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NAACP v. DONOVAN

June 28, 1983

NAACP, JEFFERSON COUNTY BRANCH, et al., Plaintiffs,
v.
RAYMOND J. DONOVAN, SECRETARY OF LABOR, et al., Defendants



The opinion of the court was delivered by: RICHEY

 BACKGROUND

 This case is before the Court on cross motions for summary judgment in what may be called Phase II of this litigation. In Phase I, the Court held that the Department of Labor ("DOL") had improperly interpreted its regulations to allow growers to consistently increase the productivity that was required of workers before the workers were eligible to earn wages higher than the Adverse Effect Rate ("AER"), *fn1" thereby effectively reducing the workers' wages. The Court held that the regulations required that the piece rate *fn2" paid to workers be tied to the AER so that when the AER increased, workers with a constant rate of productivity would increase their piece rate earnings at a rate proportional to the increase in the AER. The facts of Phase I and a complete explanation of the concepts involved are set forth in the Court's opinion. NAACP v. Donovan (" NAACP I "), 558 F. Supp. 218 (D.D.C. 1982).

 At the same time as the filing of the original complaint in this action, a second suit was filed on behalf of migrant farmworkers in Maine, Vermont and Florida. Bragg v. Donovan, No. 82-2361 (D.D.C. filed August 20, 1982). That suit was brought to compel DOL to establish 1982 AERs for the named states. In the past, AERs had been calculated based upon quarterly data provided by the Department of Agriculture ("USDA"). However, USDA had discontinued its quarterly survey and DOL had taken no action to develop a new methodology for establishing AERs. Bragg resulted in the filing of a consent decree in which DOL agreed to develop methodology to set the 1982 AERs for Maine and Vermont and the 1982 and 1983 AERs for the Florida sugar cane season.

 In response to the NAACP I and Bragg Orders, DOL published a proposed rule. The rule set forth DOL's intention to establish the required 1982 AERs according to a new methodology based upon the USDA surveys taken in the first two quarters of 1981. The DOL notice also set forth the 1982 AERs -- calculated pursuant to the proposed methodology -- for Florida, Maine and Vermont as required by Bragg and West Virginia as required by the final order in NAACP I. The published notice indicated that although the proposed methodology was consistently applied in Florida, Maine and Vermont, DOL rejected the figure yielded by the formula for West Virginia. Instead, stating that the 17.2% figure produced for West Virginia was disproportionate, DOL proposed to implement only a 10% increase in the 1982 AER with the remaining 7.2% to be applied in 1983.

 After comment, DOL published its final rule on January 4, 1983 (the "January 4th rule"). The final rule was identical to the proposed rule in most respects. It set AERs for Vermont, Maine, Florida and West Virginia, effective "beginning in the 1982 harvest season," *fn3" and set a 1983 AER for West Virginia which reflected the full 17.2% increase yielded by DOL methodology for 1982. 48 Fed.Reg. at 235. No 1982 AER was established for any state not specifically addressed in the Court's orders nor was any methodology for establishing future rates mentioned.

 DOL VIOLATED THE APA BY FAILING TO RAISE THE AER IN WEST VIRGINIA TO THE LEVEL ESTABLISHED AS PROPER BY ITS OWN METHODOLOGY.

 Pursuant to Court order, DOL commenced a rulemaking procedure and developed a new methodology for establishing 1982 AERs for Maine, Vermont, Florida and West Virginia. This methodology was consistently applied to the three former states, but was rejected as applied to West Virginia because DOL felt that the 17.2% rate that it yielded might "creat[e] economic hardship on small businesses." 47 Fed.Reg. at 52199. Although at first blush this position does not appear to be unreasonable, it constitutes a substantial departure from DOL's past practice of uniformly applying its AER methodology and improperly relies upon considerations outside of DOL's statutory mandate. Because insufficient justification is provided for the agency's departure from its practice of uniform application of its AER methodology, DOL's action violates the Administrative Procedure Act ("APA"). 5 U.S.C. § 551 et seq.

 Consistent application of AER methodology is important to the temporary labor certification scheme. The AER is the rate at which DOL requires growers to pay all of their farmworkers before the department will allow them to import alien labor. The purpose of requiring payment of the AER is to prevent importation of nonimmigrant laborers from having an adverse effect on the prevailing wage rate. The AER is set pursuant to methodology established by DOL. Because DOL applies what it considers to be the "best" methodology (i.e., the formula most likely to accurately determine the level at which adverse effect will occur), it follows that if the AER is not set at or higher than the rate produced by that formula, the prevailing wage rate will be depressed.

 DOL has subscribed to this logic in the past and has uniformly adopted the rate produced by its methodology. In fact, DOL has uniformly applied its formula for nearly fifteen years even in the face of annual increases greater than the 17.2% at issue here. See, e.g., 44 Fed. Reg. 32235 (1979) (Colorado AER increased 20.7% between 1976 and 1977); Stipulation of Facts para. 16 (Virginia AER increased 18.7% between 1979 and 1980); Stipulation of Facts para. 17 (Maryland AER increased 17.6% between 1980 and 1981). Thus, serious question is raised by DOL's deviation here from its past practice of consistently applying its AER methodology.

 Under the APA, an agency may not abandon a prior policy without providing a reasoned explanation for the change. See, e.g., Natural Resources Defense Council v. SEC, 196 U.S. App. D.C. 124, 606 F.2d 1031, 1049 n.23 (D.C. Cir. 1979); Office of Communication of the United Church of Christ v. FCC, 191 U.S. App. D.C. 360, 590 F.2d 1062, 1068-69 (D.C. Cir. 1978). See also Action on Smoking and Health v. CAB, 226 U.S. App. D.C. 57, 699 F.2d 1209, 1216 (D.C. Cir. 1983). To explain its actions, DOL merely stated that the 17.2% increase at issue here was "disproportionate" and would cause "hardship" to growers, especially in light of the fact that, pursuant to Court order, growers would have to pay this rate retroactively. See NAACP I. However, insufficient explanation was provided for these conclusory statements. Moreover, DOL failed to explain why a 17.2% increase was disproportionate here, when similar figures had been considered appropriate in the past. Thus, the Court holds that DOL's justifications clearly fall short of the reasoned explanation required by the APA to justify departure from the agency's previous consistent application of its own methodology.

 Furthermore, the reasoning DOL does provide for its actions is faulty. First, DOL's justification for its departure from past practice relies on considerations that are antagonistic to those with which DOL has been entrusted. In administering the labor certification program, DOL is charged with protection of workers. See Elton Orchards, Inc. v. Brennan, 508 F.2d 493, 499 (1st Cir. 1974); NAACP, Western Region v. Brennan, 360 F. Supp. 1006 (D.D.C. 1973). See also Alfred L. Snapp v. Puerto Rico, 458 U.S. 592, 102 S. Ct. 3260, 73 L. Ed. 2d 995 (1982). It is thus strange indeed for DOL to decrease the wage rate due to workers because of its concern for hardship to growers. Accordingly, the Court will give such a justification little weight.

 In addition, DOL improperly relies on the Court's order requiring retroactive payment, as justification for its actions. The purpose of the Court's order was to guarantee that workers would be paid the full amount due to them calculated pursuant to a properly formulated AER. By relying on the Court's order to reduce the AER, DOL ...


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