When the Supreme Court decided SEC v. Jarkesy, it only decided one of the issues in the U.S. 5th Circuit Court of Appeals decision. As we noted in “NLRB’s Administrative Law Judges Face Existential Challenges,” the 5th Circuit in Jarkesy also ruled that the Securities and Exchanges Commission’s (SEC) administrative law judges (ALJs) were unconstitutionally appointed because their removal protections violated “the appointments clause” of Article II of the Constitution. As a result of that 5th Circuit precedent, a district court in Texas held the National Labor Relations Board’s (NLRB) ALJs are likewise unconstitutionally appointed and therefore granted the employer an injunction blocking administrative proceedings at Board.
With these cases as a background, janitorial services company and federal contractor ABM has now filed suit to challenge the DOL’s ALJ proceedings in the Southern District of Texas.
In September 2021, the Office of Federal Contract Compliance Programs (OFCCP) had filed an administrative complaint against ABM alleging a compliance review found systemic racial discrimination against black and white applicants for janitorial positions at several ABM locations. The lawsuit challenges the OFCCP’s enforcement in two ways. First, it claims that because the OFCCP is engaging in an enforcement action seeking money damages—which is essentially a “common law” breach of contract claim—ABM is entitled to a jury trial under SEC v. Jarkesy because the OFCCP is “simultaneously prosecuting and adjudicating an administrative compliant.”
Second, ABM claims in its complaint the DOL ALJ process is unconstitutional because those judges are “insufficiently accountable to the head of the executive branch,” and the president “cannot adequately control the performance” of a DOL judge because removal of a judge “is impeded by two layers of for-cause removal protection.”
The complaint seeks a declaration that the ALJ proceeding is unconstitutional and an injunction barring the administrative process being used against it.
In addition to this challenge by ABM, Perdue Farms and Comcast have filed lawsuits challenging the DOL whistleblower claims, arguing that under Jarkesy they have a constitutional right to make their case to a federal jury in North Carolina and Virginia respectively.
A third case challenging the use of DOL ALJs in whistleblower cases has been filed in the federal district court in Utah, while a fourth employer challenged the use of ALJs in response to violations of H-2A visa regulations in the Western District of Kentucky.
What cases the DOL can actually handle through its ALJs will be determined through these and other cases employers are expected to file to challenge DOL’s current regulatory scheme.
Written by the editors of the Federal Employment Law Insider.
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