Opinion for the Court filed by Chief Judge WALD.
WALD, Chief Judge:
The Department of Labor (Department) is appealing a district court judgment overturning regulations it promulgated on May 5, 1987, and adopted as final on June 1, 1987.
The Immigration and Nationality Act of 1952 (INA), as amended, 8 U.S.C. §§ 1101 et seq. (1982 & Supp. III 1985), delegated regulation of the importation of foreign workers to the Attorney General. Section 1101(a)(15)(H)(ii) authorized the Attorney General to approve visas to temporary foreign workers "if unemployed persons capable of performing such service or labor cannot be found in this country." Id. § 1101(a)(15)(H)(ii). Pursuant to this congressional direction, the Attorney General promulgated 8 C.F.R. § 214.2(h)(3) (1986), which required employers seeking foreign workers to secure certification from the Department that:
Id. (emphasis added).
In turn, the Department adopted its so-called H-2 regulations to govern this certification process. Congress' mandate that foreign workers not adversely affect the wages of United States workers was accomplished through minimum wage requirements. Employers were prohibited from paying foreign workers below an hourly "adverse effect wage rate" (AEWR). These wage levels were designed to approximate the rates that would have existed had there been no increase in labor supply from foreign labor. If no American workers applied for positions at these rates, employers were permitted to fill the vacancies with foreigners. Also, if domestic workers demanded higher than AEWR wages from H-2 growers, those workers could be considered unavailable and the positions filled with foreign workers. See 20 C.F.R. §§ 655.203, -.206 (April 1, 1987). Controls were also applied to piece rates, again to offset the depressing effect on wages caused by influxes of foreign workers.
On June 1, 1987, contemporaneously with the passage of the IRCA, the Department issued a new methodology to measure AEWRs and piece rates. Although an unofficial, draft version urged that AEWRs be set 20% above the average farm wage for each state to compensate for past adverse effect, see Department of Labor Draft H-2A Regulations, the final regulations set AEWRs for all states (except Alaska) equal to the average hourly wages paid the prior year by employers. 52 Fed.Reg. 20,496, 20,504 (1987). Under these new H-2A AEWRs, foreign farm laborers — and indirectly United States workers who will be recruited at the same AEWRs — face possible wage cuts from the old H-2 AEWRs. This threat led appellees, AFL-CIO and individual named parties, to challenge the new AEWR regulations as both contrary to congressional intent and arbitrary and capricious, hence violative of the Administrative Procedure Act (APA). The district court invalidated the new AEWR regulations, see AFL-CIO v. Brock, 668 F.Supp. 31 (D.D.C.1987), J.A. at 664, and the Department appeals from that decision.
Succinctly stated, the crux of the controversy is as follows: Under the IRCA, the importation of a farmworker cannot by itself have a future adverse effect on wages, since each foreign worker must be paid at least the average rate that growers paid workers prior to that worker's arrival. However, where the pre-arrival wages were already depressed from the presence of undocumented aliens, the new rates will necessarily perpetuate this past adverse effect. Appellees argue that under the IRCA, the Department must continue its former regulatory policy of offsetting this past injury through enhanced AEWRs, while appellants insist that the Department's June 1, 1987 regulations properly limited AEWRs to prevent future wage depression.
A. Congressional Intent
In determining whether the Department's new AEWR regulations are consistent
1. Reenactment Doctrine
Appelles argue, however, that the regulation contradicts a distinct congressional purpose to offset the effects of past wage depression through enhancements of AEWRs. See Brief of Appellees at 23 ("IRCA does require that the methodology [for calculating AEWRs] achieve the policy goal set by Congress of offsetting the adverse effect of past wage depression."). This intent, appellees argue, must be inferred from Congress' express incorporation in the IRCA of the Department's "adverse effect" regulatory prohibition, which had always been interpreted to justify compensation for the ongoing adverse effects from past wage depression.
The Supreme Court warned in Girouard v. United States, 328 U.S. 61, 69, 66 S.Ct. 826, 830, 90 L.Ed. 1084 (1946), that "[i]t is at best treacherous to find in congressional silence alone the adoption of a controlling rule of law." See also United States v. Sheffield Bd. of Comm'rs, 435 U.S. 110, 134, 135, 98 S.Ct. 965, 980, 981, 55 L.Ed.2d 148 (1978) (legislative history of reenactment must show express approval of longstanding administrative interpretation for such interpretation to be treated as ratified by Congress). See generally, R. Dickerson, The Interpretation and Application of Statutes 182-83 (1975) (same). This court has also consistently required express congressional approval of an administrative interpretation if it is to be viewed as statutorily mandated. See, e.g., International Union, UAW v. Brock, 816 F.2d 761, 767 (D.C.Cir.1987) (finding no "affirmative step taken by Congress that indicates an intent to ratify the agency's interpretation") (emphasis in original); Association of Am. R.Rs. v. ICC, 564 F.2d 486, 493 (D.C.Cir.1977) ("Congress must not only have been made aware of the administrative interpretation, but must also have given some `affirmative indication' of such intent.") (footnote omitted); Plasterers Local Union No. 79, AFL-CIO v. NLRB, 440 F.2d 174 (D.C.Cir.1970) ("Reenactment of a section of law does not of itself constitute conclusive legislative approval of either decisions or administrative regulations construing the provision, in the absence of a showing that the attention of Congress was specifically directed to the matter at
In any case, even had there been indications that Congress knew of the Department's former adverse effect test requiring that the effects of past wage depression be offset through enhanced AEWRs, the Supreme Court has stated that such legislative approval of an agency's policy does not necessarily preclude the agency from subsequently changing that policy. The doctrine that an
Helvering v. Wilshire Oil Co., 308 U.S. 90, 100-01, 60 S.Ct. 18, 24, 84 L.Ed. 101 (1939). To freeze an agency interpretation, Congress must give a strong affirmative indication that it wishes the present interpretation to remain in place. We certainly find no such indication here. Thus appellees' argument that enactment of the adverse effect language alone freezes into law the agency's previous interpretation of the regulation cannot stand.
2. Repeal by the IRCA
The Department and appellants-intervenors, on the other hand, argue that the plain language of the IRCA supports the Department's decision not to permit AEWRs to offset past wage depression. The Act requires that "the employment of the alien ... will not adversely affect the wages and working conditions of workers in the United States similarly employed." IRCA § 301(c), Pub.L. No. 99-603, 100 Stat. 3359, 3411 (Nov. 6, 1986) (emphasis added). The grower-intervenors reason from the future tense of the verb that Congress intended only to eliminate wage depression prospectively. See Brief of Appellants-Intervenors at 23-24; see also Reply Brief of Appellants at 2, 3, 5 n. 5. Though plausible, this position ignores the fact that the future tense was also used in the Department's earlier adverse effect regulations, which the Department consistently interpreted to require enhancing AEWRs to compensate for past wage depression. Apart from this semantic argument, which we find unpersuasive, appellants offer no other evidence to show that Congress' recodification of the H-2 program
B. Rationality of the DOL's Policy Reversal
Because we do not find that the new Act explicitly or implicitly mandates the Department's AEWR policy — that is, because neither the Department's former policy of off-setting for past depression, nor its present policy of ignoring this adverse effect, is statutorily required — we must proceed to the second level of the Chevron analysis and decide whether the Department's changed interpretation is "permissible." Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984). The same test used to determine the permissibility of an initial agency action is applied to agency changes in policy. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut.Auto.Ins.Co., 463 U.S. 29, 41-44, 103 S.Ct. 2856, 2865-67, 77 L.Ed.2d 443 (1983); Association of Am. R.Rs. v. ICC, 564 F.2d 486, 495 (D.C.Cir.1977). That is, we will overturn an agency rule if the action is found to have been "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (1976); see Citizens To Preserve Overton Park v. Volpe, 401 U.S. 402, 413-14, 91 S.Ct. 814, 822, 28 L.Ed.2d 136 (1971).
Courts are generally deferential to longstanding policies or statutory interpretations of an agency, and they closely examine recent departures from such agency precedent. See NLRB v. Bell Aerospace Co., 416 U.S. 267, 274-75, 94 S.Ct. 1757, 1761-62, 40 L.Ed.2d 134 (1974). At the same time, however, courts recognize that agencies must respond to changed circumstances to carry out Congress' purposes. To accommodate both the need for settled courses of behavior and the imperative of flexibility, the Supreme Court has said that an
Atchison, Topeka & Santa Fe Ry. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 808, 93 S.Ct. 2367, 2375, 37 L.Ed.2d 350 (1973) (emphasis added); see also Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983) ("an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change"); National Black Media Coalition v. FCC, 775 F.2d 342, 355-56, 356 n. 17 (D.C.Cir.1985) (agency must offer sufficient explanation to ensure court that it is not "repudiat[ing] precedent simply to conform with a shifting political mood"); Brae Corp. v. United States, 740 F.2d 1023, 1038 (D.C.Cir.1984) ("agency must explain why the original reasons for adopting the rule or policy are no longer dispositive"), cert. denied, 471 U.S. 1069, 105 S.Ct. 2149, 85 L.Ed.2d 505 (1985); Hatch v. FERC, 654 F.2d 825, 834 (D.C.Cir.1981) (same).
The June 1, 1987 AEWRs represent a dramatic shift in the Department's wage policy. In the past, the Department has responded to depressed wages caused by the past employment of temporary and undocumented foreign workers by enhancing the AEWR above this depressed wage level; now it asserts that it will no longer consider such past effect. The Department's
Because the Department makes no explanatory attempt to "forthrightly distinguish or outrightly reject" this contradictory precedent,
First, the Department asserts that its new AEWR regulations represent the contemporaneous interpretation of new legislation. See Brief of Appellants at 13-15; 52 Fed.Reg. 20,496, 20,504 (1987). In the rulemaking record, this point is baldly stated, without elaboration except for a prediction that the pool of documented H-2A workers may expand considerably. Id. In subsequent submissions to this court, the Department stresses that the IRCA radically alters United States immigration policy, and specifically, that because all future imported workers allegedly will be documented and employed at the AEWR wage floor, "the source for the alleged wage depression in the past, i.e., undocumented aliens, will cease to exist." Reply Brief of Appellants at 5. The Department's observation that the IRCA constitutes a change in United States immigration law, albeit correct at a general level, is undercut by the Department's own emphasis in the Federal Register on the IRCA's continuity with its precursor in the matter of wage protection for American workers. 52 Fed.Reg. 20,496, 20,502 (1987). Congress made absolutely no alteration to the statutory mandate that underlies AEWRs. The regulatory adverse effect prohibition promulgated pursuant to
The Department's alternative explanation for its policy reversal focuses on the methodological difficulties of measuring wage depression caused by the past presence of foreign workers. 52 Fed.Reg. 20,496, 20,502-05 (1987). In particular, the Department points to "unacceptable discrepancies" between AEWRs and average hourly earnings in "non-user" states.
Agencies may not substantially alter regulatory policy without a reasoned explanation. The Department of Labor's new temporary alien agricultural labor certification program reverses a two decade-old, court-approved