ABM Industries Challenges Labor Department's Constitutional Authority

ABM Industries Inc, a prominent janitorial services company, has initiated legal action against the U.S. Department of Labor (DOL), challenging the constitutionality of its administrative proceedings. This lawsuit, filed on September 10, 2024, in a Houston federal court, marks a significant development in the ongoing debate over the authority of federal agencies.

The core of ABM's argument centers on two key points. Firstly, the company asserts that the DOL's in-house proceedings violate its constitutional right to a jury trial. Secondly, ABM contends that the administrative judges within the Office of Federal Contract Compliance Programs (OFCCP) are improperly shielded from presidential removal.

This legal challenge stems from a 2021 case where the OFCCP accused ABM of discriminatory hiring practices, favoring Hispanic applicants over white or Black candidates. ABM has consistently denied these allegations.

The OFCCP, established in 1965, plays a crucial role in enforcing executive orders that prohibit federal contractors from engaging in discriminatory practices based on race, sex, and other protected characteristics. These orders also protect workers from retaliation for engaging in protected activities.

ABM's lawsuit is not an isolated incident. It follows similar legal actions by Comcast and Perdue Farms in August 2024. These cases collectively challenge the constitutionality of Labor Department proceedings, drawing inspiration from the June 2024 U.S. Supreme Court ruling in Jarkesy v. U.S. Securities and Exchange Commission.

The Jarkesy decision, a landmark case decided on June 23, 2023, found that the SEC's practice of imposing civil penalties in administrative financial fraud cases violates the Seventh Amendment's guarantee of a jury trial. This amendment, ratified in 1791, has long been a cornerstone of the American legal system.

"The SEC's practice of imposing civil penalties in administrative financial fraud cases violates the guarantee of a jury trial in the Seventh Amendment of the U.S. Constitution."

ABM's lawsuit further argues that OFCCP administrative judges, who wield executive power, should be more directly accountable to the president. Currently, these judges can only be removed for cause after a recommendation from a federal civil service board not directly controlled by the White House.

This case, officially titled ABM Industry Groups v. U.S. Department of Labor (No. 4:24-cv-03353), is being heard in the U.S. District Court for the Southern District of Texas. ABM is represented by attorneys from Morgan Lewis & Bockius, one of the world's largest law firms, and Fox Wang & Morgan.

As of September 10, 2024, the Labor Department had not provided an immediate response to requests for comment on this developing story. The outcome of this case could have far-reaching implications for the structure and authority of administrative proceedings across various federal agencies.