On July 30, the 9th Circuit Court of Appeals settled a long-standing debate between federal contractors and journalists when it ruled on Center for Investigative Reporting v. United States Department of Labor. Their decision determined that EEO-1 reports (also called Employer Information Reports), which collect mandatory workforce demographic information from federal contractors, do not contain “commercial information” and therefore are not subject to exemption under the Freedom of Information Act (FOIA). In other words, the court determined that reporters and members of the media have a right to access reports containing the demographic data of the employees of federal contractors.
FOIA, the DOL, and Federal Contractors
For a number of years, the Center for Investigative Reporting has requested EEO-1 reports from the Department of Labor (DOL)’s Office of Federal Contract Compliance Programs (OFCCP) under FOIA.
Federal contractors have objected to the release of these reports on the basis that the reports contain trade secrets or commercial information, and are therefore exempt from public disclosure under FOIA.
FOIA Exempt Documents
Congress enacted FOIA in 1967 to grant the public visibility into government operations. The statute requires federal agencies to release records upon a request from the public (known as a FOIA request). However, there are certain categories of records that the government can withhold from disclosure, including:
- documents related to national security,
- internal personnel rules and practices of the agency in question,
- documents that federal law prohibits from publication,
- trade secrets or commercial or financial information that is confidential and privileged,
- privileged communications within or between agencies,
- information that would invade another individual’s personal privacy,
- information compiled for law enforcement purposes,
- information that concerns the supervision of financial institutions, and
- geological information on wells.
EEO-1 Reports
Federal contractors are required to file EEO-1 reports describing the composition of their workforce annually. The reports break down the workforce into ten different categories:
- executive/senior-level officials and managers
- first/mid-level officials and managers
- professionals
- technicians
- sales workers
- administrative support workers
- craft workers
- operatives
- laborers and helpers
- service workers
Within these categories, the contractor breaks down the race/ethnicity and gender of its workforce members.
Case Details and Appellate Analysis
As a result of contractors’ objections, the OFCCP refused a request from the Center for Investigative Reporting to release numerous EEO-1 reports on the grounds that they contain commercial information and thus are exempt from disclosure under FOIA. In 2022, the Center for Investigative Reporting filed a lawsuit alleging this refusal constitutes a FOIA violation. The District Court for the Northern District of California found that the reports did not contain commercial information and thus were not entitled to the exemption. On appeal, the 9th Circuit affirmed that decision.
The 9th Circuit began its analysis by noting that FOIA does not define “commercial.” In using its plain meaning, the court stated that “[i]nformation is ‘commercial’ if it pertains to ‘business [or] trade,’ or is designed to be profitable.” The court noted two ways for information to be “commercial”: it is the object of commerce (designed to be profitable), or it has the subject of commerce (pertaining to business or trade).
Information is the object of commerce (or serves a commercial function) if it is designed to be profitable when it was made to be bought or sold. The court noted that the DOL did not contend that the information was designed to be bought or sold.
The court then moved to the question of whether the information pertained to business or trade. It found that information pertaining to business or trade were such records that “actually reveal basic commercial operations, such as sales statistics, profits and losses, and inventories.” It also would be information that describes the goods and services being sold.
The court ultimately rejected that DOL’s argument that the information was commercial because it reflected a contractor’s headcount and organizational structure, its resulting capacity to engage in commerce, its performance on diversifying its workforce, and its trends on these measures over time.
In rejecting the DOL’s argument, the court found that the information did not disclose any details about the services provided by the federal contractor, the prices charged for the services, the resulting profits, the terms of the contractors’ agreements with the government, or any similar information that would ordinarily be considered “commercial.”
Next Steps for Federal Contractors
The DOL has not yet stated whether it will ask for a rehearing or otherwise appeal the decision. If the DOL accepts the opinion, it will need to produce some 16,755 reports that it withheld from the Center for Investigative Reporting.
