Administrative Review Board Decisions - March 2023

Administrative Review Board Decisions

The following case summaries were created by the Administrative Review Board staff.

Vinnett v. Exelon Generation, ARB No. 2023-0005, ALJ No. 2022-ERA-00002 (ARB Mar. 31, 2023) (Decision and Order)

EFFECT OF SEVERANCE AGREEMENT ON WHISTLEBLOWER CLAIMS; RELEASE OF CLAIMS CONTAINED IN SEVERANCE AGREEMENT SERVED AS DEFENSE TO SUBSEQUENT WHISTLEBLOWER CLAIMS

In Vinnett v. Exelon Generation, ARB No. 2023-0005, ALJ No. 2022-ERA-00002 (ARB Mar. 31, 2023), the ARB affirmed the ALJ's Order Granting Motion to Dismiss. Complainant worked as a turbine engineer for Respondent. During Complainant's tenure, he sent several e-mails and wrote two reports raising safety concerns related to his assigned turbines. Following these e-mails and reports, Complainant claimed that his supervisor harassed him, blocked him from receiving a bonus, and limited his job responsibilities. Additionally, Respondent terminated his employment via a phone call on June 30, 2020. Respondent followed up with Complainant via a letter providing Complainant written notice that his employment was terminated and informing him of his severance benefits. In another letter, Respondent confirmed the date of termination and the terms and conditions and encouraged Complainant to consult with an attorney before signing an enclosed waiver and release (Severance Agreement).

The Severance Agreement, if signed and returned within twenty-one days and not revoked in the following seven days, would entitle Complainant to financial compensation and benefits in exchange for a release of all monetary damages and claims against Respondent. The Severance Agreement also stated that it did not prohibit Complainant from filing a charge, reporting possible violations of law or regulation, or making other disclosures to any governmental agency or entity. Complainant signed the Severance Agreement on July 16, 2020, and did not take advantage of the provided opportunity to revoke it.

On December 15, 2020, Complainant filed a letter to OSHA alleging that he was retaliated against for reporting safety concerns to Respondent. OSHA investigated the complaint but dismissed the complaint after it determined that Complainant understood and freely signed the Severance Agreement. Complainant objected to OSHA's determination and requested a hearing before an ALJ. Prior to the hearing, Respondent moved for dismissal or, in the alternative, summary decision. On October 11, 2022, the ALJ issued an Order Granting Motion to Dismiss.

In affirming the ALJ, the Board adopted a three-part test, similar to its evaluation of post-filing settlement agreements, to determine when a court should accept a pre-filing agreement as a defense in whistleblower cases. These three conditions include: (1) the terms of the settlement agreement are fair, adequate, and reasonable; (2) the provisions of the agreement are not contrary to public policy; and (3) the complainant's consent was knowing and voluntary.

First, Complainant argued that the Severance Agreement was not fair, adequate, and reasonable because: (1) it failed to impose any specific waiver-related requirements on Respondent; (2) it reduced the amount of severance benefits offered to Complainant since Respondent reduced such benefits to reduce its anticipated legal expenses; and (3) it was only offered to him after Respondent broke the law. The ARB determined that the Severance Agreement was fair, adequate, and reasonable because even with Complainant's concerns, Complainant signed the Severance Agreement and accepted the money and other severance benefits. Moreover, the record did not show that Complainant revoked the Severance Agreement or ever relinquished or offered to repay the consideration.

Second, Complainant contended that the Severance Agreement was unenforceable because Respondent acted improperly, he did not have an opportunity to negotiate or provide input on the Severance Agreement, he did not have time to consider the Severance Agreement due to personal and economic issues, and he did not consult with an attorney prior to signing the Severance Agreement.

The ARB disagreed with Complainant. When a party challenges its release as not being knowingly or voluntarily entered into, courts either examine the totality of the circumstances surrounding the execution of the release or apply general principles of contract formation. The ALJ relied upon Pierce v. Atchison, Topeka and Santa Fe Ry. Co.,and analyzed the totality of the circumstances surrounding the execution of the Severance Agreement. The ALJ considered a number of factors, including:

(1) the employee's education and business experience; (2) the employee's input in negotiating the terms of the settlement; (3) the clarity of the agreement; (4) the amount of time the employee had for deliberation before signing the release; (5) whether the employee actually read the release and considered its terms before signing it; (6) whether the employee was represented by counsel or consulted with an attorney; (7) whether the consideration given in exchange for the waiver exceeded the benefits to which the employee was already entitled by contract or law; and (8) whether the employee's release was induced by improper conduct on the defendant's part.

The ALJ conducted a thorough and detailed analysis of the record and determined that Complainant's waiver was knowing and voluntary, based on the totality of the circumstances. The ALJ also concluded that Complainant did not raise a genuine issue of material fact regarding his knowing and voluntary execution of the Severance Agreement. The ARB agreed with the ALJ's analysis and summarized the factors that supported the conclusion that Complainant knowingly and voluntarily entered into the Severance Agreement.

The ARB also concluded that Complainant's other challenges to the Severance Agreement were unpersuasive. Specifically, Complainant contended that that there was no "meeting of the minds" in the formation of the contract and that Respondent took advantage of his vulnerability because following his termination he was under economical and psychological pressure, had to relocate, had to file for unemployment benefits, and urgently needed the money. However, Complainant provided no facts or evidence to support his assertions.

Finally, the ARB observed that Complainant did not address whether the Severance Agreement violated public policy. Nevertheless, the ARB analyzed this condition and determined that the Severance Agreement did not violate public policy. In analyzing this condition, the ARB examined previous cases where the ARB voided agreements due to public policy concerns, the language of the Severance Agreement, and the Energy Reorganization Act of 1974's implementing regulations. Ultimately, because the Severance Agreement did not restrict Complainant's ability to contact an agency, file a whistleblower complaint, or obstruct an agency from carrying out its responsibilities, the ARB concluded that the Severance Agreement did not violate public policy.

Administrator, Wage and Hour Div., USDOL v. Azzano Farms, Inc., ARB No. 2020-0013, ALJ No. 2019-TAE-00002 (ARB Mar. 30, 2023) (Decision and Order)

JOINT EMPLOYMENT; ESTOPPEL; JUSTIFIABLE RELIANCE; CIVIL MONEY PENALTIES

In Administrator, Wage and Hour Div., USDOL v. Azzano Farms, Inc., ARB No. 2020-0013, ALJ No. 2019-TAE-00002 (ARB Mar. 30, 2023), Respondent Washington Farm Labor Association (WAFLA) operated as an agricultural association, as defined by the H-2A regulations, 20 C.F.R. § 655.103(b). In this capacity, WAFLA provided human resources, visa support and compliance, and other support for its member farms, including co-Respondent Azzano Farms, Inc (Azzano).

The Administrator of the United States Department of Labor's Wage and Hour Division (Administrator) assessed civil money penalties (CMPs) against WAFLA as a joint employer with Azzano for violations of the H-2A program that occurred at Azzano's farm. Applying the common law of agency, an ALJ determined that WAFLA was not a joint employer for H-2A purposes and reversed all CMPs assessed against WAFLA. On appeal, the ARB reversed the ALJ and assessed CMPs against WAFLA for the H-2A violations.

JOINT EMPLOYMENT; UNDER THE 2010 H-2A REGULATIONS, RESPONDENT WAS A JOINT EMPLOYER AS A MATTER OF LAW BECAUSE IT CERTIFIED ITSELF AS A JOINT EMPLOYER ON ITS MASTER APPLICATION

The H-2A program regulations permit an agricultural association, like WAFLA, to petition to recruit temporary agricultural workers on behalf of member farms. In doing so, the agricultural association may either apply as a "joint employer" with, or as an "agent" of, its member(s). Considering the H-2A program's statute, regulations, implementing materials, history, and purpose, the ARB concluded that under the 2010 H-2A regulations in effect at the time of the violations at issue, "associations must choose one status or the other, and that choice controls."

Specifically, the ARB relied on the fact that WAFLA elected to file using a "master application," ETA Form 9142A. As the ARB observed, pursuant to the 2010 H-2A regulations, a master application was only available to agricultural associations "when the association is filing as a joint employer." 20 C.F.R. § 655.131(b). As the preambles to the 2009 notice of proposed rulemaking and the 2010 final rule made clear, the 2010 H-2A regulations continued the "long-standing" requirement that associations filing a master application must do so as a joint employer and must bear "joint responsibility" for compliance with the H-2A program requirements. Thus, "[a]s the NPRM and preamble to the 2010 regulations show, the Department intends to require associations to be employers and assume responsibility for compliance when a master application is filed."

The ARB also considered WAFLA's certifications and attestations in its H-2A application materials. On its master application, WAFLA selected the box for "joint employer," signed the form under the "Employer Declaration" section, identified itself in the section for "Employer Information," and included its own employee's information as the "Employer Point of Contact." Similarly, in the companion job order, Form ETA-790, WAFLA again identified itself as an "association [applying] on behalf of its member(s), using the joint employer format." In these materials, WAFLA also swore, under the penalty of perjury, that it would comply with the H-2A program requirements as a joint employer with its members. The ARB concluded that "[t]he application process is not a simple one, where an association could fail to realize what it was attesting to in the course of correctly completing it."

Accordingly, the ARB held that the ALJ erred by narrowly focusing on the common law test in assessing whether WAFLA was a joint employer with its member. The ARB concluded that the common law of agency provided an independent basis to find that an agricultural association is a joint employer for purposes of the H-2A program, in addition to, but separate from, the agricultural associations' self-certification as a joint employer on a master application, which was dispositive as a matter of law.

ESTOPPEL; ESTOPPEL PREVENTED RESPONDENT FROM DISCLAIMING JOINT EMPLOYER LIABILITY

The ARB also concluded that principles of estoppel prevented WAFLA from disclaiming joint employer responsibility. The ARB observed that it had "long held that entities cannot take advantage of the benefits of temporary workers and subsequently claim that they are not liable for the consequences of their violations, even when they may have erroneously been granted the benefits of the program to begin with." Consistent with its past holdings, the ARB found that "WAFLA is estopped from disclaiming liability after reaping the rewards of the H-2A program."

JUSTIFIABLE RELIANCE; RESPONDENT DID NOT JUSTIFIABLY RELY ON PAST ENFORCEMENT CHOICES OF THE ADMINISTRATOR

The ARB also rejected WAFLA's argument that, when it applied as a joint employer, it had relied on the Administrator's alleged long-standing practice of non-enforcement against associations as joint employers under the H-2A program. Although WAFLA presented testimony that it had not been subject to enforcement actions as a joint employer in its earlier eight years applying for the H-2A program on behalf of its members, the ARB recognized that "the regulations and their preambles have stated since the inception of the H-2A program that associations can be joint employers and that employers may be held responsible for failures to comply with the regulations." Thus, the ARB explained: "WAFLA argues that the mere fact that it has not been held liable for past violations, despite being party to past investigations, means that it cannot now be held liable for violations. That, without more, is far from a sufficient ground to find that WAFLA should be relieved of liability in this case."

CIVIL MONEY PENALTIES; JOINT EMPLOYER STATUS RENDERED RESPONDENT LIABLE FOR CIVIL MONEY PENALTIES

WAFLA also argued that, even if it applied as a "joint employer" under the H-2A program, it had no control over, and therefore should not be held responsible for violations concerning, the H-2A workers employed by its members. The ARB rejected WAFLA's argument. The ARB noted that employers of H-2A workers, including joint employers like WAFLA, "must agree in the H-2A application process that [they] will abide by the requirements of the regulations and make additional enumerated assurances." By virtue of these commitments and assurances, "WAFLA had an obligation to aid in compliance of its members farms. WAFLA admitted in this case that it did not consistently do that."

One Member dissented from this portion of the opinion, stating that "[e]stablishing that the association is a joint employer does not resolve the issue of liability." Although the dissenting Member agreed that "[t]he 2010 H-2A Regulation's check-the-box joint-employer status creates or affirms a potential for liability, defeating an agricultural association's bright-line defense of no liability due to the absence of an employer-employee relationship," the Member concluded that joint employer status does not automatically mean that the agricultural association should be held strictly or vicariously liable for its members' violations.

The dissenting Member opined that, "[t]ypically, ‘joint employer' status is a piercing tool and found through some level of control, either common law principles, economic realities test, or a derivative thereof." Consistent with this concept, the dissenting Member noted that the 2010 H-2A regulations define "joint employment" by referring to "definitional indicia of employment" and define the H-2A employment relationship as, among others, the ability to "hire, pay, fire, supervise or otherwise control the work of the employee." 20 C.F.R. § 655.103(b). In comparison, "[e]stablishing joint-employer status as a matter of law by checking the box without any ownership, control, or agency places a strain on adjudication regarding the putative joint employer that is not the actual employer, not the owner of the farm, and not involved in the operations of the farm." The dissenting Member also observed that, prior to "a change in internal guidance in 2017," "the 2010 H-2A regulations were not enforced against agricultural associations in the form of absolute liability for violations by member farms. . . . Before that time, the Administrator assessed CMPs for violations by agricultural associations based on their role in the violation."

Rather than imposing what he considered to be strict or vicarious liability, the dissenting Member proposed determining responsibility or liability for violations based on the agricultural association's culpability in the violation, using the regulatory mitigation factors found at 29 C.F.R. § 501.19(b). According to the dissenting member, the regulatory factors would permit the Administrator or adjudicator to "tak[e] into consideration the type of violation and the association's specific role with farms and H-2A employees."

The Majority agreed with the dissenting Member that the regulatory mitigation factors permit the Administrator and the adjudicator to assess CMPs based on the agricultural associations' and the members' relative culpability and role in the violation. However, the Majority stated that the regulatory mitigation factors could be used without "engag[ing] in a convoluted jurisprudential exercise that disavows strict liability and vicarious liability, and imports common law agency principles into an apportionment-of-liability standard."

CIVIL MONEY PENALTIES; CIVIL MONEY PENALTIES MAY BE ASSESSED AGAINST BOTH A MEMBER AND AN AGRICULTURAL ASSOCIATION WITHOUT CONSTITUTING AN UNLAWFUL DOUBLE PENALTY OR EXCEEDING THE REGULATORY MAXIMUM

The ARB also rejected WAFLA's argument that assessing CMPs against both WAFLA and Azzano resulted in an unlawful double penalty that exceeded the maximum penalty permitted under the H-2A regulations. The ARB observed that the H-2A regulations permit the Administrator to impose a CMP, up to a regulatory maximum, "for each violation." The regulations further provide that "[e]ach failure to" abide by the H-2A program requirements "constitutes a separate violation." 29 C.F.R. § 501.19(a). The ARB stated that "[t]he word ‘each' in the regulation does not mean that one violation requires splitting the CMP maximum between employers when there is a joint employment situation. Instead, CMPs are assessed per violation which, in the instance of joint employment, means that each joint employer committed a violation, rendering each joint employer liable for the violation it committed."

H-2A POSTER AND HOUSING HEALTH AND SAFETY REQUIREMENTS; RESPONDENT VIOLATED H-2A PROGRAM REQUIREMENTS BY FAILING TO APPROPRIATELY  DISPLAY THE REQUIRED H-2A POSTER AND BY FAILING TO PROVIDE HOUSING FACILITIES THAT MET THE APPLICABLE SAFETY AND HEALTH STANDARDS

Poster Violation

The H-2A regulations require an employer to "post and maintain in a conspicuous location at the place of employment, a poster provided by the Secretary . . . which sets out the rights and protections for workers" under the H-2A program. 20 C.F.R. § 655.135(l). In this case, Azzano displayed a single poster at just one of two housing locations used by the H-2A and corresponding domestic workers. The ARB determined this was not sufficient and violated the regulation. The ARB observed that in the preamble to the 2010 final rule, the Department explained that the purpose of the H-2A poster requirement is to ensure that all workers are aware of their rights, including corresponding workers who may not be aware that they are eligible for the terms and conditions of H-2A employment. "Thus, focusing on the number of posters overlooks the critical inquiry as to whether the poster was in a conspicuous location at the place of employment." Accordingly, the ARB found that WAFLA and Azzano violated this program requirement.

The ARB then considered, de novo, the appropriate penalties to assess in light of the regulatory mitigation factors applicable to the H-2A program. See 29 C.F.R. § 501.19(b). Starting with a base penalty of $1,692, the ARB analyzed each mitigation factor and ultimately assessed CMPs of $592 against WAFLA and $846 against Azzano.

Housing Safety and Health Violations

The H-2A regulations require employer-provided housing facilities under the H-2A program to meet health and safety standards identified in 29 C.F.R. § 1910.142. 20 C.F.R. § 655.122(d)(1)(i). The ARB determined that three applicable health and safety standards were violated in this case. Specifically, one housing facility did not have adequate outdoor lighting, lacked batteries in the smoke detectors, and lacked fire extinguishers in all units. Another facility also lacked batteries in the smoke detectors.

The ARB then considered, de novo, the appropriate penalties to assess in light of the regulatory mitigation factors applicable to the H-2A program. Starting with a base penalty of $1,692 for each violation, the ARB analyzed each mitigation factor and ultimately assessed CMPs of $2,284.20 against WAFLA.

Dissenting Opinion

One Member dissented from this portion of the opinion. The dissenting Member agreed with the ALJ that the Administrator was attempting to impose vicarious liability on WAFLA for violations committed by its member and for which it bore no responsibility. The dissenting Member noted the limited role WAFLA played once the workers that it recruited reached the farms belonging to its members. "Without guidance establishing strict liability, it is difficult, through a multi-factor test aimed at intentional misconduct, to support a civil monetary penalty against an association of members that filed the application but had minimal or no additional roles in the actual employment of the H-2A workers." The dissenting Member opined that it would have been difficult for WAFLA to ensure compliance with the "minute detail" of the housing regulations, absent ownership, operation, or control of the premises. For similar reasons, the dissenting Member also concluded that WAFLA should not be responsible for the poster violation. 

Administrator, Wage and Hour Div., USDOL v. Washington Farm Labor Association, ARB No. 2021-0069, ALJ No. 2018-TAE-00013 (ARB Mar. 31, 2023) (Decision and Order)

JOINT EMPLOYMENT; ESTOPPEL; JUSTIFIABLE RELIANCE; CIVIL MONEY PENALTIES

In Administrator, Wage and Hour Div., USDOL v. Washington Farm Labor Association, ARB No. 2021-0069, ALJ No. 2018-TAE-00013 (ARB Mar. 31, 2023), Respondent Washington Farm Labor Association (WAFLA) operated as an agricultural association, as defined by the H-2A regulations, 20 C.F.R. § 655.103(b). In this capacity, WAFLA was engaged by a member to apply for and obtain H-2A workers for agricultural work on the member's farm.

The Administrator of the United States Department of Labor's Wage and Hour Division (Administrator) assessed civil money penalties (CMPs) against WAFLA as a joint employer with its member for violations of the H-2A program that occurred at the member's farm. The ALJ concluded that WAFLA's self-certification as a joint employer rendered it responsible for H-2A violations that occurred at the farm and, accordingly, assessed CMPs against WAFLA. Relying in significant part on Administrator, Wage and Hour Div., USDOL v. Azzano Farms, Inc., ARB No. 2020-0013, ALJ No. 2019-TAE-00002 (ARB Mar. 30, 2023), in which WAFLA was also a respondent and which involved nearly identical issues and facts, the ARB affirmed the ALJ.

JOINT EMPLOYMENT; UNDER THE 2010 H-2A REGULATIONS, RESPONDENT WAS A JOINT EMPLOYER AS A MATTER OF LAW BECAUSE IT CERTIFIED ITSELF AS A JOINT EMPLOYER ON ITS MASTER APPLICATION

The H-2A program regulations permit an agricultural association, like WAFLA, to petition to recruit temporary agricultural workers on behalf of member farms. As the ARB observed in Azzano Farms, when applying under the H-2A program, an agricultural association must certify whether it is filing as an agent of, or as a joint employer with, its member farms.

In this case, as in Azzano Farms, WAFLA repeatedly certified in its application materials, including its master application, that it was a joint employer with its member and acknowledged its responsibility to ensure compliance with H-2A program requirements. The ALJ regarded these certifications and acknowledgments as "dispositive," and, in and of itself, "sufficient . . . to find that [WAFLA] was a joint employer" under the 2010 H-2A regulations in effect at the time of the violations. The ARB agreed. Considering the H-2A program's statute, regulations, implementing materials, history, and purposes, the ARB concluded that "by operation of law, an agricultural association like WAFLA which elects to file a master application on behalf of one or more members accepts the designation of, and certifies itself as, a joint employer. In doing so, it incurs the incumbent responsibility of any other joint employer under the H-2A program."

ESTOPPEL; ESTOPPEL PREVENTED RESPONDENT FROM DISCLAIMING JOINT EMPLOYER LIABILITY

As it did in Azzano Farms, the ARB also concluded that principles of estoppel precluded WAFLA from disclaiming its status as a joint employer. The ARB reiterated that it "has long held that entities cannot take advantage of the benefits of temporary workers and subsequently claim that they are not liable for the consequences of their violations, even when they may have erroneously been granted the benefits of the program to begin with." In this case, "[b]y certifying itself as a joint employer with [its member] and using a master application, WAFLA benefited from the H-2A program by being approved to recruit nonimmigrant workers" and by being paid by its member to do so. "Thus, WAFLA clearly benefited from its representations and its participation in the program." 

The ARB rejected WAFLA's argument that it should not be estopped from disclaiming its status as a joint employer because it could have received similar benefits, including participation in the H-2A program, by filing as an agent of its member instead of as a joint employer on a master application. The ARB noted that WAFLA had not identified any legal support for the proposition that its ability to receive similar benefits through some other means precluded the application of estoppel principles. "The fact remains that WAFLA enjoyed the benefits of its representations and certifications as a joint employer." Additionally, filing as a joint employer offered WAFLA and its member additional benefits that would not have been available had WAFLA filed as an agent of its member.

JUSTIFIABLE RELIANCE; RESPONDENT DID NOT JUSTIFIABLY RELY ON PAST ENFORCEMENT CHOICES OF THE ADMINISTRATOR

As it did in Azzano Farms, the ARB also rejected WAFLA's argument that it had a "cognizable reliance interest in the Administrator's long-standing prior interpretation and application of the H-2A statue and regulations to not hold associations liable for the conduct of their members."

First, the ARB agreed with the ALJ that the Department "has consistently—in writing—placed associations filing master applications as joint employers in a position of responsibility for ensuring compliance with the terms of the program by their members." Specifically the ARB referenced the preambles to the Department's 2009 notice of proposed rulemaking and 2010 final rule that the Department intended to retain the "long-standing" requirement that master applications could only be filed by an association acting as a joint employer with its members, that the association filing as a joint employer has "joint responsibility" with the member, that the association filing as a joint employer must "agree[ ] to the conditions of H-2A eligibility," and that the agricultural association must be clear regarding the capacity in which it is filing "so there is no doubt as to whether the association is subject to the obligations of an agent or an employer."

Second, the ARB emphasized the several attestations in WAFLA's H-2A application materials, pursuant to which it swore to comply with H-2A program requirements. On the master application, after identifying itself as a "joint employer," WAFLA swore to "comply with all applicable Federal, State and local employment-related laws and regulations, including health and safety laws." WAFLA similarly swore in the accompanying job order that it would "abide by the assurances provided in the" H-2A program regulations, including the specific guarantees and obligations which the Administrator charged WAFLA with violating in this case. "Considering these attestations, WAFLA was not caught unaware when the Administrator ultimately held WAFLA responsible for violating the obligations to which it explicitly committed itself by signing the master application."

The ARB also rejected the argument that the Administrator's previous enforcement choices to not pursue CMPs against agricultural associations for H-2A violations committed by their members created a cognizable reliance interest. The ARB emphasized that enforcement choices are generally committed to an agency's absolute discretion. The ARB also noted that WAFLA had not pointed to any evidence of any written or other express enforcement policy from the Administrator or Department expressing that associations could not be held responsible as joint employers. To the contrary, the Department had emphasized in its rulemaking and in the H-2A application materials that associations could be held liable if they applied as joint employers.

One Member dissented from this portion of the opinion. Contrary to the conclusion reached by the majority, the dissenting Member concluded that the Administrator had changed agency practice concerning association liability, resulting in unfair surprise for WAFLA. In particular, the dissenting Member relied on testimony presented by WAFLA's Executive Director that the company had submitted thousands of applications over 20 years and had gone through hundreds of Wage and Hour audits, without having ever been held responsible as a joint employer for violations committed by one of its members. The dissenting Member also observed that, consistent with WAFLA's past experiences, the original notice of determination issued to WAFLA by the Administrator did not hold WAFLA responsible for violations attributable to its member. Only later, after litigation commenced, did the Administrator revise the determination letter to hold WAFLA responsible for its member's actions, thereby increasing the assessment against WAFLA by 16,500%. The dissenting Member argued that this dramatic change cut against the notion that the Administrator merely made a discretionary enforcement choice, rather than an wholesale policy change; "[t]he timing, amount, and financial consequences of the change clearly weigh against the position that there was not a change" in the Administrator's position on association liability.

The dissenting Member also noted that the 2010 H-2A regulations were not particularly clear with respect to agricultural association liability and responsibility, leading to understandable confusion on the part of associations like WAFLA. The dissenting Member also noted the one-size-fits-all nature of the application materials, which, as structured, did not "remove the confusion for prospective applicants." Thus, the dissenting Member concluded that WAFLA reasonably believed that it would not be held responsible for its members' violations, even if it filed as a joint employer.

The dissenting Member also concluded that the Administrator failed to adequately explain the change in policy concerning association liability. The dissenting Member observed that Wage and Hour representatives who testified at the hearing could not explain how or why the Administrator suddenly issued a revised determination letter holding WAFLA responsible for its member's violations, after years of taking the contrary position in investigations and enforcement actions. The dissenting Member also noted that the Wage and Hour representatives offered inconsistent testimony concerning the circumstances in which an association would be deemed a joint employer with, and therefore responsible for violations committed by, its member(s).

CIVIL MONEY PENALTIES; JOINT EMPLOYER STATUS RENDERED RESPONDENT LIABLE FOR CIVIL MONEY PENALTIES

Similar to an argument it made in Azzano Farms,WAFLA also argued that, even if it was a "joint employer" under the H-2A program, the violations at issue in this case primarily concerned domestic workers employed by its member. According to WAFLA, it had no control over, and therefore should not be held responsible for violations concerning, the domestic workers. The ARB rejected this argument. The ARB observed that employers of H-2A workers must agree, as part of the application process, to abide by the H-2A program requirements. "These requirements cover obligations and responsibilities owed not only to the H-2A nonimmigrant workers covered by the application, but also to the domestic workers in ‘corresponding employment.'" Thus, "even if, as WAFLA argues, several of the violations here resulted from [the member]'s actions or concerned the benefits and working conditions provided to domestic workers, WAFLA violated its own affirmative obligation to ensure the H-2A program requirements were met and that violations did not occur at [the member]'s farm."

CONSENT FINDINGS; ALJ DID NOT ERR BY RELYING ON CONSENT FINDINGS SIGNED BY CO-RESPONDENT TO DETERMINE THAT THE ALLEGED H-2A VIOLATIONS OCCURRED

In concluding that violations of the H-2A program requirements occurred, the ALJ relied, in significant part, on admissions of fact made in consent findings by WAFLA's member and co-respondent as part of a settlement agreement reached between the member and the Administrator. WAFLA was not a party to, and did not sign, the consent findings. Nevertheless, the ARB found no basis to conclude that the ALJ erred by considering the consent findings when assessing whether violations occurred with respect to WAFLA. WAFLA offered only broad and conclusory assertions regarding the ALJ's use of the consent findings, which were insufficient to undermine the ALJ's use of the consent findings on appeal. The ARB also concluded that WAFLA had sufficient opportunity to conduct discovery on the factual matters contained in the consent findings, but failed to do so.

CIVIL MONEY PENALTIES; CIVIL MONEY PENALTIES MAY BE ASSESSED AGAINST BOTH A MEMBER AND AN AGRICULTURAL ASSOCIATION WITHOUT CONSTITUTING AN UNLAWFUL DOUBLE PENALTY OR EXCEEDING THE REGULATORY MAXIMUM

As it did in Azzano Farms, the ARB also rejected WAFLA's argument that the Administrator unlawfully "assess[ed] a penalty twice for the same violation" by assessing CMPs against both WAFLA and its member. As the ARB explained, the H-2A regulations permit the Administrator to assess penalties "for each violation" of the H-2A program. 29 C.F.R. § 501.19(a). The regulations explain that "[e]ach failure" to comply with the H-2A program requirements "constitutes a separate violation." Thus, the ARB concluded that WAFLA and its member, as joint employers, were each obligated to ensure compliance with the H-2A program. "[E]ach entity's failure to fulfill its obligations constitutes a separate violation and exposes each entity to separate penalties."

CIVIL MONEY PENALTIES; REPONDENT'S VAGUE ARGUMENTS REGARDING RESPONDENT'S LACK OF CULPABILITY FOR H-2A VIOLATIONS WAS INSUFFICIENT TO WARRANT REDUCING THE ASSESSED DAMAGES

WAFLA appeared to assert on appeal that its alleged lack of relative culpability with respect to the violations at issue, which it attributed to the conduct of its member, should serve to reduce the CMPs levied by the Administrator and the ALJ. The ARB observed that the ALJ, in reviewing and analyzing the regulatory mitigation factors at 29 C.F.R. § 501.19(b), considered WAFLA's culpability argument and relied on WAFLA's relative culpability in reducing the assessments levied by the Administrator. However, the ARB determined that further reduction was not appropriate. Even if the violations at issue were primarily attributable to the member's actions, "WAFLA, as a joint employer, was still obligated to ensure program compliance at [the member]'s farm." The ARB determined that WAFLA failed to take appropriate steps to fulfill its responsibilities, and declined to reduce the CMP assessments any further.

One Member dissented from this portion of the opinion. Citing the regulatory mitigation factors and the preamble to the 2010 final rule, the dissenting Member concluded that "[t]he principle of culpability underpins the CMP analysis." According to the dissenting Member, "the evaluation of culpability reaches into whether the agricultural association is liable in the first place, not just whether it is eligible for a mitigation discount."

In light of these principles, the dissenting Member determined that the ALJ's analysis of the regulatory mitigation factors "did not adequately distinguish between the activities WAFLA was directly responsible for and those that occurred at [the member's farm] outside of the knowledge, control, supervision, and direction of WAFLA." Analyzing the record evidence, the dissenting Member concluded that "WAFLA had no ownership, control, or supervision of [the member]'s housing or transportation and was not the entity that rejected the employment of the U.S. workers." As a result, the dissenting Member believed that the case should be remanded to the ALJ with instructions to consider WAFLA's culpability in the violations underlying the Administrator's assessment of CMPs.

CIVIL MONEY PENALTIES; THE ALJ DID NOT ERR BY APPROVING A PER-WORKER PENALTY FOR PREFERENTIAL TREATMENT VIOLATIONS

The Administrator determined that 207 domestic workers were unlawfully denied certain benefits and working conditions provided to H-2A workers, in violation of H-2A program regulations. See 20 C.F.R. § 655.122(a). In assessing a penalty for these violations, the Administrator elected to separately penalize WAFLA for each of the 207 affected workers (a "per-worker" penalty), rather than to assess a single penalty encompassing the entire violation (a "per-regulation" penalty). The ALJ affirmed the Administrator's per-worker approach.

The ARB agreed with the ALJ that the per-worker approach was consistent with the H-2A regulations. The ARB observed that the Administrator has the discretion to assess CMPs "for each violation" of the H-2A program requirements, including "[e]ach failure . . . to honor the terms or conditions of a worker's employment required" by the H-2A program. 29 C.F.R. § 501.19(a). "Pursuant to this regulation, each instance in which a domestic worker was denied the same benefits and working conditions as the H-2A workers constitutes a separate violation." Thus, it was within the Administrator's discretion to apply a per-worker, rather than a per-regulation, penalty.

Even so, WAFLA argued that the ALJ's reason for affirming the Administrator's choice to apply a per-worker penalty, rather than a per-regulation penalty, was flawed in this case. WAFLA noted that the ALJ asserted that a per-worker penalty was appropriate in this case because the preferential treatment violation at issue was "particularly grave." Yet, WAFLA observed that the ALJ later inconsistently asserted that the amount assessed by the Administrator for the violation should be reduced because it was not a "grave" violation. The ARB determined that although a surface reading of the ALJ's analysis may appear to reveal contradictory statements, a close reading revealed that the word "grave," as used by the ALJ, had different meanings based on the context in which it was used. When determining whether a per-worker penalty was appropriate, the ALJ determined that the violations were "grave" in scope, because they impacted a sizeable number of employees individually. In contrast, when the ALJ later analyzed other mitigating factors, the ALJ determined that the violations were not particularly "grave" in nature as compared to other types of H-2A violations. Thus, the ARB determined that "[a]lthough the ALJ may have been imprecise in his use of the term ‘grave,' his analysis, when viewed carefully, was reasonable and sound."

McDowell v. Eagle Intermodal Inc., ARB No. 2022-0046, ALJ No. 2020-STA-00054 (Mar. 27, 2023) (Decision and Order Dismissing Petition for Review)

SECOND ORDER OF DISMISSAL; COMPLAINANT FAILED TO FILE AN OPENING BRIEF

In McDowell v. Eagle Intermodal Inc., ARB No. 2022-0046, ALJ No. 2020-STA-00054 (Mar. 27, 2023), the ARB dismissed Complainant's Petition for Review for a second time for failing to file his opening brief.

On October 20, 2022, the ARB dismissed Complainant's Petition for Review for the first time for failing to file an opening brief and for failing to file a response to the ARB's Order to Show Cause. Complainant filed a request for reconsideration, asserting that he had not received the ARB's Order to Show Cause.

On February 14, 2023, the ARB granted Complainant's request for reconsideration due to a service error. The ARB ordered Complainant to file his opening brief by March 14, 2023. Complainant did not file his opening brief as ordered. The ARB dismissed Complainant's Petition for Review for a second time for failing to file his opening brief.

Adm'r, Wage and Hour Div., USDOL v. KBR Services, LLC, ARB No. 2023-0021 (Mar. 27, 2023) (Decision and Order Dismissing Petition for Review Without Prejudice)

ORDER OF DISMISSAL; ARB LACKED JURISDICTION WHERE ADMINISTRATOR'S DECISION WAS NOT A FINAL RULING

In Adm'r, Wage and Hour Div., USDOL v. KBR Services, LLC, ARB No. 2023-0021 (Mar. 27, 2023), the ARB dismissed Respondent's Petition for Review for lack of jurisdiction. On September 16, 2022, Respondent requested a wage determination for Quality Control Inspectors from the United States Department of Labor, Wage and Hour Division (WHD). On November 16, 2022, the WHD Section Chief issued a determination letter in this matter that established a flat wage rate for all the inspectors.

On December 7, 2022, Respondent requested the WHD to reconsider its determination. On February 14, 2023, a WHD investigator emailed Respondent stating that "[w]ith regards to the conformance prevailing wage amounts, the DOL gave you ample time to respond to what was provided and given deadlines. We received no timely response, the conformance stands."

Respondent filed a Petition for Review with the ARB of the February 14, 2023 reconsideration denial. The ARB issued an Order to Show Cause, ordering the parties to show cause why the ARB should not dismiss this appeal on grounds that it was not ripe for review because the WHD Administrator had not issued a final decision. The parties filed a joint motion to dismiss, requesting that this appeal be dismissed without prejudice because it was not ripe for review. The ARB determined that WHD's email did not constitute a final ruling as provided in 29 C.F.R. § 8.1(b). Therefore, the case was not ripe for review.

Pfeifer v. AM Retail Group, Inc., ARB No. 2023-0009, ALJ No. 2021-SOX-00030 (ARB Mar. 22, 2023) (Order of Remand)

DISMISSAL AS SANCTION; ALJ'S  DISMISSAL OF COMPLAINT TOO SEVERE A SANCTION AND ALJ ABUSED HIS DISCRETION IN DISMISSING COMPLAINT; COUNSEL'S NONSUBSTANTIVE PROCEDURAL ERRORS BEFORE THE ALJ DID NOT MERTIT THE EXTREME SANCTION OF DISMISSAL OF COMPLAINT IN ITS ENTIRETY

In Pfeifer v. AM Retail Group, Inc., ARB No. 2023-0009, ALJ No. 2021-SOX-00030 (ARB Mar. 22, 2023), the ARB found the ALJ's decision to dismiss Complainant's complaint in its entirety due to Complainant's counsel's failure to comply with the ALJ's orders and verbal directives and failure to request leave for many filings before the ALJ was too severe a sanction and remanded the case back to the OALJ with a recommendation that it be assigned a new ALJ. The ARB found that the errors the ALJ cited in the order dismissing the complaint were nonsubstantive procedural errors that did not rise to the level of egregious misconduct that required dismissal of a claim. The ARB noted that Complainant's counsel attempted to fix the mistakes that were brought to his attention, and that counsel was able to fix the record. The ARB concluded that the counsel's errors and lack of proper courtesy to the ALJ did not merit the extreme sanction of dismissal of the claim in its entirety and that the ALJ abused his discretion in dismissing the complaint.

OFCCP, USDOL v. WMS Solutions, LLC, ARB No. 2020-0057, ALJ No. 2015-OFC-00009 (ARB Mar. 8, 2023) (Order on Remand from the Secretary of Labor)

SECRETARY REMAND; REMAND FOR FURTHER CONSIDERATION OF BACK PAY, INTEREST, AND JOB RELIEF

In OFCCP, USDOL v. WMS Solutions, LLC, ARB No. 2020-0057, ALJ No. 2015-OFC-00009 (ARB Mar. 8, 2023), the ARB issued an Order on Remand from the Secretary, in which the Board adopted the determinations made by the Secretary related to the proper amount of back pay, interest, and job relief that should be awarded to the members of the affected class of workers discriminated against by Respondent.

On May 12, 2020, an ALJ issued a  Recommended Decision and Order (Recommended D. & O.), in which the ALJ found that Respondent violated EO 11246 when it:

1. discriminated against white, Black, Asian, and American Indian/Alaskan Native laborers in favor of hiring Hispanic laborers;
2. discriminated in hours and compensation against female laborers based on their gender and against Black and white laborers based on their race/national origin; and
3. failed to ensure and maintain a working environment free of harassment, intimidation, and coercion at construction sites where Respondent's employees worked as GSA subcontractors.

The ALJ ordered Respondent to pay $780,998 in back pay and interest to the non-hired workers who were injured by its discriminatory hiring practices, and $179,907 in back pay and interest to the female and non-Hispanic workers who were injured by its discriminatory job assignment and compensation practices. The ordered back pay covered only the review period (February 1, 2011 to January 31, 2012), while interest extended only to the date of hearing (July 2016). The ALJ did not award any equitable relief related to offers of employment.

On November 18, 2021, the ARB issued a Decision and Order (ARB D. & O.) affirming the Recommended D. & O.

On December 23, 2022, the Secretary issued a Final Agency Decision and Order (Secretary's FAD), reversing the ARB's D. & O. in part and remanding portions to the ARB for further proceedings because the Secretary found the ARB improperly deferred to the ALJ's recommended decisions related to damages. The Secretary's FAD found that the ALJ ignored established precedent for what constitutes adequate make-whole relief and, specifically:

1. failed to provide sufficient reasoning for his decision not to order back pay at least through the date of hearing for individuals affected by Respondent's discriminatory compensation practices;
2. denied interest on back pay through the date of the decision for those affected by either Respondent's discriminatory compensation or hiring practices; and
3. denied job relief for individuals affected by Respondent's discriminatory hiring practices.

Given these determinations, the Secretary remanded this matter to the ARB for
"further consideration of back pay, prejudgment interest, and job relief in
accordance with this opinion."

BACK PAY FOR COMPENSATION DISCRIMINATION; NO COMPELLING REASON TO CURTAIL THE DAMAGES PERIOD TO THE REVIEW PERIOD

In the Title VII context, the period of recovery of back pay begins at the time the discrimination causes economic harm and presumptively extends until the date of final judgment. The premature severing of back pay prior to the date of final judgment must be based on "compelling" reasons to withstand scrutiny.

Before both the ALJ and the ARB, the OFCCP argued that compensation back pay should extend through the date of the ALJ hearing because, as the record reflects, Respondent did not change its discriminatory practices regarding rates of pay or job assignments from the beginning of the review period through to the July 2016 hearing.

The ALJ awarded back pay for workers injured by Respondent's discriminatory compensation practices only for the review period. On remand from the Secretary, the ARB found the ALJ erred in limiting the back pay to the review period. The ARB found that the record sufficiently supported an award of back pay to remedy Respondent's discriminatory compensation practices through the date of the hearing. Respondent's discriminatory compensation practices were unchanged through the date of the hearing, and neither Respondent nor the ALJ in his recommended award established any compelling reason for curtailing back pay to the review period. Therefore, the ARB extended the amount of back pay owed for compensation discrimination to also include from the end of the review period (February 2012) to the date of the hearing before the ALJ (through July 2016). Accordingly, the ARB ordered back pay in the amount of $1,549,080, the amount attested to by OFCCP as directed by the ALJ following issuance of his Recommended D. & O.

PREJUDGMENT INTEREST THROUGH THE DATE OF DECISION

The law is clear that an award of interest extends to the date of final judgment.

On remand, the Board thoroughly reviewed the record and discerned no basis to deviate from the general rule that interest extends to the date of judgment. The ARB therefore found that the ALJ should have awarded interest through the date of the decision for those affected by Respondent's discriminatory compensation or hiring practices. In this specific case, OFCCP had requested an award to the date of the ALJ's Recommended D. & O., and that is the date for which OFCCP verified its calculations. Accordingly, the ARB awarded interest as requested and verified by OFCCP in the total amount of $255,979.94.

JOB RELIEF

Instatement, also known as "job relief," is widely recognized as a preferred remedy in cases involving an employer's discriminatory failure to hire. The OFCCP requested an award of job relief, but the ALJ failed to award job relief. However, the ALJ determined that Respondent had engaged in discriminatory hiring practices. Accordingly, on remand, based upon the ALJ's findings that Respondent discriminated against job applicants in its hiring processes, the ARB ordered Respondent to extend job offers to individuals in the One-Stop Shop proxy group identified by the ALJ, consisting of non-Hispanic laborers seeking construction work and registered at "One-Stop Shop" unemployment centers in the Washington, D.C. area during the review period, as jobs become available, until such time as Respondent either hires 160 laborers from the One-Stop Shop group or the proxy list is exhausted, whichever comes first.