Over the past century, policymakers have stretched our Constitution’s separation of powers to the breaking point. Today, Congress routinely, and often unconstitutionally, delegates legislative power to administrative agencies in the executive branch. For the most part, courts have looked the other way, as these agencies have assumed these lawmaking and even judicial powers. But can the executive branch create an administrative agency out of thin air?
In Oracle America, Inc. v. Department of Labor, plaintiffs are asking a federal district court to declare the Office of Federal Contract Compliance Programs (OFCCP) unconstitutional. In the 1970s, without any authorization from Congress, the Department of Labor created the OFCCP to investigate, adjudicate, and assess monetary penalties for alleged discrimination against federal contractors.
Oracle is not just another technical administrative law case. Nor is it a case about the government’s power to fight discrimination. Oracle touches the very heart of our system of representative government, and it will have important implications for the limits of government power.
According to our Constitution’s framers, each branch of government is supposed to exercise and jealously guard its granted powers. Put simply, that means Congress must legislate. While Congress undoubtedly has the power to outlaw discrimination in the performance of federal contracts, Oracle argues that because Congress has nowhere authorized the OFCCP enforcement regime, the Department of Labor unconstitutionally deprived Congress of that power.
The case has stirred up a hornets nest with high-profile amici weighing in on both sides. A number of amici, including seven states — Texas, Alabama, Arkansas, Georgia, Louisiana, Missouri, and West Virginia — the Chamber of Commerce, and the New Civil Liberties Alliance, urge the federal court to strike down the OFCCP.
Other jurisdictions, including the District of Columbia, Connecticut, Delaware, New Jersey, New York, Pennsylvania, and Virginia — along with some 46 interest groups, including the American Civil Liberties Union, the National Women’s Law Center, the NAACP, and the American Federation of Teachers — argue the OFCCP is necessary to secure equal access and economic opportunity.
In June, the Department of Justice will have an opportunity to file a brief defending the OFFCP. It shouldn’t.
The Nondelegation Doctrine
As the Supreme Court has held, an agency “literally has no power to act … unless and until Congress confers power upon it.” The nondelegation doctrine enforces this separation of powers principle. Rooted in Article I’s vesting clause, which specifies that legislative power is vested in Congress alone, the nondelegation doctrine preserves the legislative sphere for Congress. Thus, courts have long held that Congress may not give away its lawmaking authority. It must enact statutes that provide an “intelligible standard” to limit and guide agency action.
As our founders recognized, the separation of powers is crucial to protecting individual liberty. When its principles are enforced, the government may not curtail liberty or impose penalties unless each of the three branches acts in concert. Congress must pass a law penalizing certain conduct, the executive must pursue an action against an individual, and the judiciary must find that the individual violated the law. The required involvement of each branch, rather than one unaccountable agency, helps to preserve our liberty.
The OFCCP Is a No-Delegation Case
Oracle is not simply a nondelegation case. It is a case involving no statutory delegation at all. The Labor Department cannot point to any statute that grants it the authority to create the OFCCP.
Supporters of the broad reach of the OFCCP point to President Lyndon B. Johnson’s Executive Order 11246. This amended order simply requires federal contracts to contain a nondiscrimination provision. The order does not contemplate nor suggest any statutory authority for the OFCCP’s expansive enforcement and adjudication apparatus. Of course, an executive order cannot create an agency enforcement mechanism out of whole cloth.
Perhaps recognizing that Executive Order 11246 cannot itself be the basis for aggrandized agency power, defenders of the OFCCP next point to the Procurement Act. But that statute merely authorizes the president to “prescribe policies and directives” to provide the government with an “efficient” procurement system. To effectuate that purpose, the statute authorizes the use of “available property,” and the disposal of “surplus property,” but is silent regarding any supposed power to enforce nondiscrimination provisions against federal contractors.
Congress, as has often been said, does not “hide elephants in mouseholes.” Had it wanted to create a sweeping administrative agency with broad remedial powers, it certainly knew how to do so.
As a number of states that filed a brief in support of Oracle argue, in the Occupational Safety and Health Act, for example, Congress provided for a robust system of administrative adjudication. It specified the Occupational Safety and Health Administration’s investigative capabilities and the exact penalties it could impose, and it provided for the right of judicial review.
The Procurement Act, in contrast, merely conveys Congress’ intent that there be an “economical and efficient” system for federal contracting. It does not mention the requirement that contractors maintain nondiscriminatory employment practices and is silent on the procedures OFCCP should use to ensure compliance.
There is no intelligible principle to guide the creation of an administrative enforcement regime at all. The absence of any discernible standard can only mean one thing: Congress never authorized the OFCCP to create an enforcement mechanism for employment discrimination claims.
In short, it beggars belief to suggest the Procurement Act somehow provides for more robust enforcement powers than does the Occupational Safety and Health Administration. Yet the defenders of the OFCCP must argue just that.
The Sick Chicken Case
The nondelegation doctrine was most famously applied in Schechter Poultry Corp. v. United States, otherwise known as the sick chicken case. The statute at issue, the National Industrial Recovery Act (NIRA), purported to give the president power to “approve ‘codes of fair competition,’” but it did not define “fair competition” nor provide meaningful guidance as to what the codes should contain.
Under NIRA, President Franklin D. Roosevelt adopted a lengthy fair competition code, written by New York poultry butchers. The Schechters were indicted for violating that code and challenged NIRA, arguing Congress could not transfer the authority to write codes of criminal conduct to the executive.
The Supreme Court agreed. The unanimous court found that Congress could not delegate to the president the power to make whatever laws he thought necessary to rehabilitate a trade and industry. In his concurrence, Justice Benjamin Cardozo explained that Congress’ delegation of power to the president to essentially write criminal laws was “delegation running riot.”
Delegation Running Riot Leads to Abuse
The absence of any standard to guide OFCCP enforcement has predictably led to abuse. The OFCCP sets its own rules and then serves as prosecutor, judge, and jury. The agency, for example, has determined there is no statute of limitations for discrimination claims. Further, agencies can pursue a disparate impact claim against a contractor without disclosing the statistical modeling used to evaluate the data and without pursuing testimony from alleged victims.
In the absence of statutory safeguards, regulators have reportedly told contractors, over whom they have power of debarment, “we can ask for anything we want,” and “the judge works for us.” These statements represent a flagrant disregard for the Constitution’s separation of powers.
D.C. and the Amici States are Wrong About OFCCP
The District of Columbia and fellow amici ask the district court to ignore all of OFCCP’s constitutional shortcomings because the agency is supposedly “efficient” at ferreting out workplace discrimination.
But the efficiency of an agency is irrelevant if that agency has no right to exist. The Justice Department should not bless the unconstitutional enforcement regime.
Concerns that equal opportunity will suffer absent this federal agency are likewise unfounded. The federal government is perfectly capable of enforcing the requirements of federal contracts, including nondiscrimination clauses, by pursuing actions for breach of contract in federal court. In addition, both the Equal Employment Opportunity Commission and aggrieved employees can seek relief in federal court for unlawful discrimination under Title VII.
As the amici supporting Oracle point out, state governments are well equipped to enforce equal opportunity through government contracting. State legislatures have “enacted multiple regimes to enforce equal opportunity through government contracting while ensuring that contractors receive due process throughout.” They pursue the same objectives as the OFCCP “without the corresponding intrusions on liberty or the Constitution.” This is not, as the parties supporting the OFCCP argue, a problem in search of a remedy.
It goes without saying that federal contractors must utilize nondiscriminatory employment practices. But the OFCCP is “delegation running riot.”
Any enforcement mechanism must be sanctioned by Congress and may take place only through statutorily prescribed procedures with statutorily authorized remedies. If the executive branch may create its own enforcement mechanism to remedy discrimination, nothing can stop it from single-handedly creating, investigating, adjudicating, and punishing other conduct, too.
Our constitutional safeguards are not so easily tossed aside. The Department of Justice should not support an unconstitutional enforcement regime never contemplated by Congress. It’s high time for the federal courts to say, “enough!”