Brave New World For ALJs

Executive Order Excepting Administrative Law Judges from the Competitive Service Issued on: July 10, 2018 

By the authority vested in me as President by the Constitution and the laws of the United States of America, including sections 3301 and 3302 of title 5, United States Code, it is hereby ordered as follows:

 Section 1. Policy. The Federal Government benefits from a professional cadre of administrative law judges (ALJs) appointed under section 3105 of title 5, United States Code, who are impartial and committed to the rule of law. As illustrated by the Supreme Court’s recent decision in Lucia v. Securities and Exchange Commission, No. 17-130 (June 21, 2018), ALJs are often called upon to discharge significant duties and exercise significant discretion in conducting proceedings under the laws of the United States. As part of their adjudications, ALJs interact with the public on issues of significance. Especially given the importance of the functions they discharge ‑‑ which may range from taking testimony and conducting trials to ruling on the admissibility of evidence and enforcing compliance with their orders ‑‑ ALJs must display appropriate temperament, legal acumen, impartiality, and sound judgment. They must also clearly communicate their decisions to the parties who appear before them, the agencies that oversee them, and the public that entrusts them with authority.

Previously, appointments to the position of ALJ have been made through competitive examination and competitive service selection procedures. The role of ALJs, however, has increased over time and ALJ decisions have, with increasing frequency, become the final word of the agencies they serve. Given this expanding responsibility for important agency adjudications, and as recognized by the Supreme Court in Lucia, at least some ‑‑ and perhaps all ‑‑ ALJs are “Officers of the United States” and thus subject to the Constitution’s Appointments Clause, which governs who may appoint such officials.

As evident from recent litigation, Lucia may also raise questions about the method of appointing ALJs, including whether competitive examination and competitive service selection procedures are compatible with the discretion an agency head must possess under the Appointments Clause in selecting ALJs. Regardless of whether those procedures would violate the Appointments Clause as applied to certain ALJs, there are sound policy reasons to take steps to eliminate doubt regarding the constitutionality of the method of appointing officials who discharge such significant duties and exercise such significant discretion.

Pursuant to my authority under section 3302(1) of title 5, United States Code, I find that conditions of good administration make necessary an exception to the competitive hiring rules and examinations for the position of ALJ. These conditions include the need to provide agency heads with additional flexibility to assess prospective appointees without the limitations imposed by competitive examination and competitive service selection procedures. Placing the position of ALJ in the excepted service will mitigate concerns about undue limitations on the selection of ALJs, reduce the likelihood of successful Appointments Clause challenges, and forestall litigation in which such concerns have been or might be raised. This action will also give agencies greater ability and discretion to assess critical qualities in ALJ candidates, such as work ethic, judgment, and ability to meet the particular needs of the agency. These are all qualities individuals should have before wielding the significant authority conferred on ALJs, and each agency should be able to assess them without proceeding through complicated and elaborate examination processes or rating procedures that do not necessarily reflect the agency’s particular needs. This change will also promote confidence in, and the durability of, agency adjudication

Sec. 2. Excepted Service. Appointments of ALJs shall be made under Schedule E of the excepted service, as established by section 3 of this order.

Sec. 3. Implementation. (a) Civil Service Rule VI is amended as follows:

(i) 5 CFR 6.2 is amended to read:

OPM shall list positions that it excepts from the competitive service in Schedules A, B, C, and D, and it shall list the position of administrative law judge in Schedule E, which schedules shall constitute parts of this rule, as follows:

Schedule A. Positions other than those of a confidential or policy-determining character for which it is not practicable to examine shall be listed in Schedule A.

Schedule B. Positions other than those of a confidential or policy-determining character for which it is not practicable to hold a competitive examination shall be listed in Schedule B. Appointments to these positions shall be subject to such noncompetitive examination as may be prescribed by OPM.

 Schedule C. Positions of a confidential or policy-determining character shall be listed in Schedule C.

 Schedule D. Positions other than those of a confidential or policy-determining character for which the competitive service requirements make impracticable the adequate recruitment of sufficient numbers of students attending qualifying educational institutions or individuals who have recently completed qualifying educational programs. These positions, which are temporarily placed in the excepted service to enable more effective recruitment from all segments of society by using means of recruiting and assessing candidates that diverge from the rules generally applicable to the competitive service, shall be listed in Schedule D.

 Schedule E. Position of administrative law judge appointed under 5 U.S.C. 3105. Conditions of good administration warrant that the position of administrative law judge be placed in the excepted service and that appointment to this position not be subject to the requirements of 5 CFR, part 302, including examination and rating requirements, though each agency shall follow the principle of veteran preference as far as administratively feasible.

 (ii) 5 CFR 6.3(b) is amended to read:

 (b) To the extent permitted by law and the provisions of this part, and subject to the suitability and fitness requirements of the applicable Civil Service Rules and Regulations, appointments and position changes in the excepted service shall be made in accordance with such regulations and practices as the head of the agency concerned finds necessary. These shall include, for the position of administrative law judge appointed under 5 U.S.C. 3105, the requirement that, at the time of application and any new appointment, the individual, other than an incumbent administrative law judge, must possess a professional license to practice law and be authorized to practice law under the laws of a State, the District of Columbia, the Commonwealth of Puerto Rico, or any territorial court established under the United States Constitution. For purposes of this requirement, judicial status is acceptable in lieu of “active” status in States that prohibit sitting judges from maintaining “active” status to practice law, and being in “good standing” is also acceptable in lieu of “active” status in States where the licensing authority considers “good standing” as having a current license to practice law. This requirement shall constitute a minimum standard for appointment to the position of administrative law judge, and such appointments may be subject to additional agency requirements where appropriate.

(iii) 5 CFR 6.4 is amended to read:

Except as required by statute, the Civil Service Rules and Regulations shall not apply to removals from positions listed in Schedules A, C, D, or E, or from positions excepted from the competitive service by statute. The Civil Service Rules and Regulations shall apply to removals from positions listed in Schedule B of persons who have competitive status.

 (iv) 5 CFR 6.8 is amended to add after subsection (c):(d) Effective on July 10, 2018, the position of administrative law judge appointed under 5 U.S.C. 3105 shall be listed in Schedule E for all levels of basic pay under 5 U.S.C. 5372(b). Incumbents of this position who are, on July 10, 2018, in the competitive service shall remain in the competitive service as long as they remain in their current positions.

 (b) The Director of the Office of Personnel Management (Director) shall:

 (i) adopt such regulations as the Director determines may be necessary to implement this order, including, as appropriate, amendments to or rescissions of regulations that are inconsistent with, or that would impede the implementation of, this order, giving particular attention to 5 CFR, part 212, subpart D; 5 CFR, part 213, subparts A and C; 5 CFR 302.101; and 5 CFR, part 930, subpart B; and

 (ii) provide guidance on conducting a swift, orderly transition from the existing appointment process for ALJs to the Schedule E process established by this order.

 Sec. 4. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

 (i) the authority granted by law to an executive department or agency, or the head thereof; or

 (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

 (b) This order shall be implemented in a manner consistent with applicable law and subject to the availability of appropriations.

 (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

 DONALD J. TRUMP THE WHITE HOUSE, July 10, 2018. 

https://www.whitehouse.gov/presidential-actions/executive-order-excepting-administrative-law-judges-competitive-service/

White House Fact Sheet

FACT SHEETS

President Donald J. Trump is Enhancing the Efficiency of America’s Administrative Law Courts

 Issued on: July 10, 2018

We’re going to run government smoothly, efficiently, and on behalf of the very hardworking taxpayers.

President Donald J. Trump

SAFEGUARDING THE EFFICIENCY OF ADMINISTRATIVE COURTS: The President signed an Executive Order ensuring that Administrative Law Judges (ALJs) are hired through a more efficient and less burdensome process.

·       The Executive Order allows agency heads to directly hire ALJs without going through the complex Office of Personnel Management (OPM) selection process by creating a new excepted service “schedule E” for them.

o   This process gives agency heads greater flexibility and responsibility for ALJ appointments.

o   Agencies will be free to select from the best candidates who embody the appropriate temperament, legal acumen, impartiality, and judgment required of an ALJ, and who meet the other needs of the agencies.

o   The new ALJ appointment process is very similar to the process agencies currently use to hire attorneys throughout the executive branch.

SUPREME COURT RULING ON ALJ APPOINTMENTS: The Supreme Court recently ruled that SEC ALJs are inferior officers of the United States, and require appointment consistent with the Appointments Clause of the Constitution.

·       In a decision authored by Justice Kagan, the Supreme Court recently ruled in Lucia v. SEC that Securities and Exchange Commission (SEC) ALJs are considered “inferior officers” of the United States as opposed to ordinary employees.

o   The Appointments Clause limits who may appoint inferior officers. It permits such officers to be appointed by the President or Department heads, as Congress has by law provided, but it does not allow them to be hired like ordinary government employees who are not appointed in a manner consistent with the Clause.

·       The Supreme Court held that the SEC’s ALJ appointment process did not satisfy this constitutional requirement.

AGENCY AUTHORITY IN DOUBT: This Supreme Court ruling casts doubt on ALJ authority in other Federal agencies.  

·       In Lucia, the Supreme Court vacated a decision made by an SEC ALJ, ruling that the ALJ was improperly appointed and therefore not authorized to rule on behalf of the SEC.

·       The logic of Lucia casts doubt on the validity of many – if not all – ALJ appointments within the Federal Government.

o   Agency ALJs are selected through a complex process that limits the flexibility of agency heads in making these appointments.

o   Some ALJs may not have been appointed by the head of the agency, but by lower agency officials.

o   Other ALJs may exercise significant authority and could be classified as inferior officers under this ruling.

·       Any ongoing legal uncertainty over ALJ appointments and authority could hinder the enforcement of dozens of important laws protecting Americans.

·       The order reduces legal uncertainty under the Appointments Clause and helps to ensure that agencies can continue to enforce the law and serve the American people.

o   This order is an important step in preempting arguments going forward that ALJs have been unconstitutionally selected and that their decisions should be overturned.

·       This order addresses potential constitutional concerns with the ALJ appointment process without affecting new ALJs’ decisional independence after they are appointed or altering the status of incumbent ALJs.

https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-enhancing-efficiency-americas-administrative-law-courts/

Trump Order Leads To Union Grievance At Social Security

     From the Washington Post (I've avoided parts of the article that are obviously slanted against the employee unions):

Federal agencies on Monday begin implementing executive orders from President Trump on how to confront employee unions, following strict guidelines likely to escalate tensions that have been building since the president took office. ...

The administration wants agencies to reopen collective bargaining agreements to reduce the on-duty time union representatives spend representing employees. Managers are directed to “monitor and carefully report” on the time and make the information publicly available. And agencies are directed to move swiftly to fire poor performers, renegotiating any contracts that allow for progressive discipline.

The conflict appears headed for a showdown, either in federal court, where the unions have filed numerous lawsuits challenging the orders, or in Congress. The administration and the unions have courted Capitol Hill allies, with Republicans supporting Trump’s tactics and Democrats backing the unions, a key constituency. ...

     See below for the grievance that has been filed by the union representing most Social Security employees in response to this.  Click on each page to view full size.

     I'm a neutral non-combatant in this battle. However, the Trump order is clearly a declaration of war.  The Supreme Court's obvious hostility to employee unions may help Trump but he may also need continued GOP control of both houses of Congress to win this war.

     The Washington Post piece is not worthy of a great newspaper. It's filled with pejorative references to federal employees and their unions. I don't think that even Rupert Murdock's Wall Street Journal would have written a piece like that. Joe Davidson, who normally covers federal employee matters for the Post, wrote a much more even-handed piece.

Assaults At Social Security Office Leave One Dead And Two In Critical Condition

     From WJTV in Mississippi:

A Mississippi sheriff says a man stabbed a relative in a federal government office and then was shot by a security guard.

Pike County Sheriff Kenny Cotton tells The Enterprise-Journal of McComb that the attacker entered a U.S. Social Security Administration office in the southwest Mississippi city Monday morning.

Cotton says the attacker confronted and stabbed a relative who worked at the office, and may have stabbed a second person.

According to a spokesperson with the Southwest Regional Medical Center in McComb, the suspect in this morning's attack is dead and two stabbing victims are in critical but stable condition.

The suspect has been identified as 21-year-old Branen Carter of Foxworth. According to authorities, Carter was shot in the abdomen and died in the emergency room just before noon at Southwest Regional Medical Center.

Investigators say Carter is responsible for stabbing his mother and grandmother, both of whom are also from Foxworth. ...

The incident apparently started out as a family squabble, according to sources close to the investigation the suspect reportedly stabbed both his mother and grandmother before a security guard shot him.

Still True

This Year's COLA May Hit Ten Year High

     From the Motley Fool:

... While nothing is set in stone, given that we don't even have data from the three months that actually count (July-September), as an early glimpse I'd suggest that there's a good chance [Social Security's Cost Of Living Adjustment or COLA] could be the biggest raise since 2012, with a slim possibility of it being the largest raise in a decade. ... 

According to the May inflation data release from the BLS [Bureau of Labor Statistics], which primarily tracks the Consumer Price Index for All Urban Consumers (CPI-U), the CPI-W has increased exactly 3% on a trailing-12-month basis. ...

The CPI-U inflation data, which is similar to the CPI-W, shows that energy has been the primary driver of higher prices. On an unadjusted 12-month basis, aggregate energy prices have risen by 11.7% as of May 2018, with gasoline and fuel oil costs up by 21.8% and 25.3%, respectively. Shelter and transportation services also saw increases of 3.5% and 3.8%, respectively. Meanwhile, new and used vehicles are the only line items to have observed year-on-year deflation over the past 12 months. 

With the summer driving season kicking into full swing, and prices at the pump soaring in the wake of four-year highs for crude oil prices, energy commodities have a really good shot (at least right now) of carrying Social Security's 2019 COLA above the 3% mark. Keep in mind that hurricanes Harvey and Irma, which disrupted production and refining capacity throughout the Gulf of Mexico and the southeastern U.S. last year, played a critical role in lifting COLA by 2% for 2018. If this hurricane season is anything like last year's, any extended disruption in the domestic refining industry could give Social Security's COLA an outside chance of eclipsing 3.6%, as it did in 2012, ultimately pushing it to a 10-year high. ...

OMB Asked To Approve Final Regs On Attorney Advisor Program

     The Social Security Administration has asked the Office of Management and Budget (OMB) to approve final regulations to make the attorney advisor program permanent.

Is It Any Different In The U.S.?

     From The Local Europe Italy AB:

Italy needs more migrants in order to pay for the population's pensions, the country's social security chief said Wednesday, drawing the ire of anti-immigration interior minister Matteo Salvini. 

If we halved migratory flows "in five years we would lose population equivalent to that of Turin", Boeri said referring to the country's important northern industrial hub.

If immigration were reduced to zero we would lose "700,000 people under 34 years of age in the space of one parliamentary mandate", he told the lower house of parliament.

Italy is suffering a demographic decline with one of the lowest birthrates in Europe. Boeri said he was concerned that "no one seems to care" about this decline in Italy and recommended maintaining a flow of legal migration, which alone, he said, could ensure the balance of Italy's pension fund. ...