Date: Sep 14, 2026

AIR 21 Review: No Issue-Exhaustion Under 29 C.F.R. § 1979.110(a), and No Vacatur for Unconstitutional ALJ Removal Protections Without Collins Harm

1. Introduction

Corr Flight S. v. Dept of Labor (5th Cir. Sept. 10, 2026) arises from an AIR 21 whistleblower dispute between Corr Flight S. d/b/a Nicholas Air (a pilot-management company) and its former captain-in-training/observer, Colin DeBuse. DeBuse reported alleged flight-safety violations by Captain Stacey Lee and said he would not fly with Lee. Corr Flight responded by placing DeBuse on unpaid leave and later terminating him.

The Department of Labor adjudication resulted in an Administrative Law Judge (ALJ) award of limited back pay (for the unpaid-leave period) plus fees/costs, which the Administrative Review Board (ARB) affirmed. Corr Flight petitioned the Fifth Circuit for review.

The petition presented two principal issues:

Whether the ALJ’s “two-layer” removal protection violated the Constitution, and if so, whether that required vacating the ALJ’s order.
Whether the ALJ/ARB erred in holding that DeBuse engaged in protected activity that contributed to his unpaid leave.

2. Summary of the Opinion

The Fifth Circuit denied Corr Flight’s petition for review on two independent procedural/substantive paths:

Although the court accepted (consistent with Fifth Circuit precedent) that the ALJ removal protections are unconstitutional, Corr Flight was not entitled to vacatur because it failed to show “harm” under the framework derived from Collins v. Yellen and subsequent Fifth Circuit cases.
On the AIR 21 merits, the ALJ had two independent bases for awarding back pay. Corr Flight challenged only one (refusal-to-fly), but did not challenge the other (the protected report to management). Because the unchallenged ground independently supported the order, the petition was denied without reaching the disputed alternative rationale.

The court also rejected Corr Flight’s suggestion that the petition was jurisdictionally premature merely because a fee petition remained pending.

3. Analysis

3.1 Precedents Cited

Finality and Jurisdiction Despite a Pending Fee Petition

Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988): The court relied on Budinich’s bright-line rule that a merits decision is final and appealable even if attorney’s fees remain unresolved, characterizing fees as “collateral.”
Peacock v. United States, 597 F.3d 654 (5th Cir. 2010): Cited for the Fifth Circuit’s application of Budinich where fees remained pending in the district court.
Fluor Constructors, Inc. v. Reich, 111 F.3d 94 (11th Cir. 1997): Cited for extending Budinich’s collateral-fee principle to appeals from administrative agencies.

Influence on the decision: These cases allowed the court to proceed to the merits under 49 U.S.C. § 42121(b)(4)(A), rejecting Corr Flight’s own suggestion that jurisdiction was lacking due to unresolved fees.

Standard of Review for ARB Orders Under the APA

Ameristar Airways, Inc. v. Admin. Rev. Bd., 771 F.3d 268 (5th Cir. 2014): Confirmed the APA framework: legal conclusions reviewed de novo; factual findings reviewed for substantial evidence.

Issue Exhaustion (and When It Is Not Required)

Sims v. Apfel, 530 U.S. 103 (2000): Provided the key distinction between exhausting “claims” (pursuing administrative remedies) and exhausting “issues” (raising particular arguments), holding that issue exhaustion is not required where regulations are silent.

Influence on the decision: The court held that 29 C.F.R. § 1979.110(a) did not expressly impose issue exhaustion, so Corr Flight did not forfeit its constitutional removal-protection argument by failing to raise it to the ARB.

Structural Constitutional Claims and Administrative Fora

Carr v. Saul, 593 U.S. 83 (2021): Cited for the proposition that agency adjudications are typically ill-suited to resolve structural constitutional challenges.
Traffic Jam Events, L.L.C. v. Fed. Trade Comm'n, No. 21-60947, 2025 WL 1904566 (5th Cir. July 10, 2025): Cited for rejecting forfeiture where an agency could not have remedied an Appointments Clause problem if raised earlier.

Influence on the decision: These authorities reinforced the court’s refusal to impose judicially-created issue exhaustion for Corr Flight’s constitutional argument.

Appointments Clause, Inferior Officers, and Two-Layer Removal Protections

Jarkesy v. SEC, 34 F.4th 446 (5th Cir. 2022), aff'd on other grounds, 603 U.S. 109 (2024): Established (in this circuit) that ALJ removal protections can violate the Constitution.
Space Exploration Technologies Corporation v. National Labor Relations Board, 151 F.4th 761 (5th Cir. 2025): Cited for classifying certain ALJs as “inferior officers,” deeming the two-layer removal scheme unconstitutional, and emphasizing that retrospective relief requires a causal link between the constitutional violation and the outcome.

Influence on the decision: The Department conceded unconstitutionality under Fifth Circuit law. The contested question became remedy—whether Corr Flight was entitled to vacatur without showing harm.

Remedy for Unconstitutional Removal Protections: Harm Requirement

Collins v. Yellen, 594 U.S. 220 (2021): Central to the remedy analysis; the Supreme Court found a removal restriction unconstitutional but did not automatically set aside agency action absent a showing of harm connected to the restriction.
Cmty. Fin. Servs. Ass'n of Am., Ltd. v. Consumer Fin. Prot. Bureau, 51 F.4th 616 (5th Cir. 2022), rev'd and remanded on other grounds, 601 U.S. 416 (2024), reinstated in part by, 104 F.4th 930 (5th Cir. 2024): Cited for distilling Collins into a three-part harm showing: (1) presidential desire to remove, (2) perceived inability due to the restriction, and (3) nexus to challenged actions.

Influence on the decision: These cases drove the holding that Corr Flight could not obtain vacatur because it sought backward-looking relief but offered no evidence/argument satisfying the Collins-derived harm factors.

Appellate Forfeiture and Independent Grounds

Rollins v. Home Depot USA, 8 F.4th 393 (5th Cir. 2021): Cited for the rule that a party forfeits an argument by failing to adequately brief it.
United States v. Real Prop. Located at 14301 Gateway Blvd. W., 123 F.3d 312 (5th Cir. 1997) (per curiam): Cited for the principle that an appellate court will not reverse if the judgment can be affirmed on any ground.

Influence on the decision: Because Corr Flight did not challenge the ALJ’s first protected-activity theory (reporting safety violations), the Fifth Circuit treated that ground as dispositive and declined to reach the contested refusal-to-fly theory.

3.2 Legal Reasoning

(a) Jurisdiction and Finality

The court confirmed jurisdiction under 49 U.S.C. § 42121(b)(4)(A) and held that an unresolved attorney-fee petition does not defeat finality. Fees are collateral to the merits under Budinich v. Becton Dickinson & Co. and related authority.

(b) Constitutional Removal Protections: Unconstitutional, But No Vacatur Without Harm

The Fifth Circuit accepted that, under circuit precedent, the ALJ removal scheme is unconstitutional. It then separated: (i) preservation/forfeiture and (ii) remedy.

No forfeiture: Applying Sims v. Apfel, the court held 29 C.F.R. § 1979.110(a) does not expressly require issue exhaustion. The court also noted the impropriety of judicially imposing issue exhaustion for a “purely constitutional” structural challenge (citing Carr v. Saul and Traffic Jam Events, L.L.C. v. Fed. Trade Comm'n).
No vacatur absent Collins harm: Because Corr Flight sought retrospective relief (vacatur of a completed adjudication), it had to show a causal link between the unconstitutional removal protection and the outcome. Relying on Collins v. Yellen, the court invoked the Fifth Circuit’s three-factor articulation from Cmty. Fin. Servs. Ass'n of Am., Ltd. v. Consumer Fin. Prot. Bureau and the “causal link” framing in Space Exploration Technologies Corporation v. National Labor Relations Board. Corr Flight presented no evidence or developed argument meeting those factors, so vacatur was denied.

In effect, the opinion reinforces a remedial rule: even where a structural constitutional defect exists, backward-looking relief is not automatic.

(c) AIR 21 Merits: Failure to Challenge an Independent Ground Is Dispositive

AIR 21 requires a complainant to show (1) protected activity, (2) unfavorable personnel action, and (3) contributing factor causation. The ALJ awarded back pay for the unpaid leave based on two protected activities that contributed to that unpaid leave: (i) reporting safety violations to management and (ii) refusing to fly/train with Captain Lee.

Corr Flight attacked only the second rationale on appeal. Applying Rollins v. Home Depot USA, the court treated the first rationale (reporting) as forfeited and therefore intact. Because that unchallenged ground independently supported the ALJ’s award, the court denied the petition without addressing the refusal-to-train issue, consistent with United States v. Real Prop. Located at 14301 Gateway Blvd. W..

3.3 Impact

Structural constitutional challenges in agency review: The opinion strengthens the Fifth Circuit’s post-Collins remedial posture: even when removal protections are unconstitutional, a regulated party seeking to unwind an adverse administrative outcome must build a record and argument showing a causal connection (“harm”)—not merely point to the defect.
Issue exhaustion in DOL AIR 21 proceedings: The court’s reading of 29 C.F.R. § 1979.110(a) signals that, absent explicit regulatory language, the Fifth Circuit is unlikely to infer an issue-exhaustion requirement that would bar judicial review of unraised arguments—particularly structural constitutional ones.
Appellate strategy in AIR 21 cases: The decision is a cautionary precedent: where an ALJ/ARB provides multiple independent bases for relief, failure to challenge each basis can be fatal on petition for review.
Finality and fees: Parties cannot delay or defeat review by pointing to a pending fee petition; merits orders remain reviewable.

4. Complex Concepts Simplified

AIR 21 (49 U.S.C. § 42121) “protected activity”: Conduct such as reporting air-safety violations. If an employer retaliates because of that conduct, AIR 21 can provide remedies.
“Contributing factor” causation: A relatively employee-friendly causation standard: the protected activity need only contribute in some way to the adverse action, not be the sole or primary cause.
Issue exhaustion vs. claim exhaustion: Claim exhaustion means you must use the agency process before going to court. Issue exhaustion means you must also raise each specific argument to the agency first. Under Sims v. Apfel, courts typically require issue exhaustion only when regulations clearly demand it.
Two-layer removal protection: A structure that makes it hard for the President to remove an ALJ because removal requires passing through multiple “for-cause” protections. The Fifth Circuit has held such structures unconstitutional for ALJs exercising substantial authority.
Why “unconstitutional” does not always mean “vacated”: Collins v. Yellen teaches that even if an officer’s tenure protection is unconstitutional, past agency actions are not automatically invalid. A challenger seeking to undo past actions must show the unconstitutional feature likely affected the outcome (i.e., “harm”).
Independent grounds on appeal: If a lower tribunal gives two separate reasons for a result, an appellant generally must defeat both. If one reason goes unchallenged, the judgment can stand on that basis alone.

5. Conclusion

Corr Flight S. v. Dept of Labor delivers two practical rules for AIR 21 and administrative-law litigants in the Fifth Circuit. First, even where ALJ removal protections are unconstitutional under circuit precedent, a party seeking to vacate a completed agency adjudication must demonstrate Collins-type harm; unconstitutionality alone does not secure retrospective relief. Second, petitioners must carefully brief and challenge each independent basis supporting an ALJ/ARB order, or the unchallenged ground will sustain the agency decision on review.