This article was authored by Jack Beermann, Professor of Law and Harry Elwood Warren Scholar at Boston University School of Law.
This article first appeared in the Regulatory Review's series on "Prioritizing Accessibility and Clarity in Agency Actions" that focuses on the ACUS Recommendations adopted at the June 2018 Plenary Session. Reposted with permission. The original may be found here, and the Regulatory Review's entire series may be found here.
Administrative law judges (ALJs) are the workhorses of the administrative state. They preside over thousands of hearings annually in areas such as disability benefits, international trade, taxation, environmental law, occupational safety, and communications law, to name a few. There are nearly 2,000 ALJs employed by 28 agencies in the federal government, as compared to 870 authorized Article III federal judgeships.
Keeping this corps of ALJs fully staffed requires numerous appointments annually. Last year, in a decision that likely applies to most if not all federal ALJs, the U.S. Supreme Court held in Lucia v. SEC that SEC adjudicators are “officers of the United States” who must be appointed in accordance with the Constitution’s Appointments Clause. Assuming that ALJs are “inferior officers,” this clause allows Congress to delegate the appointment of ALJs to the President alone, to department heads, or to courts of law. Shortly after the decision in Lucia, President Trump issued an executive order that made significant changes to the ALJ hiring process.
Before Lucia and the executive order, most ALJs were already appointed by department heads, after a process administered by the Office of Personnel Management (OPM) that included a competitive examination and point rating system with a significant preference for veterans. Under the OPM process—which did not take subject-matter expertise into account—the three top-scoring applicants were placed on a list of eligible candidates. Agencies could hire only from that list unless they decided to reject all three candidates and request a new list or hire an incumbent ALJ away from another agency.
The perceived defects in the OPM process included the inflexibility of having to choose from the list of three, the lack of consideration of subject-matter expertise, problems finding ALJ candidates who met the agencies’ geographical requirements, and the effects of the veterans’ preference, which meant that in many cases veterans without the desired experience were the only candidates available.
As a matter of policy, Lucia has appeared to inspire dramatic changes to the appointment of ALJs. The President’s subsequent executive order placed ALJs in what is known as the “excepted service” and instructed each agency to devise and administer a process for hiring its own ALJs. The order also required agencies “to follow the principle of veteran preference as far as administratively feasible,” which in operation is a more flexible preference than the points that were added to veterans’ scores by OPM.
The reforms effectuated by the executive order were welcomed by many agencies that for decades felt hamstrung by the OPM hiring process. Many agencies acted very quickly, formulating and announcing new procedures for hiring ALJs when the ink on the executive order was barely dry. In fact, most agencies had been sidestepping the OPM process for years, hiring incumbent ALJs away from other agencies, mainly the U.S. Social Security Administration. The new process will allow agencies to hire their own ALJs directly without their desired candidates first needing to go through the OPM process, get hired by another agency, and then be hired away as a transfer.
The Administrative Conference of the United States (ACUS) retained me and Jennifer Mascott, an assistant professor of law at Antonin Scalia Law School, as consultants to investigate the ALJ hiring process and formulate proposed recommendations for agencies who now must construct new ALJ hiring processes. In the middle of our project, Professor Mascott took a leave of absence from her faculty position because she was appointed as Deputy Assistant Attorney General in the Office of Legal Counsel in the U.S. Department of Justice, so I completed the work on my own. She had by then, however, formulated a set of proposed recommendations which were very important to the final product.
Our underlying research, which included interviews with officials in agencies that employ the vast majority of ALJs, revealed a variety of views on the best process and hiring criteria for ALJs. On hiring procedures, most agencies intend to involve incumbent ALJs, including the chief ALJ, in a process that includes advertising openings on USAJobs, committee screening of resumes, interviews, reference and background checks, and perhaps review of writing samples. Recommendations for individuals to hire are then to be presented to the department head, or to the agency head—or heads—in the case of an independent agency. Only one agency, the U.S. Department of Labor, intends to present a list of candidates to the department head after a screening process involving the deputy secretary and a career attorney in the department’s ethics office. Agencies with very small numbers of ALJs may act less formally and hire from within, without advertising open positions or formulating and publishing procedures and criteria in advance.
On the substantive issue of hiring criteria, all agencies agreed with the executive order’s statement that “ALJs must display appropriate temperament, legal acumen, impartiality, and sound judgment.” The most significant area of variation across agencies concerns the relative importance of familiarity with the particular agency’s caseload. Some officials believe that this is an important criterion for ALJ hiring, but others think that litigation and dispute resolution experience is more important. Some expressed the concern that experience at the agency itself might suggest bias in favor of the agency. Although some of these views may be idiosyncratic to the particular officials we interviewed, it seems to me that much of the variation in hiring criteria reflects differences in the policies and needs of the agencies involved.
In light of the diversity of views among agencies, and ACUS’s determination not to make recommendations that might appear to intrude on agency discretion over ALJ hiring, both the initial recommendation that we proposed to ACUS and the final recommendation that the ACUS Assembly adopted consist of relatively modest suggestions to help agencies exercise their ALJ hiring authority.
The final ACUS recommendation contains four elements. First, it encourages agencies to publicize their ALJ openings on the government-wide employment website, their own websites, and websites that will reach a diverse range of candidates. Second, the ACUS recommendation encourages agencies to formulate and publish ALJ selection criteria. Third, it encourages agencies to develop procedures to review and assess ALJ applications. Finally, it recommends that the guidelines and procedures be designed “to ensure the hiring of ALJs who will carry out the functions of the office with impartiality and maintain the appearance of impartiality.”
Although this last element of the recommendation is the least concrete, it is, in my view, the most important and presents the greatest challenge. The smooth functioning of many benefits programs and regulatory regimes depends to a great degree on the availability of trustworthy and efficient administrative adjudicators. Although moving the hiring process into the agencies themselves will have salutary effects, it presents the danger of politicization, especially since the Lucia decision mandates the involvement of agency heads who are politically appointed.
Politicization, in turn, could threaten the efficiency and perceived impartiality of the adjudicatory system. If the public loses confidence in administrative adjudication, or if the efficiency of the system suffers, the consequences could be disastrous. My conversations with numerous agency officials, as well as my review of the hiring plans announced by several agencies soon after the executive order was issued, are very reassuring. They indicate a continued commitment to hiring highly qualified ALJs with the necessary integrity to maintain both actual and perceived impartiality. Only time will tell if this commitment bears the desired fruit.