Donovan v. Lone Steer, Inc.

Background

An employer in Steele, North Dakota, a motel and restaurant called Lone Steer, refused to obey a Department of Labor administrative subpoena for payroll and sales records. A Wage and Hour compliance officer and an assistant area director visited the business, waited in the public lobby, and served a subpoena on an employee directing production of records at the Department's Bismarck office. The employer sued in federal court arguing that enforcing the subpoena would be an unlawful search and seizure under the Fourth Amendment because the Labor Department had not first obtained a judicial warrant.

Reasoning

The Court asked whether the Secretary of Labor must have a judicial warrant before issuing an administrative subpoena or entering business premises to obtain records. The Court reversed the district court, explaining that prior cases requiring administrative warrants involved nonconsensual searches of nonpublic workplace areas, while here the officers only entered a public lobby and served a subpoena that required documents be produced at the Department's office. The Court relied on earlier decisions holding that administrative subpoenas may be issued without warrants so long as they are limited, relevant, and not unreasonably burdensome. The opinion emphasized that employers can challenge a subpoena's scope and burden in court, but they cannot insist on a warrant as a precondition to the subpoena's validity.

Real world impact

The decision allows Labor Department investigators to require employers to produce payroll records without first getting a judicial warrant, making it easier to obtain documentary evidence in wage-and-hour investigations. At the same time, employers retain the right to go to court to dispute overly broad or unduly burdensome subpoenas. The Court made clear it did not approve warrantless nonconsensual searches of private work areas and limited its holding to subpoenas for documents and similar investigatory processes.