Court Blocks Ag Worker Final Rule from Taking Effect in 17 States

A group of 17 states, including Kansas, Georgia, and Texas, along with other plaintiffs, sought a preliminary injunction to prevent the implementation of a new rule issued by the U.S. Department of Labor (DOL). The rule, known as the Final Rule, aimed to provide collective bargaining rights to agricultural migrant workers employed under the H-2A visa program. The plaintiffs argued that the rule exceeded the DOL's authority and violated the National Labor Relations Act (NLRA), which excludes agricultural workers from collective bargaining rights.

The U.S. District Court for the Southern District of Georgia granted the preliminary injunction, preventing the rule from taking effect within the states that are plaintiffs in the case.

The court found that the plaintiffs demonstrated a substantial likelihood of success on the merits, a substantial threat of irreparable injury, and that the balance of harms and public interest favored granting the injunction. The decision does not apply nationwide but is limited to the states involved in the lawsuit.

The decision in State of Kansas v. U.S. Department of Labor applies specifically to the 17 states that were plaintiffs in the case. These states are Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Carolina, Tennessee, Texas, and Virginia​.

This decision has a significant impact on the U.S. Department of Labor's (DOL) ability to regulate the H-2A program, particularly in the context of collective bargaining rights afforded to agricultural workers.

Here’s how the decision affects the DOL's regulatory authority:

• Limitation on New Rule Implementation:

The court's preliminary injunction prevents the DOL from enforcing its new rule that sought to extend collective bargaining rights to H-2A agricultural workers in the 17 plaintiff states. This directly limits the DOL's ability to implement changes related to collective bargaining in those states.

• Challenge to DOL’s Authority:

The plaintiffs argued that the DOL exceeded its authority by issuing the rule, which they claimed was inconsistent with the National Labor Relations Act (NLRA).

• Maintaining the Status Quo in Wage Regulations:

The decision maintains the existing framework for labor relations in the agribusiness industry in the plaintiff states. This means that the DOL cannot impose heavier collective bargaining burdens upon the agribusiness industry in the plaintiff states, at least for now.

• Potential Broader Implications:

The Georgia decision means the DOL cannot create law by affording some agricultural workers – H-2A workers and American workers similarly situated – the right to collectively bargain. While the injunction currently applies only to the 17 plaintiff states, the legal reasoning behind the decision could have broader implications. When granting relief to the plaintiff states, the Court recognized the specific harm the Final Rule imposed upon growers and agricultural associations, namely: the additional cost of employer compliance.  That harm would presumably apply to farms and other agricultural employers, so it is unlikely that the DOL would be able to enforce the aspects of the Final Rule that expanded collective bargaining obligations in other states. Other aspects of the Final Rule may still apply. 

Agricultural employers should take care to adhere to the existing legal framework for labor practices as it relates to labor union engagement and collective bargaining in every other way.  Additionally, H-2A employers who are onboarding for planting and harvesting activities should pay attention to how they communicate with H-2A employees who are filing - or soon filing - DS-160 applications for H-2A visas in U.S. Consulates abroad. 

Besides expanding employer obligations under the NLRA, the June 28, 2024 Final Rule, also known as the “Worker Protection Rule,” required agricultural employers to give notice to H-2A employees if they could not commence employment within 14 days of the first date of employment certified by the DOL by way of Job Order.  According to that portion of the Final Rule, agricultural employers are obligated to notify H-2A employees are delayed for 14 days or more, with contemporaneous notice to the State Workforce Agency. 

Although the Court’s ruling enjoining the Final Rule in the 17 plaintiff states relieves those agricultural employers of expanded collective bargaining obligations under the NLRA, agricultural employers are not clearly relieved of other aspects of the Final Rule that did not implicate the NLRA or that that did not extend outside the 17 plaintiff states.  The liability risk remains for H-2A employers who are onboarding during this 2024 harvesting season.  Those employers should pay close attention to consular delays in Central American consulates and provide sufficient notice when first dates of employment will be delayed for more than 14 days. 

Compliance with that aspect of the Final Rule would at least shield agricultural employers from delay risk if those portions of the Final Rule are ultimately determined to apply to agricultural employers outside of the 17 plaintiff states between now and October 1^st, when most agricultural employers will onboard H-2A staff. 

This conservative approach should also guide agricultural employers who are now questioning how they should comply with the other aspects of the Final Rule that regulated non-union concerns. 

The preliminary injunction prevents the DOL from enforcing the Final Rule, Improving Protections for Workers in Temporary Agricultural Employment in the United States only in Georgia, Kansas, South Carolina, Arkansas, Florida, Idaho, Indiana, Iowa, Louisiana, Missouri, Montana, Nebraska, North Dakota, Oklahoma, Tennessee, Texas, and Virginia, and against Miles Berry Farm and Georgia Fruit and Vegetable Growers Association. 

Other employers should understand that compliance (for now) with the other portions of the Final Rule makes sense. 

Those provisions imposed:

• Redefinition of Termination Protocols: Addressing the norm of "at-will" employment, the rule introduces a new, stricter definition of "termination for cause" under 29 CFR § 655.122(n). Employers must meet five criteria to justify terminations, making it harder to fire workers without substantial reason. This change reflects a broader shift in legal perspectives on employer discrimination and disciplinary actions.
• Immediate Implementation of Wage Updates: The Final Rule mandated that any changes to the Adverse Effect Wage Rate (AEWR) are effective immediately upon their announcement in the Federal Register. If an AEWR adjustment occurs mid-pay period, employers must compensate workers retroactively from the update's publication date.
• Increased Transparency in Foreign Labor Recruitment: Similar to the H-2B program, new regulations (29 CFR § 655.137 and § 655.135(p)) require agricultural employers to disclose comprehensive details about their recruitment of foreign workers, including the identities and locations of recruiters and agents. This ensures better protection against exploitation and maintains the integrity of the recruitment process.
• Enhanced Disclosure of Job Terms: The rule requires detailed disclosure of employment terms such as minimum productivity standards, applicable wage rates, and overtime opportunities (29 CFR § 655.122(l)). This aims to provide workers with clear expectations of their employment conditions and safeguard their rights.
• Additional Worker Protections and Employer Responsibilities:

         --Notices for Delayed Work Start: Employers must inform the state workforce agency about any changes to job start dates due to unforeseen circumstances, limiting such delays to 14 days (29 CFR § 655.175).

        --Transportation Safety Enhancements: All employer-provided transportation must comply with U.S. Department of Transportation Federal Motor Vehicle Safety Standards, ensuring that all passengers and drivers use seat belts.

        --Prohibition on Document Withholding: New regulations forbid employers from retaining workers' passports or other identification documents (29 CFR § 655.135(o)), protecting workers from coercive practices.

• Regulations for Agribusiness Entities: The rule introduces a "single employer" definition to address times where multiple agricultural businesses operate as a single entity for H-2A certification. This aims to prevent manipulations of the certification process and ensure that seasonal labor needs are genuinely temporary.

All agricultural employers should stay updated on any developments in this case because the June 28, 2024 Final Rule marked a significant expansion of HR obligation and EEO liability in the agribusiness industry.

The preliminary injunction is temporary, and the final outcome of the case could change the legal landscape. Employers might need to adjust their practices if the injunction is lifted or if the court issues a final ruling that allows the DOL’s new rule to take effect.

Employers should continue to maintain thorough documentation of wage payments, work hours, and compliance with existing labor laws. Proper record-keeping is crucial, especially if there are future changes to the legal requirements.

Although the new rule is currently blocked, employers should be aware of its potential impact if it were to take effect. This includes understanding how collective bargaining rights might alter wage negotiations and labor practices, and how EEO claims alleging national origin discrimination under Title VII of the Civil Rights Act are a new industry norm.  So too, are claims brought by agricultural workers or by the DOL enforcing provisions of the Fair Labor Standards Act

Employers might consider preparing contingency plans to quickly adapt if this legal situation changes for good For those H-2A applications that are now pending or soon scheduled for filing, employers should consult with legal counsel to make sure that job order disclosures are sufficiently stated to avoid certification delays and EEO/HR liability in light of this changed landscape that may arguably still apply (or ultimately apply) in many states.

Please contact Brandon Davis or any member of the Phelps Labor and Employment team if you have questions or need advice or guidance.