The Department of Labor’s (DOL) administrative law judges (ALJs) are currently facing significant constitutional challenges. These challenges have emerged in the wake of the 5th Circuit Court of Appeals decision in SEC v. Jarkesy, which ruled that the Securities and Exchange Commission’s (SEC) ALJs were unconstitutionally appointed. This landmark ruling has set a precedent, leading to similar legal challenges across various federal agencies. The court’s decision that SEC ALJs were improperly insulated from executive control has raised questions about the appointment and removal processes for federal officials as prescribed by Article II of the Constitution.
ALJs Under Fire Across Federal Agencies
Expanding Judicial Scrutiny
Building upon the precedent set by SEC v. Jarkesy, a Texas district court found that the National Labor Relations Board’s (NLRB) ALJs also violated constitutional requirements. The court granted an injunction in favor of the employer, effectively halting administrative proceedings against the company. This decision has opened the door for other federal contractors and businesses to challenge the constitutionality of ALJs. One such case involves ABM, a janitorial services company and federal contractor, which recently filed a lawsuit challenging the DOL’s ALJ processes. ABM argues that the DOL’s ALJs are unconstitutionally insulated by dual-layer for-cause removal protections, which impede presidential oversight and control.
ABM’s legal battle originates from a 2021 compliance review conducted by the Office of Federal Contract Compliance Programs (OFCCP). The review accused the company of systemic racial discrimination. In response, ABM contends that it is entitled to a jury trial citing the SEC v. Jarkesy decision. The company asserts that the OFCCP’s claims involve a common law breach of contract, further strengthening their argument for a judicial declaration of the unconstitutionality of ALJ proceedings. ABM is seeking an injunction to prohibit the use of ALJs in addressing their case.
Broader Implications and Emerging Trends
The ABM lawsuit is not an isolated case. Other companies, such as Perdue Farms and Comcast, have also filed lawsuits claiming the right to jury trials in DOL whistleblower cases. These cases are critical as they put the DOL’s existing regulatory framework under intense judicial scrutiny. Although a unified legal consensus is yet to be established, it is clear that the constitutionality of ALJs is increasingly questioned. The outcomes of these cases could potentially lead to significant reforms in federal administrative procedures.
The trend shows a growing judicial skepticism towards mechanisms that insulate ALJs from executive control. This skepticism is fostering a legal landscape wherein employers are more willing to contest administrative enforcement actions in federal court. They often use the Jarkesy ruling as a foundational argument, suggesting that the existing appointment processes hinder executive oversight and thereby violate constitutional norms. Thus, each new case contributes to redefining the constitutionality of ALJ appointments and their broader role within the federal administrative system.
Impacts on Federal Administrative Processes
Evolving Legal Landscape
These constitutional challenges are not just isolated incidents but part of a wider movement that seeks to reevaluate the role and function of ALJs within the federal administrative framework. With every legal challenge, the possibility of substantial changes to the way administrative law is practiced in the United States looms larger. The ripple effects of these lawsuits may extend beyond the immediate parties involved, potentially affecting how federal agencies conduct their enforcement and compliance activities.
As employers increasingly turn to the judiciary to resolve disputes traditionally handled by ALJs, the federal administrative system is under pressure to adapt. If courts continue to find ALJs unconstitutional, agencies like the DOL may have to revise their appointment and removal procedures to align with constitutional requirements. This ongoing legal scrutiny could ultimately lead to a more transparent and accountable administrative process, ensuring that federal officials are subject to appropriate executive oversight while preserving the rights of all parties involved.
Future of Administrative Law
The Department of Labor’s (DOL) administrative law judges (ALJs) are grappling with major constitutional issues. These challenges arose following the 5th Circuit Court of Appeals’ ruling in SEC v. Jarkesy. The ruling declared that the administrative law judges appointed by the Securities and Exchange Commission (SEC) were unconstitutionally appointed. This pivotal decision has set a significant precedent, spurring similar legal challenges across multiple federal agencies. The court found that SEC ALJs were improperly protected from executive oversight, which has sparked further debate about how federal officials should be appointed and removed under Article II of the Constitution. Consequently, this development has profound implications, calling into question the legitimacy of many ALJ appointments across various federal agencies. As these constitutional debates continue, they could potentially reshape the landscape of federal administrative proceedings and the balance of power between governmental branches.
