UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

STAR WAY LINES and )

SVITLANA MELNYK, )

)

Plaintiffs, ) Case No. 20-cv-4842

)

v. ) Hon. Steven C. Seeger

)

MARTIN J. WALSH, Secretary )

DEPARTMENT OF LABOR, and )

UNITED STATES DEPARTMENT )

OF LABOR, EMPLOYMENT AND )

TRAINING ADMINISTRATION, )

)

Defendants. )

____________________________________)

MEMORANDUM OPINION AND ORDER

Svitlana Melnyk is a dispatch manager at Star Way Lines, a local trucking company. She 

has worked for that company for the last six years as an independent contractor. By all 

appearances, she is good at her job, because the company wants to hire her as a permanent 

employee. 

But there is a regulatory roadblock. Melnyk is from Ukraine, and is not a citizen. Before 

bringing her on board, Star Way Lines needs to receive an alien labor certification from the 

Department of Labor to hire her as an employee. So Star Way Lines submitted an application. 

The Department of Labor eventually denied the application. The Denial Notice stated

that Melnyk didn’t have the requisite qualifications for the job. When making that decision, the 

Department considered her qualifications when the company hired her as an independent 

contractor in 2013, not when the company applied for the certification to hire her as an employee 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 1 of 19 PageID #:347
2

in 2019. So, in the Department’s view, the fact that Melnyk had six years of experience in the 

job didn’t count, because the relevant time was the moment when she joined the company. 

Star Way Lines and Melnyk did not challenge the DOL’s decision administratively. 

Instead, they filed this lawsuit. They seek a declaratory judgment that the Department of Labor’s 

decision violates federal regulations and is arbitrary and capricious. Based on the administrative 

record, the parties filed cross motions for summary judgment.

For the reasons stated below, the Court denies Plaintiffs’ motion for summary judgment. 

The Court grants Defendants’ motion for summary judgment for lack of exhaustion. 

Regulatory Framework

Before diving into the facts, the Court will provide a brief overview of the regulatory 

framework. The main idea is that an employer needs to obtain a certification from the United 

States Department of Labor before it can permanently employ a noncitizen. 

The Department of Labor administers a labor certification program where employers can 

permanently employ noncitizen workers in the United States. See 8 U.S.C. § 1182(a)(5)(A)(i); 

20 C.F.R. § 656.2(c). The Immigration and Nationality Act lays out the steps that an employer 

must complete under that program. See 8 U.S.C. § 1101 et seq. 

The process starts with certification from the Department of Labor. The employer gets 

the ball rolling by filing an Application for Permanent Employment Certification (i.e., an “ETA 

Form 9089”) with the Department of Labor. See 8 U.S.C. § 1182(a)(5)(A)(i); 20 C.F.R. 

§ 656.17(a)(1).

When the ball arrives in the agency’s court, the agency will approve the certification if 

(1) there are not enough United States “workers who are able, willing, qualified, and available” 

for the proffered job, and (2) the employment of the noncitizen “will not adversely affect the 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 2 of 19 PageID #:348
3

wages and working conditions of similarly employed United States workers.” See 8 U.S.C. 

§ 1182(a)(5)(A)(i)(I)–(II). In other words, the agency considers the impact of hiring a noncitizen 

over a citizen.

This inquiry requires the Department of Labor to consider a few factors before making its 

decision about certification. Relevant here, the Department of Labor must evaluate whether the 

noncitizen meets the employer’s actual minimum requirements for the job at the time of hiring. 

See 20 C.F.R. § 656.17(i) (stating that the “DOL will evaluate the employer’s actual minimum 

requirements”). 

If the noncitizen is already working for the employer, the DOL will consider the 

qualifications of the employee at the time of hiring, including “as a contract employee.” “If the 

alien beneficiary already is employed by the employer, in considering whether the job 

requirements represent the employer’s actual minimums, DOL will review the training and 

experience possessed by the alien beneficiary at the time of hiring by the employer, including as 

a contract employee.” See 20 C.F.R. § 656.17(i)(3).

So, the agency looks at the employer’s requirements, and the employee’s qualifications, 

and checks if they line up. See 20 C.F.R. § 656.17(i)(4) (noting that the DOL will “evaluat[e]

whether the alien beneficiary satisfies the employer’s actual minimum requirements”). That’s 

the key requirement at issue in this lawsuit. 

The employer has the burden of proving that it meets all regulatory requirements before 

the Department of Labor will grant a labor certification. See 20 C.F.R. § 656.2(b). 

The next hurdle is getting the noncitizen a visa. If the Department of Labor approves an 

employer’s labor certification application, then the employer must obtain an immigrant visa by 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 3 of 19 PageID #:349
4

submitting another application (i.e., a Form I-140), along with the certification. See 8 C.F.R. 

§ 204.5(a); Advanced Cabinets Corp. v. Mayorkas, 2021 WL 825608, at *1 (N.D. Ill. 2021). 

At that point, if the government issues a visa, there is one step to go. With the 

certification and visa in hand, the noncitizen can apply to enter the United States legally. The 

noncitizen employee applies for lawful permanent resident status. See 8 U.S.C. § 1255(a); 

Advanced Cabinets, 2021 WL 825608, at *1.

This case involves the first hurdle: the alien labor certification application. The 

Department of Labor denied Melnyk’s application, so she never passed the first hurdle. The 

question now is whether the Department of Labor put that hurdle too high. 

Background

Plaintiff Star Way Lines is a trucking company in Palatine, Illinois. See Defs.’ Resp. to 

Pls.’ Statement of Facts, at ¶ 1 (Dckt. No. 23). In 2013, with business booming, Star Way Lines

subcontracted with SD Group to hire a dispatch manager, Svitlana Melnyk. Id. at ¶¶ 2, 14; see 

also Defs.’ Statement of Additional Facts, at ¶ 27 (Dckt. No. 23). A dispatch manager is in 

charge of overseeing delivery routes and communicating with drivers. See Application (Dckt. 

No. 13-1, at 238 of 243). Melnyk is a citizen of Ukraine. See Defs.’ Resp. to Pls.’ Statement of 

Facts, at ¶ 2. 

According to Star Way Lines, Melnyk owns SD Group.1 See Pls.’ Statement of Facts, at 

¶ 14 (Dckt. No. 20). For the next six years, Melnyk worked as the only dispatch manager at Star 

Way Lines. See Defs.’ Resp. to Pls.’ Statement of Facts, at ¶ 14 (Dckt. No. 23). She was an 

independent contractor, not an employee. Id. 

1

 That’s a disputed fact, but it’s not material to the decision. 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 4 of 19 PageID #:350
5

By September 2019, Melnyk had worked for the company as an independent contractor 

for six years. That’s when Star Way Lines applied for an alien labor certification on Melnyk’s 

behalf to employ her as a dispatch manager. Id. at ¶¶ 4, 12. 

The application from Stay Way Lines listed the position as “Dispatch Manager” and 

identified the job requirements as a high school degree and three years of experience in the same 

or a similar occupation. Id. at ¶ 13. The application listed the job location as 300 South Hicks 

Road, Palatine, Illinois. See Defs.’ Statement of Additional Facts, at ¶ 29 (Dckt. No. 23).2

The application also addressed Melnyk’s work history and education. It listed only one 

job: employment as a dispatcher from August 2, 2013 to the present. See Defs.’ Resp. to Pls.’ 

Statement of Facts, at ¶ 14 (Dckt. No. 23); see also Application (Dckt. No. 13-1, at 233 of 243). 

Her work history included only one employer: SD Group, located at 300 South Hicks Road. See 

Defs.’ Resp. to Pls.’ Statement of Facts, at ¶ 14; Application; see also Defs.’ Statement of 

Additional Facts, at ¶ 29 (Dckt. No. 23). That’s the same address as Star Way Lines. 

In June 2020, the Department of Labor Employment Training Administration notified 

Star Way Lines that it had selected Star Way Lines and Melnyk’s alien labor certification 

application for audit. See Defs.’ Resp. to Pls.’ Statement of Facts, at ¶ 15 (Dckt. No. 23). The 

audit requested recruitment documentation for the position, proof of the existence of a bona fide 

job opportunity, and evidence showing the ability of Star Way Lines to pay the wage or salary 

offered. Id. at ¶ 16. The audit also requested any documentation about the relationship between 

Star Way Lines and SD Group. Id. at ¶ 17. 

2 Star Way Lines failed to respond to the DOL’s 56.1(b)(3) Statement of Additional Facts. Because Star 

Way Lines failed to respond, the Department’s Additional Facts are deemed admitted. See L.R. 

56.1(e)(3).

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 5 of 19 PageID #:351
6

Star Way Lines responded to the audit request in July 2020. Id. at ¶ 18. Its response

stated that as its business grew, Star Way Lines had created a dispatch manager role to ease the 

duties of its general manager. See 7/21/20 Star Way Lines Letter (Dckt. No. 13-1, at 23 of 243). 

So, it brought on an independent contractor, Melnyk, for the role of dispatch manager in 2013 or 

2014. Id. at 23–24. By 2019, Star Way Lines decided to internalize the position as a W-2 

employee. Id. at 23. 

In addition, Star Way Lines submitted a copy of the 2014 subcontractor agreement 

between Star Way Lines and SD Group, and Tax Form 1099s issued to SD Group in 2018 and 

2019. See Pls.’ Statement of Facts, at ¶ 14 (Dckt. No. 20).

On August 6, 2020, the Department of Labor denied the alien labor certification

application. See Defs.’ Resp. to Pls.’ Statement of Facts, at ¶ 5 (Dckt. No. 23). The Denial 

Notice provided one reason: Melnyk’s deficient qualifications when the company hired her in 

2013. “The foreign worker’s experience, as listed on the [application] does not demonstrate the 

foreign worker met the employer’s experience requirements at the time the foreign worker began 

working for the employer (as a contractor) in the offered position.” Id. at ¶ 22; see also 8/6/20 

DOL Reason for Denial (Dckt. No. 13-1, at 7 of 243). 

That sentence is the crux of the case. The key question is where to draw the starting line, 

meaning when to evaluate Melnyk’s qualifications to work for Star Way Lines. The agency 

drew the starting line at 2013, when Star Way Lines hired her as a dispatch manager (as an 

independent contractor, not an employee). According to the agency, she had no experience at 

that point, so she wasn’t qualified when she was hired. But Star Way Lines and Melnyk think 

that the agency should have drawn the line at 2019, when the company wanted to hire her as a

permanent employee.

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 6 of 19 PageID #:352
7

The Denial Notice cited 20 C.F.R. § 656.17(i)(1), stating that “the job requirements, as 

described, must represent the employer’s actual minimum requirements for the job opportunity.” 

See 8/6/20 DOL Reason for Denial (Dckt. No. 13-1, at 7 of 243). That section of the regulation 

also requires the Department of Labor to “review the training and experience possessed by the 

alien beneficiary at the time of hiring by the employer, including as a contract employee.” See 

20 C.F.R. § 656.17(i)(3). 

The Department of Labor emphasized that section 656.17(i)(3) “instruct[s] the 

department to review the training and experience possessed by the foreign worker at the time of 

hire, including as a contract employee.” See 8/6/20 DOL Reason for Denial (Dckt. No. 13-1, at 7 

of 243) (emphasis in original). The Department determined that Star Way Lines first hired 

Melnyk as a contractor in 2013. See, e.g., Defs.’ Statement of Additional Facts, at ¶ 27 (Dckt. 

No. 23); 8/6/20 DOL Reason for Denial (Dckt. No. 13-1, at 7 of 243) (“Notably, in its response 

to the Department’s Audit Notification dated June 23, 2020, the employer also acknowledges the 

foreign worker ‘has been working with Star Way Lines as a contractor since 2013.’”).

Since Melnyk did not have experience as a dispatch manager or a comparable position in 

2013, the Department of Labor determined that she did not possess the requisite three years of 

experience when Star Way Lines hired her. “Therefore, the application is denied because the 

employer’s requirements as stated on the application cannot represent the employer’s actual

minimum requirements since the employer is/was willing to employ the foreign worker in the

offered job [as a contractor] without possessing the necessary three years’ experience.” See 

8/6/20 DOL Reason for Denial (Dckt. No. 13-1, at 7 of 243). 

In other words, the company hired her as an dispatch manager (as an independent 

contractor) in 2013, and at that point, she didn’t have the requisite three years of experience. In 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 7 of 19 PageID #:353
8

the agency’s view, it didn’t matter that Melnyk was qualified at the time of the application, 

because the relevant point in time was “at the time of hiring by the employer, including as a 

contract employee.” See 20 C.F.R. § 656.17(i)(3) (emphasis added). And when she was hired in 

2013, she didn’t have three years of experience. 

In the Denial Notice, the Department included language notifying Star Way Lines of its 

right to request review of the denial with the Board of Alien Labor Certification Appeals 

(“BALCA”). See Defs.’ Statement of Additional Facts, at ¶ 30 (Dckt. No. 23); see also 8/6/20 

DOL Letter (Dckt. No. 13-1, at 6 of 243). The notice stated that failure to seek review of the 

denial before the BALCA within 30 days of the denial would constitute a failure to exhaust 

administrative remedies. See Defs.’ Statement of Additional Facts, at ¶ 31. 

Star Way Lines did not request review before the BALCA. Instead, Star Way Lines and 

Melnyk went straight to court. On August 18, 2020, Star Way Lines and Melnyk filed this 

lawsuit against the Department of Labor and its Secretary, Martin Walsh, seeking judicial review 

under the Administrative Procedure Act (“APA”). See Cplt. (Dckt. No. 1). 

Star Way Lines and Melnyk seek a declaratory judgment that the agency’s decision 

violates federal regulations, is arbitrary, capricious, and an abuse of discretion, and otherwise is 

not in accordance with the law. Id. at ¶ 33. They claim that the Department of Labor erred in

interpreting 20 C.F.R. § 656.17(i)(3), and should have considered Melnyk’s six years of 

experience as a dispatch manager (as an independent contractor) in determining whether she had 

the requisite three years of experience. Id. at ¶¶ 37, 40. 

The parties filed cross motions for summary judgment based on the administrative 

record.

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 8 of 19 PageID #:354
9

Legal Standard

Normally, a district court “shall grant” summary judgment “if the movant shows that 

there is no genuine dispute as to any material fact and the movant is entitled to judgment as a 

matter of law.” See Fed. R. Civ. P. 56(a).

But in a case involving review of a final agency action under the APA, “summary 

judgment instead serves as a ‘mechanism for deciding, as a matter of law, whether the agency 

action is . . . consistent with the APA standard of review.’” Fisher v. Pension Benefit Guar.

Corp., 468 F. Supp. 3d 7, 18 (D.D.C. 2020) (quoting Cayuga Nation v. Bernhardt, 374 F. Supp. 

3d 1, 9 (D.D.C. 2019)).

Courts give deference to the agency’s decision when reviewing denials of alien labor 

certifications. See Boutte v. Duncan, 348 F. App’x 151, 154 (7th Cir. 2009); see also 

Stenographic Machs., Inc. v. Reg’l Adm’r for Emp. & Training, 577 F.2d 521, 524 (7th Cir. 

1978). Courts can only set aside an agency decision that is “arbitrary, capricious, an abuse of 

discretion, unsupported by substantial evidence in the case, or not in accordance with law.” 

Fliger v. Nielsen, 743 F. App’x 684, 687 (7th Cir. 2018) (quoting Little Co. of Mary Hosp. v. 

Sebelius, 587 F.3d 849, 853 (7th Cir. 2009)); see also Stenographic Machs., 577 F.2d at 524; 5 

U.S.C. § 706(2)(A), (E). Judicial review is “confined to the administrative record.” Little Co. of 

Mary Hosp., 587 F.3d at 856. 

So, “[t]o survive summary judgment under the APA, the plaintiffs must point to facts or 

factual failings in the administrative record that indicate that the [agency’s] decision is arbitrary, 

capricious, an abuse of discretion, [unsupported by substantial evidence,] or otherwise not in 

accordance with law.” Advanced Cabinets, 2021 WL 825608, at *3 (cleaned up).

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 9 of 19 PageID #:355
10

“To determine whether an agency’s decision was arbitrary or capricious, [courts] ask if it 

was ‘based on a consideration of the relevant factors and whether there has been clear error of 

judgment.’” Boutte, 348 F. App’x at 154 (quotation marks omitted) (quoting Ind. Forest 

Alliance, Inc. v. U.S. Forest Serv., 325 F.3d 851, 858–59 (7th Cir. 2003)); see also Stenographic 

Machs., 577 F.2d at 24. Even when the agency decision isn’t clear, courts will uphold the 

decision if “the agency’s path may be reasonably discerned.” See Boutte, 348 F. App’x at 154 

(quotation marks omitted). In reviewing an agency’s decision, courts do not substitute their own 

judgment for that of the agency. Id.; Motor Vehicles Mfrs. Ass’n of the U.S., Inc. v. State Farm 

Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).

Courts must affirm administrative decisions that are supported by “substantial evidence” 

if there is a “rational connection between the facts found and choice made.” See Burlington 

Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962); State Farm, 463 U.S. at 43.

“Substantial evidence” is merely relevant evidence that a reasonable person might accept as 

adequate to support a conclusion. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 

(1981).

Analysis

Star Way Lines and Melnyk seek a declaratory judgment that sets aside the denial of their 

labor certification application. See Cplt., at 9 (Dckt. No. 1). They argue that the Department 

erred in interpreting its own regulation, including the meaning of the term “contract employee.” 

See Pls.’ Mtn. for Summ. J., at 5 (Dckt. No. 19). They claim that the term “contract employee” 

is not genuinely ambiguous, and that the Department’s interpretation is not reasonable. Id. at 5–

7. In their view, the Department’s decision was arbitrary, capricious, not supported by the 

record, and in violation of law. Id. at 2, 9.

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 10 of 19 PageID #:356
11

The Department argues that it is entitled to summary judgment because Star Way Lines 

and Melnyk failed to exhaust their administrative remedies. See Defs.’ Mtn. for Summ. J., at 7

(Dckt. No. 22). On the merits, the agency also argues that the operative phrase is not “contract 

employee,” but rather “at the time of hiring by the employer.” The DOL points out that Star 

Way Lines hired her (albeit as an independent contractor) in 2013, so that’s the relevant point in 

time for measuring her experience. Id. at 8–9 (Dckt. No. 22). 

This Court starts and ends with exhaustion. Melnyk failed to exhaust, so the Court 

doesn’t need to get into the merits. 

I. Exhaustion

The first question is whether Star Way Lines and Melnyk exhausted their administrative 

remedies.

“The doctrine of exhaustion of administrative remedies is well established in the 

jurisprudence of administrative law.” Woodford v. Ngo, 548 U.S. 81, 88 (2006) (quoting McKart 

v. United States, 395 U.S. 185, 193 (1969)). Under the doctrine, “no one is entitled to judicial 

relief for a supposed or threatened injury until the prescribed administrative remedy has been 

exhausted.” Id. at 88–89 (quoting Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50–51 

(1938)).

Exhaustion serves two purposes. It protects administrative agency authority by allowing 

an agency to correct its own mistakes before being pulled into federal court. Id. at 89. And it 

promotes efficiency: claims are usually resolved more quickly in agency proceedings than in 

federal court litigation. Id.

“The exhaustion requirement can be statutorily created or judicially created (so-called 

‘common-law exhaustion’).” Gonzalez v. O’Connell, 355 F.3d 1010, 1015 (7th Cir. 2004). 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 11 of 19 PageID #:357
12

Often, agency statutes don’t address exhaustion. But when they do, courts must follow the 

statute and cannot simply “apply common law exhaustion doctrine with its pragmatic, judicially 

defined exceptions.” Id. (quotation marks omitted) (quoting 2 Kenneth C. Davis et al., 

Administrative Law Treatise § 15.3 (3d ed. 1994)).

So, the Court must start with the relevant statutory text to determine administrative 

exhaustion requirements. 

Star Way Lines and Melnyk filed suit under the APA. Section 10(c) of the APA codifies 

administrative exhaustion. See 5 U.S.C. § 704. Section 10(c) only permits judicial review of 

“final” agency actions. Id. “[A]ny definitive agency decision is considered ‘final,’ and therefore 

reviewable, unless the agency’s regulations require exhaustion as a prerequisite to judicial 

review.” Shawnee Trail Conservancy v. U.S. Dep’t of Agric., 222 F.3d 383, 389 (7th Cir. 2000) 

(citing Darby v. Cisneros, 509 U.S. 137, 153 (1993)); see also Alto Dairy v. Veneman, 336 F.3d 

560, 568 (7th Cir. 2003). 

In other words, “[w]hen an aggrieved party has exhausted all administrative remedies 

expressly prescribed by statute or agency rule, the agency action is ‘final for the purposes of [the 

APA]’ and therefore ‘subject to judicial review.’” Darby, 509 U.S. at 146 (emphasis added). An 

aggrieved party must jump through all of the hoops raised by Congress and the executive branch 

before coming to the federal courthouse. 

The APA does not allow courts to require administrative exhaustion in the absence of a

statute or regulation requiring it. The APA, “by its very terms, has limited the availability of the 

doctrine of exhaustion of administrative remedies to that which [a] statute or rule clearly 

mandates.” Darby, 509 U.S. at 146. 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 12 of 19 PageID #:358
13

The Department argues that 20 C.F.R. § 656.24(e)(3) contains an exhaustion requirement. 

See Defs.’ Mtn. for Summ. J., at 7 (Dckt. No. 22). Section 656.24(e) describes what the 

Department of Labor must include in the Final Determination form if the Department denies the

labor certification. See 20 C.F.R. § 656.24(e). The Final Determination form must give the 

reasons for the agency’s decision, and so on. Id. 

Subpart three requires the Final Determination to notify the aggrieved party of the need to 

exhaust administrative remedies. “If the labor certification is denied, the Final Determination 

form will: . . . (3) Advise that failure to request review within 30 days of the date of the 

determination, as specified in § 656.26(a), constitutes a failure to exhaust administrative 

remedies . . . .” See 20 C.F.R. § 656.24(e)(3).

That language is not the most direct route for imposing an exhaustion requirement. The 

regulation did not come out and say, in straightforward fashion, that an aggrieved party must 

exhaust administrative remedies before filing suit. Instead, the language was about the content 

of the Notice to the aggrieved party. It required the Department to include certain language in 

the Notice. From a drafting standpoint, the language did not travel as the crow flies. 

Still, it is difficult to know what else that language could mean, except that there is an 

exhaustion requirement. There would be no need to tell an aggrieved party about an exhaustion 

requirement if there was no exhaustion requirement. The language was circuitous, but it got 

there. 

And worse yet, it would mislead the aggrieved party to say that there is an exhaustion 

requirement when there is none. If there is no exhaustion requirement, subpart three would be 

nullity, and courts are loathe to adopt interpretations that render text meaningless surplusage. 

See, e.g., Duncan v. Walker, 533 U.S. 167, 174 (2001) (collecting cases).

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 13 of 19 PageID #:359
14

A related issue is how clearly an agency needs to speak before imposing an exhaustion 

requirement. In Darby v. Cisneros, 509 U.S. 137 (1993), the Supreme Court addressed whether 

federal courts can add exhaustion requirements as a matter of judicial discretion, above and 

beyond the requirements imposed by Congress and the agencies themselves. Along the way, the 

Supreme Court noted that an action is subject to judicial review under the APA “[w]hen an 

aggrieved party has exhausted all administrative remedies expressly prescribed by statute or 

agency rule.” Id. at 146 (emphasis added). The Supreme Court went on to say that the APA “by 

its very terms, has limited the availability of the doctrine of exhaustion of administrative 

remedies to that which [a] statute or rule clearly mandates.” Id. (emphasis added).

Darby involved concerns that the judiciary could lay in the weeds, and spring new 

exhaustion requirements on unsuspecting litigants. “Congress clearly was concerned with 

making the exhaustion requirement unambiguous so that aggrieved parties would know precisely 

what administrative steps were required before judicial review would be available.” Id. That’s 

not the situation here. In fact, the regulation in question explicitly required the Department to 

notify losing parties about the need to exhaust. See 20 C.F.R. § 656.24(e)(3). 

And that’s exactly what happened. The DOL let Star Way Lines and Melnyk know about 

the need to exhaust. See 8/6/20 DOL Letter (Dckt. No. 13-1, at 6 of 243). The Department 

devoted an entire page of the letter to explaining how they could challenge its decision 

administratively. Id. Requiring Stay Way Lines and Melnyk to follow that brightly-lit path is a 

far cry from setting a “trap for unwary litigants.” See Darby, 509 U.S. at 147. It is more akin to 

requiring Star Way Lines and Melnyk to follow instructions. 

The Seventh Circuit has also suggested that a statute or regulation must explicitly require 

exhaustion, or else there is no need to exhaust. For example, in Shawnee Trail Conservancy v. 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 14 of 19 PageID #:360
15

U.S. Dep’t of Agric., 222 F.3d 383 (7th Cir. 2000), the Seventh Circuit noted that exhaustion was

required when “the Forest Service regulations explicitly require exhaustion as a prerequisite to 

judicial review.” Id. at 389; see also Alto Dairy, 336 F.3d at 568. District courts take a similar 

approach, looking to what the regulations explicitly require. See, e.g., Perez v. United States, 

850 F. Supp. 1354, 1360 (N.D. Ill. 1994) (“Yet, critically, nothing in the applicable statute or 

regulations requires Perez to avail himself of the BCNR’s broad remedial powers.”) (emphasis in 

original); Hafeez v. Dorochoff, 2007 WL 4300582, at *6 (N.D. Ill. 2007) (“Because the 

immigration statute and regulations do not mandate exhaustion of remedies for immediate 

relative petitions, exhaustion is not a precondition to the exercise of jurisdiction over plaintiffs 

APA claim.”) (emphasis added); Zaidi v. Chertoff, 2006 WL 3147722, at *4 (N.D. Ill. 2006) 

(explaining that exhaustion was required because the statute and implementing regulations 

“specifically require” exhaustion). 

Overall, the regulation at hand could have imposed an exhaustion requirement in a 

straightforward manner, with simple language. Instead, it got there through the backdoor, by 

directing the Department to notify losing parties of the need to exhaust. That language 

presupposes the existence of an exhaustion requirement. There’s no other way to read it. 

On the flipside, Star Way Lines and Melnyk rely on another regulation that addresses the 

denial of certifications. See 20 C.F.R. § 656.26(a). That regulation expressly authorizes 

aggrieved parties to appeal adverse decisions to the BALCA. “If a labor certification is denied 

. . . a request for review of the denial . . . may be made to the Board of Alien Labor Certification 

Appeals by the employer or debarred person or entity by making a request for such an 

administrative review . . . .” See 20 C.F.R. § 656.26(a).

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 15 of 19 PageID #:361
16

Star Way Lines and Melnyk read that language to mean that there is no exhaustion 

requirement at all. They point out that an aggrieved party may appeal, not must appeal. And 

“may” is discretionary. See Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 103 (2016) 

(“[W]e have emphasized that the word ‘may’ clearly connotes discretion.”); United States v. 

Sutton, 962 F.3d 979, 986 (7th Cir. 2020) (“The use of ‘may’ is quintessential discretionary 

language.”).

It is true that “may” is discretionary, not mandatory. And it is true that that regulation 

does not require a losing party to pursue an appeal to the BALCA. But those facts don’t mean 

that there is no exhaustion requirement. 

That regulation simply explains how an aggrieved party can appeal if it wants to appeal. 

The use of “must” would be potentially confusing. After all, a losing party isn’t required to 

appeal. An appeal isn’t mandatory. Maybe the losing party will decide to accept the agency’s 

decision, and move on. By way of illustration, the rule covering notices of appeal in federal 

court uses the word “may” too. See Fed. R. App. P. 3(a)(1). The losing party “may” appeal, but 

doesn’t have to. Id.

The use of “may” does not mean that an aggrieved party can sidestep the administrative 

appeal process, and go right to federal court. It didn’t make an administrative appeal optional. 

The regulation simply explained how to appeal if the party wants to appeal. 

Taken together, the two regulations chart the path forward. One regulation says that the 

losing party can challenge an adverse decision by going to the BALCA, if it wants to appeal at 

all. See 20 C.F.R. § 656.26(a). The other regulation says, albeit in roundabout fashion, that the 

aggrieved party must exhaust administrative remedies if it wants to challenge the agency’s 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 16 of 19 PageID #:362
17

decision. See 20 C.F.R. § 656.24(e)(3). They send the following message: if you want to 

appeal, here’s how you have to do it. 

In sum, Star Way Lines and Melnyk had no obligation to challenge the Department’s 

denial of their application. But if they wanted to challenge that decision, they needed to appeal 

to the BALCA. They needed to exhaust their administrative remedies. But instead, they went 

straight to the federal courthouse. So, they jumped the gun by filing suit. 

The parties cite some case law, but it is not much help. The government relies on De 

Jesus Ramirez v. Reich, 156 F.3d 1273 (D.C. Cir. 1998). There, the D.C. Circuit addressed a 

challenge to the Department’s denial of labor certifications. Along the way, the D.C. Circuit 

took note of the lower court’s dismissal for lack of exhaustion. The lower court “feared that a 

contrary result would give employers an incentive to ‘short-cut’ the administrative scheme by 

sending aliens directly to court to argue the merits of the labor certification applications.” Id. at 

1277. But the D.C. Circuit resolved the issue on other grounds because of an exhaustion wrinkle 

– the employees wanted to challenge the denial, but their employer did not. Id. 

The case law offered by Star Way Lines and Melnyk is not much better. Three of 

Plaintiffs’ cited cases don’t mention exhaustion at all. See generally Sec’y of Labor v. Farino, 

490 F.2d 885 (7th Cir. 1973); First Girl, Inc. v. Regul. Manpower Adm’r of U.S. Dep’t of Labor, 

499 F.2d 122 (7th Cir. 1974); Gladysz v. Donovan, 595 F. Supp. 50 (N.D. Ill. 1984). 

And their fourth case doesn’t move the needle. In Gentis, Inc. v. Oates, 2011 WL 93851 

(E.D. Pa. 2011), the court considered whether the BALCA must review an adverse decision 

about labor certification. But the court considered the exhaustion requirements under the statute 

(only), not the regulations. That is, the court considered whether the Immigration and 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 17 of 19 PageID #:363
18

Nationality Act requires exhaustion of administrative remedies in labor certification cases, 

without getting into the requirements of the regulations. See Gentis, 2011 WL 93851, at *3–4. 

This Court located one case that required BALCA review before judicial review. See 

generally Powell Elec. Mfg. Co. v. Solis, 2009 WL 995278 (N.D. Tex. 2009). But it did so 

through the doctrine of common-law exhaustion, or prudential exhaustion. In Powell, the court 

considered whether an employer had to appeal to the BALCA after the Department of Labor 

denied its application for labor certification for failing to submit a response to a Notice of 

Findings. Id. at *7. The court held that the INA did not mandate an appeal to the BALCA, but 

common-law exhaustion principles did. Id at *8. To the court, it was “a situation in which 

agency expertise makes agency consideration necessary to generate a proper record and reach a 

proper decision.” Id. 

This Court lands in the same place, but gets there a different way. Common-law 

exhaustion doesn’t apply to claims brought under the APA. See Darby, 509 U.S. at 146. So, it 

can’t apply here. Still, one of the regulations requires the Department to tell losing parties that 

they must exhaust administrative remedies. It’s hard to see what that regulation means unless 

there is an exhaustion requirement. 

One final issue remains. Star Way Lines and Melnyk invite this Court to give them an 

excused absence from exhaustion, because it would take too long. See Pls.’ Resp., at 3 (Dckt. 

No. 26). They offered examples of two cases where review by the BALCA took four years. Id.

at 3 n.1.

This Court declines that invitation. If courts are not in the business of writing exhaustion 

requirements, then presumably courts shouldn’t be in the business of un-writing exhaustion 

requirements, either. Or at the very least, they should hesitate before doing so, and proceed 

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 18 of 19 PageID #:364
19

cautiously. The Seventh Circuit has recognized limited situations when a court can excuse a 

party from jumping through the exhaustion hoops, including: “(1) requiring exhaustion of 

administrative remedies causes prejudice, due to unreasonable delay or an indefinite timeframe 

for administrative action; (2) the agency lacks the ability or competence to resolve the issue or 

grant the relief requested; (3) appealing through the administrative process would be futile 

because the agency is biased or has predetermined the issue; or (4) where substantial 

constitutional questions are raised.” Iddir v. INS, 301 F.3d 492, 498 (7th Cir. 2002).

This case does not fit within any of those narrow exceptions. Star Way Lines and 

Melnyk have not demonstrated that review by the BALCA is foreordained to take years on end.

They offer two examples, but that’s not much of a data set. Any prejudice is entirely speculative. 

The Department’s motion for summary judgment for failure to exhaust administrative 

remedies is granted.

Conclusion

For the foregoing reasons, the Court denies Plaintiffs’ motion for summary judgment. 

The Court grants Defendants’ motion for summary judgment for lack of exhaustion.

Date: March 31, 2022

Steven C. Seeger

United States District Judge

Case: 1:20-cv-04842 Document #: 28 Filed: 03/31/22 Page 19 of 19 PageID #:365