Opinion for the Court filed by Circuit Judge WALD.
WALD, Circuit Judge:
The Railway Labor Executives' Association ("RLEA") seeks review, pursuant to 45 U.S.C. §§ 231g and 355(f), of a decision of the Railroad Retirement Board ("the Board") which determined that Canadian employees of United States railroads operating in Canada ceased to be covered by the Railroad Retirement Act of 1974 ("RRA"), 45 U.S.C. §§ 231-231t, and the Railroad Unemployment Insurance Act ("RUIA"), 45 U.S.C. §§ 351-367, as of April 10, 1978, the effective date of certain Canadian immigration regulations. The issue on review is whether the Board properly construed the Canadian Immigration Act, 1976 2d Sess., ch. 52, § 10, and the 1978 regulations issued thereunder, as requiring United States railroads operating in Canada to employ, in whole or in part, Canadian citizens or residents, so as to bring such workers within the exceptions to covered service found in section 231(d)(3) of the RRA and section 351(e) of the RUIA. We find that the Board's decision lacked any coherent articulation of what types of foreign law restrictions on hiring are sufficient to satisfy the requirement language found in sections 231(d)(3) and 351(e) and consequently lacked any reasoned analysis of why these Canadian regulations come within the meaning of these two sections. We also find that the record on which the Board acted is inadequate to support its apparent conclusion concerning the actual effects of the Canadian law and regulations. We vacate the Board's decision and remand for further proceedings.
Together the RRA and RUIA provide a system of retirement and unemployment benefits for railroad workers. Both Acts define an employee as an individual in the service of an employer for compensation or an employee representative. 45 U.S.C. §§ 231(b)(1), 351(d). An individual in the service of an employer is covered under the Acts whether the service is performed inside or outside the United States. 45 U.S.C. §§ 231(d)(1), 351(e). Both Acts, however, contain the following exception to covered service:
45 U.S.C. §§ 231(d)(3), 351(e) (emphasis added). It is this exception, contained in both Acts, that is at the heart of the controversy. The Board asserts that Canadian immigration regulations require United States railroads operating in Canada to employ Canadians. Consequently, the Canadian employees are excepted from coverage under RRA and RUIA by virtue of sections 231(d)(3) and 351(e), respectively. The RLEA asserts that the Canadian regulations in question do not require the railroads
The Canadian Immigration Act provides that any noncitizen or nonresident of Canada seeking to enter Canada for the purpose of engaging in employment must obtain an employment authorization prior to appearing at a port of entry.
Id. at § 20 (emphasis added).
On the basis of the above provisions of the Canadian Immigration Act, and regulations issued thereunder, the General Counsel of the Railroad Retirement Board issued Legal Opinion L-83-79,
On June 3, 1983, the RLEA sought reconsideration of the Board's decision pursuant to 20 C.F.R. § 259.3. In its request for reconsideration, the RLEA argued that the Canadian immigration regulations do not on their face require the hiring of Canadians or even the denial of an employment authorization to any person, but merely delineate criteria for immigration officers to use in exercising their discretion as to whether an employment authorization should be issued in a specific instance. Appendix at 13-14. The RLEA included in its request for reconsideration a memorandum of law written by a Canadian attorney, Mr. M.W. Wright, Q.C., stating that the regulations create a "preference" for hiring Canadians but do not make the hiring of Canadians "obligatory." Appendix at 20-28.
On December 12, 1983, the Deputy General Counsel issued Legal Opinion L-83-79.2 denying the RLEA's request for reconsideration but permitting the RLEA request to be considered an appeal to the three-member Board pursuant to 20 C.F.R. § 259.5. Appendix at 30-35. The Board affirmed the Deputy General Counsel's decision and denied the RLEA's appeal on January 10, 1984, with one member dissenting. Appendix at 2-4.
The Board frames the issue in this case as: "[W]hether the Board's interpretation of the RRA and the RUIA, the statutes which it administers, as they are affected by Canadian law and regulations and Canada's application of them to United States companies, has a reasonable basis in law." Brief for Board at 10. The RLEA, on the other hand, argues that the Board's decision was based upon a determination of foreign law and as such is entitled to no
The Board's determination of Canadian law is entitled to no deference from this court. Bamberger v. Clark, 390 F.2d 485, 488 (D.C.Cir.1968) (overturning agency's determination of German law). This is purely a question of law and the court is free to make its own independent determination of Canadian law.
It is well established that an agency's construction of its own governing statutes is entitled to considerable deference. Chevron U.S.A., Inc. v. Natural Resources Defense Council, ___ U.S. ___, 104 S.Ct. 2778, 2782-83, 81 L.Ed.2d 694 (1984). In Chevron, the Supreme Court articulated the appropriate framework for analysis:
Id. at 2782 (footnotes omitted). Thus, when an agency formulates standards or policy pursuant to an implicit delegation of authority, Chevron directs us to uphold the agency's interpretation of its own governing statute if "reasonable." Id.
Congress, in the RRA and RUIA, has granted the Board broad authority to exercise the duties and powers necessary to administer and enforce the Acts, including the authority to determine which employees are covered. See 45 U.S.C. §§ 231f(b)(1), 362(l). Thus the Board has been implicitly delegated the task of elaborating the standard in question. The principal argument advanced by the RLEA, however, is that the plain meaning of the requirement language in §§ 231(d)(3) and 351(e) is controlling, and that no reasonable construction of the Canadian regulations can be deemed to create a requirement in
Although the RLEA's plain meaning argument is plausible and even superficially appealing, we ultimately reject it. The language of sections 231(d)(3) and 351(e) simply does not compel the narrow, literal interpretation advanced by the RLEA. The statutory terms at issue, "required under the laws" and "in whole or in part," do not have one plain meaning in the context of this case, but rather are subject to varying interpretations. For instance "required under the laws" may refer to express provisions mandating the hiring of Canadians, or provisions which on their face create such a strong preference so as to in effect compel the hiring of Canadians, or provisions which appear facially neutral but, as implemented, operate to compel the hiring of Canadians. Similarly, a requirement "in part" may be interpreted to mean a requirement that an absolute percentage or quota of Canadians must be hired or that Canadians must be hired to fill certain types of jobs.
In sum, the plain words contained in the RRA and RUIA exceptions to covered service do not compel us to adopt any particular meaning. Moreover, nothing in the legislative history of these provisions gives us any clue as to the meaning Congress intended.
Our task in determining the reasonableness of the Board's decision is not to interpret the statutes as we think best but only to inquire as to whether the Board's interpretation is "`sufficiently reasonable' to be accepted by a reviewing court." Federal Election Commission v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 39, 102 S.Ct. 38, 46, 70 L.Ed.2d 23 (1981). Nonetheless, "the thoroughness, validity, and consistency of an agency's reasoning are factors that bear upon the amount of deference to be given an agency's ruling." Id. at 37, 102 S.Ct. at 44. In the present case, the Board's reasoning is so lacking in thoroughness that we are unable to discern the Board's basic path of analysis and consequently we are unable to determine the reasonableness of the Board's decision.
At a minimum, the Board's path of analysis should have included an articulation of its interpretation of sections 231(d)(3) and 351(e), including the standard to be used in assessing provisions of foreign law, followed by an application of that standard to the relevant provisions of Canadian law, resulting in a final determination.
In the initial opinion issued on March 25, 1983, the General Counsel offered little in the way of reasoned analysis but appeared to be saying that the Canadian regulations on their face require the hiring of Canadians. See supra p. 859 & n. 4. The Deputy General Counsel, in denying the RLEA's request for reconsideration, states that to accept the position advanced by the Canadian lawyer, Mr. Wright, in his letter submitted by the RLEA, "one has to give an extremely literal interpretation to the word `required,' as used in the sections of the Acts under consideration." Appendix at 31. The Deputy General Counsel, however, then proceeds to discuss the Canadian regulations without ever specifying the "appropriate" interpretation of the word "required." The Deputy General Counsel concludes that "the practical result of the [Canadian] regulations is to `require' an employer in Canada to fill most of his positions with Canadians." Appendix at 32 (emphasis added). This language seems to imply that "require" may mean an express statutory provision or a statutory provision which, while not express, in effect has the result of requiring the hiring of local citizens or residents. In short, the Board never articulates a definitive interpretation of the requirement language contained in the coverage exceptions.
Even if the Board could be construed to have articulated an adequate standard for assessing whether provisions of foreign
For the foregoing reasons, we vacate the Board's decision and remand for further proceedings consistent with this opinion.
Vacated and remanded.
112 Can.Gaz., Part II, No. 5, § 20(4).
Appendix at 8.
Section 231(d)(3) was added to the RRA in 1940 by H.R.J.Res. 496, 76th Cong., 3d Sess. (1940). The addition of § 231(d)(3) was also in response to Pullman's employment of Mexicans in Mexico. See H.R.Rep. No. 2029, 76th Cong., 3d Sess. 1 (1940). The House Report accompanying the H.R.J.Res. 496 contains only a 3 paragraph letter from the Railroad Retirement Board explaining the need for the amendment. After noting the earlier amendment of the RUIA, the Board's letter reads:
Id. at 1-2.
The major reasons for enacting these exclusionary provisions appear to be difficulties in administering the Acts in a foreign country and the fact that Mexico prohibited any withholding tax, the means by which these programs are partly funded. See infra note 12. At the time these provisions were passed, Mexican Law provided:
Appendix at 33.
Appendix at 32-33.
The Deputy General Counsel, while enumerating these varying interpretations, fails to indicate explicitly which interpretation is being adopted. The second paragraph would seem to imply that a preference for hiring local citizens or residents may in effect be sufficient to be construed as a requirement in part.
The General Counsel apparently issued Legal Opinion L-83-79 solely on the basis of the fact that the Internal Revenue Service had ruled in a private letter ruling to Conrail that Canadian law required the employment of Canadians within the meaning of § 3231(d) of the Railroad Retirement Tax Act (RRTA), 26 U.S.C. §§ 3201-3233, a provision substantially equivalent to § 231(d)(3) of the RRA and § 351(e) of the RUIA. See Brief for Board at 5-6. The Board notes in its brief that the railroad retirement system is funded through an employment tax levied under the RRTA and collected by the Internal Revenue System. Brief for Board at 4. The RRA, RUIA, and RRTA all contain substantially similar definitions of employer and employee, thus for the sake of consistency, determinations implementing these definitions are coordinated between the Board and IRS. Id. The Board, however, may not totally abandon its independent responsibility to construe and administer the RRA and RUIA on the basis of the recognized need for coordinating their implementation with the IRS' implementation of the RRTA.