March 16, 1978



## 78-17 MEMORANDUM OPINION FOR THE ACTING DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET

Reorganization Plan No. 1 of 1978— Equal Employment Opportunity Commission— Transfer of Function

This responds to your request for our opinion concerning two legal questions raised by § 3(b) of Reorganization Plan No. J of 1978, 14 Weekly Comp. Pres. Doc. 398, 43 F.R. 19807. Under § 3(a) of the Plan, the responsibility for enforcement of equal opportunity in Federal employment, presently lodged in the Civil ServiceCommission (CSC), would be transferred to the Equal Employment Opportunity Commission (EEOC), an executive branch agency.1 Section 3(b) of the Plan would empower the EEOC to delegate to the CSC or a successor agency“ the function of making a preliminary determination on the issue of discrimination,” whenever a Federal employee has alleged in a proceeding before the EEOC that his rights under § 717 of the Civil Rights Act of 1964 have been violated.2 Your questions arise because it is contemplated that the CSC’s successor agency for these purposes would be an independent regulatory agency exercising quasi-judicial powers whose members would not serve at the pleasure of the President. The first question is whether the independence of this successor agency would be affected by the transfer to it of the responsibility for making a preliminary determination of the merits of a Federal employee’s allegation. The task of making such determinations is purely adjudicatory. Under the rationale of the most recent Supreme Court decisions dealing with this general question,

'T h is office has taken the position, m ost recently in o u r letter to you o f F ebruary 7. 1978, that com m issioners o f the E E O C serve at the pleasure o f (he President and that the A gency is an, executive— as opposed to an independent regulatory— agency. 2(b) T he Equal E m ploym ent O pportunity C om m ission m ay delegate to the C ivil Service C om m ission or its successor the function o f m aking a prelim inary determ ination on the issue o f discrim ination w henever, as a part o f a com plaint or appeal before the C ivil S ervice C om m ission on other grounds, a Federal em ployee alleges a violation o f § 717 o f the C ivil R ights Act o f 1964. as am ended (42 U.S.C. 2000e-16), provided that the Equal E m ploym ent O pportunity C om m ission retains the function o f m aking the final determ ination.

69assignment of an adjudicatory function to an agency then recognized to be

“ independent” would not alter its independent status in any way. Cf., Wiener

v. United States, 357 U.S. 349 (1958). We see no basis for a different
conclusion here.3 The second question is whether limiting the successor agency to making a preliminary determination on the merits of the employee’s allegation while retaining in the EEOC the “ function of making the final determination concerning such issue of discrimination . . . ” would affect the independence of the successor agency. In other words, does the placement of power in an executive agency to review and overturn a preliminary decision reached by an independent agency impinge on the independent status of the latter? We think the answer to this question is “ n o .” The proposition that executive agencies may be empowered by Congress to review and adopt or overturn decisions made by “ independent” agencies or hearing examiners without affecting the independent status of either is well established. For example, the President is authorized by statute to review and reverse certain decisions made by the Civil Aeronautics Board; yet we have no doubt that members of that Board may be removed only for cause under 49 U.S.C. § 1321. More recently, Congress has given the Secretary of Energy the power to implement or reject certain regulatory actions formulated by theFederal Energy Regulatory Commission, an independent agency.4 The conference report indicates that Congress believed that such review power in the Secretary would not affect the independent status of the Commission. See H. Rept. No. 539, 95th Cong., 1st sess., at 78 (1977). Given the adjudicatory nature of the decisions to be reviewed by the EEOC under § 3(b), we think the history of the use of independent administrative law judges and hearing examiners under the Administrative Procedure Act (APA) of 1946 supports our position. Under § 11 of that Act,5 these officers were specifically made “ independent . . . in their tenure and compensation.” 6 One of the major functions performed by administrative law judges is to preside over formal APA proceedings, 5 U.S.C. § 556(c), and then to make the initial decision or recommendation regarding the disposition of the matter before them, 5 U.S.C. §§ 554(d) and 557(b). This decision may then be reviewed by the agency, often an executive agency, which has “ all the powers which it would have in making the initial decision . . .. ” 5 U.S.C. § 557(b). Thus, to conclude that EEOC review of preliminary decisions made by asuccessor agency pursuant to § 3(b) of the Plan would jeopardize the independence of the latter agency would cast grave doubt on the principle under which

3W e drew the sam e conclusion w ith regard to this q uestion in our m em orandum to W . H arrison W ellford o f February 23, 1978. 4D epartm ent o f E nergy O rganization A ct, § 4 0 2 (c), Pub. L. N o. 95-91, 91 Stat. 565. 5Section II is now codified in various sections o f 5 U .S .C ., nam ely, §§ 1305, 3105, 3344, 4 3 0 K 2 X E ), 5362, and 7521. 6A dm inistrative P rocedure A ct— L egislative H istory, S. D oc. N o. 248, 79th C o n g ., 2d sess., at 215 (1946).

70administrative law judges and similar hearing officers have performed equivalent adjudicatory functions for more than three decades during which their independence has never been doubted, although subject to administrative
review. Thus, we conclude that the delegation under § 3(b) of the Plan will not raise questions as to the independent status of the CSC successor agency.

J o h n M . H a r m o n Assistant Attorney General

Office o f Legal Counsel

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