Labor & Employment Law Daily H-2B program and wage rules were properly promulgated based on Congress’ implied delegation to DOL as consulting agency
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Thursday, December 24, 2020

H-2B program and wage rules were properly promulgated based on Congress’ implied delegation to DOL as consulting agency

By Kathleen Kapusta, J.D.

The plaintiffs challenged Homeland Security’s 2008 rules and the joint 2015 rules as exceeding the agencies’ statutory authority.

Addressing a challenge to DHS’ 2008 rules and its 2015 rules issued jointly with the DOL by a group of employers and associations whose members rely on H-2B visas to find workers for their temporary nonagricultural jobs, the Fourth Circuit found the challenge to the 2008 rules was untimely. Further, while the plaintiffs lacked standing to challenge the 2015 enforcement rules, the court, affirming in part and vacating in part the decision of the court below, found the 2015 program and wage rules were properly promulgated (Outdoor Amusement Business Association, Inc. v Department of Homeland Security, December 18, 2020).

2008 rules. The 2008 rules require that before submitting an H-2B petition to DHS, an employer must receive a favorable labor certification from the Department of Labor stating that the employer’s temporary jobs could not be filled with U.S. workers and that H-2B workers would not adversely affect similarly employed American workers. Before the 2008 rules, employers still had to seek a labor certification, but they could request a review by DHS if they were denied.

Under the 2008 rules, however, DHS would not consider granting an H-2B petition if DOL denied the employer a labor certification, and the employer must instead appeal to DOL. According to the plaintiffs, the 2008 rules abrogate DHS’s statutory duty to be the agency determining every petition by making petitions contingent on a favorable labor certification from DOL. The rules met with a “flurry of litigation” and were enjoined.

2015 rules. DHS and DOL subsequently jointly promulgated the 2015 “Program and Wage Rules.” The 2015 program rules established “the process by which employers obtain a temporary labor certification” from DOL for use in petitioning DHS, and the 2015 wage rules establish the methodology by which DOL “calculates the prevailing wages to be paid to H-2B workers.” The 2015 rules, which were promulgated under the “good cause” exception to full notice-and-comment rulemaking, were also challenged in the courts.

Here, the plaintiffs argued that the 2015 rules exceed DHS’ and DOL’s statutory authority because DHS cannot pass rules about labor certifications controlling DOL, and DOL lacks authority to issue any rules governing its own conduct in granting the labor certifications.

The plaintiffs sought declaratory and injunctive relief, and both parties cross-moved for summary judgment. The district court granted the government’s motion for summary judgment, upholding the regulations.

Justiciability. Addressing first on appeal whether the employers had standing, the court noted that while they received every labor certification and visa they requested, their injury stems from the alleged costs and delays that come from the new rules. They sufficiently established that several of their members faced increased compliance costs because of the new regulations and delays in getting workers, which caused layoffs, lost revenue, contractual defaults, and even bankruptcy. As to Outdoor Amusement, an organization representing some of the employers, it claimed the regulations have hurt membership, reduced dues, diverted resources, and increased litigation costs.

While the government argued that the employers did not have any certifications denied, so an injunction would not redress their injuries, the court pointed out that one plaintiff claimed injuries that could be redressed by enjoining the 2008 rules, because after it was denied a labor certification for failure to comply with the 2015 rules, it was required by DOL to re-apply as a job contractor. By the time it re-applied and “jumped through all of Labor’s hoops to receive a certification, half the season was over, and the workers did not arrive in time.” Without the 2008 rules, it could have gone to DHS directly and offered countervailing labor-market evidence after DOL denied certification. Further, it will continue to seek H-2B visas in the upcoming season and will again be subject to the 2008 rules when it does. Thus, the court found there was enough evidence to show an immediate future injury to establish standing for an injunction.

Statute of limitations. However, the court pointed out, the employers brought their facial challenged to the 2008 rules in 2016, eight years after they were promulgated. Noting that 28 U.S.C. § 2401(a) makes it clear “every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues,” and that pursuant to Fourth Circuit precedent when “plaintiffs bring a facial challenge to an agency [action]… the limitations period begins to run when the agency publishes the regulation,” the court found the facial challenge to the 2008 rules was time-barred.

Challenge to 2015 rules. The challenge to the 2015 program and wage rules, however, could go forward. The employers provided enough specific facts to show those rules harmed them and that they would continue to harm them: There was evidence the rules will cost over a billion dollars in 10 years and that the delays and compliance costs of dealing with the wage calculations, increased wages, and procedures for the labor certifications have cost them and their members greatly. Thus, said the court, they have standing to sue. And because Outdoor Amusement has standing to sue on behalf of its injured members, it had associational standing.

“Program and Wage rules.” Rejecting the employers’ assertion that DHS and DOL exceeded their statutory authority to administer the H-2B program by promulgating the 2015 program and wage rules, the court found Congress implicitly delegated to DOL rulemaking authority to administer its labor certifications as part of its duty as the consulting agency. The relevant section, the court observed, says that “any specific case or specific cases shall be determined by the [Secretary], after consultation with appropriate agencies of the Government, upon petition of the importing employer…. The petition shall be in such form and contain such information as the [Secretary] shall prescribe.”

Gaps. As a result, Congress made clear that a consulting agency or agencies chosen by DHS would help DHS in considering petitions for H-2B visas. And in doing so, it left gaps in the form of consultation, the identity of the consulting agency or agencies, and the content of the petitions. “Homeland Security has used the resulting discretion to fill these three gaps: Homeland Security chose Labor as the appropriate agency; determined that it would consult with Labor through labor certifications; and decided that the petitions must include an approved labor certification, along with other evidence such as a statement of the employer’s need and the alien’s qualifications.” Further, said the court, the “choice to fill the statutory gaps by consulting with Labor through labor certifications reflects a consistent practice for H-2 visas that various agencies have engaged in since at least 1968.”

DOL’s authority. The court also pointed out that Congress has given DOL varying degrees of control and responsibility over labor certifications in other parts of the Immigration and Nationality Act, including H-2A visas. The plaintiffs, however, argued that because Congress chose DOL as the consulting agency and defined its role elsewhere in the INA, the fact that it did not do so here showed Congress meant to preclude DOL from occupying a similar role for H-2B visas. DHS, they argued, has sole rulemaking authority because DOL is neither named nor given functions specifically for the H-2B program, in contrast with other provisions of the INA that specify DOL as the agency to perform certain functions.

Disagreeing, the court reasoned that “the existence of unconstrained discretion under H-2B does nothing to imply that Labor could not be chosen for the same role it has elsewhere.” Noting that the same section requires DHS to engage in “consultation with appropriate agencies” for H-2B and H-2A visas, the court pointed out that the section then goes on to explicitly define the appropriate agencies for H-2A as Labor or Agriculture, and other sections outline the form of that consultation. That the same sections are silent on the agency and type of consultation for H-2B visas “implies discretion, not limitation,” said the court. “Surely Congress did not intend to give the consulting agency Homeland Security chooses for H-2B less power than Labor in its consulting role for H-2A when Congress used the same word in the same section but did not direct how that consultation can be done.”

Historical role. Further, the court noted, DOL has been the consulting agency through labor certifications before H-2A and H-2B were divided. “By specifying the consulting agency for H-2A but not H-2B despite both historically relying on Labor, Congress has evidenced its intent to give Homeland Security more discretion in H-2B, including the discretion to continue the historical practice of relying on Labor and its rulemaking if it so chooses.”

Appropriate agency. Moreover, DHS lacks unlimited discretion to consult with any agency; the statute requires “consultation with appropriate agencies of the Government.” And here, DOL is an appropriate agency given its expertise and historical role in providing information on the availability of American workers. Further, said the court, even when DHS chooses an appropriate consulting agency, that agency does not acquire unlimited rulemaking authority or even authority commensurate with DHS. Any rules that DOL promulgates relating to H-2B visas must relate to its consulting role, and that role is in part defined by DHS’ regulations choosing DOL as the consulting agency and defining the consultation.

DOL’s regulations, the court explained, must be reasonably related to administering its labor certifications and making the determinations about the labor market and required wages. And the “2015 Rules do just that by establishing ‘the process by which employers obtain a temporary labor certification from [Labor] for use in petitioning [Homeland Security]’ and ‘the methodology for determining the wage that a prospective H-2B employer must pay.” The 2015 program and wage rules, therefore, are valid exercises of DOL’s implied delegation to rule-make as part of its duty as DHS’ chosen consulting agency.

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