The Framers of our Constitution elevated one historical insight above all others. Concentrating power in the hands of a single branch of government, they agreed, is the antithesis of liberty. An “accumulation of all powers, legislative, executive, and judiciary, in the same hands,” James Madison warned in Federalist 47, “may justly be pronounced the very definition of tyranny.”
The modern administrative state may be a softer form of absolutism than that of Charles I, but it is no less tyrannical. Take the phenomenon of federal agency adjudication. An agency investigates American citizens for alleged administrative offenses. Then it prosecutes and tries them for those offenses, not in a court of law, but in the agency’s own administrative star chamber. Beyond allowing the agency to be the investigator, prosecutor, and judge in its own case, agency adjudication in practice often allows the agency to decide cases based on its own internal policies, not on Acts of Congress.
To appreciate the perils of administrative adjudication, one need look no further than to the Office of Federal Contract Compliance Programs. As a division of the Department of Labor, the OFCCP enforces anti-discrimination provisions in federal contracts. The OFCCP’s chief method for rooting out discrimination by contractors is a jarringly blunt statistical calculus. If a company’s workforce is off—even if by a few percentage points—from the minority composition of the available applicant pool, the OFCCP assumes the company has engaged in discrimination.
The OFCCP rarely considers whether anyone has even complained about the company’s hiring or promotion practices, much less whether the company’s hiring and promotion decisions are in fact biased. Indeed, it often proceeds against the accused contractor with zero evidence of discriminatory animus or motive. Under the OFCCP’s approach to discrimination, intent doesn’t matter. Nor does the diversity of the company’s board, or its longstanding commitment to, and investment in, an outreach plan that identifies and recruits qualified minority candidates.
The OFCCP’s stark statistical analysis has produced some curious results. In 2012, it forced FedEx into a $3 million settlement. According to the Labor Department’s own press release, “The affected workers, include men and women as well as African-American, Caucasian and Native American job seekers, as well as job seekers of Hispanic and Asian descent.” In other words, the agency claimed that FedEx discriminated against virtually every class of worker in one way or another. Who benefited from this indiscriminate discrimination? We are left only to guess.
If it suspects a federal contractor or subcontractor of violating one of the anti-discrimination provisions in a government contract, the OFCCP doesn’t refer the matter to the DOJ to sue for breach of contract in federal court. Nor does it refer the company to the EEOC for further investigation and possible action under Title VII. Instead, the OFCCP brings an administrative enforcement action against the accused before the Labor Department’s own administrative law judges. Appeals from that adjudication? The Labor Department decides the appeal, too.
Rather than pursue contractual damages, the OFCCP seeks—in a case of alleged “pay bias,” for example—individualized back pay awards and other “make whole” relief on behalf of the contractor’s employees. It may impose hiring quotas or require linkage agreements between contractors and Labor Department job-training programs to ensure that employers identify and recruit qualified workers. The ultimate sanction is debarment, the loss of a company’s federal contracts. None of these, of course, are traditional contract remedies.
Yet the most extraordinary thing about the OFCCP’s adjudication process is that Congress has never authorized it. With a straight face, the OFCCP claims an LBJ-era executive order—Executive Order 11,246—as the source of its authority to conduct administrative adjudications. But that order identifies no statutory authority for the OFCCP’s adjudicative process. It requires only that government officials include a set of anti-discrimination provisions in government contracts. And it contemplates that the Department of Labor may, after consulting with the contracting agency, sanction an offending contractor by cancelling the contract or by suspending the contractor’s ability to contract with the government. It doesn’t authorize an entire regime to bring, prosecute, and then adjudicate discrimination claims, or to obtain injunctive relief and back pay for employees of government contractors. Not even EEOC can do that without going into court.
Secretary of Labor Eugene Scalia has long criticized administrative overreach by the Labor Department. In a 2014 op-ed in the Washington Post, for example, he complained that then-President Obama’s Labor Department was wielding executive orders “to bypass Congress.” Such orders, he rightly observed, lack “the democratic pedigree of laws passed by both houses of Congress.” Yet since Secretary Scalia assumed his post in September 2019, the OFCCP has seemingly grown more strident under his watch. At the same time, Secretary Scalia has had nothing to say about OFCCP’s ultra vires enforcement regime.
To be clear, the question the OFCCP’s conduct raises is not whether claims of discrimination and contractual violations should be tried and adjudicated; they should be. The question is where and under what lawful standard. Congress rarely gives agencies broad and unfettered authority to investigate, prosecute, and adjudicate lawsuits entirely in-house. But as we have seen, that hasn’t stopped agencies like the Labor Department from asserting and exercising that authority.
And while the OFCCP’s decisions are ultimately subject to judicial review in federal court, Chevron deference allows the agency to effectively interpret the relevant law as well as enforce it. Chevron tells the judge that she must understand the law, if unclear, to mean not what she interprets its text to mean, but what the agency says it means. In the context of an Executive Order, this unites the powers of making, enforcing, and interpreting laws in the same hands. At best, it obliterates the Constitution’s separation of powers. At worst, it erects a modern form of tyranny.
Also published by Forbes.com on WLF’s contributor page.