Industrial Holographics, Inc. v. Donovan

• Decision Date: 20 December 1983
• Docket Number: No. 83-1057,83-1057
• Citation: 722 F.2d 1362
• Parties: INDUSTRIAL HOLOGRAPHICS, INC. and Roger K. Yu, Plaintiffs-Appellants, v. Raymond J. DONOVAN, Secretary of Labor, and United States Department of Labor, Employment and Training Administration, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1362

722 F.2d 1362

INDUSTRIAL HOLOGRAPHICS, INC. and Roger K. Yu, Plaintiffs-Appellants, v. Raymond J. DONOVAN, Secretary of Labor, and United States Department of Labor, Employment and Training Administration, Defendants-Appellees.

No. 83-1057.

United States Court of Appeals Seventh Circuit.

Argued Sept. 26, 1983.

Decided Dec. 20, 1983.

Paul J. Bargiel, Doss, Puchalski, Keenan & Bargiel, Ltd., Chicago, Ill., for plaintiffs-appellants.

Harriet A. Gilliam, U.S. Dept. of Labor, Office of Sol., Washington, D.C., for defendants-appellees.

Before PELL and CUDAHY, Circuit Judges, and WILKINS, Senior District Judge. ^*

CUDAHY, Circuit Judge.

This case presents a challenge to a refusal by the Department of Labor to certify an alien for lawful employment in the United States. Specifically, the appellants challenge the Department's regulations equating an employer's offer of "prevailing wages and working conditions" with terms which "will not adversely affect the wages and working conditions" of American workers. The appellants also object to the prevailing wage determination in this case. The district court upheld the Secretary's action and we affirm.

I.

Under section 212(a)(14) of the Immigration and Nationality Act, 8 U.S.C. Sec. 1182(a)(14), the State Department may not issue an alien a visa for admission to the United States for purposes of employment unless the Secretary of Labor certifies that American workers are not "able, willing, qualified ..., and available" for the work, and that the employment of the alien "will not adversely affect the wages and working conditions" of similarly employed Americans. The Secretary of Labor has promulgated regulations which establish standards and procedures for the certification of alien workers under section 212(a)(14). See 20 C.F.R. Secs. 656.20 et seq. (1983). If an employer wishes to hire an alien for work in the United States, these regulations require the employer first to recruit among American workers offering the "prevailing wage" and "prevailing working conditions" to determine whether any American workers are "able, willing, qualified, and available" for the job. See 20 C.F.R. Sec. 656.21(b)(1), (3) and (9) (1980). ¹ If an employer submits documentation showing it has been unable to recruit American workers on these terms, then the Secretary of Labor may certify the alien to enter the country and perform the work.

In this case, plaintiffs challenge the validity of the requirement that employers offer the "prevailing wage" when they advertise for American workers. They also challenge the application of the "prevailing wage" requirement in this case.

Plaintiff Industrial Holographics, Inc. (the "employer") manufactures and tests machinery used to make rubber tires. Plaintiff Roger K. Yu is an alien whom Industrial Holographics has sought to employ in Michigan as an export manager. The record indicates that Yu has never been in the United States. In June 1979, Industrial Holographics applied for labor certification on behalf of Yu. Industrial Holographics followed the various provisions in 20 C.F.R. Sec. 656.21 (1980), requiring it to post the job for internal recruitment, to advertise the job in newspapers and to post the job with the state employment service. On August 24, 1979, the employer submitted to the certifying officer ² documentation showing that it had complied with the requirements of section 656.21.

The employer, however, had advertised that the salary for the job of export manager was $1,000 per month. Section 656.21 requires the employer to advertise and post the job at the "prevailing wage" and "prevailing working conditions" in order to obtain certification. 20 C.F.R. Sec. 656.21(b)(3) and (9) (1980). The Michigan Employment Security Commission (the "MESC") was responsible for determining the prevailing wage in this case, see 20 C.F.R. Sec. 656.21(f) (1980), and it determined that the prevailing wage for export managers in the area was $1,666 per month. Therefore, the certifying officer issued to the employer a Notice of Findings proposing to deny labor certification for Yu because the employer had failed to advertise the job at the prevailing wage.

After receiving the Notice of Findings, the employer agreed to repeat the advertising and recruiting process at the higher salary of $1,666 per month. The employer advertised the job at the higher salary, but it failed to comply with all of the requirements of section 656.21. Specifically, the employer did not show it had posted the job for internal recruitment at the higher salary, Sec. 656.21(b)(10), did not document the results of its recruitment efforts, Sec. 656.21(b)(15), and did not recruit for thirty days through the state employment service, Sec. 656.21(g)(1). Because the employer had failed to comply with the strict advertising requirements within the relevant time limits, the certifying officer denied the certification for Yu. ³ On review within the Department of Labor, the administrative law judge concluded that the employer had failed to comply with the regulations and that certification was properly denied.

Plaintiffs then sought review in the district court. Judge Moran granted summary judgment for the Department of Labor in an unpublished memorandum opinion. He held (1) that the Secretary of Labor had the statutory authority to issue the advertising regulations contained in section 656.21; (2) that the employer's burden of production to document compliance with the regulations was proper; (3) that the employer's noncompliance with the regulations justified the denial of labor certification; and (4) that the Department of Labor's use of the prevailing wage standard in the regulations was not arbitrary and capricious. ⁴

Plaintiffs now appeal presenting three issues. First, they contend that the Secretary of Labor exceeded his statutory authority when he promulgated regulations requiring the employer to advertise the job at the "prevailing wage." Second, they argue that the prevailing wage determination in this case was incorrect. Finally, they argue that they substantially complied with the regulations and that they are therefore entitled to certification. We conclude that the Secretary had authority to promulgate the "prevailing wage" requirement, that the prevailing wage determination in this case was proper and that the denial of certification was also justified in this case. Therefore, we affirm the district court's grant of summary judgment for defendants.

II.

Appellants contend first that the Secretary of Labor exceeded his statutory authority by requiring the employer to advertise the position at the "prevailing wage." 20 C.F.R. Sec. 656.21(b)(1), (3) and (9) (1980). The applicable statutory language says that the Secretary shall certify the alien only if his or her employment "will not adversely affect the wages and working conditions" of similarly employed workers in the United States. 8 U.S.C. Sec. 1182(a)(14)(B).

The district court relied upon our decision in Production Tool Corp. v. Employment and Training Admin., 688 F.2d 1161 (7th Cir.1982), in holding that the Secretary had statutory authority to issue the prevailing wage standard. In Production Tool, the employers argued that the Immigration and Nationality Act did not authorize the Secretary to issue any interpretative regulations under section 212(a)(14), and that the regulations could not properly impose on the employer the burden of producing evidence showing that United States workers were not "able, willing, qualified, and available." This court held that the Secretary had inherent authority to issue the regulations requiring an employer to advertise positions among American workers and imposing on an employer the burden of producing evidence showing it had complied with the advertising procedures. 688 F.2d at 1170. On this appeal, appellants present us with a narrower challenge to the same regulations. They argue only that the regulations improperly equate the statute's standard of adverse effects with the payment of wages below "prevailing wages." This precise issue was not before the court in Production Tool, ⁵ so we must go beyond that decision in considering the Secretary's authority to issue the prevailing wage requirement. However, the court's reasoning in Production Tool is highly relevant to this issue of statutory authority; hence, we believe that the Production Tool reasoning extends to the prevailing wage requirement.

In Production Tool this court clarified the authority under which the labor certification regulations were promulgated. The Immigration and Nationality Act does not expressly authorize the Secretary to issue regulations. However, the standards of section 212(a)(14) are quite broad. The Secretary must decide whether there are sufficient American workers who are "able, willing, qualified, and available," and whether the alien's employment would "adversely affect the wages and working conditions" of American workers. The statute leaves to the Department a broad area for the exercise of its discretion in issuing labor certificates. Where the agency must make a large number of individual discretionary decisions, it is entirely appropriate for it to issue regulations informing the public about the standards and procedures the agency intends to apply. Production Tool, supra, 688 F.2d at 1166. Those regulations simplify the administrative task and help guard against arbitrary agency action. See Silva v. Secretary of Labor, 518 F.2d 301, 310 (1st Cir.1975) (criticizing absence of regulations for certifying alien agricultural workers). As the court held in Production Tool, the labor certification regulations promote these ends, and the Secretary has inherent authority to issue them. 688 F.2d at 1167 & n. 1.

Because the Secretary did not act beyond his authority in issuing the advertising regulations, the only substantial reason appellants offer for finding the prevailing...