Labor Secretary Alexander Acosta. (Photo: Diego Radzinschi / ALM)

The U.S. Department of Labor has ratified the appointment of dozens of administrative law judges as the U.S. Supreme Court prepares to weigh a case that could have wide consequences for in-house courts across the federal bureaucracy.

Labor Secretary Alexander Acosta in December sent letters to the department's 40 administrative law judges who preside in courts throughout the country, ratifying their appointment. The move could head off challenges from companies and employees—in disputes that include wage disputes, benefits claims and discrimination—over whether those judges were sitting lawfully.

The Labor Department's move comes as the Supreme Court keys up to hear an important case, Lucia v. Securities and Exchange Commission, which looks at whether the bureaucratic hiring process for administrative law judges violates the U.S. Constitution appointment clause. Companies have long complained about the U.S. Securities and Exchange Commission's in-house forum.

The outcome of the Supreme Court's decision could have an effect on administrative law judge decisions and proceedings at other agencies. A circuit court split exists over this question over whether the judges are “inferior officers.” In November, the U.S. Department of Justice  switched sides in this fight, arguing that the SEC's judges are officers, not mere employees. The position raises the bar for the hiring and firing of these judges.

In a new statement on its website, the Labor Department's Office of Administrative Law Judges confirmed that Acosta ratified Chief Judge Stephen Henley on Dec. 15 and the other judges Dec. 21 to “address any claim that administrative proceedings pending before, or presided over by” the judges violates the Constitution following the U.S. solicitor general's new position in the Lucia case in the high court.

The National Law Journal sought clarification last week about the status of any ratification orders by the Labor Department. The department did not immediately comment then.

In November, the SEC, responding to the Justice Department's new litigation stance, ratified the appointment of its agency's five administrative law judges. The commission said the ratification would “put to rest any claim that the administrative proceedings pending before, or presided over by, commission administrative law judges violate the appointments clause.”

John Christopher Larsen, a Labor Department administrative law judge in San Francisco since 2005, said he and other judges received the ratification notice from Acosta on Dec. 21. Larsen said last week the ratification would “lift the cloud of uncertainty” over the appointment status of the department's administrative law judges.

Larsen is presiding over a high-profile case in which the Labor Department's Office of Federal Contract Compliance accuses Oracle America Inc. of paying white men more than women and minorities in similar positions, and for favoring Asian workers for certain technical roles. In that case, Larsen said Oracle—represented by a team from Orrick, Herrington & Sutcliffe—had raised the objection during a hearing that he wasn't properly appointed and asked him to disqualify. He overruled that objection.

The Labor Department's administrative law judges handle a variety of disputes such as wage-and-hour cases and discrimination and whistleblower complaints. Google Inc. faces a pending investigation by the Labor Department, and JPMorgan Chase & Co. lost an effort to dismiss a pay discrimination case.

About 30 federal agencies have administrative law judges. The Social Security Administration, for example, has about 1,400 judges.

“Some of these agencies would really be in a pickle, if the court said, 'All your judges are pretenders to the throne,'” Larsen said.

 

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