Labor Secretary Alex Acosta. Photo: Diego M. Radzinschi/ALM

Oracle America Inc. must face pay discrimination claims brought by the U.S. Labor Department, despite a U.S. Supreme Court ruling last term that cast doubt on the appointment of administrative law judges across the federal government, an agency judge has ruled.

Oracle’s lawyers at Orrick, Herrington & Sutcliffe had pointed to the Supreme Court’s decision in Lucia v. SEC, in seeking the dismissal of Labor Department claims.

The high court’s ruling said administrative judges at the U.S. Securities and Exchange Commission were “officers” and had not been properly appointed. The ruling raised questions about how administrative law judges, including the dozens of in-house judges at the Labor Department, are appointed.

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The Labor Department’s contract compliance office sued Oracle in 2017, arguing its compensation practices discriminate against female, African-American and Asian employees. Oracle was one of several big-company defendants—including JPMorgan Chase & Co. and Google—that the Labor Department sued at the end of the Obama administration. Oracle has called the suit “politically motivated, based on false allegations, and wholly without merit.”

Before the Supreme Court’s decision in June, Labor Department Secretary Alexander Acosta ratified all the existing in-house judges in an attempt to sure up the lawfulness of their appointments. The Lucia decision gave the power to agency heads, such as Acosta, to appoint administrative law judges.

Oracle’s lawyers challenged Acosta’s ratification, saying his move carried “none of the necessary hallmarks for a proper appointment.” The Orrick team alleged Acosta had “merely rubber stamped” the conclusion that currently sitting administrative law judges, known widely as ALJs, should be appointed.

Labor Department administrative Judge Richard Clark said in his Jan. 11 ruling that Acosta’s ratification and the other issues raised by the company’s attorney “should not prevent this matter from proceeding.”

“Because Secretary Acosta had the authority to complete the appointment of DOL ALJs and his December 21, 2017 letters did so, any Appointments Clause defect has been cured,” Clark wrote.

Clark said that the “Appointments Clause requires only that the appointment be made by the head of department, not that the head of department conform to a particular process to make such an appointment.”

Orrick partner Erin Connell in San Francisco, a lawyer for Oracle, declined to comment.


Read the ruling denying Oracle’s challenge:



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