In-House Labor Dept. Judges Could Face Neutrality Questions

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By Jon Steingart

It will be harder to win challenges to Labor Department determinations following a recent U.S. Supreme Court ruling on in-house judges, a former chief legal officer for the DOL told Bloomberg Law.

The Supreme Court tossed out a Securities and Exchange Commission administrative law judge’s findings because he wasn’t appointed according to the procedure in the U.S. Constitution’s appointments clause. The clause requires that “Officers of the United States” be appointed either by the president or by the head of a department. The ALJ qualified as an officer in part because of the significant authority he held, the court said June 21.

The ruling could change the way the Labor Department’s ALJs are appointed, making them more directly accountable to the labor secretary. There are 41 ALJs in the Office of Administrative Law Judges who hear challenges to DOL agency enforcement actions. For example, the department’s Office of Worker Compensation Programs administers the Federal Black Lung Program, which pays benefits to coal miners with black lung disease. An applicant who is found ineligible may challenge the determination before an ALJ.

The OALJ has faced a backlog for adjudicating black lung benefits that would be reduced by adjusting staffing levels, the DOL inspector general found in September 2017.

But making ALJs accountable to a political appointee will affect their decision making, according to former top DOL lawyer Patricia Smith .

“It’s going to become much more political and I don’t think that’s a good thing for a justice system,” Smith, who served as solicitor of labor during the Obama administration, told Bloomberg Law.

Smith said she’s concerned that making ALJs accountable to the secretary of labor could impede their impartiality.

“The ALJs are deciding cases when people say the agency’s decisions are wrong,” Smith said. “Now ALJs are dependent on a political person appointing them and what that means is the political people, to the extent that they have the ability to decide, are going to take that into consideration.”

There are another 25 ALJs who hear challenges to Labor Department determinations who aren’t part of the Labor Department’s Office of ALJs. The Occupational Safety and Health Administration and the Mine Safety and Health Administration, which administer workplace health and safety laws, are part of the Labor Department. But challenges to their determinations come before ALJs who are housed within independent commissions that aren’t part of the DOL.

Secretary Ratified Judges’ Appointments

Labor Secretary Alexander Acosta attempted to eliminate any possibility that rulings of the department’s ALJs could be challenged on the basis that they weren’t properly appointed. Acosta notified the department’s ALJs in December 2017 of his assent to their appointments a few weeks after the Justice Department filed a brief in the Supreme Court. The DOJ argued that ALJs should be appointed by the head of the department, and it asked the court to establish a nationwide standard because appeals courts were divided on whether ALJs needed to be appointed.

“In my capacity as head of the Department of Labor, and after due consideration, I hereby ratify the Department’s prior appointment,” Acosta wrote in separate letters to the chief and associate administrative law judges. He also appointed a judge by writing, “I hereby appoint you as an Administrative Law Judge in the Office of Administrative Law Judges.”

“This letter is intended to address any claim that administrative proceedings pending before, or presided over by, administrative law judges of the U.S. Department of Labor violate the Appointments Clause of the U.S. Constitution,” he wrote in each letter.

But can ratification block a claim that an ALJ’s ruling is invalid because of a problem with the way the ALJ was appointed?

“Nobody knows,” Kent Barnett, an administrative law professor at the University of Georgia, told Bloomberg Law. “It’s been an open question of what exactly is required to cure it.”

The Supreme Court opinion notes that the SEC also ratified its ALJs’ appointments while the case was before the Supreme Court. The court declined to take up the question of whether ratification can fix a defective appointment.

“I think the betting money was it’s just fine,” Barnett said. “The other possibility if the Department of Labor is going to protect itself would be to reappoint the ALJs.”

The Labor Department didn’t respond to Bloomberg Law’s request for comment.

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