American Federation of Labor and Congress of Indus. Organizations (AFL-CIO) v. Dole, AFL-CIO

• Decision Date: 29 August 1989
• Docket Number: AFL-CIO,89-5012,Nos. 89-5001,s. 89-5001
• Parties: AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS (), et al. v. Elizabeth H. DOLE, Secretary of Labor, et al., National Council of Agricultural Employers, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 597

884 F.2d 597

280 U.S.App.D.C. 158

AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL

ORGANIZATIONS (AFL-CIO), et al. v. Elizabeth H. DOLE, Secretary of Labor, et al., National

Council of Agricultural Employers, et al., Appellants.

Nos. 89-5001, 89-5012.

United States Court of Appeals, District of Columbia Circuit.

Argued March 10, 1989.

Decided Aug. 29, 1989.

Appeals from the United States District Court for the District of Columbia (D.C. Civil Action No. 87-01683).

John S. Koppel, Atty., U.S. Dept. of Justice, with whom John R. Bolton, Asst. Atty. Gen. at the time the brief was filed, Jay B. Stephens, U.S. Atty., and Harry L. Sheinfeld, Counsel for Litigation, U.S. Dept. of Labor, Washington, D.C., were on the brief, for federal appellants/appellees. Michael J. Singer, Atty., U.S. Dept. of Justice, Washington, D.C., also entered an appearance for appellees in No. 89-5001.

John M. Simpson, with whom Kathryn A. Oberly, Washington, D.C., Michael F. Rosenblum, Chicago, Ill., Patricia A. McCoy, and Robert A. Burgoyne, Washington, D.C., were on the brief, for appellants Nat. Council of Agr. Employers, et al.

Edward J. Tuddenham, Austin, Tex., with whom Shelley Davis, New York City, Garry G. Geffert, and David Silberman, Washington, D.C., were on the brief, for appellees AFL-CIO.

Before WALD, Chief Judge, and BUCKLEY and SENTELLE, Circuit Judges.

Opinion for the court filed by Circuit Judge BUCKLEY.

BUCKLEY, Circuit Judge:

The Department of Labor and the National Council of Agricultural Employers challenge district court orders enjoining the Department from implementing a new regulation governing the compensation of alien agricultural workers hired on a piece-work basis. The orders were based on a ruling that the Department had not provided a reasoned explanation for what the court deemed to be a departure from prior policy. We conclude that the regulation is consistent with past policy and that the reasons for its promulgation are adequately explained. Therefore, we reverse.

I. BACKGROUND

The Immigration and Nationality Act of 1952 as amended, 8 U.S.C. Secs. 1101 et seq. (1982 & Supp. V 1987) ("Act"), authorizes the Attorney General to approve an employer's petition to import alien workers if the petitioner receives certification from the Secretary of Labor ("Secretary") that

(A) there are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services involved in the petition, and

(B) the employment of the alien in such labor or services will not adversely affect the wages and working conditions of workers in the United States similarly employed.

8 U.S.C.A. Sec. 1188(a)(1) (1989 Supp.) (redesignating 8 U.S.C. Sec. 1186).

To protect domestic employees against the wage depression attributed to the importation of foreign workers, the Department of Labor ("DOL" or "Department") has for many years regulated the wages paid by employers hiring alien labor. With respect to farmworkers paid by the hour, the DOL has prohibited affected employers from paying less than the "adverse effect wage rate" ("AEWR") established by the Department. The Department has also used various techniques to protect workers paid by the piece, e.g., by the bushel of apples picked.

On June 1, 1987, the DOL adopted an interim final rule that set new procedures for calculating the AEWR and for protecting piece-rate employees. The AFL-CIO and other interested parties successfully challenged the new regulations in the district court. See AFL-CIO v. McLaughlin, 702 F.Supp. 307 (D.D.C.1988) (dealing with AEWR issue); AFL-CIO v. McLaughlin, 702 F.Supp. 314 (D.D.C.1988) (dealing with piece-rate regulation) ("Mem. Op."). Appellants initially asked us to review the district court's ruling on both the AEWR and piece-rate issues. As the Department has recently published a final AEWR regulation that replaces the interim rule, see 54 Fed.Reg. 28,037 (1989), we have dismissed the case challenging that rule as moot. AFL-CIO v. Dole, No. 89-5011, --- WL ---- (D.C.Cir. Aug. 9, 1989) (order dismissing case as moot). Thus, we only review the district court's piece-rate decision.

The new piece-rate regulation provides:

(A) If the worker will be paid on a piece rate basis and the piece rate does not result at the end of the pay period in average hourly piece rate earnings during the pay period at least equal to the amount the worker would have earned had the worker been paid at the appropriate hourly rate, the worker's pay shall be supplemented at that time so that the worker's earnings are at least as much as the worker would have earned during the pay period if the worker had been paid at the appropriate hourly wage rate for each hour worked; and the piece rate shall be no less than the piece rate prevailing for the activity in the area of intended employment; and

(B) If the employer who pays by the piece rate requires one or more minimum productivity standards of workers as a condition of job retention.

(1 ) Such standards shall be specified in the job offer and be no more than those required by the employer in 1977, unless [the DOL] approves a higher minimum; or

(2 ) If the employer first applied for ... temporary alien agricultural labor certification after 1977, such standards shall be no more than those normally required (at the time of the first application) by other employers for the activity in the area of intended employment, unless [the DOL] approves a higher minimum.

20 C.F.R. Sec. 655.102(b)(9)(ii) (1988).

The district court held that this rule was contrary to law because the Department had failed to provide

any explanation for why it now has chosen to abandon [its past policy] and adopt its new system. Nor has DOL explained how its new system will protect U.S. piece rate workers from the adverse effects of the importation of alien workers.

702 F.Supp. at 318.

Specifically, the court noted that although the Department's new regulation provides that piece-rate workers must receive no less than what they would have earned as hourly employees under the AEWR, the new regulation abandons two provisions that had previously had the effect of enhancing wages of all piece-rate workers. Id. at 317-18. First, prior regulations had included a "designed to yield" provision that required employers to design their piece rates so that their average employee's hourly earnings would at least equal the AEWR hourly wage. (Below average workers were protected by the requirement that employers pay them the difference between their piece-rate earnings and what they would have earned had they been employed by the hour at the AEWR.) 20 C.F.R. Sec. 655.202(b)(9)(ii) (1987). Second, earlier regulations had included a "proportional increase" provision which, as applied, required employers to increase their piece rates in proportion to any increase in the AEWR. Id. Sec. 655.207(c). By way of contrast, the new rule does not require employers to revise their piece rates in response to changes in the AEWR. Instead, it merely requires that piece-rate workers earning less than the AEWR receive make-up payments representing the difference between the two.

In a supplemental opinion and order issued January 5, 1989, the district court ruled that a remand for further explanation of the piece-rate rule would be fruitless and, with certain exceptions, permanently enjoined the regulation's implementation. The court issued a clarifying order on January 17, 1989.

II. DISCUSSION

The principal issue facing us is whether the district court correctly held that the Department's new regulation represented an unexplained departure from its past piece-rate policy. See 702 F.Supp. at 317.

As mentioned previously, the DOL's prior piece-rate regulations included two provisions, the "designed to yield" and "proportional increase" requirements, that have been eliminated from the new rule. The "designed to yield" requirement appeared as part of the provision assuring piece-rate workers of minimum earnings equivalent to the AEWR:

[T]he piece rate will be designed to produce average hourly earnings at least equal to the [AEWR]. If the piece rate does not result at the end of the pay period in average hourly earnings during the pay period at least equal to the amount the worker would have earned had the worker been paid at the adverse effect rate, the worker's pay will be supplemented at that time so that the worker's earnings are at least as much as the worker would have earned during the pay period if the worker had been paid at the adverse effect rate.

20 C.F.R. Sec. 655.202(b)(9)(ii) (1987) (emphasis added). The proportional increase requirement, as set forth in the prior regulation, provided:

In any year in which the applicable adverse effect rate increases to the point where the employer's previous year's piece rate in a crop activity will not enable the average U.S. worker's hourly earnings to equal or exceed the new applicable adverse effect rate without requiring the average U.S. worker to increase productivity over the previous year, the employer shall increase the piece rate to a level at which the average U.S. worker would earn at least the adverse effect rate.

Id. Sec. 655.207(c).

Historically, the Department did not interpret its proportional increase provisions as requiring an increase in a piece rate each time the AEWR was raised so long as the employer's average worker continued to earn the AEWR. See 52 Fed.Reg. at 11,461 (1987). In NAACP v. Donovan, 558 F.Supp. 218, 222 (D.D.C.1982), however, the district court held that the provision required that employers increase piece rates in proportion with each increase in the AEWR. Since 1982, therefore, the two rates have increased in lockstep. As a consequence, all piece-rate workers, including those earning well above the AEWR, were assured of increased earnings each time the adverse effect rate was raised.

In its...