Texas Federal Court Ruling Declares OSHA’s Use of Administrative Law Judges Unconstitutional

According to an article by John D. Surma and Ryan J. Swink from the Ogletree Deakins firm, a federal judge in the Southern District of Texas has ruled that the Department of Labor’s (DOL) use of Administrative Law Judges (ALJs) for adjudicating disputes, including those involving the Occupational Safety and Health Administration (OSHA), is unconstitutional. 

Judge Sim Lake’s decision follows the Supreme Court’s ruling in SEC v. Jarkesy, which limited the use of ALJs at the Securities and Exchange Commission (SEC). Judge Lake held that the multilevel “for-cause” removal protections for ALJs infringed on the president’s authority under the Take Care Clause, granting a temporary restraining order that halts certain DOL administrative proceedings.

The case arose when a federal contractor was audited by the Office of Federal Contract Compliance Programs (OFCCP) and subsequently referred to a DOL administrative proceeding. In this setting, ALJs preside over litigation and issue final rulings. Judge Lake found that the dual layers of removal protection for DOL ALJs, which prevent dismissal without “good cause,” hinder the president’s ability to ensure enforcement of federal law. His ruling mirrors the Fifth Circuit’s reasoning in Jarkesy, where it was held that Administrative Law Judges with multilevel removal protections are “Officers of the United States,” thereby creating a constitutional barrier to presidential oversight.

Judge Lake’s ruling has significant implications for employers, particularly those in Texas. His decision undermines the validity of OSHA’s administrative adjudication process and could prompt further constitutional challenges to DOL procedures. Employers now have additional leverage in OSHA disputes, as the ruling may disrupt administrative actions.

For compliance officers, this ruling signals potential changes in federal enforcement strategy, particularly around OSHA and ALJ-led proceedings. Organizations should monitor for updates and be prepared to reevaluate dispute strategies with OSHA, as administrative rulings could face increased scrutiny and potential judicial challenges.