Industrial Holographics, Inc. v. Donovan

Industrial Holographics (Industrial) (plaintiff) manufactured machinery used to make rubber tires, and sought to hire an export manager in Michigan. Industrial submitted an application for labor certification for Roger K. Yu, an alien, for the export manager position. As part of the application, Industrial had to certify that it had complied with the various provisions of 20 C.F.R. 656, which among other things require an employer to post a job both internally and with a state employment service, and to advertise in newspapers. Additionally, § 656.21 requires that an employer advertise the job at the “prevailing wage” and “prevailing working conditions.” The Department of Labor denied Industrial’s application because Industrial had advertised the export manager salary at $1,000 per month, when the prevailing wage, as determined by the Michigan Employment Security Commission (MESC), was $1,666 per month. The MESC contacted five Michigan employers to determine the average wage for export managers, and come up with that sum. Industrial then tried to re-advertise the job at $1,666, but did not comply with all of the § 656.21 requirements; specifically, Industrial did not post the job internally. Thus, the labor certification was denied. On review within the Department of Labor, an administrative law judge (ALJ) affirmed the denial. Industrial sought review of the ALJ’s decision in district court. The district court granted summary judgment for the Department of Labor, holding that the Secretary of Labor had the authority to issue the advertising regulations at issue and the Department of Labor’s use of the prevailing wage standard was not arbitrary and capricious. Industrial appealed.