This term, the U.S. Supreme Court is set to hear three major cases involving the power of federal agencies. While those cases are understandably getting a lot of attention, they’re only the tip of the iceberg. Americans are increasingly questioning agencies’ role in our government. They have sued agencies from the FTC to the DOL, arguing that the agencies’ very structures are unconstitutional. These lawsuits rely on different theories, but their thrust is the same: modern agencies have too much power. They insert themselves into private disputes and decide cases involving private rights. In other words, they act like courts. But they have none of courts’ traditional safeguards, such as independent judges and juries.
That problem is most obvious in the National Labor Relations Board. For nearly 100 years, the Board has exercised power over private rights. It decides who can unionize and when. It decides whether union organizers can come on private property. And it decides when and under what circumstances people can bargain about their own employment.
The Board makes these decisions against a partisan backdrop. Its decisions swing from election to election. Democratic Board members vote uniformly for unions, while Republican members side invariably with management. The results depend less on the law than on which party holds the White House.
While many agencies act politically, the Board is a special problem. Unlike other agencies, the Board makes almost all its decisions not through rulemaking, but through one-off panel decisions. That means it can change policy much faster. The “law” can swing wildly from case to case. In fact, according to one study, the Board during the Obama administration reversed a group of decisions that had been on the books for more than a collective 4,500 years.
The Board’s constitutional flaws are also different from those of other agencies. For example, in a recent case involving the SEC, the Fifth Circuit Court of Appeals held that the agency’s structure violated the Seventh Amendment. That was because the SEC can impose civil fines—the kind of claims that must be tried to a jury. The Board has no authority to impose civil fines, so it doesn’t have the same Seventh Amendment problem. Its problem instead comes instead from its unchecked power to decide cases. It controls the outcome in disputes affecting a range of private rights. And those disputes, according to Article III of the Constitution, should be decided only by real judges.
These flaws are becoming more obvious as the Board is taking more radical stances. Just this year, the agency has held that employers may not offer employees severance agreements with non-disparagement clauses, may not have run-of-the-mill work rules like general professionalism requirements, and may not discipline employees for bringing political issues into the workplace. These decisions lacked any connection to real working conditions, much less the law. But without an effective check, the Board has no incentive to trim its own sails.
More people are questioning the Board’s structure. One worker has even sued to invalidate the Board’s whole process. The worker is making a narrow argument: she says the Board’s so-called administrative law judges are too independent from the president to legitimately exercise executive power. But other challenges could also be on the table. For example, in a recent concurrence, Justice Thomas explained that when agencies resolve disputes about “core” private rights, such as property rights, they are exercising “judicial power.” And again, under Article III of the U.S. Constitution, that kind of power can be wielded only by courts.
A successful challenge wouldn’t necessarily abolish the Board. Courts could fix the independent-agency-judges problem by striking down the judges’ removal protections. That’s exactly what the Supreme Court did in a 2020 case involving the CFPB. Similarly, courts could fix the judicial-power problem by reviewing the Board’s decisions more closely. The Board’s flaw is that it has no check: it can flip positions at will without worrying that it will be second-guessed in court. But if courts stopped deferring to its supposed expertise, that problem could go away. The Board could continue processing labor disputes at an administrative level, and people could still get their day in court.
Fortunately, courts seem to be moving in that direction. The Supreme Court recently agreed to hear Loper Bright Enterprises v. Raimondo, a case about when (or whether) courts should defer to agencies. Most observers think the Court will use the case to tighten the standards for judicial review. If it does, the decision could help rein the Board in. The Board would have to defend its decisions in court with little or no deference. And that fact alone might help moderate its political excesses.
But whatever the outcome in Loper Bright, the Board’s power is concerning. For years, the agency has acted like a political appendage of the party in power. That kind of partisanship reduces confidence in the legal system. The Board transparently plays politics with people’s rights. It serves the administration’s friends and attacks the administration’s enemies. People can predict its decisions only by watching the election results. That is not law, but raw political power.
Note from the Editor: The Federalist Society takes no positions on particular legal and public policy matters. Any expressions of opinion are those of the author. We welcome responses to the views presented here. To join the debate, please email us at firstname.lastname@example.org.