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COURT HITS BACK AT TRUMP ADMINISTRATION H1B DECISIONS

2020-04-01
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On March 10, in the case of ITServe Alliance v. L. Francis Cissna, U.S. District Judge Rosemary M. Collyer invalidated several USCIS policies that caused H-1B denial rates to shoot up. These policies affected IT consulting companies (that employed foreign national IT specialists on the H-1B status) the most. This ruling has been seen as a major victory for many American IT companies that employ foreign talent.

The ruling is expected to have a significant effect on how H-1B cases are adjudicated. According to Judge Collyer, the Trump administration cannot implement policies that have caused H-1B petition denial rates to shoot from 2 percent in FY2015 to more than 30 percent for IT services companies. The data used is based on analysis done by the National Foundation for American Policy.

 

What are the court’s major rulings against USCIS in the  ITServe Alliance v. L. Francis Cissna case?

The outcome of the ruling affected several requirements and regulations included in the PM-602-0157 and the 2010 Neufeld memo. Here are the rulings of the Court.

Employer-Employee Relationship

According to the court, the USCIS interpretation of the employer-employee relationship requirements pertaining to third-party sites is illegal and unenforceable. The current interpretation of the employer-employee relationship requirement by the USCIS based on PM-602-0157 (February 2018 internal memo) and the 2010 Neufeld memo is inconsistent with its own regulations (8 C.F.R. Sec. 214.2(h)(4)(ii)). According to the USCIS, petitioners must have actual control of their H-1b employees while they perform work. However, the USCIS requirements set forth are inconsistent with the definition of ‘employer’ by the Labor Department.

Proof of Non-speculative Work Assignments

Also, the requirement that the employer provides proof of client work assignments throughout the trough the entire requested validity period was declared as unlawful and unenforceable. According to the Judge, these requirements were being applied without formal rulemaking and as such cannot be enforced.

Itinerary Rule

Thirdly, the itinerary requirement was ruled as unenforceable as it is superseded by an earlier stature - the 1998 ACWIA (American Competitiveness and Workforce Improvement Act), an act passed by the government of the United States on October 21, 1998.

Short Approvals & Denials

Lastly, the USCIS is required to provide a legitimate reason for the short-term approval or denial of an H-1B petition.

 

Background Information

Right from the start, many IT services companies challenged the requirement brought forth by USCIS. Many saw the requirements as unlawful. In early lawsuits, such as Small & Medium Enter. Consortium, Inc. v. Nielsen (filed on May 1, 2018), IT staffing firms such as Nam Info, Inc, Small and Medium Enterprise Consortium, Inc., and Derex Technologies, Inc. argued that the policy memo - PM-602-0157 infringed on the authority of the Labor Department, as this department is responsible for defining ‘employer’. Additionally, some of the requirements brought forth by the policy memo PM-602-0157 contradict the regulations set forth by both the Labor Department and the INA.

On October 11, 2018, IT Serve Alliance (association of IT Solutions & Services organizations in the U.S.) filed a lawsuit challenging the USCIS after receiving several H-1B shortened approval periods and denials. According to IT Serve Alliance changes implemented by the February 2018 USCIS memo were done unlawfully as the USCIS amended the regulation by not going through notice and comment as required by law.

The lawsuit challenged the USCIS on the following,

A1. The interpretation of an employer-employee relationship, and the requirements needed to establish one

A2.  Requirements that needed to meet to establish non-speculative work

A3.  Itinerary requirements involving h-1b employees at third party sites

A4.  The USCIS’s authority as regarding short term approval

 

What are the policies in question?

The policies in question include the 2010 Neufeld Memo titled “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements.” and the 2018 policy memo - PM-602-0157,  entitled Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites. These memos provide the USCIS with guidelines pertaining to the adjudication of H-1B petitions, in particular, those involving employees that work at third-party sites.

 

Conclusion

Please contact our Offices to find out more about how this decision can positively impact your business. We have been advising our clients to litigate all short term approval cases (H-1b approvals given for one year or less) as the cost of litigation will be commensurate with having to file an H-1b extension, in addition, you will be decreasing your denials and increasing your chances of getting longer approvals for future cases if you litigate. IT companies around the country are doing this with good results. Each case has to be evaluated to see if litigation is a good option. We at the Law Offices of Prashanthi Reddy can do this for you. The implementations of several policies set forth by the USCIS has caused a sharp increase in the rate of H-1B petition denials pertaining to third-party worksites. Many IT services companies based in the U.S. that utilize foreign IT talent find these requirements and policies to be unlawful. This has lead to lawsuits including the ITServe Alliance v. L. Francis Cissna. On March 10, 2020, Judge Rosemary M. Collyer invalidated several policies that caused a sharp increase in H-1B denial rates. The rulings of the Judge were based on contradictions between the new policies and existing laws, acts and definitions set forth by the U.S. government (including the 1998 ACWIA, existing USCIS regulations, and the Labor Department’s definition of employer and employer-employee relationships).

 

 

Sources :

A1. Bloomberg LP. (May 2, 2018). Added High-Skill Visa Requirements Illegal, Lawsuit Says.  Retrieved 11 May 2018 

A2. US Citizenship and Immigration Services. (February 22, 2018). Policy Memorandum, SUBJECT: Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites.

A3. US District Court for the District of Columbia. (March 10, 2020). ITServe Alliance v. L. Francis Cissna. 

A4. US District Court for the District of New Jersey. (May 1, 2018). Small & Medium Enter. Consortium, Inc. v. Nielsen. 1 May 2018. 2:18-Cv-08672.

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