Kenric Steel, LLC, a New Jersey based steel fabrication company, filed a complaint in the U.S. District Court of New Jersey alleging that the Occupational Safety and Health Review Commission (OSHRC), an independent federal commission, should not decide whether Kenric Steel, LLC has to pay $348,000 in penalties for alleged violations of the Occupational Safety and Health Act (OSH Act). See Kenric Steel LLC v. United States Department of Labor, Occupational Safety and Health Administration et. al, Case Number 1:24-cv-09221, US Dist. Court NJ (Sept. 17, 2024). The penalty assessed includes citations for willful violations.
Kenric Steel asked the court to block the OSHRC proceedings, issue a declaratory judgment that the OSHRC’s structure is unconstitutional, and issue a court order permanently blocking U.S. Secretary of Labor Julie A. Su (Su) and Solicitor of Labor Seema Nanda (Nanda) from enforcing the proposed penalties against the company.
Specifically, Kenric Steel, invoking the Supreme Court’s recent SEC v. Jarkesy, 144 S. Ct. 2117 (June 27, 2024) holding, raised the following arguments against the OSHRC’s authority to hold a hearing or issue penalties:
- The structure of the OSHRC, that operates as a two-tiered administrative court deciding contests, citations and penalties issued by the Occupational Safety and Health Administration (OSHA), violates the U.S. Constitution because it is part of the Executive Branch and not the Judicial Branch.
- OSHRC members are unconstitutionally shielded from removal due to the staggered, six-year terms, and OSHRC’s administrative law judges are unconstitutionally appointed because they are named by the commission chairperson instead of the U.S. President.
- U.S. Secretary of Labor Su and Solicitor of Labor Nanda are prosecuting violations found by OSHA in breach of the OSH Act, because neither the Attorney General nor anybody in the U.S. Department of Justice supervises or directs OSHRC proceedings. Principal Officers such as ambassadors, judges and department heads must be appointed by the President “by and with the Advice and Counsel of the Senate.” U.S. Constitution, Article II, §2, cl. 2.
- Every federal official whose position is “established by law” and who exercises “significant authority” must be appointed under the Appointments Clause. See Buckley v. Valeo, 424 U.S. 1, 118, 126, 132 (1976).
- The OSH Act requires that the Attorney General supervise and direct OSH Act litigation, not the Secretary or the Solicitor of Labor.
The Kenric Steel case highlights several concerns regarding the appointment of administrative law judges within the OSHRC who are not overseen by the Judicial Branch in the wake of the Supreme Court’s SEC v. Jarkesy decision. If Kendric Steel is successful with its Complaint, the next administration may be forced to review the OSHRC’s current structure and/or move the OSHRC to the Judicial Branch for supervision. In the end, this case has the potential to disrupt the OSHRC review process that has been in place for over five decades.
