Mar 27, 2024

Supreme Court case could provide ag regulation relief

The first skiff of snow in the Washington, D.C., area this year fell in mid-January. In fact, now that I think of it, it may have been the first snow that had survived overnight until the morning for the past several years. And it was chilly!

On Jan. 17, the U.S. Supreme Court heard arguments in a case that is important to agricultural employers. It involves fish, but it also could have implications for farm and ranch families struggling to stay in business. The justices will potentially render a decision by the end of its session in late June or early July that could change the regulatory dynamic we face in agricultural labor.

During the Trump administration, a regulation was issued by the National Marine Fisheries Service, which operates under the U.S. Department of Commerce. The regulation promulgated by the agency was an attempt to stem the overfishing of herring in the North Atlantic Ocean by U.S. fishing companies.

The mitigation strategy developed by the government was to require the hiring of contractors to accompany the crews going to sea to monitor the catch. According to the commercial fishers, the cost of this regulation would exceed $700 per day, reducing gross profits on their catch by up to 20%.

One can understand why the commercial fishers are wont to shed themselves of this onerous regulation that imperils their family businesses. And the Court must be alert to any “red herrings” the government attorneys espoused in their oral arguments.

What is at issue in this case, and something that agricultural employers face regularly when dealing with government agencies such as the U.S. Department of Labor, is commonly referred to as the principle of Chevron deference. This principle involves a precedential case decided by the Supreme Court in 1984, Chevron v. Natural Resources Defense Council.

In essence, the principle allows government mandates — that are detrimental to agriculture employers, in some cases — to stand.

The principle is essentially that where legislative language is ambiguous or is silent, a court reviewing a regulation issued by an agency should defer to the regulatory action taken by the agency, if the action is “reasonable.”

Chevron deference is often cited by courts when petitioners attempt to unwind unjustifiable regulations issued by governmental agencies. This deference can allow a regulation to stand when it is in fact unlawful. This allows judges to kind of shrug their shoulders and say the departments of commerce, agriculture or labor are the experts in their sectors and must know what they are doing, so we should defer to them. This deference has unfortunately led to the administrative state having far too much say over what occurs with the regulations they promulgate.

Deference to the Department of Labor (DOL) was cited by a magistrate judge in Florida in his Report and Recommendation to the District Court judge in the National Council of Agricultural Employers’ challenge to the Adverse Effect Wage Rate (AEWR). The AEWR is the hourly rate for H-2A workers.

The magistrate judge assumed that the DOL knew what it was doing when it promulgated a new AEWR rule — that disaggregated non-farm wages and other wages disconnected from the market for agricultural wages was somehow “reasonable.” So the magistrate deferred to the expertise of the DOL because it must know what it is doing.

Therein lies the challenge that we look to the Supreme Court to correct. In the case of farm and ranch families who are impacted by the DOL’s regulations, the lack of any understanding of economic reality belies the DOL’s having a clue, not just that the regulations promulgated are “unreasonable.”

This is a very important case for agricultural employers. We have just filed comments on several proposed regulations where the DOL is seeking to extend its reach. The “Walkaround Rule” from DOL’s Occupational Safety and Health Administration (OSHA) and the DOL’s proposal on “Worker Protections” are perfect examples of this overreach.

In the former proposal, an OSHA inspector on the farm or ranch could invite a union organizer to join on the “walkaround” of the property.

In the latter proposal, the DOL’s overreach is stunning. Not only would it allow union organizers to “take access” to an agricultural employer’s property (absent compensation for the government’s “taking” of the employer’s property for union organizing), but it also similarly suggests that such organizing is not preempted by the agricultural exemption included by Congress in the National Labor Relations Act of 1938.

Hopefully, the Supreme Court will dispatch the government’s arguments here and allow agricultural employers to have some protection from agency overreach. Stay tuned.

Michael Marsh has led the National Council of Agricultural Employers since 2017. A Wyoming native and certified public accountant, Marsh worked for a CPA firm with farm and ranch clients investigating fraud. He was director of finance for the Almond Board of California for 7 years and for 15 years was CEO of the largest U.S. dairy producer trade association.