District Court Rejects Constitutional Challenge To DOL Adjudication Of Whistleblower Claims

On September 23, 2025, the U.S. District Court for the Eastern District of Virginia issued a decision dismissing constitutional challenges to Department of Labor Administrative Law Judge (ALJ) adjudication of whistleblower claims under Section 806 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A (SOX). This District Court's narrow reading of the Supreme Court's recent decision in Jarkesy may prove critical to agency enforcement of federal whistleblower and other employment laws.

For context, on June 27, 2024, the Supreme Court issued its decision in S.E.C. v. Jarkesy, in which the Court threw out a $300,000 penalty awarded to the SEC because the decisionmaker was an agency Administrative Law Judge (ALJ), and not a federal judge and jury. The Jarkesy decision's interpretation of the Seventh Amendment – guaranteeing a right to a jury trial for "Suits at common law" – and Article III of the Constitution sent shockwaves throughout labor and employment law. A dizzying array of challenges sprang up almost immediately in every conceivable forum as employers started raising Jarkesy arguments before ALJs, agency appellate bodies and in federal district and circuit court, claiming the ALJs in the DOL and NLRB could no longer decide whether employees were entitled to relief under federal labor laws.

The Jarkesy Court's Seventh Amendment analysis first looked at whether the cause of action brought and remedies sought resemble those historically available in courts of common law. If so, then the Seventh Amendment presumptively applies and requires a jury trial. In the case of the SEC's enforcement action, the cause of action resembled common law fraud actions, and the remedies – monetary penalties – were an example of a quintessential legal remedy. The Court then went on to discuss the "public rights" exception to the Seventh Amendment. Whereas Article III of the Constitution vests "[t]he judicial Power of the United States" in Article III courts (Art. III § 1), such that only Article III courts could adjudicate federal law disputes involving "private rights," the Supreme Court has historically allowed executive or legislative adjudication of disputes involving "public rights." Under a 1977 Supreme Court decision, Atlas Roofing Co. v. OSHA, this exception had been read broadly to allow Congress to delegate enforcement under almost any statutory scheme to ALJs. However, in Jarkesy, the Court rejected the broad reading of Atlas Roofing and made clear that the public rights exception would be applied narrowly to those matters that "historically could have been determined exclusively by the executive and legislative branches," such as cases involving "the collection of revenue; aspects of customs law; immigration law; relations with Indian tribes; the administration of public lands; and the granting of public benefits."

Comcast Corp. v. DOL arose from a dispute over executive compensation. Complainants Lawrence Gloss and Travis Rosiek alleged that Comcast promised them a lucrative incentive compensation deal as part of a corporate acquisition, and that Comcast was required under applicable securities laws and regulations to disclose the incentive compensation to shareholders. During the course of their employment, Gloss and Rosiek contend they complained about Comcast's failure to pay the incentive comp as well as its failure to report the incentive comp, leading to a series of retaliatory actions culminating in their constructive discharge. Gloss and Rosiek filed administrative complaints under Section 806 of the Sarbanes-Oxley Act of 2002 (SOX 806), seeking to recover the alleged incentive compensation payments only. SOX 806 protects employees of publicly traded companies (like Comcast) from retaliation if they complain, either internally or to the government, about what they reasonably believe is a violation of a securities law, criminal wire, bank, or mail fraud, any rule or regulation of the SEC, or any other federal law related to fraud against shareholders. The statute requires complainants like Gloss and Rosiek to file complaints with the Occupational Safety and Health Administration (OSHA) and proceed through administrative investigation and adjudication before they have a right to proceed before a jury in federal court. As Gloss and Rosiek did not opt for a jury trial, Comcast found itself stuck in the DOL administrative process.

Instead of proceeding with this administrative adjudication process, Comcast chose a different route. It sued the DOL before the ALJ could hold a hearing, arguing in part that under the Supreme Court's decision in Jarkesy, the Seventh Amendment and Article III of the Constitution requires SOX 806 claims to be tried in federal court before a jury, and that the ALJ proceedings were thus unconstitutional.

The District Court ruled for the Government on the merits of Comcast's Jarkesy arguments, holding that the payments sought by Gloss and Rosiek would be payments "awarded for lost compensation . . . or in lieu of reinstatement," and thus akin to equitable monetary payments under Supreme Court case law. SOX 806 specifically notes that its remedies are designed "to make the employee whole," 18 U.S.C. § 1514A(c)(1), which the Court relied on to conclude the remedies were equitable in nature. The Court further noted the SOX 806 cause of action, a retaliation claim for an unlawful termination, was not a claim available at 18^th-century common law, but rather a creature of the 20^th century. Accordingly, the Seventh Amendment did not apply.

Turning to the Article III "public rights" question, the Court discussed the importance of whistleblower protections in Congress's efforts to "safeguard public investors and restore trust in financial markets," which thus "impl[ied] a broader public right." The District Court did not grapple at all with Jarkesy's suggestion that the public rights doctrine should be cabined to those areas historically within the complete control of the legislative or executive branch. Nor did the District Court question why the SEC's enforcement actions at issue in Jarkesy, which were also designed to safeguard public investors and the financial markets, were "private" in nature, while whistleblower claims, brought by private individuals, can involve "public rights." Sidestepping these issues, the District Court reasoned that SOX 806 was "self-consciously novel" in both "concept and execution," and could not trace "its ancestry to the common law," making it a matter of public right that could be adjudicated by an ALJ.

The District Court's opinion in Comcast Corp. v. DOL is bound to be controversial and the subject of continued litigation. For now, DOL adjudication of SOX and other whistleblower statutes have the green light to proceed. However, there are many reasons to think this won't last for long. Notably, the Court was only confronted with one type of remedy available under SOX, and it did not decide whether more common-law-like remedies, including non-economic compensatory damages available under SOX or liquidated or punitive damages available under other whistleblower laws, implicate the Seventh Amendment. Furthermore, not every statute has the "make whole" language in SOX 806, making it possible that employment laws lacking such language will implicate the Seventh Amendment. Finally, the Court's broad reading of the public rights doctrine stands in stark contrast with the historical analysis performed by other courts interpreting Jarkesy, such as the Third Circuit in Sun Valley Orchards . Accordingly, employers facing whistleblower claims before a DOL ALJ should ensure they are working with counsel to assess the viability of constitutional challenges and strategize on the best path to raise them.

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