Third Circuit Limits DOL’s Power To Impose Penalties Under H-2A Program

October 9, 2025

What's New

The Department of Labor may not unilaterally impose civil penalties and back wages for alleged violations of its H-2A visa regulations, the U.S. Court of Appeals for the Third Circuit held in Sun Valley Orchards v. DOL.

DOL alleged that a New Jersey employer violated the H-2A visa program by coercing employees to end work before the contract period expired and failing to provide specified living standards. An administrative law judge imposed more than $500,000 in back wages and penalties on the employer, and DOL’s Administrative Review Board affirmed. On appeal, a federal district court judge upheld DOL’s actions.

The Third Circuit reversed, ruling that under Article III of the Constitution, DOL must pursue these common law remedies through federal court rather than through its administrative system.

What It Means

The Sun Valley ruling, coupled with last year’s injunction in ABM v. DOL and the Supreme Court’s landmark SEC v. Jarkesy ruling, raises significant questions as to whether DOL can levy civil penalties without filing a complaint in federal court. For employers, this means more legal certainty and a chance to defend themselves in court—but it also means enforcement actions could take longer and become more complex.

What You Should Do

DOL has asked for a rare “en banc” rehearing in front of a panel of all Third Circuit judges. In the meantime, CWC members should continue to comply with DOL regulations but consult with counsel if they are currently subject to any DOL administrative enforcement procedures.

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