractors’ workforces should contain a certain percentage of disabled workers. Associated Builders and Contractors, Inc. (ABC) (plaintiff) filed suit in federal district court to oppose the new regulations, arguing that the OFCCP exceeded its statutory authority and that the regulations were arbitrary and capricious. The district court ruled in favor of the OFCCP, and ABC appealed. ABC argued that the Rehabilitation Act limited affirmative action to people already offered jobs rather than to job applicants. Additionally, ABC argued that the OFCCP could not adequately explain its decision to create the new requirements and to apply them to the construction industry.