Everglades Harvesting and Hauling, Inc. v. Scalia ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
EVERGLADES HARVESTING )
AND HAULING, INC., et al., )
)
Plaintiffs, )
) Civil Case No. 19-3291 (RJL)
v. )
)
EUGENE SCALIA, sued in his )
official capacity, et al., )
)
Defendants. )
,,, .z
MEMORANDUM OPINION
(December7'2019) [#5]
On October 31, 2019, Plaintiffs Everglades Harvesting and Hauling, Inc.
("Everglades"), Statewide Harvesting and Hauling, LLC ("Statewide"), Florida Fruit and
Vegetable Association ("FFVA"), Florida Citrus Mutual, and National Council of
Agricultural Employers ("NCAE") (collectively, "plaintiffs") filed suit against the United
States Secretary of Labor, Eugene Scalia ("the Secretary"), and the Assistant Secretary of
Labor for Employment and Training Administration, John P. Pallasch (collectively,
"defendants"), alleging violations of the Administrative Procedure Act ("AP A"), 5
U.S.C. § 551, et seq. See Compl. [Dkt. #1] `` 29-36. Six days later, plaintiffs filed a
Motion for Temporary Restraining Order and Motion for Preliminary Injunction ("Mot.
for P.I."). See Mot. for P.I., Nov. 6, 2019 [Dkt. #5]. The following day, I held a hearing
at which I heard argument on and, ultimately, denied the TRO. See Civ. Case No. 19-
3291, Minute Entry, Nov. 7, 2019. The parties briefed the motion for P.I., and this Court
1
heard argument from both sides on November 21, 2019. See Civ. Case No. 19-3291,
Minute Entry, Nov. 21, 2019. After review of the pleadings, oral argument, and the
entire record, I hereby GRANT the motion for P.I. for the reasons set forth below. See id.BACKGROUND
I. The H-2A Program and its Statutory and Regulatory Framework
The "H-2" temporary foreign worker program dates back to the original enactment
of the Immigration and Nationality Act ("INA") in 1952. See Pub. L. 82-414 §
101(15)(H)(ii) (June 27, 1952).1 The Immigration Reform Control Act of 1986 ("IRCA")
later split the H-2 program into two components: H-2A for temporary agricultural
workers and H-2B for nonagricultural workers. See Pub. L. 99-603 § 30l(a).2 In 2005,
this portion of the INA was slightly modified once again. See Pub. L. 109-90 § 536 (Oct.
18, 2005). This portion of the INA now defines the term "immigrant" to include:
an alien having residence in a foreign country which he has no intention of
abandoning who is coming temporarily to the United States to perform
agricultural labor or services, as defined by the Secretary of Labor in
regulations and including agricultural labor defined in section 3121 (g) of
title 26 [the Internal Revenue Code], agriculture as defined in section 203(f)
of title 29 [the Fair Labor Standards Act], and the pressing of apples for
cider on a farm, of a temporary or seasonal nature.
1
This provision of the INA defined the term "immigrant" to include "an alien having a
residence in a foreign country which he has no intention of abandoning ... who is
coming temporarily to the United States to perform other temporary services or labor, if
unemployed persons capable of performing such service or labor cannot be found in this
country."
2 This provision of the IRCA replaced the phrase "to perform other temporary services or
labor" in the original section with "to perform agricultural labor or services, as defined by
the Secretary of Labor in regulations and including agricultural labor denied in section
312l(g) of the Internal Revenue Code of 1954 and agriculture as defined in section 3(f)
of the Fair Labor Standards Act of 1938 ... of a temporary or seasonal nature."
2
8 U.S.C. § 1101(a)(15)(H)(ii)(a).
Pursuant to the statutory directive above, the Department of Labor ("DOL") has
promulgated a number of different definitions of "agricultural labor or services" over the
years. See, e.g., 52 FR 20496 (June 1, 1987); 73 FR 8538, 8555 (Feb. 13, 2008); 73 FR
77110, 77212 (Dec. 18, 2008); 75 FR 6884, 6887-6889 (Feb. 12, 2010). The current
version of the regulations, adopted in 2010, almost mirrors the statute, defining
"agricultural labor or services" as (additions to the statutory definition italicized):
agricultural labor as defined and applied in sec. 3 121 (g) of the Internal
Revenue Code of 1986 at 26 U.S.C. 312 l(g); agriculture as defined and
applied in sec. 3(f) of the Fair Labor Standards Act of 1938 (FLSA) at 29
U.S.C. 203(f); the pressing of apples for cider on a farm; or logging
employment. An occupation included in either statutory definition is
agricultural labor or services, notwithstanding the exclusion of that
occupation from the other statutory definition.
20 C.F .R. § 655 .103( c) ( emphasis added). As relevant here, the definition of
"agricultural labor" under IRC § 3121 (g)( 1):
includes all service performed ... on a farm, in the employ of any person,
in connection with cultivating the soil, or in connection with raising or
harvesting any agricultural or horticultural commodity, including the
raising, shearing, feeding, caring for, training, and management of
livestock, bees, poultry, and fur-bearing animals and wildlife;
26 U.S.C. § 312l(g)(l). The DOL has not adopted any of its own regulations further
elaborating on the meaning of IRC § 3121 (g)( 1 ), but the Department of the Treasury has:
( 1) Services performed on a farm by an employee of any person in
connection with any of the following activities constitute agricultural labor:
(i) The cultivation of the soil;
(ii) The raising, shearing, feeding, caring for, training, or
management of livestock, bees, poultry, fur-bearing animals, or
wildlife; or
3
(iii) The raising or harvesting of any other agricultural or
horticultural commodity.
(2) Services performed in connection with the production or: harvesting of
maple sap, or in connection with the raising or harvesting of mushrooms, or
in connection with the hatching of poultry constitute agricultural labor only
if such services are performed on a farm. Thus, services performed in .
connection with the operation of a hatchery, if not operated as part of a
poultry or other farm, do not constitute agricultural labor.
26 C.F.R. § 31.312l(g)-l(b).
In addition to these statutes and regulations, the DOL' s most recent
pronouncement regarding the H-2A program is a document containing a series of
frequently asked questions ("FAQs") and responses, which DOL distributed on October
23, 2019 in response to the controversy that gave rise to this case. See 2010 H-2A Final
Rule FAQs: Round 14: H-2A Definition of Agricultural Labor or Services ("H2-A
FAQs"), Oct. 23, 2019 [Dkt. # 1-6]. 3 Of course, these FAQs have not gone through any
formal rulemaking process, but they do provide evidence of and explanations for the
DOLs latest thinking on the matters at issue here.
II. The H-2A Application and Appeal Process
In order to obtain an H-2A Temporary Labor Certification ("TLC"), an employer
must go through a multi-step application process, the relevant parts of which can be
summarized as follows: First, the employer submits a "job order" to a state agency
between sixty and seventy-five days before the labor is needed. See 20 C.F.R. §
655.12l(a). The state agency checks for compliance with DOL regulations, classifies the
type of job the employer seeks to fill, and attempts to recruit U.S. workers to fill that job.
3
Available at https://www.foreignlaborcert.doleta.gov/pdf/H-2A-20l 0-Rule-
F AQs _Round-Ld _Definition-of-Ag.pdf
4
See id. § 12l(b)(l), (c). Second, while the state agency is completing these steps, the
employer submits an H-2A application and supporting documentation to the DOL no less
than forty-five days before the labor is needed. See id. § 655.130(b). Third, DOL
employees then review the application for compliance with all applicable program
requirements. See id. § 655.140(a). Within seven days of receiving the H-2A
application, a DOL Certifying Officer ("CO") issues either a Notice of Acceptance
("NOA") or a Notice of Deficiency ("NOD"). Id. §§ 655.141(a), 655.143(a). NODs
identify the reasons the employer failed to meet the H-2A program's criteria and, if
applicable, list the modifications required for acceptance. See id. § 655.143(b). If the
employer submits modifications, the CO will review and either accept or deny the
modified application.
When their application for an H-2A TLC is denied, an employer has seven days to
request either an expedited administrative review by, or a de novo administrative hearing
before, an Administrative Law Judge ("ALJ"). See id. §§ 655.164(b), 655.171. If the
employer does not request such a review within seven days, the CO's decision is final.
See id.§ 655.164(c). If the employer requests an expedited review, the ALJ will review
the written record and any written submissions within five days of receiving the
administrative record and either affirm, reverse, or modify the CO's decision, or remand
to the CO for further action. See id.§ 655.171(a). If the employer requests a de novo
hearing, the ALJ will schedule a hearing for within five days of receiving the
administrative record, consider any new evidence, and render a decision affirming,
reversing, or modifying the CO's determination, or remand to the CO for further action,
5
within ten days of the hearing. See id. § 65 5 .171 (b ). The ALJ' s decision after either an
expedited review or a de novo hearing is the final decision of the Secretary. See id.
§655.171.
III. H-2A Agricultural Labor Contractors
Plaintiffs Everglades and Statewide are agricultural labor contractors ("ALCs"),
also known as H-2A Labor Contractors. In laymen's terms, these ALCs contract with
growers to provide them needed labor and then use the H-2A program to hire foreign
workers to complete this labor. More formally, DOLregulations define an ALC as:
Any person who meets the definition of employer4 under this subpart and is
not a fixed-site employer, an agricultural association, or an employee of a
fixed-site employer or agricultural association, as those terms are used in
this part, who recruits, solicits, hires, employs, furnishes, houses, or
transports any worker subject to [the H-2A program].
20 C.F.R. 655.103(b).
A. Everglades Harvesting and Hauling, Inc.
Plaintiff Everglades was founded in 1991 to provide harvesting and hauling
services to small and medium sized fruit and vegetable growers in southwest Florida. See
4 Employer is in relevant part defined as:
A person (including any individual, partnership,' association, corporation,
cooperative, firm, joint stock company, trust, or other organization with
legal rights and duties) that:
Has a place of business (physical location) in the U.S. and a means
by which it may be contracted for employment;
Has an employer relationship (such as the ability to hire, pay, fire,
supervise or otherwise control the work of employee) with respect to
an H-2A worker or a worker in corresponding employment ....
20 C.F.R. 655.103(b).
6
Deel. of Paul J. Meador, Jr. ("Meador Reply Deel."), Pl.'s Mem. in Further Support of
Mot. for P .I. ("P .I. Reply") [Dkt. # 12], Ex. 2 at 1. Over the following years, Everglades
began to rely on the H-2A program as "the only reliable means of obtaining capable and
willing agricultural laborers" for its harvesting operations. Id. These days, Everglades
has grown to provide harvesting, hauling, grove management, and other agrimanagement
services to fruit and vegetable growers throughout the state of Florida. See Deel. of Paul
J. Meador, Jr. ("Meador Deel."), Mot. for P.I. Ex. 1 ~ 3. And over the past five years, the
company has come to rely on the H-2A program to find workers to haul harvested crops
to the first point of processing or packing. See Meador Reply Deel. at 1-2. To that end,
the DOL has certified applications filed by Everglades for H-2A workers in connection
with truck driving positions over the past several years:
• 9 "agricultural equipment operators" whose job duties included "hauling citrus to
plants" in 2017;
• 30 "agricultural equipment operators" whose job duties included "the collection
and hauling of crops from groves and fields to designated work sites" in 2018;
• 30 "truck drivers" whose job duties included "the collection and hauling of crops
from groves and fields to designated work sites" in 2018.
Meador Deel.~ 4; Deel. of Brian D. Pasternak ("Pasternak Deel."), Gov'ts Opp'n to P.I.
Mot. ("P.I. Opp'n") [Dkt. #10], Ex. 1 ~ 17(a), (c), (d).
This year, on August 16, 2019, Everglades applied' to DOL to obtain a TLC for 44
"heavy and tractor-trailer truck drivers" to assist in loading and hauling raw sugarcane
from farms and fields to a centralized processing mill. See In the Matter of Everglades
Harvesting and Hauling, Inc., Nov. 8, 2019 Decision & Order Affirming Denial of
5The record reflects that plaintiff FFV A submitted this application on behalf of
Everglades. See Everglades ALJ Decision, infra, at 2.
7
Certification ("Everglades ALJ Decision") at 26; see also Pasternak Deel. ~ 16( e)
(identifying this Everglades ALJ decision). But this time, DOL issued a NOD, finding a
failure to establish that the job opportunity consisted of agricultural labor of services for
purposes of participation in the H-2A program.7 See Everglades ALJ Decision at 2. To
say the least, Everglades viewed this as the DOL applying a new, narrower, interpretation
of the regulations to H2A applications. Everglades responded to the NOD by submitting
several exhibits, including a copy of its 2018 tax return, and contended that its proposed
job opportunity met the IRC definition of agricultural labor. Id. at 3. Additionally,
Everglades represented that "[o]fthe estimated hours worked by [its] drivers, 60 percent
of their workweek hours takes place on the sugarcane farm property." Id. The CO
rejected these arguments and issued a denial letter on September 17, 2019. See id.
Everglades filed for an expedited administrative review before an ALJ, and a hearing was
held on October 22, 2019. See id. at 4. Everglades and DOL filed additional briefing on
November 1, 2019, and the ALJ issued his decision affirming the CO' s denial of the TLC
on November 8, 2019.
As a result of this decision, Everglades represents that it is losing $86,000 per
week, totaling $430,000 at the time of plaintiffs' reply brief, and that it expects to lose
6
Available athttps://www.oalj.dol.gov/DECISIONS/ALJ/TLC/2019/EMPLOYMENT
_AND_TRAIN_v _EVERGLADES_HARVESTIN_20 l 9TLC00088 _(NOV_ 08_2019)_ 1
21657 - CADEC - PD.PDF.
7
The NOD referenced other reasons for the initial denial, but the ALJ later concluded
that the CO's final determination to deny Everglades a TLC was based solely on this
ground. See Everglades ALJ Decision at 2 n.2.
8
over $4.7 million dollars over the course of this season. Meador Reply Deel. at 2. This
loss represents over 21 % ofEverglades's total projected revenue. Id.
B. Statewide Harvesting and Hauling, LLC
Plaintiff Statewide contracts with growers to provide labor to harvest crops and
transport those crops to off-side storage and processing locations. Compl. ~ 14. DOL
has certified two applications filed by Statewide for H-2A workers in connection with
truck driving positions over the past two years:
• 5 "truck drivers" whose job duties included "hauling crops from groves and fields
to designated processing and packing facilities" in 2018;
• 6 "truck drivers" whose job duties included "hauling crops from groves and fields
to designated processing and packing facilities" at the beginning of 2019;
Id.; Pasternak Deel. ~ 17( e ), (f). When Statewide applied for a TLC for three truck
drivers for this season, however, its application, like that submitted by Everglades, was
denied. See Pasternak Deel. ~ 19.
C. Sugarland Ag, LLC
Sugarland Ag, LLC ("Sugarland") is not a named plaintiff in this case, but it is a
NCAE member and therefore falls within the scope of plaintiffs' proposed injunction.
P.I. Reply at 10; Deel. of William Wilkes, II ("Wilkes Deel."), P.I. Reply Ex. 3 [Dkt.
# 13-1] `` 1-2. Sugarland was started by the Wilkes family in May 2018 to provide
sugarcane harvest hauling and other services to Florida sugarcane growers through a
contract with the Sugarcane Growers Cooperative of Florida ("SCGC"). Wilkes Deel.
~ 1. DOL certified one previous application filed by Sugarland for fifteen drivers to haul
sugarcane during the 2018-2019 season. Id.~ 4. Based on the successful completion of
9
that work, Sugarland "substantially increased [its] scope of planned operations" for
2019-2020 and took on debt to finance the planned expanded operation. Id.`` 5, 7. As
part of this expansion, Sugarland applied for a TLC for sixty-five drivers to haul
sugarcane during 2019-2020. See id.~ 5. DOL denied Sugarland's application in
September 2019. 8 As a result of this denial, and because Sugarland increased its
operations this year, the company stands to lose $1,370,619.66. Id.~ 9; see also id.
`` 10-22 ( explaining the basis for this calculation). This total does not include any
possible liability to SCGC for failing to deliver on its contract. Id. ~ 7. The company's
managing member represents that these losses will be unrecoverable absent being able to
mitigate them unless it is immediately able to begin its planned hauling activities. See id.
`` 23, 25.
Plaintiffs contend that each of these H-2A ALCs (and one other, Fresh Harvest)
will suffer irreparable injury if injunctive relief is denied by this _Court.
ANALYSIS
I. Standard of Review
The factors a court must weigh in deciding whether to grant a preliminary
injunction are familiar: (1) whether the plaintiffs have a substantial likelihood of success
8
The precise date is not in the record but can be inferred from the date Sugarland's ALJ
appeal commenced. See Notice of Docketing & Pre-Hr'g Order, In the Matter of
Sugar/and AG, LLC, https://www.oalj.dol.gov/DECISIONS/ALJ/TLC/2019/In_re_
SUGARLAND_AG_LLC_2019TLC00087_(NOV_07_2019)_160144_ORDER_PD.PDF
(reflecting September 23, 2019 docketing). Sugarland's request for a de novo hearing is
still pending ( and is, in fact, on hold pending the outcome of this motion). See Order to
Submit Status Rep., In the Matter of Sugar/and, https://www.oalj.dol.gov/DECISIONS/
ALJ/TLC/2019/EMPLOYMENT- and - TRAIN-- v SU GARLAND - AG -LLC - 20 l 9TLC0
0087 _(NOV_15_2019)_165704_ ORDER_PD.PDF.
10
on the merits; (2) whether the plaintiffs would suffer irreparable injury in the absence of
preliminary relief; (3) whether the balance of equities tips in their favor; and ( 4) whether
the requested injunction would further the public interest. Guedes v. Bureau of Alcohol,
Tobacco, Firearms and Explosives, 920 F.3d 1, 10 (D.C. Cir. 2019). The last two factors
merge when the Government is the opposing party. Id. A preliminary injunction is "an
extraordinary remedy that may only be awarded upon a clear showing that the plaintiff]s]
[are] entitled to such relief," and the plaintiffs bear the burden of persuasion in seeking
preliminary relief. Id. (quoting Winter v. Natural Res. Def Council, Inc., 555 U.S. 7, 22
(2008) (internal quotation marks omitted)).9
II. Plaintiffs Demonstrate That Injunctive Relief Is Warranted.
At first blush, it might appear that plaintiffs seek injunctive relief in the form of an
order from this Court directing the DOL to immediately grant TLCs to those falling
within the scope of its proposed relief. But as the plaintiffs themselves recognize, such
an order is not, for obvious reasons, an option. County of Los Angeles v. Shala/a, 192
F.3d 1005, 1011 (D.C. Cir. 1999). Instead, they seek a more appropriate remedy: remand
back to the agency of those applications that were filed by ALCs that had previously
received TLCs and that were filed this year before the DOL released its FAQ document
in late October. In essence, they seek a reevaluation of their applications under the
DOL's "old" standard, which had previously resulted in the applications being granted.
9
Whether the "sliding scale" approach to injunctive relief, whereby a strong showing on
one factor can outweigh a weak showing on another, survives the Supreme Court's
decision in Winter "remains an open question" in the D.C. Circuit. Aamer v. Obama, 742
F.3d 1023, 1403 (D.C. Cir. 2014).
11
The DOL, not surprisingly, argues strenuously that there is no "old" standard and that
plaintiffs are not entitled to TLCs under any reading of the INA and its applicable
regulations. Although I agree that there is no coherent, clearly designated, "old"
standard, I disagree that there is no reading of the law under which the plaintiffs could be
granted TLCs. After all, similar applications by these same companies had been granted
on numerous occasions in prior years. As I explain below, I believe the plaintiffs have
the better of the legal argument here, especially in light of the reliance interests stake.
Therefore, I will remand this limited group of applications back to the DOL for
reevaluation.
A. Plaintiffs Are Likely to Succeed on the Merits.
Plaintiffs underlying suit seeks relief under the AP A, which requires a court to set
aside agency action it finds to be, among other things, "arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law; in excess of statutory jurisdiction,
authority, or limitations; or short of statutory right; [or] without observance of
procedure required by law." 5 U.S.C. § 706(2)(A), (C), (D). Judicial review of DO L's
regulations construing the portion of the INA authorizing the H-2A program, see 8
U.S.C. § 110l(a)(l5)(H)(ii)(a); 20 C.F.R. § 655.103(c), must be accorded due deference
under Chevron, US.A., Inc. v. Natural Res. Def Council, Inc., 467 U.S. 837 (1984).
DO L's interpretation of its own regulations is entitled to deference under Auer v.
Robbins, 519 U.S. 452 (1997), if such deference is warranted. See generally Kisor v.
Wilkie, 139 S. Ct. 2400 (2019).
12
The DOL essentially contends that under the INA and its regulations, hauling
activities performed off the farm site cannot be "agricultural labor or services" unless
performed in the employ of a farmer. See P.I. Opp'n 10, 15, 23; Pasternak Deel. ,i 10. It
further contends that H-2A workers may perform only agricultural labor or services and
that any non-agricultural labor job duties render a job ineligible to be filled by an H-2A
worker. See P.I. Opp'n 7. Plaintiffs disagree with both contentions, although their
arguments have evolved over the course of the briefing in this case. First, plaintiffs
contend that the term "agricultural labor or services" is properly read to include hauling
off the farm site as long as it is performed incident to harvesting and even when done by
ALC employees. See Compl. ,i 20 (relying on the term "including" in the INA); Mem. in
Support of P.I. Mot. [Dkt. #6] at 4-5 (repeating argument based on "including" and
adding arguments about inadequate notice and reliance interests); P.I. Reply at 2-8
(repeating notice and reliance arguments and adding argument based on the IRC
definition of agricultural labor). Second, plaintiffs contend that the DOL has
misinterpreted Congress's intent in separating the original H-2 program into separate
agricultural (H-2A) and non-agricultural (H-2B) programs. P.I. Reply at 3.
Plaintiffs, of course, bear the burden of persuasion." As such, I will focus on their
arguments first. Initially, they contend that the IRC definition of "agricultural labor,"
10
Preliminarily, I reject the argument that use of the word "including" in the statute
authorizing the H-2A program contradicts the DO L's present interpretation of the term
"agricultural labor or services." It is true, as plaintiffs contend, that the word "including"
in the statute must mean something, but even if Congress's use of that word required the
DOL to expand the definition of "agricultural labor or services" beyond the IRC
definition of agricultural labor, the FLSA definition of agriculture, and the pressing of
13
covers their situation. As a reminder, the statutory and regulatory scheme I set out above
defines "agricultural labor or services" to include "agricultural labor as defined and
applied in sec. 312l(g) of the Internal Revenue Code," 20 C.F.R. § 655.103(c), which
itself "includes all service performed ... on a farm, in the employ of any person, ... in
connection with ... harvesting any agricultural ... commodity .... " 26 U.S.C.
§ 3121 (g)(l ). Plaintiffs' argument is that "hauling freshly-harvested crops to storage or
processing is inextricably linked with (thus, 'in connection with') the ... harvesting of
those crops." P.I. Reply 6.11 Indeed. At least, so long as this hauling incident to
harvesting occurs on the farm site, it seems to fit squarely within the IRC's definition of
. agricultural labor. However, to the extent plaintiffs argue that hauling off the farm site by
their employees qualifies as agricultural labor, none of the FLSA or IRC definitions
seems to fit squarely with that interpretation.
Second, the plaintiffs contend that the DOL misinterprets congressional intent in
the way it imposes a rigid separation between agricultural and non-agricultural labor.
This argument, as I understand it, is that the inclusion of some job duties that do not
constitute agricultural labor should not, at least automatically, defeat plaintiffs'
applications for H-2A TLCs. See Draft Tr. of P.I. Hr'g 7 ("[T]he work involved some
work in the harvest so the same people that are driving would also be part of the harvest
apples for cider, the DOL did so: it added "logging employment" to the definition. See
20 C.F.R. § 655.103(c). Granted, this is not a large expansion of the statutory definition,
but to the extent the DOL was required to give effect to the word "including," it did so.
11 This language from plaintiffs' brief actually references 26 U.S.C. § 312l(g) subsection
(3) instead of subsection ( 1 ), but the former applies only to a small class of specially-
defined tree-gum products while the former applies far more broadly. Still, I think their
textual interpretation is sound.
14
crew. The interpretation from the Department of Labor, though, was that they can't leave
that farm essentially. They're locked into that parcel of land.").
Before weighing the plaintiffs' construction of the DOL' s regulation against its
own, however, I must determine how much deference to accord the DOL's interpretation.
Here, the reliance interests and lack of prior announcement lead me not to accord Auer
deference to the DOL's apparent construction of its own regulation. How so?
The Supreme Court's decision in Christopher v. SmithKline Beecham Corp., 567
U.S. 142 (2012), is instructive in answering this question. There, a group of sales
representatives sued their pharmaceutical company employers for failure to pay overtime
under the FLSA. See id. at 150-52. The employers argued that the sales representatives
fell under the FLSA exemption for "outside salesm[ e ]n," under DOL regulations and so
did not need to be paid overtime. See id. at 152. In response, the sales representatives
pointed to a recent interpretation by the DOL contradicting this argument. See id. The
DOL had announced this interpretation for the first time in an amicus brief filed in a
similar case then on appeal. See id. The Supreme Court first concluded that although
DO L's regulations were entitled to Chevron deference, the interpretation of those
regulations at issue in the case was not entitled to Auer deference. See id. at 159.
Writing for the Court, Justice Alita explained that such deference was unwarranted
because:
Petitioners invoke the DOL's interpretation of ambiguous regulations to
impose potentially massive liability on respondent for conduct that
occurred well before that interpretation was announced. To defer to the
agency's interpretation in this circumstance would seriously undermine the
principle that agencies should provide regulated parties "fair warning of the
15
conduct [a regulation] prohibits or requires." Gates & Fox Co. v.
Occupational Safety & Health Review Comm 'n, 790 F.2d 154, 156 (D.C.
Cir. 1986). Indeed, it would result in precisely the kind of "unfair surprise"
against which our cases have long warned. See Long Island Care at Home,
Ltd. v. Coke, 551 U.S. 158, 170-41 (2007); ... Martin v. Occupational
Safety and Health Review Comm'n, 499 U.S. 144, 158 (1991) (identifying
"adequacy of notice to regulated parties" as one factor relevant to the
reasonableness of the agency's interpretation); NLRB v. Bell Aerospace
Co., 416 U.S. 267 (1974) (suggesting that an agency should not change an
interpretation in an adjudicative proceeding where doing so would impose
"new liability ... on individuals for past actions which were taken in good-
faith reliance on [agency] pronouncements" .... ).
Id. at 155-57.
The parallels to this case are undeniable. Here, as in Christopher, the plaintiffs
. relied on one interpretation of DO L's regulations in organizing their businesses, and here,
as in Christopher the DOL announced (the DOL, of course, would say clarified) its much
narrower interpretation of its regulations after that reliance had occurred. Indeed, in
evaluating the reliance interests at play in Christopher, the Supreme Court found it
especially important that "despite the industry's decades-long practice of classifying
[ outside pharmaceutical sales representatives] as exempt employees, the DOL never
initiated any enforcement actions with respect to [these sales representatives] or
otherwise suggested that it thought the industry was acting unlawfully." Id. at 157. And
it added that where "an agency's announcement of its interpretation is preceded by a very
lengthy period of conspicuous inaction, the potential for unfair surprise is acute." Id. at
15 8. The Court quoted approvingly from a Seventh Circuit decision explaining that
"while it may be 'possible for an entire industry to be in violation of the [FLSA] for a
long time without the Labor Department noticing,' the 'more plausible hypothesis' is that
16
the Department did not think the industry's practice was unlawful." Id. (quoting Dong Yi
v. Sterling Collison Ctrs., Inc., 480 F.3d 505, 510-11 (2007)). All this reasoning applies
even more forcefully in the present case, where the ALCs relied not on silence or tacit
acquiescence by DOL but on it actually approving their applications year after year after
year!
The Court in Christopher also pointed to a policy rationale underlying its decision,
warning that the practice of deferring to agency interpretations of ambiguous regulations
"creates a risk that agencies will promulgate vague and open-ended regulations that they
can later interpret as they see fit, thereby 'frustrat[ing] the notice and predictability
purposes of rulemaking. "' Id. ( quoting Talk America, Inc. v. Mich. Bell Telephone Co.,
564 U.S. 50, 69 (2011) (Scalia, J., concurring)). Again, this policy rationale is even
stronger here. If agencies can promulgate ambiguous regulations, lull industry
stakeholders into a false sense of security by granting years' worth of applications under
those regulations, and then suddenly shift gears, deny applications, and claim that the
time to challenge the regulation has passed, 12 those ambiguous regulations could fail to
provide "fair warning" and evade any sort of judicial review. 13
12
See P.I. Opp'n 15 n.9 (claiming any challenge to the DOL regulation defining
"agricultural labor or services" itself is barred by the six-year statute of limitations on
actions against the United States).
13
There is no indication of bad faith on the DOL's part here. The DOL claims that it has
always held a consistent interpretation and mistakenly approved these prior applications,
and there is no reason to doubt that explanation. But because the ALCs were not on
notice of this consistent, uniformly-applied mistake, the DO L's good faith is irrelevant.
17
Thus, the Court in Christopher declined to grant Auer deference to the DOL's
interpretation of its regulation, instead according it "a measure of deference proportional
to the 'thoroughness evident in its consideration, the validity of its reasoning, its
consistency with earlier and later pronouncements, and all those factors which give it
power to persuade."' Id. at 159 (quoting United States v. Mead Corp., 533 U.S. 218,228
(2001)). That approach makes good sense here as well.14
At oral argument, and in the FAQ document it issued last month, the DOL pointed
to the text of IRC provision defining "agricultural labor" and Treasury regulations for its
argument that plaintiffs' hauling activities are not "agricultural labor or services" within
the meaning of the INA and the DO L's regulations. To the extent the DOL argues that
any activity incident to harvesting performed by ALC employees (i.e., non-farm
employees) is no longer agricultural labor once those ALC employees leave the farm site,
I agree. See 26 C.F.R. § 3 l.312l(g)-l(b)(l) (limiting agricultural labor to "[s]ervices
performed on a farm" (emphasis added)). However, to the extent the DOL argues that
hauling is not "agricultural labor" even on the farm site, I must disagree in the face of
contrary statutory and regulatory language.
The DOL additionally contends that even if ALC employee hauling activities
constitute "agricultural labor or services" when on the farm site, H-2A TLCs may only be
14
I do not believe the DOL's interpretations of the INA in the context of adjudicating a
TLC is the sort of the decision that is entitled to Chevron deference as a general matter.
But even if it could be, see, e.g., Citizens Exposing Truth about Casinos v. Kempthorne,
492 F.3d 460, 466-67 (D.C. Cir. 2007), I would not grant those interpretations Chevron
deference here for the same reliance reasons I lay out above, see, e.g., Encino Motorcars,
LLCv. Navarro, 136 S. Ct. 2117, 2125-27 (2016).
18
granted when an H-2A employee's job duties would consist solely of "agricultural labor
or services," so the applications were properly denied. See P.I. Opp'n 7. DOL, not
surprisingly, repeated this point ad nauseum in its recent FAQ publication. See, e.g., H-
2A FAQs ~ 1 ("Only those duties encompassed by the Department's definition of
agricultural labor or services ... may be included on an H-2A application."), ~ 2
(answering "No" in response to question "May I include both agricultural and
nonagricultural duties on my H-2A applicationv''L'[ 3 ("[A]n H-2A application for a job
opportunity that contains ... a combination of agricultural and nonagricultural duties,
cannot be certified."). And the preamble to the 2010 regulation published in the Federal
Register makes the same claim in explaining why the DOL modified the portion of the
2008 regulation defining "agricultural labor or services":
The 2008 Final Rule's definition was problematic because it allowed a
farmer to employ both H-2A workers and H~2B workers to perform
identical work, so long as the H-2A workers and the H-2B workers were
employed in different locations. Congress clearly intended to create two
separate programs: H-2A for agricultural work and H-2B for other,
nonagricultural work. Compare 8 U.S.C. l 10l(a)(l5)(H)(ii)(a) and 8
U.S.C. 110l(a)(l5)(H)(ii)(b). A regulation that allows H-2A workers and
H-2B workers to perform the same activity is inconsistent with this
Congressional intent. ...
75 F.R. 6888 (Feb. 12, 2010) (emphasis added). But the fact that Congress chose to
create separate programs for agricultural and non-agricultural work does not necessarily
mean that Congress intended that workers in the agricultural program could not perform
19
any other work.15 More importantly, despite the (mostly recent) repetition of this DOL
interpretation of the INA, it is enshrined nowhere in actual regulations!
What's more, an examination of the broader statutory and regulatory scheme
suggests that the DOL is borrowing its adherence to a strict bright line between
agricultural and non-agricultural labor from the separate and distinct FLSA context.
DOL regulations implementing the FLSA have long provided that an employee who
would be exempt as working in agriculture under the Act loses that exemption by
performing any work not defined as agriculture under the Act. See 29 C.F.R. § 780.11.
But the incorporation of the FLSA's definition of agriculture into the INA does not mean
that this rigid FLSA rule should also be incorporated. As the Second Circuit once
explained in an analogous context involving the NLRB:
[W]hen the issue is whether a small amount .of nonagricultural work
converts one who would otherwise be "an agricultural laborer" under [the
National Labor Relations Act] into one who is not, the questions "of policy
and statutory construction" under the two acts are altogether different.
Assignment of a man to covered wage and hour status under the FLSA for a
15
Indeed, an admittedly preliminary review of the legislative history surrounding the
enactment of the H-2A program indicates that it was created to impose more stringent
obligations on prospective employers of temporary agricultural workers than temporary
non-agricultural workers. See Immigration Control & Legalization Amends. Act of 1986,
H. Comm. on the Judiciary, H.R. Rep No. 99-682, at 80 (l 986) ("Recognizing the unique
needs of growers and the inadequacy of current protections for farmworkers, the bill
creates a separate and distinct H-2 program for agriculture, referred to in the bill as the
"H-2A" program."); see also Immigration Reform & Control Act of 1986, Conf. Report,
H.R. Rep. No. 99-1000, at 94 (1986) (noting that the final bill agreed on by the
conference committee adopted the House's H-2A provisions). As the legislation
provided agricultural workers with more protections that non-agricultural workers (and
thereby made it less desirable from an employer's perspective to hire agricultural
workers), there is no reason to believe that Congress would be concerned about
agricultural workers performing some non-agricultural work (as opposed to the
alternative).
20
particular workweek in which he has engaged in appreciable non-exempt
work has no implications for other work weeks, or other men. Labor
relations know no such watertight compartments. [W]e see no reason for
believing that, by regularly enacting riders incorporating the FLSA' s broad
definition of agriculture, Congress meant to relieve the Board of the task of
developing an approach to this question of mixed work that is suitable in
the light of the principles, the policies and the administrative problems of
the National Labor Relations Act, and instead to permit mechanical
adoption of the practice developed by the Department of Labor to meet the
altogether different problems of the FLSA-particularly when this would
often restrict an exemption which Congress intended to expand.
N.L.R.B. v. Kelly Bros. Nurseries, 341 F.2d 433, 438-39 (2d Cir. 1965). Rules relating to
FLSA exemptions are especially inapplicable here because the FLSA is a remedial statute
whose exemptions traditionally have been interpreted narrowly, see A.H. Phillips, Inc. v.
Walling, 324 U.S. 490 (1945); but see Encino Motorcars, LLC v. Navarro, 138 S. Ct.
1134, 1142 (2018) (rejecting this principle), whereas whether a worker performs
agricultural labor or not under the INA is subject to no such canon of construction.
To the extent the DOL sought to borrow from a different regulatory framework,
the one I would look to here is the IRC and Treasury regulations, as I am examining the
INA's definition of "agricultural labor and services" derived from the IRC. In contrast to
the FLSA context, where even a de minim is amount of non-agricultural work prevents an
employee from being an exempt agricultural employee, in the tax context (indeed, in the
same section of the same statute that defines "agricultural labor"), what matters is the
bare majority ofan employee's work. See 26 U.S.C. § 312l(c) ("if the services
performed during more than one-half of any such pay period by an employee for the
person employing him do not constitute employment, then none of the services of such
employee for such period shall be deemed to be employment").
21
As such, it seems that there is little reason to accept, and good reason to doubt, the
DOL's proffered (but not formally adopted) interpretation that an employer is ineligible
for an H-2A TLC if the employer's application includes any non-agricultural.job duties.
To me, at least at this admittedly preliminary stage, the better reading of the statute and
its context allows for non-agricultural work to be included, so long as agricultural work
predominates.
The question, then, is whether the six applications at issue in this case would
qualify even under a more relaxed standard .allowing some non-agricultural work. With
respect to Everglades, at least, the answer appears to be yes. See Everglades ALJ
Decision at 3 (Everglades represented that"[ o ]f the estimated hours worked by [its]
drivers, 60 percent of their workweek hours takes place on the sugarcane farm
property."). And based on plaintiffs' representations to date, I presume the answer will
be yes for the other applicants as well. But, as my accompanying order makes clear, the
DOL will need to conduct this evaluation for itself.
B. Plaintiffs Demonstrate That They Will Suffer Irreparable Harm.
Plaintiffs allege two types of harm: economic and reputational. To start with the
economic harm, each H-2A ALC that has had one of its applications denied for this
season faces economic losses that are certain, actual, and imminent.16 Still, our Circuit
16
The structure of the H-2A application process guarantees that this is so. In order to
apply to receive an H-2A TLC, ALCs must first enter into contracts with growers for
work to commence imminently and submit those contracts to state workforce agencies
and the DOL. As part of certifying these applications, the state workforce agencies and
the DOL must determine that there are no American workers available and willing to take
these jobs. Because the applications at issue here were approved in all respects except
22
has long held that "economic loss does not, in and of itself, constitute irreparable harm."
Wisc. Gas Co. v. F.E.R.C., 758 F.3d 669,674 (D.C. Cir. 1985). This is so because
economic injuries are generally recoverable. See id. However, there are two exceptions
to this general rule. First, "[r]ecoverable monetary loss may constitute irreparable harm
only where the loss threatens the very existence of the movant's business." Id. Second,
where economic loss will be unrecoverable, such as in a case against a Government
defendant where sovereign immunity will bar recovery, economic loss can be irreparable.
See Save Jobs USAv. U.S. Dep t ofHomeland Security, 105 F. Supp. 3d 108,114
(D.D.C. 2015) (citing Clarke v. Office of Fed. Haus. Enter. Oversight, 355 F. Supp. 2d
65-66 (D.D.C. 2004)); see also Smoking Everywhere, Inc. v. U.S. Food & Drug Admin.,
680 F. Supp. 2d 62, 77 n.19 (D.D.C. 2010). Plaintiffs allege that both exceptions to the
general rule on economic losses apply here. I agree.
There is. strong evidence to suggest that plaintiffs' businesses will be threatened
without injunctive relief. Plaintiff Everglades is facing a loss of more than 21 % of its
revenue and Sugarland, a member of plaintiff NCAE, is a small family company that is
facing a loss of over $1 million. These H-2A ALCs are not massive entities that can
withstand such losses in their core business. See, e.g., Smoking Everywhere 680 F. Supp.
2d at 76-77 ( concluding that small companies focused on importing electronic cigarettes
faced irreparable injury when FDA prevented them from importing further cigarettes).
What's more, even if their projected losses do not sink these small businesses, they will
the alleged failure to show that the workers would perform agricultural labor or services,
by definition there is a contract, an imminent need for workers to perform the labor
outlined in that contract, and no American workers available to perform that labor.
23
be unrecoverable because the plaintiffs would have no cause of action against the DOL to
recover their lost money. Thus, plaintiffs' economic losses constitute irreparable harm.
Moving on to reputational harm, it is unquestionable that plaintiffs will suffer
severe reputational harm if they are forced to renege on their contracts with growers, and
such reputational harm will almost certainly be irreparable. Courts have recognized that
such harm to a business's reputation can constitute irreparable harm sufficient to qualify
for a preliminary injunction. See Patriot, Inc. v. US. Dep 't of Housing & Urban Dev.,
963 F. Supp. 1, 5 (D.D.C. 1997) (grating P.I. where plaintiffs "demonstrated irreparable
harm in damage to their business reputation"). Here, the structure of the H-2A visa
program makes it unquestionable that at least some growers will be unable to find
sufficient labor to haul their harvest and haul their crops to market absent injunctive
relief.'? See, e.g., P.I. Mot., Deel. of Carlton ("Carlton Deel."), Ex. 2 [Dkt. #5-2] ~ 6
("The crops have been planted and cultivated, and now our growers face losses that
jeopardize their ability to continue in operation."). Even if the growers whose crops are
left to rot in the field manage to survive this season, it strains credulity to suggest that
they would simply renew their contract with the ALCs that failed them in a previous year.
Thus, the prospect of severe and unrecoverable reputational harm is certain, actual, and
imminent, justifying preliminary relief in this case.
17
See note 16 supra.
24
C. The Balance of Equities and the Public Interest Tips Strongly in Favor of
Injunctive Relief.
Once again, the third and fourth factors required for injunctive relief-balancing
of the equities and the public interest-merge where a plaintiff seeks preliminary relief
against the government. Nken v. Holder, 556 U.S. 418, 435 (2009). Here, these factors
weigh very heavily in favor of plaintiffs. As I have explained above, the structure of the
H2-A program and its application process effectively requires serious and advanced
reliance interests because ALCs must sigri contracts committing to provide a certain
amount of labor in order to apply for H-2A TLCs in the first place. Where, as here, the
state workforce agencies and the DOL have reviewed and approved these applications, 18
it is likewise true that there is no source for this labor aside from temporary foreign
workers. Thus, in binding themselves to provide labor under the H-2A program, H-2A
ALCs are required to rely on previously successful applications. Where, as here, similar
applications have been routinely and unanimously approved in prior years, it is only fair
to conclude that the ALCs have had the proverbial rug yanked out from under them by
the DOL' s decision not to approve their applications this year.
Fortunately, the relief sought here is also very narrowly tailored. The plaintiffs
seek only a re-evaluation by the DOL of applications filed before October 31, 201919 for
the coming season by ALCs that previously have been granted TLCs and whose
applications were denied solely on the basis of an alleged failure to include only job
18
Except, of course, that the DOL did not approve the applications here ori the sole issue
of whether the H-2A workers would be completing solely agricultural labor or services.
19
The date this case was filed. See Compl.
25
duties that consist of agricultural labor or services 1:1 s more narrowly defined in 2019.
Plaintiffs have identified six applications to which that relief would apply. See Comp!. i1~
13, 14 (listing one application each by Everglades and Statewide); P.I. Reply 10 (listing
three applications by Fresh Harvest and one application by Sugarlandj" The DOL's
own regulations require that it evaluate such applications in the first instance within
seven days, see 20 C.F.R. §§ 655.14l(a), 655.143(a), and the applications here would
need to be re-evaluated as t6 only one factor among many, so the burden to the DOL's
resources would be minimal.
The DOL points to this Court's language in a previous case for the proposition that
issuing an injunction here would work great harm by subverting Congress's plenary
power over the admission of aliens and substituting the Court's judgment for that of the
agency Congress chose to handle these matters. See P.I. Opp'n 30. Of course, issuing a
preliminary injunction is always a weighty matter, especially when doing so against the
Government. But notwithstanding the DOL's claims to be acting pursuant to a clear
congressional intent, this claim falls on skeptical ears when the DOL' s interpretation here
bears such a dubious legislative pedigree. It is ironic, indeed, that the DOL stresses the
need for uniformity in the implementation of regulations, when uniformity with years of
prior DOL decisions is precisely what plaintiffs crave.
As such, considering the balance of equities and the public interest between re-
evaluating six applications for TLCs-which will expire in any event in the first half of
20Some of these applications have finally denied while others are in the administrative
appeals process. As the accompanying Order makes clear, those decisions still in the
appeals process will become subject to this decision once that process has completed.
26
next year-on the one hand and wreaking havoc with the settled expectations of small
businesses who without fair warning to the contrary very reasonably relied on the DOL's
past actions on the other, I find in favor of the plaintiffs.
CONCLUSION
Thus, for the reasons set forth above, the plaintiffs Motion for Preliminary
Injunction [Dkt. #5] is GRANTED. A separate Order consistent with this decision
accompanies this Memorandum Opinion.
United States District Judge
27