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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
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`Case No. _________________
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`SUN VALLEY ORCHARDS, LLC,
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`Plaintiff,
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`v.
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`U.S. DEPARTMENT OF LABOR,
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`and MARTIN J. WALSH, in his
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`official capacity as United States
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`Secretary of Labor,
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`Defendants.
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`____________________________________)
`_______________________________________________________
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`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`AND DEMAND FOR JURY TRIAL
`_______________________________________________________
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`Robert E. Johnson*
`INSTITUTE FOR JUSTICE
`16781 Chagrin Blvd. #256
`Shaker Heights, OH 44120
`Tel: (703) 682-9320
`Fax: (703) 682-9321
`Email: rjohnson@ij.org
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` * Pro hac motion to be filed
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`Scott Wilhelm
`WINEGAR, WILHELM, GLYNN & ROEMERSMA, P.C.
`305 Roseberry Street, P.O. Box 800
`Phillipsburg, NJ 08865
`Tel: (908) 454-3200
`Fax: (908) 454-3322
`Email: wilhelms@wwgrlaw.com
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`Attorneys for Plaintiff Sun Valley Orchards, LLC
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`LOCAL RULE 10.1 STATEMENT
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`1.
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`The mailing addresses of the parties to this action are:
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`Sun Valley Orchards, LLC
`29 Vestry Road
`Swedesboro, NJ 08085
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`Department of Labor
`200 Constitution Avenue N.W.
`Washington, D.C. 20001
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`Martin J. Walsh, U.S. Secretary of Labor
`200 Constitution Avenue N.W.
`Washington, D.C. 20001
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`INTRODUCTION
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`2.
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`Sun Valley Orchards, a family farm in New Jersey, has spent nearly five years in
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`proceedings before agency judges, attempting to contest the U.S. Department of Labor’s decision
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`to subject the farm to over half a million dollars in liability. The bulk of that assessment—over
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`$320,000—is related to a paperwork violation: When filling out paperwork to participate in a
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`DOL visa program for migrant farm workers, the farm indicated that it would give workers
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`access to a kitchen when, in fact, it offered a meal plan under which workers could purchase
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`food at a cost of approximately $3.75 per meal. The farm was in its first year participating in the
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`H-2A visa program when it made that mistake, and DOL’s only complaint about the meal plan
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`was that it was not accurately described in the farm’s paperwork; in subsequent years, the farm
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`has offered the same meal plan without DOL raising any objections.
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`3.
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`DOL in this case has appointed itself prosecutor, judge, and jury. The monetary
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`award was first assessed by DOL inspectors, was then affirmed by a DOL administrative law
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`judge after an administrative hearing, and was finally affirmed by an appellate panel of DOL
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`judges. DOL wrote the governing regulations with only minimal congressional guidance, and
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`DOL invented an agency adjudicatory process with no congressional authorization. The agency
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`made the law and found the facts, and then the agency decided the penalty.
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`4.
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`The Complaint in this case raises a claim under Article III of the U.S.
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`Constitution. If an agency wants to impose this kind of financial liability, then the agency should
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`be required to proceed before a real federal judge in a real federal court. At a minimum, an
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`agency should not be able to take over the judicial function without a clear direction from
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`Congress providing for adjudication in an agency court.
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`5.
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`The Complaint raises other claims as well. The award was imposed by agency
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`judges who were appointed in violation of the Appointments Clause. And the imposition of
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`hundreds of thousands of dollars in liability for a paperwork violation also separately violates the
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`Excessive Fines Clause. Indeed, even under the Administrative Procedure Act’s deferential
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`standard of review, the DOL’s award is unsupported by substantial evidence, an abuse of
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`discretion, and not in accordance with law. Five years after this administrative odyssey began,
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`the DOL’s unconstitutional award should be set aside.
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`JURISDICTION AND VENUE
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`6.
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`This Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 2201,
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`2202 and 5 U.S.C. § 702.
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`7.
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`Venue lies in this Court pursuant to 28 U.S.C. § 1391(e). Sun Valley Orchards is
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`located at 29 Vestry Road, Swedesboro, NJ 08085, which is within Gloucester County and the
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`Camden vicinage of the United States District Court for the District of New Jersey. Plaintiff Sun
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`Valley Orchards resides at that address, and a substantial part of the events giving rise to the
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`governmental enforcement action at issue in this case also occurred at those premises.
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`THE PARTIES
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`8.
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`Plaintiff Sun Valley Orchards, LLC is a family-owned limited liability company
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`organized under the laws of New Jersey. Joseph Marino is the Managing Partner of Sun Valley
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`Orchards, and he owns and operates the company together with his brother Russell Marino. Sun
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`Valley Orchards operates a vegetable farm in southern New Jersey, growing crops including
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`peppers, squash, eggplant, cucumbers, and asparagus.
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`9.
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`Defendant U.S. Department of Labor (“DOL”) is the federal administrative
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`agency responsible for bringing enforcement actions against employers for alleged violations of
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`the rules and regulations of the H-2A visa program. The enforcement proceeding at issue in this
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`case was initiated by DOL personnel, tried by DOL attorneys, heard and decided by a DOL
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`judge, and then affirmed by a panel of DOL appellate judges.
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`10.
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`Defendant Martin J. Walsh is sued in his official capacity as the U.S. Secretary of
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`Labor. In that capacity, he is responsible for the oversight, administration, and enforcement of
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`the H-2A visa program.
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`REGULATORY BACKGROUND
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`The Statutory Framework
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`11.
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`The H-2A visa program was created by Congress in 1986, as part of the
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`Immigration Reform and Control Act, Pub. L. No. 99-603, 100 Stat 3359. The H-2A program
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`allows for employment of foreign nationals as temporary agricultural workers in circumstances
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`where an employer’s needs cannot be met out of the domestic labor pool. See 8 U.S.C.
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`§§ 1101(a)(15)(H)(ii)(a); 1188(a).
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`12.
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`Congress has enacted express provisions to govern the debarment of H-2A
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`employers who allegedly violate H-2A regulations. Under these provisions, DOL may debar an
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`employer for up to three years if the employer “substantially violated a material term or
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`condition of the labor certification with respect to the employment of domestic or nonimmigrant
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`workers.” 8 U.S.C. § 1188(b)(2). If an employer contests its debarment, the statute also expressly
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`provides for “a de novo administrative hearing respecting the denial or revocation.” Id.
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`§ 1188(e).
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`13.
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`By contrast, Congress has not authorized agency judges to impose monetary
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`penalties for violations of the H-2A program through agency adjudication.
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`14.
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`DOL’s statutory authority to impose monetary penalties for H-2A violations is
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`found in a single, vague provision: “The Secretary of Labor is authorized to take such actions,
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`including imposing appropriate penalties and seeking appropriate injunctive relief and specific
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`performance of contractual obligations, as may be necessary to assure employer compliance with
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`terms and conditions of employment under this section.” 8 U.S.C. § 1188(g)(2).
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`15.
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`Notably, while Section 1188(g)(2) authorizes the Secretary of Labor to impose
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`“appropriate penalties,” the statute says nothing at all about imposing such penalties in
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`administrative proceedings before agency judges.
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`16.
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`To the contrary, Congress has specifically provided that “[w]henever a civil fine,
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`penalty or pecuniary forfeiture is prescribed for the violation of an Act of Congress without
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`specifying the mode of recovery or enforcement thereof, it may be recovered in a civil action.”
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`28 U.S.C. § 2461(a). When Congress authorized the Secretary of Labor to impose penalties for
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`violations of H-2A violations, Congress thus authorized the Secretary of Labor to impose those
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`penalties “in a civil action”—not an administrative proceeding before an administrative judge.
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`DOL’s System of Administrative Adjudication
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`17.
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`Despite the above lack of congressional authorization, the Secretary of Labor has
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`promulgated regulations providing for the imposition of civil monetary penalties and back wages
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`in administrative courts. Based solely on the vague statutory grant of authority in Section
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`1188(g)(2), DOL regulations subject employers to “appropriate administrative proceedings” to
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`impose penalties including “recovery of unpaid wages” and “assessment of a civil money
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`penalty.” 29 C.F.R. § 501.16.
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`18.
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`Under DOL’s regulations, the amount of a civil monetary penalty is determined in
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`the first instance by the agency’s enforcement personnel in the Wage and Hour Division, who
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`“shall consider the type of violation committed and other relevant factors.” 29 C.F.R.
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`§ 501.19(b). These “relevant factors” include, but “are not limited to,” seven factors listed in the
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`regulation: (1) the employer’s previous history of violations; (2) the number of workers affected;
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`(3) the gravity of the violation; (4) good faith efforts to comply; (5) the employer’s explanation
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`for the violation; (6) the employer’s commitment to future compliance; and (7) the extent of the
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`employer’s financial gain or the worker’s financial loss or injury. Id.
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`19.
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`Under DOL’s regulations, a “civil money penalty for each violation of the work
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`contract or a requirement of [the H-2A program] will not exceed $1,787 per violation.” 29 C.F.R.
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`§ 501.19(c). In 2015, the time period at issue in this case, that amount was set at $1,500. See 81
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`Fed. Reg. 43429, 43435 (July 1, 2016).
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`20.
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`Under DOL’s regulation, “[e]ach failure to pay an individual worker properly or
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`to honor the terms or conditions of a worker’s employment . . . or the regulations in this part
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`constitutes a separate violation.” 29 C.F.R. § 501.19(a).
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`21.
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`Once a penalty is assessed by DOL’s enforcement personnel, that determination is
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`reviewed at a hearing by DOL ALJs, who are employees of the agency.
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`22.
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`As DOL employees, ALJs are affected by the financial health of the agency as a
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`whole. For instance, when DOL was forced to make budget cuts in 2013, the DOL’s Office of
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`Administrative Law Judges was forced to cut its budget by five percent and, as a result,
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`furloughed DOL ALJs for multiple days.
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`23.
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`In litigation, DOL has also taken the position that the Secretary of Labor has
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`“broad authority to remove ALJs” from their positions and that “Article II’s mandate that inferior
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`executive officers remain accountable to the President and their Department Heads through the
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`removal power applies to ALJs.” Brief for Federal Respondent at 30, 35, K&R Contractors, LLC
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`v. Keene, No. 20-2021 (4th Cir. Feb. 4, 2021).
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`24.
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`After an ALJ issues a decision, DOL regulations then allow an employer to appeal
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`that decision to an internal agency appellate court called the Administrative Review Board
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`(“ARB”). 29 C.F.R. § 501.42.
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`25.
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`The ARB is nowhere authorized by any statute. Rather, the Secretary of Labor
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`created the ARB by executive order in 1996. See Secretary’s Order 02-96, 61 Fed. Reg. 19978
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`(May 3, 1996); see also Secretary’s Order 02-2012, 77 Fed. Reg. 69378 (Nov. 16, 2012).
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`26.
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`The ARB consists of a maximum of five administrative judges appointed by the
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`Secretary of Labor. 77 Fed. Reg. at 69379. The members of the ARB are appointed for a fixed
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`term “of two years or less.” Id.
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`27.
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`The Secretary of Labor’s Orders creating the ARB direct that “[t]he Board shall
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`not have jurisdiction to pass on the validity of any portion of the Code of Federal Regulations
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`which has been duly promulgated by the Department of Labor and shall observe the provisions
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`thereof, where pertinent, in its decisions.” 61 Fed. Reg. at 19979; see also 77 Fed. Reg. at 69379.
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`DOL’s H-2A Enforcement Activity
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`28.
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`As recently as 2006, annual civil monetary penalties imposed by DOL for
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`violations of the H-2A program totaled just $57,900. See David J. Bier, Cato Institute,
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`Immigration Research and Policy Brief No. 17, H-2A Visas for Agriculture: The Complex
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`Process for Farmers to Hire Agricultural Guest Workers (Mar. 10, 2020) (Table B).1
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`29.
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`Annual civil monetary penalties for H-2A violations first crossed the million-
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`dollar mark in 2012 and reached as high as $5.9 million in 2013. Id.
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`30.
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`Data on DOL’s website shows that, from 2005 through August 2021, DOL has
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`imposed three civil monetary penalties over $1 million; 52 penalties between $100,000 and $1
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`million; 482 penalties between $10,000 and $100,000; and 1,850 penalties under $10,000 for
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`alleged violations of the H-2A program. See U.S. Dep’t of Labor, Wage and Hour Compliance
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`Action Data (hereinafter, “DOL Data”).2
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`31.
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`In addition to imposing civil monetary penalties for H-2A violations, DOL’s ALJs
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`also assess back wages that are purportedly owed to employees of H-2A employers. Since 2005,
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`DOL has assessed a total of $37.5 million in civil monetary penalties and $28.9 million in back
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`wages in connection with the H-2A program. See DOL Data, supra ¶ 30.
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`32.
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`Back wages are technically owed to the employees, but in most cases involving
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`the H-2A program they are collected by the agency. Employees must then claim the funds from
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`the government. If the funds go unclaimed for three years, the government keeps the money.
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`1 Available at https://www.cato.org/publications/immigration-research-policy-brief/h-2a-
`visas-agriculture-complex-process-farmers-hire.
`2 Available at https://enforcedata.dol.gov/views/data_summary.php.
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`33.
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`In 2015, the DOL’s Office of Inspector General found that DOL “made minimal
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`efforts to locate” employees who it was supposed to pay back wages. U.S. Dep’t of Labor, Office
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`of Inspector General, Wage and Hour Division Needs to Strengthen Management Controls for
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`Back Wage Distributions (Mar. 2015).3 As a result, between 2010 and 2014, the government
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`kept $60 million in back wages that were collected by DOL and never paid to workers. Id.
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`34. While the amount of money collected for alleged H-2A violations in
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`administrative proceedings has significantly increased, the number of employers who are
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`debarred for violations has remained relatively small. The number of debarments each year
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`ranges from zero (in 2010) to 31 (in 2018). See Bier, supra ¶ 28.
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`35.
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`In 2015, the agency imposed $3.9 million in civil monetary penalties in 207 cases
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`involving alleged violations of the H-2A program. See Bier, supra ¶ 28. In that same year, the
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`agency debarred 30 employers. Id.
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`36.
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`In other words, the agency subjects more employers to its unauthorized
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`administrative procedures for monetary penalties than it does to its authorized administrative
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`procedures for debarment.
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`FACTUAL BACKGROUND
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`Sun Valley Orchards
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`37.
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`Sun Valley Orchards operates a family farm in southern New Jersey that grows a
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`variety of vegetables, including peppers, squash, eggplant, cucumbers, and asparagus.
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`38.
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`Sun Valley Orchards is owned and operated by two brothers, Joseph and Russell
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`Marino. They are fourth-generation farmers in New Jersey.
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`3 Available at https://www.oig.dol.gov/public/reports/oa/2015/04-15-001-04-420.pdf.
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`39.
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`Vegetable farming is a labor-intensive business. Because vegetables are easily
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`bruised and damaged, they cannot be harvested by machine and must be picked by hand. Many
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`vegetables also must be hand-planted, and, in some instances, must be tied up to stakes while in
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`the process of growing.
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`40.
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`As a result, Sun Valley Orchards depends on seasonal labor to grow and harvest
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`its crops. It would be impossible to run the farm without those workers.
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`41.
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`During the times relevant to this case, Sun Valley Orchards’ seasonal workers
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`were supervised by Agustin Hernandez. Agustin’s father also previously worked at Sun Valley
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`Orchards, and Agustin’s wife worked in the farm’s kitchen cooking meals for the workers.
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`42.
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`Seasonal workers at Sun Valley Orchards are paid above minimum wage: In
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`2015, when the events at issue here occurred, the Marinos paid their workers $11.29 per hour, as
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`compared to the then-prevailing state minimum wage of $8.38 per hour. Moreover, unlike for
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`domestic workers, those wages are not subject to tax withholding.
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`43.
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`Seasonal workers at Sun Valley Orchards are also provided with free lodging at
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`the farm in group dormitories with bunk beds.
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`44. Working at a vegetable farm like Sun Valley Orchards is hard work, but it is also
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`comparatively well paid. Given the wage rate and the provision of free lodging, workers can
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`make a good amount of money over a season.
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`The 2015 Growing Season
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`45.
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`During the 2015 season, Sun Valley Orchards participated for the first time in the
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`H-2A visa program.
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`46.
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`Before the 2015 season, Sun Valley Orchards had relied on seasonal workers who
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`primarily came from Florida and Puerto Rico; the Marino brothers had avoided the H-2A visa
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`program in part because they had heard horror stories about other farms’ regulatory tie-ups with
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`DOL. But in 2015 the farm was increasingly unable to meet its needs out of the domestic labor
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`pool, and the Marinos decided they had no real choice other than to enter the program.
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`47.
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`Because the H-2A program is complex and requires significant paperwork, the
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`Marinos hired a contractor to help them navigate the program and fill out the necessary forms.
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`48.
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`Towards the beginning of the 2015 season, an inspector from DOL visited Sun
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`Valley Orchards.
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`49. When the inspector left, the Marinos asked if he had spotted any issues and if
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`there were any changes the Marinos ought to make. The inspector assured the Marinos that
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`everything was fine and did not suggest any changes.
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`DOL’s Half-Million Dollar Assessment
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`50.
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`In early 2016, the DOL inspector returned—this time accompanied by officials
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`from DOL’s headquarters in Washington, D.C. These DOL officials handed Joseph and Russell a
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`letter stating that they were being assessed over $550,000 for alleged H-2A violations—
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`including a civil monetary penalty of over $200,000 and over $350,000 in back wages.
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`51.
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`In June 2016, DOL mailed a letter finalizing this assessment. A copy of that letter
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`is attached as Exhibit A.
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`The Meal Plan Paperwork
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`52.
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`The majority of this assessment was based on a paperwork violation: Over
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`$326,000 of the over-$550,000 assessment was imposed because Sun Valley Orchards’ H-2A
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`paperwork did not accurately describe the farm’s meal plan for its workers.
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`53.
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`On that basis alone, DOL enforcement personnel assessed $198,450 in monetary
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`penalties and $128,285 in back wages. DOL enforcement personnel calculated the penalty by
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`assessing a $1,350 penalty for each worker who was eligible to participate in the farm’s meal
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`plan (whether they were H-2A workers or not, and whether they actually chose to participate or
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`not); and DOL enforcement personnel calculated the back wages by determining the full amount
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`paid by all of Sun Valley Orchards’ workers for the meal plan during the 2015 season (whether
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`those amounts were paid by H-2A workers or not).
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`54.
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`It is entirely legal for an H-2A employer to offer employees a meal plan, and, in
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`fact, federal regulations expressly allow H-2A employers to charge workers for meals. See 20
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`C.F.R. § 655.122(g).
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`55.
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`The amount that employers may charge for meals is set by regulation and is
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`indexed to inflation. See id. § 655.173(a). In 2015, the agency set the maximum allowable meal
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`charge at $11.86 per day, or $83.02 per week. See 80 Fed. Reg. 9482 (Feb. 23, 2015).
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`56.
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`The amount charged by Sun Valley Orchards was below the maximum allowable
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`amount set by DOL’s own regulations. Sun Valley Orchards’ meal plan for 2015 charged
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`workers $75 to $80 per week, or between $10.71 and $11.42 per day.
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`57.
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`DOL’s only concern with Sun Valley Orchards’ meal plan was that it was not
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`accurately described on the farm’s paperwork. Instead, the contractor who filled out Sun Valley
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`Orchards’ application erroneously stated that employees would have access to the kitchen so that
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`they could cook their own meals.
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`58.
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`Even if employees had been given access to the kitchen, those employees still
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`would have had to pay to purchase food. Indeed, given the cost of food in New Jersey, the high
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`caloric needs of workers performing manual labor, and the fact that workers eating individually
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`would not be able to buy in bulk, it would have been difficult for the workers to eat for much less
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`than the cost of the meal plan even if the farm had provided them with kitchen access.
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`59.
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`Nothing in the H-2A program regulations required Sun Valley Orchards to
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`provide its workers with free food, and Sun Valley Orchards never stated that it would do so.
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`Yet, under DOL’s assessment, Sun Valley Orchards was required to pay as “back wages” the full
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`amount paid by all of its workers for its meal plan.
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`60.
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`In subsequent years, after the 2015 season, Sun Valley Orchards has continued to
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`offer a meal plan for H-2A workers but has described the meal plan on its H-2A paperwork.
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`DOL has not expressed any concern with Sun Valley Orchards’ meal plan in those later years,
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`confirming that DOL’s sole concern with the meal plan in 2015 was that it was not fully
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`described on the farm’s paperwork.
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`The Early Departure Paperwork
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`61. Most of the remainder of the assessment consisted of $142,728.20 in back wages
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`(and $2,700 in penalties) related to the early departure of some of the farm’s workers.
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`62.
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`DOL regulations include a “three-fourths guarantee” for H-2A workers, under
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`which employers must “guarantee to offer the worker employment for a total number of work
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`hours equal to at least three-fourths of the workdays” of the period for which the worker is hired.
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`20 C.F.R. § 655.122(i). A worker is not entitled to that guarantee, however, if the worker
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`“voluntarily abandons employment before the end of the contract period” or if the worker “is
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`terminated for cause.” Id. § 655.122(n).
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`63.
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`During the 2015 season, nineteen of the farm’s H-2A workers left early and, in
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`doing so, signed paperwork stating that they were leaving voluntarily. The workers were asked to
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`pick asparagus, which is particularly difficult physical work, and they left the farm after just a
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`short time on the job because they did not like the work.
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`64.
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`DOL, however, claimed that this paperwork was inaccurate and that these
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`workers were fired.
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`65.
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`Even if the Marinos had fired the workers, the workers would not have been
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`entitled to the benefit of the three-fourths guarantee so long as the farm had filed paperwork
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`informing DOL that the workers were being terminated for cause.
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`66.
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`The applicable job order stated that “cause” to fire the workers would include if a
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`worker “fails . . . to perform the work as specified,” “malingers or otherwise refuses without
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`justified cause to perform as directed the work for which the Worker was recruited and hired,” or
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`otherwise “fails to meet applicable production standards or keep up with fellow workers.”
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`67.
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`DOL’s complaint was therefore not that the farm allegedly fired the workers, but,
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`rather, that the farm allegedly did so without filing the necessary paperwork to establish that the
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`termination was for cause.
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`68.
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`Because DOL believed the workers were fired without the proper paperwork to
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`establish that the termination was for cause, DOL assessed back wages equal to the amount the
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`workers would have been paid under the three-quarters guarantee.
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`The Remainder of the Assessment
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`69.
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`Beyond that, DOL assessed over $71,000 in back wages because Agustin
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`Hernandez (the workers’ supervisor) sold non-alcoholic beverages to the workers. Agustin would
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`sell sodas for $1, energy drinks for $1.50, and bottled water for $0.75.
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`70.
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`DOL assessed back wages because Agustin purchased the beverages and sold
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`them at a small up-charge; DOL believed that it was unlawful for Agustin to profit off such sales.
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`However, in calculating the amount of back wages, DOL awarded the full amount paid by the
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`workers, and not just the amount of Agustin’s profit.
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`71.
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` It is not illegal to sell drinks to H-2A workers, and DOL would have had no
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`problem if the farm had instead allowed an independent third party to come sell drinks to the
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`workers (even if an independent vendor would have charged more for drinks). In fact, the farm
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`has done just that in later years, and DOL has raised no objection.
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`72.
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`Similarly, DOL assessed $8,972.60 in back wages because Agustin sometimes
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`bought beers in bulk and sold them to the workers at the dormitories. Again, it is not illegal to
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`sell alcoholic beverages to H-2A workers, but DOL objected to these sales because they were
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`made by the workers’ supervisor. DOL would have raised no objection if the farm had allowed
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`an independent third party to come sell beers to the workers.
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`73.
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`Finally, less than two percent of DOL’s total assessment pertained to actual living
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`and working conditions at the farm. DOL assessed $3,600 in civil monetary penalties related to
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`living conditions, such as missing screens on some of the windows, as well as $7,500 in civil
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`monetary penalties related to the provision of transportation to the fields.
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`74.
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`Since this fine was assessed, Sun Valley Orchards has continued to participate in
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`the H-2A program. DOL has not sought to debar Sun Valley Orchards from the H-2A program,
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`and DOL has not imposed any fines for later years.
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`75.
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`Sun Valley Orchards does not have $550,000 to pay to DOL, and if Sun Valley
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`Orchards is forced to pay that amount it may very well destroy the business.
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`AGENCY PROCEEDINGS
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`Before The Administrative Law Judge
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`The Assignment and Hearing
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`76.
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`As required by DOL regulations, Sun Valley Orchards contested the agency’s
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`letter assessing penalties and back wages by requesting a hearing.
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`77.
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`The Administrator of DOL’s Wage and Standards Division referred the case to
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`the DOL’s Chief ALJ, who, in turn, referred the case to DOL ALJ Theresa C. Timlin.
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`78.
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`ALJ Timlin has been employed by the DOL for almost the entirety of her career.
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`ALJ Timlin completed her education in 1990. From 1991-2005, she worked as an attorney in the
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`DOL’s Office of the Regional Solicitor. From 2005-2008, she worked in the DOL’s Office of
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`Federal Contract Compliance Programs. And—after a one-year period working as an ALJ at the
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`Social Security Administration—she worked as a DOL ALJ from 2009 through the present.
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`79.
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`On information and belief, because ALJ Timlin was hired as a DOL ALJ via a
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`transfer from the Social Security Administration, ALJ Timlin’s hiring as a DOL ALJ was
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`effected without an appointment by the Secretary of Labor.
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`80.
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`ALJ Timlin held a four-day hearing for this case in July 2017. During the hearing,
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`ALJ Timlin heard testimony from multiple witnesses, including Joseph Marino, Russell Marino,
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`three former employees of Sun Valley Orchards, and a DOL inspector.
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`81.
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`On December 21, 2017, the Secretary of Labor ratified ALJ Timlin’s appointment
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`as an ALJ. The Secretary’s letter stated that the ratification was “intended to address any claim
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`that administrative proceedings pending before, or presided over by, administrative law judges of
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`the U.S. Department of Labor violate the Appointments Clause.”
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`82.
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`ALJ Timlin issued her decision on October 28, 2019. ALJ Timlin based her
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`decision on evidence and testimony presented at the July 2017 hearing, which occurred prior to
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`the Secretary of Labor’s ratification of ALJ Timlin’s appointment.
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`The ALJ’s Decision
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`83.
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`The ALJ’s decision affirmed the DOL’s initial assessment in almost all material
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`respects. A copy of the ALJ’s decision is attached as Exhibit B.
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`84.
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`The ALJ affirmed the $198,450 civil monetary penalty for the meal plan
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`violation. In doing so, the ALJ did not attempt to decide the appropriate penalty for the meal plan
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`violation. Instead, the ALJ merely concluded that the penalty assessment made by DOL’s
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`enforcement personnel was “reasonable” and “rational.”
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`85.
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`The ALJ therefore concluded that “[t]he Administrator’s assessment of a $1,350
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`CMP for each worker was reasonable, because she reviewed each of the mitigation criteria at 29
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`C.F.R. § 501.19(b)” and “rationally considered all of the § 501.19(b) mitigation factors.”
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`86.
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`Among other things, although Sun Valley Orchards argued that the workers did
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`not suffer any significant harm as a result of the farm’s paperwork error—as they would have
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`had to pay for meals regardless, even if they had been afforded kitchen access—the ALJ found
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`that DOL “rationally viewed the violation as serious.”
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`87.
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`The ALJ also held that DOL’s enforcement personnel “reasonably” multiplied the
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`$1,350 monetary penalty by the number of workers eligible to participate in the meal plan. To
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`justify this multiplier—which increased the penalty from $1,350 to $198,450—the ALJ stated
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`simply: “District Director Rachor explained that the Administrator assessed the CMP in this way
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`due to the seriousness of the violation and the ‘large amount of workers affected.’”
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`88.
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`The ALJ also affirmed the assessment of $128,285 in back wages for the meal
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`plan violation. While Sun Valley Orchards had argued that this assessment of back wages vastly
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`overstated any harm to the employees—who would have had to purchase food even if they had
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`been granted kitchen access—the ALJ deemed that to be irrelevant. The ALJ reasoned that “[a]
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`material change to the terms of [the] contract necessarily provides ‘harm’ to both the workers’
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`reliance on the H-2A program to ensure that their rights are protected, as well as the overall
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`integrity of the program itself.”
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`89.
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`The ALJ also affirmed the assessment of back wages for Agustin’s beverage
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`sales. Although there is no requirement anywhere in DOL’s regulations for the H-2A program to
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`provide free beverages to workers, the ALJ reasoned that the sales constituted an “unlawful
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`deduction” from the workers’ pay because Agustin made a profit from the sales.
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`90.
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`Although there was no evidence that Sun Valley Orchards in any way authorized
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`Agustin’s beverage sales, the ALJ held that Sun Valley Orchards could be held responsible for
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`Agustin’s beverage sales because Agustin acted as Sun Valley Orchards’ agent.
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`91.
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`The ALJ, however, did reduce the award for the non-alcoholic beverage sales
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`from $71,790.08 to $64,960 on the ground that the evidence did not support DOL enforcement
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`personnel’s calculations regarding the number of drinks consumed by the workers.
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`92.
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`The ALJ separat