How the Agency Judges Case Impacts the DOL and Immigration

Monday morning thoughts for those observing the work environment.

SCOTUS Fallout|WIOA Opposition

Rebecca Rainey and Andrew Kreighbaum: The U.S. Supreme Court’s decision last week limiting the Securities and Exchange Commission’s ability to use domestic courts is expected to ignite challenges against similar administrative law tribunals at federal employment agencies.

Ruling 6-3 SEC vs. Jarkesy ruled that defendants have the right to present their case to a federal jury when the agency seeks financial penalties. Specifically, the court found that the SEC’s anti-fraud rules at issue in the case replicated “common law fraud” and that it was “well-settled” that such claims should be tried by a jury.

Although the Supreme Court’s decision concerned only the SEC, the principles on which it is based “reach wider” and will not be limited to this agency, said Rob Johnson, senior staff attorney at the libertarian Institute for Justice. The group sued the U.S. Department of Labor on behalf of employers fighting penalties for violating immigration laws for workers.

“We look forward to receiving today’s advice to ensure it applies across the country,” Johnson said.

In the DOL and related agencies, where administrative judges (ALJs) decide a large number of cases, the impact of a ruling may be limited.

Court decision It will not necessarily help overcome challenges in areas such as immigrationwhere there is no public right of action, said Stephen Yale-Loehr, a professor of immigration law at Cornell Law School.

“The Court did not address the other constitutional issues in the case concerning the nondelegation doctrine and whether the isolation of SEC administrative law judges from executive oversight violates the separation of powers,” Yale-Loehr said. “Those issues are for another case.”

The majority opinion also noted that there is an exception to the jury requirement, recognized in a 1977 case that upheld the decision of the Occupational Safety and Health Review Board, a tribunal that hears employer appeals regarding worker safety citations.

In that case, SCOTUS said there is an exception to the jury requirement “when Congress creates new statutory ‘public rights’” or when the claims are “unknown at common law.” The Supreme Court noted, however, that the jury trial exception should not apply to “traditional legal claims” or common law issues such as the SEC’s fraud rules.

Lawyers say that the Supreme Court’s distinction between OSHA disputes and other common law disputes may protect both OSHRCs and its mine safety counterpart, the Mine Safety and Health Review Commission, against challenging its powers under the ruling.

“They basically said, although they didn’t officially claim it, that OSHA penalties are not really similar to what the SEC is imposing here,” said Anthony Rainone, co-chair of the labor and employment practice at Brach Eichler LLC. “So I don’t think that gives people in front of ALJs in OSHA cases any argument that, oh, we should go before a judge and jury.”

Nevertheless, Rainone anticipated legal proceedings, arguing that: An administrative judge (ALJ) does not have the authority to preside over disputes and will not bring any criminal proceedings before DOL administrative judges.

Employers penalized for violations related to temporary work visa programs or alleged bias in the hiring of non-citizens have already raised legal issues in recent years regarding the constitutionality of the administrative judge system. This tactic gained new momentum following the Fifth Circuit’s 2022 ruling in Jarkesy.

Seasonal employers represented by the Institute for Justice filed suit over H-2A and H-2B seasonal work visa penalties, while a Tulsa construction company sued to challenge Justice Department penalties for deficiencies in verifying work eligibility.

More famous employers Walmart Inc. and Elon Musk’s SpaceXmeanwhile, they have secured recent district court victories in cases involving employment verification and employment discrimination, respectively, by taking aim at the administrative law judge system.

Some of the cases that have been put on hold, Jarkesy was pending before the Supreme Court, the proceedings can now be commenced, but not necessarily with new information from judges about the broader administrative law system in federal agencies.

Diego Munhoz Areas: You’d think the legislation, which dissolved the bitterly divided U.S. House of Representatives by a 378-26 majority, would provide an overwhelming consensus – but it doesn’t.

Upon re-approval by the House Innovation and Employment Opportunities Act—the main law governing the financing of vocational training programs in the country— The Senate is currently working on its own bill, with lawmakers planning a finished product before Congress recesses in August.

In a rare display of bipartisanship in labor politics, prominent pro-union senators Bernie Sanders (I-Vt.) and conservative congresswoman Virginia Foxx (R-N.C.) work together to reauthorize a program that has the support of governors across the country and some of America’s largest companies in need of skilled workers.

But unions and some on the left are less than enthusiastic about the direction of the bipartisan legislation, particularly the lack of equal representation for workers on the job boards that administer job training programs and WIOA funds at the local level.

“Co-determination makes perfect sense. Co-determination is how many other countries implement these kinds of systems—employers and workers working together at one table,” said Mary Alice McCarthy, senior director of the Center for Education and Work at New America.

“Why do Democrats, why do Bernie Sanders allow this?” McCarthy said.

The AFL-CIO sent lawmakers letter in May, asking for greater employee representation in works councilsadding that WIOA funds should only go to employers who commit to neutrality when organizing work.

In its current form, WIOA does not provide high-quality jobs and is too focused on employers, the country needs newer models of workforce development, McCarthy said.

But Congressman Bobby Scott (Virginia).) — the top Democrat on the Education and Workforce Committee, which Foxx chairs — told Bloomberg Law that he supports reauthorizing WIOA, noting that its greatest strength is its local approach.

He also added that progress has been made to increase employee representation on boards, although this is not exactly what unions expect.

“We’re doing the best we can,” Scott said.

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