District Court Enjoins DOL From Enforcing New Rules Pertaining to H-2B Visa Program

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The U.S. District Court for the Northern District of Florida enjoined April 26 the Department of Labor from enforcing new regulations governing the employment of low-skilled, nonagricultural guestworkers under the H-2B visa program (Bayou Lawn & Landscape Servs. v. Solis, N.D. Fla., No. 3:12cv183, 4/26/12).

The court granted the motion for a preliminary injunction filed by a group of businesses and business associations, including the U.S. Chamber of Commerce. In a lawsuit filed April 16, the plaintiffs claimed that DOL acted without statutory authority, failed to conduct the proper cost analyses, and issued a rule that is arbitrary and capricious.

The business groups established a substantial likelihood of success on the merits of their claims that DOL had no authority to issue the rules and that, even if it did, it issued them in violation of the Administrative Procedure Act and the Regulatory Flexibility Act, the court concluded. The groups also showed that they would suffer irreparable injury absent an injunction, that such injury trumped whatever damage the injunction would cause DOL, and that the injunction would not run afoul of the public interest, Judge M. Casey Rodgers wrote for the court.

New Regulations Revamp H-2B Program.

The final H-2B rule, scheduled to take effect April 27, was issued Feb. 10 by DOL (6 WIR 103, 2/20/12) and published in the Feb. 21 Federal Register (77 Fed. Reg. 10,038). It returns the program to a certification-based model rather than an attestation-based model for purposes of employers showing that U.S. workers are unavailable and that workers will be paid at least the prevailing wage.

It also bifurcates the application process into a registration process, which addresses whether an employer has a temporary need for workers, and an application process that addresses whether there is an insufficient supply of U.S. workers.

The rule contains several protections for workers, including a requirement that H-2B guestworkers and “corresponding workers”--those who perform substantially the same work as H-2B workers--be treated equally, a requirement that employers guarantee work for at least three-fourths of the workdays in every 12-week period (or every six-week period if the job order is for less than 120 days), and a prohibition on retaliation for exercising workers' rights.

Additionally, the rule defines “temporary need” as nine months, whereas the Department of Homeland Security has defined it as one year or less, and requires employers to pay the round-trip transportation and subsistence costs for foreign workers to and from the worksite.

Business Groups Allege APA, Other Violations.

In their complaint, the business groups claimed that the new regulations will force them to choose between terminating their H-2B employees and terminating their operations altogether. Their complaint alleged that the regulations violate the Administrative Procedure Act because they do not reference the statutory provision granting DOL the authority to promulgate them.

The business groups also claimed a violation of the Regulatory Flexibility Act because DOL concluded that the regulations would not greatly impact small businesses, based on the fact that only 6,980 out of over 1 million small businesses in the country actually use the H-2B program. But the Small Business Administration commented in response to the proposed rule that DOL should have looked at the impact on the 6,980 businesses that do use the program, not on small businesses as a whole, according to the complaint.

“DOL made no effort to calculate the costs associated with the three-fourths guarantee, the nine-month definition of temporary, or the added costs associated with processing delays occasioned by additional applications procedures in the H-2B program,” the groups argued.

Finally, the business groups alleged that the regulations are arbitrary and capricious in that DOL lacked statutory authority to promulgate the rules, did not publish any data or evidence supporting the changes to the H-2B program, and did not provide evidence that the regulatory changes would not harm U.S. workers. The groups also claimed that DOL's definition of “temporary” is inconsistent with DHS's definition.

Intervenors Seek to Protect Workers' Rights.

However, a group of workers and employee organizations April 19 filed a motion to intervene as defendants, arguing that their rights--either as workers “similarly employed” to H-2B workers, as “corresponding employees,” or as H-2B workers--would be affected if the regulations were enjoined by the court. The motion to intervene remains pending.

The intervenors in a separate memorandum supporting their motion also said they are seeking to protect their gains from an earlier lawsuit in which the U.S. District Court for the Eastern District of Pennsylvania struck down a 2008 H-2B wage rule (Comité de Apoyo a los Trabajadores Agrícolas (CATA) v. Solis, E.D. Pa., No. 2:09-cv-00240, 8/30/10). CATA, the lead plaintiff in the case, is one of the parties seeking to intervene.

While DOL has issued a new, separate H-2B wage rule that has been postponed until Oct. 1, 2012, because Congress stripped funding for the regulation (6 WIR 10, 1/9/12), the intervenors pointed out that portions of the 2012 H-2B program rule address the court's findings with respect to recruitment procedures, the definition of full-time work, and provisions related to job contractors. The intervenors argued that the plaintiffs were “essentially asking this Court to enjoin DOL's compliance with the CATA court's orders.”

Court Says DOL Hasn't Established Source of Authority.

The plaintiffs all alleged that they or their members have ties to the H-2B program and that the implementation of the new rules would cause immediate and irreparable injury to the plaintiffs' business operations, the court said. It found that the plaintiffs thus sufficiently demonstrated their standing.

DOL conceded that Congress vested authority in the DHS secretary to engage in legislative rulemaking under the H-2B program, the court said. It found DOL's arguments unpersuasive that DOL's authority could be inferred from certain provisions of the Immigration and Nationality Act, that DHS delegated rulemaking authority to DOL, and that Congress has acquiesced in DOL's rulemaking.

The court said it could not plainly infer DOL's rulemaking authority from any of the statutory provisions the agency referenced. In any case, DOL did not cite the statute as a source of its authority in the proposed or final rules, the court said. It added that the agency would have to undergo extra notice and comment rulemaking to rely on the statute as a source of its authority.

The court also found no indication that Congress intended a particular statutory provision, 8 U.S.C. § 1103(a)(6), to permit DHS to delegate its legislative rulemaking authority to any other federal agency.

Court Says Businesses Face Threat of Harm.

The court then determined that the business groups demonstrated a substantial threat of irreparable harm. They showed that the rules will have an immediate and significant impact on their current bidding processes and will cause them to lose revenue, customers, and/or goodwill, the court found. It said DOL failed to describe any harm the agency would experience due to a “mere delay” in the implementation of the rules.

Finally, the court decided that the requested injunction would not be adverse to the public interest.

“If DOL lacks the requisite Congressional authority to promulgate the rules at issue in this case, they will be rendered invalid and the public interest will be best served by enjoining their enforcement,” the court said. “If not invalid, the injunction will only have delayed the rules' implementation.”

Rights Group Criticizes Injunction.

Saket Soni, executive director of the National Guestworker Alliance, criticized the lawsuit and injunction. The new regulations “make common sense and are badly needed” and are “only a 'burden' to those who build their business on exploitation,” Soni said.

“We're confident that the DOL will prevail in the end,” Soni said. “In the meantime, this lawsuit is hurting small businesses who play by the rules and don't rely on abusing the H-2B program to turn a profit. It's also delaying economic security in desperate times for all workers.”

A DOL spokesman declined to comment on the injunction.

Robert Charrow and Laura Klaus of Greenberg Traurig in Washington, D.C., and Wendel Hall and Monte Lake of CJ Lake in Washington, D.C., represented the plaintiffs. Geoffrey Forney of the Justice Department represented DOL. Kristi Graunke of the Southern Poverty Law Center in Atlanta and Gregory Schell of the Migrant Farmworker Justice Project in Lake Worth, Fla., represented the intervenor defendants.

Text of the court order is available at http://op.bna.com/dlrcases.nsf/r?Open=edue-8trkyh. Text of the complaint is available at http://op.bna.com/dlrcases.nsf/r?Open=lfrs-8thrb9.