In 2022, Aqua Dental, a Texas-based dental practice, terminated an employee who delivered a profanity-laced rant to a coworker. The National Labor Relations Board (NLRB) then filed an administrative action alleging that Aqua Dental committed an “unfair labor practice” by firing the employee. The NLRB brought the accusation before its own in-house court, which ruled against the practice.
An NLRB administrative law judge (ALJ) imposed a slew of remedies, including a mandate that the employee be reinstated and an order that Aqua Dental compensate her with backpay and relief “for any other direct or foreseeable pecuniary harms incurred” as a result of her termination. In other words, Aqua Dental was told it owed not just back pay but any other costs the firing could possibly be traced to.
Federal labor law allows the Board to reinstate employees. The Board now claims it can go further—without authorization from Congress—and charge employers for other financial setbacks that followed the firing. Congress never gave it that power.
The Constitution did not give the Board the power to decide the case by itself, either. A dispute between two private parties over money belongs in a courtroom, with an independent judge and a jury. The Supreme Court confirmed in 2024’s SEC v. Jarkesy that agencies get no exception.
Aqua Dental filed a petition for review in the U.S. Court of Appeals for the Fifth Circuit, represented free of charge by Pacific Legal Foundation, asking the court to restore its right to a neutral judge and a jury, and enforce proper limits on the NLRB’s authority.
No one should be forced to defend a case to an agency that serves as accuser, prosecutor, and judge. A win for Aqua Dental would send these disputes to where they rightfully belong: a courtroom where both sides must prove their case before a neutral judge and jury.
What’s At Stake?
- The Seventh Amendment guarantees the right to a jury trial when the government seeks civil penalties for alleged violations of the law. The government cannot sidestep that right by assigning those disputes to an administrative tribunal where an agency investigates, prosecutes, and decides the case.
- Federal agencies can exercise only the authority Congress gives them. When an agency stretches that authority to award damages Congress never authorized, it is rewriting the law rather than enforcing it.
