Supreme Court Weighs Whether Labor Department Can Fine Farm Employers Through Its Own Judges
The United States Supreme Court heard arguments on Tuesday, 10 November, in a case that could curb how the federal government punishes employers who mistreat seasonal farmworkers.
The case, Department of Labor v. Sun Valley Orchards, asks whether the Labor Department may order a farm to pay penalties and back wages through its own administrative judges — or whether it must take the employer to a federal court instead. Nothing has been decided yet: Tuesday was only the argument, and a decision is expected by the end of June 2027.
The farm and the $550,000 order
Sun Valley Orchards, a family-owned farm in New Jersey, hired temporary workers under the H-2A seasonal farmworker visa programme in the 2015 season. The programme allows American agricultural employers to recruit foreign workers for seasonal work, on condition that they meet federal requirements on wages, housing, transport and working conditions.
After an investigation, the Labor Department found a series of violations. Workers were denied access to a kitchen, charged for food and drinks, transported in unsafe vehicles, housed in substandard conditions and sent home before receiving the work they had been promised. Investigators also found that the farm had pressed workers to give up their rights under the programme.
A Labor Department administrative law judge heard evidence over four days and ordered the farm to pay $344,945.80 in back wages and $211,800 in civil penalties — more than $550,000 in total. The department’s Administrative Review Board upheld the order. The farm later went out of business.
A long road to the Supreme Court
Sun Valley challenged the order in federal court, arguing that the dispute belonged before a judge and jury rather than an agency tribunal. A district court sided with the Labor Department, but in July 2025 the US Court of Appeals for the Third Circuit reversed that ruling.
The appeals court relied on the Supreme Court’s 2024 decision in SEC v. Jarkesy, which held that the government must bring certain fraud claims in federal court rather than before its own in-house judges. The Third Circuit concluded that the farmworker claims resembled a breach-of-contract suit and therefore had to be heard by a federal judge.
The Supreme Court agreed in April to decide two questions: whether Article III of the Constitution bars the department from adjudicating the claims, and whether the H-2A statute itself authorises it to do so.
A sceptical bench
During Tuesday’s argument, the court’s conservative majority appeared sceptical that the department’s in-house judges could impose the penalties, Bloomberg Law reported. Justice Brett Kavanaugh took the most aggressive stance, questioning whether the government could seek any such penalties outside a courtroom. Justice Clarence Thomas said the case could not rest solely on the federal government’s immigration authority.
Chief Justice John Roberts and Justice Amy Coney Barrett appeared cautious about giving the executive branch broad adjudication powers. But the court’s liberal justices pushed back: Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson said immigration was central to the case, whatever the contractual disagreement.
The Labor Department, led by Secretary Lori Chavez-DeRemer, argued that the H-2A programme imposes obligations on employers precisely to protect domestic workers from being undercut by foreign labour. The farm’s lawyer, Robert Johnson, argued that the dispute rests on differences in a contract and should be decided by a federal court.
What is at stake
The ruling will shape enforcement far beyond one New Jersey farm. If the court sides with Sun Valley, the Labor Department — and potentially other agencies — could be forced to bring penalty cases in federal court, a slower and more expensive route that could weaken enforcement of farmworker protections.
The case also lands amid a broader fight over agency power. Since Jarkesy, the court has steadily narrowed the ability of federal agencies to decide disputes and impose fines through their own tribunals, and Tuesday’s argument suggested that at least some justices are ready to go further.
What happens next
The justices will now deliberate in private, with a decision expected by the end of June 2027. Until then, the $550,000 order against Sun Valley remains in limbo — and so does the question of who gets to decide when a business breaks federal law.
