Oracle Invokes Supreme Court Ruling to Attack Labor Department's Discrimination Claims

Oracle headquarters in Redwood Shores. (Photo: Jason Doiy/ALM)

The U.S. Labor Department suit alleging discriminatory practices at Oracle America Inc. should be thrown out after a Supreme Court ruling last term questioned the lawfulness of thousands of administrative judges across the federal bureaucracy, lawyers for the tech company are arguing.

Oracle's lawyers at Orrick, Herrington & Sutcliffe contend there is no currently serving administrative judge law at the Labor Department who can lawfully preside over the case, in which labor regulators contend Oracle's compensation practices discriminate against female, African-American and Asian employees. The agency sued Oracle in January 2017 at the end of the Obama administration.

Oracle's attorneys rested their argument in the Supreme Court's ruling in June in Lucia v. SEC, which set new requirements for how in-house judges are appointed. The ruling carried wide implications, setting up fresh arguments for companies and individual at the U.S. Securities and Exchange Commission and across all federal agencies.

Federal officials moved swiftly to "ratify" the appointments of judges who had been serving at the time of the ruling. In some instances, different judges were picked to hear pending cases. Oracle's legal team contends this maneuvering isn't enough to remedy the problem. They argue the Labor Department's case needs to be dismissed outright and refiled, if deemed appropriate, after the department has lawfully appointed its administrative law judges.

"It is not possible for the department to comply with its constitutional obligation to cure the unconstitutionality of the initial proceedings in this matter simply by reassigning the case to another of its ALJs because at present, there are no constitutionally appointed ALJs in the Department of Labor," Orrick partner Erin Connell and senior counsel Gary Siniscalco said in their latest filing. Siniscalco is co-chair of the firm's equal employment team.

The Labor Department's Office of Federal Contract Compliance Programs is expected to respond Wednesday to Oracle's effort to dismiss the case. A representative declined to comment Tuesday.

Before the Supreme Court court issued its ruling in Lucia v. SEC, U.S. Labor Department Secretary Alexander Acosta ratified all of the agency's administrative law judges, an attempt to head off challenges against the rulings in those courts. The Supreme Court's ruling says agency heads—such as Acosta—do have the power to appoint administrative judges.

"Secretary Acosta's ratification orders merely rubber stamp some other official's determination that these ALJs should be appointed," Oracle's attorneys wrote. They added: "Moreover, the ratification orders themselves make clear the secretary did not consider what he was doing to be an appointment."

Reassigning the case to another in-house judge "means substituting one unconstitutional proceeding for another, resulting in Oracle (and OFCCP) spending significant additional time and resources re-litigating this matter just to have it start again once the constitutional questions are resolved.”

The case against Oracle is one of several big carryover matters from the Obama-era agency. In another pending case, against JPMorgan Chase & Co., an agency lawyer asked the administrative law judge to reassign the dispute to a different judge.

"In Lucia, the court held that, where an appropriate and timely appointments clause challenge has been raised, a new hearing before another ALJ who has been properly appointed and has not previously adjudicated the matter is an appropriate remedy," Labor Department attorney Alexander Kondo wrote in a filing on Sept. 4.

Kondo noted Acosta’s move to ratify the appointments of existing DOL judges. All Labor Department in-house judges "are now properly appointed," Kondo wrote. "Reassignment will be in the service of helping ensure that litigation of this case proceeds to the merits as expeditiously as possible," Kondo said in the filing.

A Labor Department judge on Oct. 30 reassigned the JPMorgan case to a different judge.



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