American Federation of Labor and Congress of Indus. Organizations v. Brock

Decision Date22 December 1987
Docket NumberNos. 87-5258--87-5260,s. 87-5258--87-5260
Citation835 F.2d 912
PartiesAMERICAN FEDERATION OF LABOR AND CONGRESS of INDUSTRIAL ORGANIZATIONS, et al. v. William E. BROCK, III, Secretary of Labor, et al. National Council of Agricultural Employers, et al., Appellants. AMERICAN FEDERATION OF LABOR AND CONGRESS of INDUSTRIAL ORGANIZATIONS, et al. v. William E. BROCK, III, Secretary of Labor, et al., Appellants, National Council of Agricultural Employers, et al. AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS, et al. v. William E. BROCK, III, Secretary of Labor, et al. American Farm Bureau Federation, Appellants.
CourtU.S. Court of Appeals — District of Columbia Circuit

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

John S. Koppel, Dept. of Justice, with whom Richard K. Willard, Asst. Atty. Gen., Dept. of Justice, Joseph E. diGenova, U.S. Atty., Michael Jay Singer, Dept. of Justice and Harry L. Sheinfeld, Dept. of Labor, Washington, D.C., were on the brief for appellants, Brock, Secretary of Labor, et al. in No. 87-5259.

John M. Simpson, with whom Carl W. Vogt, Warren Belmar and Robert A. Burgoyne, for Nat. Council of Agr. Employers, et al., Kathryn A. Oberly, Washington, D.C., Michael F. Rosenblum, Chicago, Ill., and Patricia A. McCoy, Washington, D.C., for American Farm Bureau Federation were on the joint brief for appellants, Nat. Council of Agr. Employers, et al. in Nos. 87-5258 and 87-5260.

Shelly Davis, with whom Edward Tuddenham, Hereford, Tex., Garry G. Geffert, Martinsburg, W. Va., and David Silberman, Washington, D.C., were on the brief, for appellees.

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

Opinion for the Court filed by Chief Judge WALD.

WALD, Chief Judge:

The Department of Labor (Department) is appealing a district court judgment overturning regulations it promulgated on May 5, 1987, and adopted as final on June 1, 1987. 1 The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and individual named plaintiffs below, argue here that the district court's invalidation should be affirmed. In the regulations at issue, the Department significantly altered its prior regulatory policy on minimum wage rates that employers must pay to foreign agricultural workers. Because we find that the Department did not provide a reasoned explanation for its new policy, we order remand. 2


The Immigration and Nationality Act of 1952 (INA), as amended, 8 U.S.C. Secs. 1101 et seq. (1982 & Supp. III 1985), delegated regulation of the importation of foreign workers to the Attorney General. Section 1101(a)(15)(H)(ii) authorized the Attorney General to approve visas to temporary foreign workers "if unemployed persons capable of performing such service or labor cannot be found in this country." Id. Sec. 1101(a)(15)(H)(ii). Pursuant to this congressional direction, the Attorney General promulgated 8 C.F.R. Sec. 214.2(h)(3) (1986), which required employers seeking foreign workers to secure certification from the Department that:

(a) qualified persons in the United States are not available; and

(b) that the employment of the [alien] will not adversely affect the wages and working conditions of workers in the United States similarly employed.

Id. (emphasis added).

In turn, the Department adopted its so-called H-2 regulations to govern this certification process. Congress' mandate that foreign workers not adversely affect the wages of United States workers was accomplished through minimum wage requirements. Employers were prohibited from paying foreign workers below an hourly "adverse effect wage rate" (AEWR). These wage levels were designed to approximate the rates that would have existed had there been no increase in labor supply from foreign labor. If no American workers applied for positions at these rates, employers were permitted to fill the vacancies with foreigners. Also, if domestic workers demanded higher than AEWR wages from H-2 growers, those workers could be considered unavailable and the positions filled with foreign workers. See 20 C.F.R. Secs. 655.203, -.206 (April 1, 1987). Controls were also applied to piece rates, again to offset the depressing effect on wages caused by influxes of foreign workers.

In 1986, Congress enacted the Immigration Reform and Control Act (IRCA or "the Act"), Pub.L. No. 99-603, 100 Stat. 3359 (Nov. 6, 1986), which overhauled United States immigration policy. Among the changes to the INA is an amendment that prohibits the Department from approving the importation of foreign workers unless such employment "will not adversely affect the wages and working conditions of workers in the United States similarly employed." Id. Sec. 301(c), 100 Stat. 3411. The new legislation thus expressly incorporates the adverse effect prohibition that the Department had earlier introduced by regulations in order to meet Congress' resolve that American workers not be injured by immigration policies. See 41 Fed.Reg. 25,017, 25,018 (1976). Like its precursor, however, the IRCA does not define "adverse effect." Nor does the Act specify how adverse effect is to be measured. The Department is entrusted with these tasks. Throughout its twenty year oversight of the INA, the Department periodically increased AEWRs and piece rates to compensate for past adverse wage effects. 3 The Department first accomplished this by linking AEWRs to manufacturing wages, on the theory that farm wages had stagnated because of the enormous past influx of Mexican workers between 1951 and 1964. 4 Thereafter, this original, enhanced base was indexed according to United States Department of Agriculture (USDA) data. This methodology produced AEWRs that exceeded average farm wages by approximately 20%. See Brief of Appellants at 8.

On June 1, 1987, contemporaneously with the passage of the IRCA, the Department issued a new methodology to measure AEWRs and piece rates. Although an unofficial, draft version urged that AEWRs be set 20% above the average farm wage for each state to compensate for past adverse effect, see Department of Labor Draft H-2A Regulations, the final regulations set AEWRs for all states (except Alaska) equal to the average hourly wages paid the prior year by employers. 52 Fed.Reg. 20,496, 20,504 (1987). Under these new H-2A AEWRs, foreign farm laborers--and indirectly United States workers who will be recruited at the same AEWRs--face possible wage cuts from the old H-2 AEWRs. This threat led appellees, AFL-CIO and individual named parties, to challenge the new AEWR regulations as both contrary to congressional intent and arbitrary and capricious, hence violative of the Administrative Procedure Act (APA). The district court invalidated the new AEWR regulations, see AFL-CIO v. Brock, 668 F.Supp. 31 (D.D.C.1987), J.A. at 664, and the Department appeals from that decision.


Succinctly stated, the crux of the controversy is as follows: Under the IRCA, the importation of a farmworker cannot by itself have a future adverse effect on wages, since each foreign worker must be paid at least the average rate that growers paid workers prior to that worker's arrival. However, where the pre-arrival wages were already depressed from the presence of undocumented aliens, the new rates will necessarily perpetuate this past adverse effect. Appellees argue that under the IRCA, the Department must continue its former regulatory policy of offsetting this past injury through enhanced AEWRs, while appellants insist that the Department's June 1, 1987 regulations properly limited AEWRs to prevent future wage depression.

A. Congressional Intent

In determining whether the Department's new AEWR regulations are consistent

                with the statutory mandate, we look to the principles announced by the Supreme Court in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).  In reviewing an agency interpretation of a statute, courts ask first whether Congress has spoken directly to the issue.  Here Congress has not.  Congress, indeed, has never paid any attention to the method or policy of calculating AEWRs.  It paid no attention in 1964, and it paid no attention in 1987.  Throughout, calculating AEWRs has been left entirely to the Department's discretion. 5   The committee and floor discussion on the IRCA, cited by both parties, confirms only Congress' general intent to protect United States workers against adverse effects from imported labor.  See Brief of Appellees at 8 (citing H.Rep. No. 682, 99th Cong., 2d Sess. 80, reprinted in 1986 U.S.Code Cong. & Admin.News 5649, 5684);  Brief of Appellants at 5-6 (citing H.R.Rep. No. 99-682(I), 99th Cong., 2d Sess. 50 & passim, reprinted in 1986 U.S.Code Cong. & Admin.News 5649 & passim)
1. Reenactment Doctrine

Appelles argue, however, that the regulation contradicts a distinct congressional purpose to offset the effects of past wage depression through enhancements of AEWRs. See Brief of Appellees at 23 ("IRCA does require that the methodology [for calculating AEWRs] achieve the policy goal set by Congress of offsetting the adverse effect of past wage depression."). This intent, appellees argue, must be inferred from Congress' express incorporation in the IRCA of the Department's "adverse effect" regulatory prohibition, which had always been interpreted to justify compensation for the ongoing adverse effects from past wage depression.

The Supreme Court warned in Girouard v. United States, 328 U.S. 61, 69, 66 S.Ct. 826, 830, 90 L.Ed. 1084 (1946), that "[i]t is at best treacherous to find in congressional silence alone the adoption of a controlling rule of law." See also United States v. Sheffield Bd. of Comm'rs, 435 U.S. 110, 134, 135, 98 S.Ct. 965, 980, 981, 55 L.Ed.2d 148 (1978) (legislative history of reenactment must show express approval of...

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