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More Alien Worker Wage Rules Vacated under APA: What H-2B Rules Apply?

Posted in Agency Authority, Judicial Review & Remedies, Regulatory Process

While much attention in the immigration arena has focused on a new employment verification document, the potentially rapid filling of the professional employees (H-1B) temporary visa quota, and the apparent conflict over determining wage rates for foreign workers that may be stalling Senate negotiators, wage methodology for the unskilled workers temporary visa category (H-2B) is quietly becoming a major administrative law problem.  With a new decision vacating the Department of Labor (DOL) 2008 wage methodology rules, the 2011 wage methodology rules enjoined and on appeal, and with no end in sight for the Congressional bar to implementing the 2011 rules, what rules govern the determination of wage methodology?  DOL announced today that it would promulgate a new wage methodology rule by the court’s 30-day deadline – April 22, 2013 – but that is hard to reconcile with the Administrative Procedure Act (APA) notice and comment requirements and exceptions.

Introduction:  United States employers may employ foreign workers to perform temporary, unskilled, non-agricultural work – eponymously “H-2B” for the authorizing statutory section of the Immigration and Nationality Act.  The statute requires that such workers be paid a wage that does not adversely affect the wage paid to U.S. workers.  How that wage is calculated is the stuff of years of litigation, appropriations riders, and heated debate.

DOL Appropriations Delay:  DOL, as reported earlier this week, sent a final rule to the Office of Management and Budget (OMB) for review on March 21, 2013, and now we know that it was no more than another delay in the effective date of the 2011 rule – until the beginning of another fiscal year, October 1, 2013.  OMB completed review on March 26, and the effective date delay will be / is published in the March 29 Federal Register.  [UPDATE:  in today's Federal Register].  This political kerfuffle, however, is a sideshow to the larger legal problems – the funding bar applies only to the specific rule promulgated in 2011, not more.  This history, however, complicates the legal issues facing DOL.  DOL’s explanation is somewhat curious:

The Department considers this situation an emergency warranting the publication of a final rule under the good cause exception of the Administrative Procedure Act.  See 5 U.S.C. 553(b)(B), (d)(3).  We are currently experiencing a significant suspension in program operations as a result of the court’s order and until we promulgate a new regulation, which we intend to do in short order.  In order to avoid a complete operational suspension of the H-2B program while we promulgate a new regulation (due to the continued defunding of the 2011 Wage Rule), as well as the confusion and disruption that would result from the 2011 Wage Rule briefly taking legal effect pending that new regulation, the Department finds good cause to adopt this rule, effective immediately, and without prior notice and comment.  See 5 U.S.C. 553(b)(B), (d)(3).  Any delay in promulgating this extension of the Wage Rule’s effective date as the result of notice-and-comment rulemaking would significantly disrupt the program.

Which is the emergency – delaying the effective date (which would not require a rule if the original rule never became effective) or the new rule to replace that which is being delayed?

2008 Rules Vacated:  On March 21, 2013, the United States District Court for the Eastern District of Pennsylvania released Comité de Apoyo a los Trabajadores Agrícolas v. Solis (CATA, for short), vacating aspects of the DOL’s 2008 wage determination rules as improperly promulgated under the APA notice and comment procedures.  The late judge Louis Pollak had invalidated specific language of the 2008 wage rule as improperly promulgated but only remanded the rule to DOL in 2010.

Judge Pollak found the violations to be serious and counseled in favor of vacating the rule, but adopted the D.C. Circuit’s Allied-Signal test (yes, this keeps coming up), acknowledging that neither the Supreme Court nor the Third Circuit Court of Appeals had adopted that test and vacated only specific language.  Judge Davis newly found that provisions of the rule exceeded the statute and were arbitrary and capricious, but could not escape the corrosive effect of delay:

The DOL now expresses that it has no intention of taking further action to bring the DOL’s H-2B labor certification into statutory and regulatory compliance and instead urges that we leave un-disturbed a rule that this Court found procedurally invalid thirty months ago and that has since been declared substantively invalid by the very agency that now urges us to leave the Rule in place.

Doctrinally, Judge Davis takes a different approach from Judge Pollak:

In this Court’s view, however, remand without vacatur is not easily squared with [the APA, 5 U.S.C. §] 706(2)’s seemingly mandatory language – which requires that we “hold unlawful and set aside agency action” that violates the APA.

Although Judge Davis points out the increasing practical concern for remand without vacature, he concludes that even adopting the Allied-Signal approach, “we find that the facts of this case counsel in favor of vacating the 2008 Wage Rule.”

2011 Rules in Legal Limbo:  As noted previously, the United States District Court for the Eastern District of Pennsylvania upheld the 2011 rules, but the United States District Court for the Northern District of Florida granted a preliminarily injunction barring DOL from enforcing its 2011 H-2B rules for want of statutory authority to promulgate regulations in Bayou Lawn & Landscape Services v. Solis.  DOL has appealed Bayou Lawn & Landscaping to the United States Court of Appeals for the Eleventh Circuit, but that does not help resolve the issue.  Bayou Lawn & Landscaping simply adds another layer of legal limbo.

Breaking the Deadlock?  DOL announced on March 28, 2013, that it is holding in abeyance most pending H-2B prevailing wage requests and all it received after March 22, while it considers appropriate action in response to CATA.  DOL explains the permanent injunction against the “operation of the portion of the 2008 wage rule related to prevailing wage determinations” and the requirement that DOL comply within 30 days.  DOL admits that it can no longer use the 2008 or 2011 rules, but believes it can make prevailing wage determinations based on applicable Collective Bargaining Agreements, acceptable private wage surveys, or Service Contract Act or Davis Bacon Act wage determinations.

The Department intends to comply with the Court order within 30 days by promulgating a revised wage rule.  This will allow the Department to resume providing employers with prevailing wage determinations.

New Rules?  DOL’s announcement that it would adopt new rules on an incredibly short time-frame begs for a clear statement of their authority to do so.  DOL may attempt to promulgate an “interim final rule” using the “good cause” exceptions to the APA’s notice and comment rulemaking requirements.  In this complicated and litigious environment, it behooves DOL to state clearly, in more than a “brief statement of reasons,” how it is “impracticable, unnecessary, or contrary to the public interest” to promulgate a rule without advance notice and an opportunity for public comment.  DOL faces a steep, difficult climb justifying an interim final rule in light of four years of litigation, including questions of its basic authority, and multiple decisions to delay and not to promulgate a new rule.

What Rules Apply Now?  With the rules vacated or barred, employers will be justly confused about what rules apply.  The answer to that question is not so simple:  20 C.F.R. § 655.3 (2008) appears to be the touchstone, but in two short paragraphs totaling less than a column, the regulations say little except that the agency will consider whether “the terms of employment will not adversely affect the wages and working conditions of workers in the United States similarly employed.”  The United States, through its Department of Justice (DOJ) counsel in CATA, appears to have conceded that the policies adopted prior to the 2008 rules did not comport with the APA and therefore cannot be relied upon.  That leaves practically nothing.  With no rules, DOL may be left to its discretion to … advise the Department of Homeland Security (DHS) what it thinks DHS should do.