In Lucia v. Securities and Exchange Commission (Supreme Court of the United States No. 17-130, decided June 21, 2018), the question before the court was whether an Administrative Law Judge (ALJ) of the Securities and Exchange Commission (SEC) had been properly appointed in accordance with the Constitution’s “Appointments Clause.” Under that provision, an officer of the United States could be appointed only by the President, “Courts of Law,” or “Heads of Departments.”
As a result of this decision, President Trump issued an Executive Order entitled “Excepting Administrative Law Judges from the Competitive Service”.
The new Executive Order allows agency heads to directly hire ALJs without going through the OPM selection process. It creates a new excepted service “schedule E” for this purpose. In effect, it means that the head of an agency can appoint people into these positions without going through a competitive examination and selection procedures.
On September 21, 2020, the Office of Personnel Management (OPM) is issuing a proposed rule to implement the Executive Order. The proposed revisions update the rules for hiring Administrative Law Judges.
Previously, appointments to ALJ positions were made through competitive examination and competitive service selection procedures. But, as noted in the Supreme Court decision cited above, at least some ALJs are “inferior Officers” of the United States. This make them subject to the Constitution’s Appointments Clause, which governs who has the authority to appoint these officials.
On July 10, 2018, President Trump signed Executive Order (E.O.) 13843. This Order states “that conditions of good administration make necessary an exception to the competitive hiring rules and examinations for the position of ALJ. These conditions include the need to provide agency heads with additional flexibility to assess prospective appointees without the limitations imposed by competitive examination and competitive service selection procedures.” The Executive Order states that ALJ positions will be in the excepted service.
After the Executive Order was issued, OPM terminated the ALJ competitive service register and its centralized list of eligible ALJ applicants. The rule now proposed by OPM states that any ALJ selected (with the application of veterans’ preference as far as administratively feasible) on or after July 10, 2018, must be appointed by the head of the hiring agency and placed in an ALJ position in the excepted service.
The Federal Register notice requires that comments on the proposed changes must be received on or before November 20, 2020. The ways in which comments may be submitted are outlined in the notice. The notice also outlines numerous other changes that will impact Administrative Law Judges in the excepted service.
