NC Chamber General Counsel Ray Starling provided the following update on a recent decision by the federal district court for the Eastern District of California.

I’m pleased to report on a massive legal development that has tremendous financial significance to our farmers and broader agribusiness community.  With continuing drought across the state, challenges with input costs, and inflation and higher interest rates that don’t seem to be transitory, this good news could not come at a better time.

Earlier today, the federal district court for the Eastern District of California denied a preliminary injunction and Section 705 stay request filed by the United Farm Workers against the Trump administration.  In short, the litigation challenged the Department of Labor’s new (but interim) Adverse Effect Wage Rate Methodology, which of course this group knows has been very favorable to the farming community in our state.

Though the case will move forward on the merits, this is a major victory for agricultural employers.

For the Plaintiffs in the suit to prevail, they had to make a clear evidentiary showing of what the legal nerds call the four “Winter factors,” which have nothing to do with the weather.  Those factors require the plaintiff to establish:  (1) likelihood of success on the merits; (2) likelihood of irreparable harm; (3) that the balance of equities tips in their favor; and (4) that an injunction is in the public interest – with irreparable harm being indispensable to demonstrate the higher standard for a permanent injunction.

The court’s denial turned primarily on plaintiffs’ failure to demonstrate irreparable harm. It found that the bulk of the evidence consisted of speculative, forward-looking assertions about potential wage reductions rather than concrete, imminent injury. Most declarants described anticipated future employment and hypothetical wage decreases tied to lower AEWRs, but failed to show that they were currently employed, that their wages had actually been reduced, or that any such reductions were likely to occur in their specific circumstances. The court noted that many workers had historically earned above the AEWR, challenging the belief that lowering it would reduce pay. The court also found that concerns about wage loss leading to hardships like unaffordable housing or food were speculative and lacked supporting evidence. The court gave only limited weight to the plaintiffs’ supplemental declarations about wage decreases (which we believe were filed as a result of arguments raised in our amicus brief), concluding they did not prove irreparable harm since no evidence showed the reductions caused or were likely to cause imminent, non-compensable injuries like inability to meet basic needs. Additionally, the court noted that plaintiffs’ nearly three-month delay in seeking injunctive relief weighed against a finding of urgency and irreparable harm.

These deficiencies led the court to conclude that plaintiffs had not met their burden to show a likelihood of irreparable harm, which alone was sufficient to deny the requested preliminary relief.  The judge explicitly stopped the analysis after finding that plaintiffs failed to show a likelihood of irreparable harm and therefore declined to reach the other Winter factors. Notably, the court did not provide any substantive analysis or conclusions on plaintiffs’ likelihood of success on the merits.

On standing, the court distinguished between organizational and associational standing for the UFW, denying organizational standing due to lack of evidence that the IFR caused harm beyond the UFW’s routine activities. However, it found associational standing was met, despite not alleging a single named plaintiff as a member, the court concluded that at least one member would be adversely affected by the AEWR reduction. The UFW could thus proceed for its members, and standing for individual plaintiffs was not separately addressed.

Many of you know that we have run a coalition effort on H-2A reform now for almost two years.  Our friends in that effort span multiple states and include top-notch organizations right here in our own back yard.  It’s not too late for you to join those efforts.  All of the information regarding that coalition can be found on our website.

This outcome confirms what we argued at the outset: that the plaintiffs’ theory of irreparable harm could not survive close scrutiny, and that the court would benefit from hearing directly from the employer side on what the Interim Final Rule actually does and does not do in practice. We are grateful to the members who shared their operational experience and helped shape our brief, to our coalition members, and our partners at the California Farm Bureau Federation and the National Council of Agricultural Employers (who also filed amicus briefs) for a well-coordinated effort.

The judge acknowledged the amicus briefs in the procedural history section. While not specifically referencing the amicus briefs in the analysis, many of the points the decision hinged upon were directly raised by the North Carolina Chamber brief, demonstrating the value it provided to the court.  This may seem like smooth talk from your friends at the NC Chamber, but there simply is no denying that the Court leaned into, in particular, the standing arguments raised in our brief.

The case is not over.  It will continue on the merits, and we expect further challenges to H-2A and related labor regulations across other forums in the months ahead. The Chamber will continue to monitor these proceedings, weigh in where the agricultural community’s interests are at stake, and keep you informed as developments warrant. We are super grateful for the counsel and guidance that Kristi Boswell and Leon Sequeira have given us through the course of this litigation and of our project. The agriculture community is lucky to have advocates like them in our corner.

All that said, we should take a moment to appreciate that this is a major victory for the agricultural community.  Indeed, there are few things farmers in North Carolina can point to this year that cost them less than they did last year.  The mandatory wage rates for H-2A are one exception, even though many farmers already go above and beyond the wage levels required by law.  We are honored to be a part of this work on your behalf and grateful to be able to share – for now – this great news!