The Sixth Amendment of the U.S. Constitution guarantees all Americans a fair and impartial trial. But in recent years, this right has been coopted and nullified by the faceless bureaucrats who choose kangaroo courts rather than a constitutional process. As a result, many small business owners who are charged with violating one of the tens of thousands of regulations are tried, not in court in front of a judge, but in a federal agency proceeding in front of another employee from that very same agency, known as an administrative law judge. To prevail, a defendant is forced to persuade an agency employee to rule against their employer and their best interests, often under bizarre evidentiary standards favoring the agency.
"Essentially, much of the Bill of Rights has been gutted,” explains Columbia University School of Law professor Philip Hamburger. “You don't have the right to be heard by a real judge or a jury and you don't have the full due process of law. Our fundamental procedural freedoms, which once were guarantees, have become mere options."
The president and Congress can work together to end these agency-created “courts” that are working far beyond their authority. For decades, executive agencies have been accumulating power that is not theirs to wield, and it is time to end this bureaucratic tyranny.
California farmer Marvin Horne experienced unchecked bureaucratic power when the Raisin Administrative Committee, which is overseen by the Department of Agriculture, seized 47 percent of his raisin crop without due process or compensation.
The absurdity of a Raisin Administrative Committee would be laughable if it hadn't taken more than a decade for Horne to receive payment for his crop. Rather than a transparent process, the case was trapped in a bureaucracy predisposed to rule against Horne.
Thankfully, the Supreme Court in 2015 took action in the case, in which the NFIB Small Business Legal Center filed an amicus brief, ruling in favor of Horne and striking a blow to the powers of unelected administrators.
The Supreme Court continued to limit bureaucrats in 2018 when it struck down a Securities and Exchange Commission (SEC) ruling against financial advisor Raymond Lucia. SEC officials wanted to ban Lucia from the investment industry for life and fine him. Instead of going to court, the agency took Mr. Lucia before an SEC administrative law judge who unsurprisingly ruled in favor of the agency. Justice Elena Kagan and six other Justices overturned this ruling because the SEC official making the ruling didn't have the power to do so under the Constitution.
Court rulings against bureaucratic fiat, unfortunately, have not stopped executive agencies from trying to strong-arm businesses and individuals through the use of agency courts.
In the closing days of the Obama administration, for example, the Department of Labor arbitrarily sued Oracle for racial discrimination. As an initial matter, there was not a meaningful racial disparity between those hired and the applicant pool — 82% of those hired for a technical position were Asian compared to 75% of the job applicants. Moreover, DOL didn’t consider whether pay and hiring discrepancies could be based on merit and assumed that employees with the same job title did the exact same tasks. The DOL charges make little sense and appear to be a last-ditch effort to force Oracle to settle before Donald Trump became president.
Instead of debating the merits in a neutral court, DOL is trying to keep the proceedings in-house using the Office of Federal Contract Compliance Programs (OFCCP) as a court. Under this system, employees of the DOL act as prosecutor, judge, jury and executioner subverting due process. OFCCP officials are seizing enforcement powers Congress explicitly didn’t give them to try and force companies to settle.
Oracle is fighting back, suing the OFCCP for violating the separation of powers and due process provisions of the Constitution and the NFIB Small Business Legal Center plans to weigh in on their behalf. A ruling in favor of Oracle would be a significant blow against the OFCCP and the administrative state more broadly.
It's time to eliminate these rogue agency courts and put an end to their blatant actions of ignoring the rule of law and people's rights. Our Federal Government operates with separate, distinct branches — all given specific powers and authority, and these agency courts have long blurred the lines of different branches of government. Decisions impacting the livelihood and wellbeing of Americans should be made in fair and impartial courts that operate under the Judicial Branch of our government - not by unaccountable government bureaucrats working to advance their political agenda.
Karen Harned serves as Executive Director of the National Federation of Independent Business Small Business Legal Center.