Earlier this week, the Third Circuit Court of Appeals ruled that the Department of Labor’s administrative law judge (ALJ) system is unconstitutional when it imposed fines for H-2A temporary visa program violations.
Rebecca Hause-Schultz, a partner at Fisher & Phillips, a national law firm specializing in labor and employment law, notes that while the ruling says the system is unconstitutional, that does not mean the fines are.
“This doesn’t mean the DOL can’t pursue H-2A penalties; they can, and they likely will continue to do so,” she says. “It just means they potentially are going to have to take it to federal court if the employer challenges.”
Hause-Schultz, who wrote a larger piece looking at this ruling, explains this ruling stemmed around the way in which the Department of Labor can pursue monetary penalties or back wages for H-2A violations against employers. The department could file through Article III judges or federal judges or administratively through an administrative law judge (ALJ) to decide whether the penalties were valid.
“In this case, one of the things they challenged was that, just as a threshold matter, it shouldn’t be an administrative court, an ALJ, deciding these types of cases; DOL needs to go have these claims heard in by an Article III judge in the federal court,” she says. “[The case argued] you can’t just assign these to its internal ALJ system and have the matter heard by the ALJ administratively, and then, levy all these heavy fines and back wage findings on the employer. What this decision said was, yes, you should have filed this in federal court. It’s not an issue that is for an ALJ to decide.”
As far as what this means for the future of H-2A fines and enforcement, Hause-Shultz says it’s possible that growers could appeal ALJ decisions using this ruling in the Third District Court of Appeals jurisdiction — New Jersey, Pennsylvania and Delaware — and elsewhere.
“We’ll probably see employers in other circuits also challenging the ALJ decision, citing this ruling, and saying we should have had the opportunity to get our case heard by an Article III judge as well,” she says.
Hause-Schultz says it’s also worth paying attention to how the Department of Labor responds to the ruling.
“We’ll have to wait and see what the DOL does, whether they pause correct enforcement actions or go ahead and just start filing challenges in the federal court anyway,” she says. “They have already done that in several cases that I’ve handled where they just go straight to federal court on these larger types of penalties. It’s possible they use more of that playbook nationwide. We’ll just have to see what they do on it.”
