Third Circuit Upholds Labor H-2B Regulations & Confuses Agency Rulemaking Jurisdiction

"The United States Court of Appeals for the Third Circuit recently upheld the Department of Labor (DOL) promulgation of regulations governing the calculation of the minimum wage a United States employer must offer to recruit non-agricultural foreign workers under the Department of Homeland Security (DHS) “H-2B” visa program in Louisiana Forestry Association v. Secretary United States Department of Labor.  The decision fails to answer the core question:  can an agency delegate rulemaking authority to another agency.  The decision conceptually and potentially directly conflicts with the Eleventh Circuit decision in Bayou Lawn and Landscaping Services v. Secretary of Labor, and adds further confusion to a complicated inter-agency rulemaking jurisdiction problem. ... 

The Bootstrap:  The Third Circuit notes that “DHS has also by regulation endowed the DOL with the authority to create the procedures necessary to fulfill its charge of issuing labor certifications.”  With little explanation of how it relates to history, the Third Circuit relies on a 2013 DHS regulations that provides:

The Secretary of Labor shall separately establish for the temporary labor program under his or her jurisdiction, by regulation at 20 CFR 655, procedures for administering that temporary labor program under his or her jurisdiction, and shall determine the prevailing wage applicable to an application for temporary labor certification for that temporary labor program in accordance with the Secretary of Labor’s regulation at 20 CFR 655.10.

This “delegation” was not the basis for the 2008 or 2011 rules or any other rule, but is a bootstrap of authority to DOL by DHS after the fact and after the district court decision under review.  The Third Circuit appears to not appreciate or understand the post hoc action, or even that the post hoc rulemaking implies that DOL has statutory authority through its own purported promulgation of the rule – the Secretary of Labor signed its own delegation.

The court’s citation to a preambular justification from 1990 remains, according to the Third Circuit, “to be codified” nearly a quarter century later, but a regulation promulgated in 2013 is cited to the Code of Federal Regulations for 2013 in which it does not exist (the 2013 Code for the relevant provision of closed on January 1, 2013).  (Perhaps the court was confused by the “not an official legal edition” Electronic Code of Federal Regulations or a private publisher).  This structural confusion about the origin and promulgation of the “delegation” regulations ill serves the Third Circuit and all who read the decision.  Substantively, a 1990 rationale does not support a 2013 regulatory text.

Intercircuit Conflict:  The Third Circuit suggests only that its decision “may potentially create a split between” circuits, but focuses on the different procedural postures of the two cases.  The preliminary injunction in Bayou Lawn and Landscaping has not been reduced to a final judgment – cross-motions for summary judgment are pending in the Northern District of Florida – but the Eleventh Circuit’s decision will guide its district court, not the Third Circuit’s logic.  A direct conflict does not yet exist, but a conceptual conflict is clear.

Legal Danger:  The Third Circuit’s flawed analysis preserves the 2011 rule in the Third Circuit, but the potential for further litigation is heightened by the decision.  DOL’s authority remains very much in doubt in light the Third Circuit’s confusion.  At bottom, DHS attempted to “ratify” (using the term colloquially, not technically), post-hoc, a regulation adopted without statutory authority, and fundamental issues of statutory jurisdiction remain." - Leland E. Beck, Feb. 7, 2014.