Morrison v. US Dept. of Labor

• Decision Date: 16 May 1989
• Docket Number: No. 86 Civ. 6548.,86 Civ. 6548.
• Citation: 713 F. Supp. 664
• Parties: Henry E. MORRISON, Walter Solomon, and Morgan Lee, on behalf of themselves and all others similarly situated, Plaintiffs, v. The UNITED STATES DEPARTMENT OF LABOR, William Brock, Secretary of Labor, Barbara Ann Farmer, Acting Administrator for Regional Management, Thomas Hill, Regional Administrator, Region II, and The Immigration and Naturalization Service, and Valley Growers Co-Operative, Inc., Mid-Hudson Co-Operative, Inc., Wayne County Growers and Processors, Inc., Northwest Growers Cooperative, Inc., and Nardone Farms, on behalf of themselves and all others similarly situated, Defendants.
• Court: U.S. District Court — Southern District of New York

713 F. Supp. 664

Henry E. MORRISON, Walter Solomon, and Morgan Lee, on behalf of themselves and all others similarly situated, Plaintiffs, v. The UNITED STATES DEPARTMENT OF LABOR, William Brock, Secretary of Labor, Barbara Ann Farmer, Acting Administrator for Regional Management, Thomas Hill, Regional Administrator, Region II, and The Immigration and Naturalization Service, and Valley Growers Co-Operative, Inc., Mid-Hudson Co-Operative, Inc., Wayne County Growers and Processors, Inc., Northwest Growers Cooperative, Inc., and Nardone Farms, on behalf of themselves and all others similarly situated, Defendants.

No. 86 Civ. 6548.

United States District Court, S.D. New York.

May 16, 1989.

Migrant Legal Action Program, Inc., Washington, D.C. (Edward J. Tuddenham, Shelly Davis, of counsel), Farmworkers Legal Services of New York, Inc., New Paltz, N.Y. (Thomas A. Harnett, Claudia A. Smith, of counsel), for plaintiffs.

Benito Romano, U.S. Atty., S.D.N.Y. (Paul K. Milmed, Asst. U.S. Atty., of counsel), for Federal defendants.

Seyfarth, Shaw, Fairweather & Geraldson, New York City and Washington, D.C. (Thomas Wilson, Michael Hirschfeld, of counsel), for Growers defendants.

OPINION AND ORDER^*

CONBOY, District Judge:

This case arises out of the 1986 apple harvest in New York. Plaintiffs, (the "workers") originally requested a preliminary injunction to enjoin their employers, New York apple growers (the "growers") from paying the wage rate approved by the Department of Labor ("DOL") for the 1986 season as they asserted that it was unlawful. They also sought a declaration that the DOL had failed to enforce its own regulations as well as an injunction prohibiting the "federal defendants"¹ from allowing foreign workers from entering the United States to work for the growers and requiring DOL to revoke its acceptance of the growers' job clearance order. Judge Weinfeld, to whom this case was previously assigned,² declined to issue the relief requested by an Order entered October 10, 1986. Later, in the course of this litigation, Judge Weinfeld, certified both plaintiff and defendant classes under Rule 23(b)(2) of the Federal Rules of Civil Procedure.³ At the present time, the plaintiff class primarily seeks a declaration that the DOL regulations in question were not correctly interpreted by the agency; that the wage rate paid was unlawful; and that the rate should have been higher. In addition, plaintiffs request a declaration that the defendant class violated the DOL regulations and seek restitution from them for the back wages they assert should have been paid. The motions currently before the Court are the motions and cross-motions of all the parties for summary judgment. Oral argument on the motions was had in February of 1989.

FACTUAL BACKGROUND

The grower defendants utilized the United States Employment Service to recruit workers for the 1986 apple harvest in New York. In brief, the Employment Service, a network of federally funded local employment offices,⁴ was established by the Wagner-Peyser Act of 1933, 29 U.S.C. § 49 et seq., as a means of reducing unemployment by matching available jobs in one part of the country with unemployed workers in another. Employers in need of workers file job offers ("clearance orders") with their local employment office. These offers are circulated ("cleared") through the Employment Service to offices in other states. Employers who utilize the system are required to offer certain minimum terms and conditions of work pursuant to DOL regulations. See generally 20 C.F.R. Part 653 (the "prevailing wage regulations"). The local office must ensure that the job offers comply with the minimum terms and conditions of the DOL regulations. 20 C.F.R. § 653.501(c).

If the Employment Service is unable to fill all of an employer's needs and the employer receives a certificate from the DOL so certifying, the employer may make up the shortfall by hiring temporary foreign workers. If the employer seeks to hire these foreign workers, called "H-2 workers," the job clearance order must also comply with the H-2 regulations (the "adverse effect wage regulations"), codified at 20 C.F.R. Part 655. In addition, the job clearance order must be approved by the DOL Regional Administrator. It is undisputed that the Grower Defendants utilized temporary foreign workers, and therefore, all the parties agree that the 1986 job clearance orders were subject to the two sets of DOL regulations.⁵ What is disputed is whether the DOL, in approving the job orders, made sure that both regulations were, in fact, complied with.

In 1986, the prevailing wage rate was a piece rate. Because of a series of rulings by Judge Charles Richey of the District of the District of Columbia and by the Circuit Court of Appeals for the District of Columbia, which require that when a piece rate is offered, it must be a piece rate that is proportional to the adverse effect wage rate ("AEWR"), the growers decided to offer an hourly wage rate for the 1986 harvest season. This conversion from a piece rate to an hourly wage was anticipated by the DOL.⁶ The Acting Administrator for Regional Management, Barbara Ann Farmer, wrote a memorandum (the "Farmer Memorandum") to three DOL Regional administrators stating:

... such orders should not be rejected solely on the grounds that it is the prevailing practice for apple growers to pay by the piece or that the change in method of payment may have an adverse effect on U.S. workers because actual hourly earnings may not be as high as they had been previously when workers were paid by piece rate.

. . . . .

Generally, 1986 criteria apple orders that offer an hourly rate of pay (at least the AEWR) may be accepted if they otherwise meet regulatory requirements and the regional office is convinced that the same job offer is being made to foreign workers. (emphasis in original).

Exhibit 1 to Plaintiffs' Memorandum of Law in Support of Motion for Summary Judgment ("Plaintiffs' Main Memo."). According to the DOL, there was no methodology in place for computing the prevailing wage when the prevailing method of payment was switched from a piece rate to an hourly rate. On the other hand, there was a methodology available to convert hourly rates into piece rates in order to ascertain a prevailing wage. In an attempt to fill the gap, the policy to accept offers of hourly wages of at least the AEWR by the growers, as memorialized in the Farmer Memorandum, was instituted. It is this agency determination that is at the core of this lawsuit because, pursuant to it, the growers' job orders with fixed hourly wages of $4.56 were approved by the DOL and cleared through the system.

It was the federal defendants' position in the beginning of this litigation (from August 1976—May 1987) that the offer of a fixed hourly wage which was not less than the 1986 AEWR, satisfied both the adverse effect wage regulations and the prevailing wage regulations. However, their position on this issue changed in the middle of this litigation. In May of 1987, the federal defendants "confessed error" to Judge Weinfeld and stated that the prior agency determination—that the prevailing wage regulation had been satisfied—was too hastily made and could not be defended. Their "new" position, as of May of 1987, is that the prevailing wage regulations were not applied by the DOL in approving the 1986 job orders; the DOL had allowed the AEWR to be used in lieu of a prevailing wage. This new position was articulated in the Affidavit of Robert A. Schaerfl, sworn to May 8, 1987 ("Schaerfl 5/8/87 Aff.") at ¶ 4.

Of course, the growers vigorously dispute this new position and contend that the prevailing wage regulations were not ignored in the 1986 approvals.⁷ On the other hand, the plaintiffs emphatically agree with the new DOL position that the DOL did not properly consider the prevailing wage legislation when approving the 1986 job orders, and that, therefore, these approvals were contrary to law. The plaintiffs believe that if the prevailing wage regulation had been properly considered, the wage offered and paid by the growers would have been higher. Therefore, they believe they are entitled to restitution for the difference between what was paid and what should have been paid.

After this change in position, the government then requested that the action be remanded to the DOL for the purpose of developing a methodology so that the proper prevailing wage could be determined, and thus, the proper hourly wage would be ascertainable. Judge Weinfeld remanded the action by Order dated August 31, 1987. In November of 1987, the new methodology was submitted to Judge Weinfeld. However, the information necessary to calculate the proper wage according to the methodology was still being compiled when the summary judgment motion papers were submitted.⁸ As of this date, despite many representations by the government that it would be forthcoming, no computation of the "proper" prevailing wage, according to the methodology developed on remand, has been submitted. In the present posture of the case, however, a computation in hand is not necessary.

Significantly, and for different reasons, both the plaintiff and the defendant classes argue in their papers that this Court should not adopt the methodology developed by the DOL on remand. At the oral argument, however, counsel for all of the parties agreed that the issues relating to restitution could be decided without this Court making a finding as to the validity or soundness of the methodology. Transcript ("Tr.") of Oral Argument, February 17, 1989, at 34, 38, 50-51. Plaintiffs' counsel argued, however, that even if the Court decides that restitution is inappropriate, we must nonetheless address the issue of the validity of the methodology so that there is a decision of record should the DOL attempt to apply the methodology in the future. Tr. at 14, 38. The government disagreed, arguing that the issue of the...