Tag Archive for: H-1B

Andrew Stegmann
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Judge Declares United States H-1B Visa Rules Unlawful

A federal judge has declared the current US administration violated the law when it published two regulations in October to restrict H-1B visas. The plaintiffs – businesses and universities led by the U.S. Chamber of Commerce – argued economic data, the administration’s long delay and other factors showed “good cause” did not exist for Trump officials to bypass standard rulemaking procedures. A judge agreed.

“Defendants failed to show there was good cause to dispense with the rational and thoughtful discourse that is provided by the APA’s [Administrative Procedure Act] notice and comment requirements,” wrote U.S. District Judge Jeffrey S. White in an order on December 1, 2020. “Accordingly, the Court concludes that Plaintiffs are entitled to judgment in their favor on their first two claims for relief, and the Court sets aside the Rules on the basis that they were promulgated in violation of [the law].”

What does the judge’s decision mean? First, the opinion is binding nationwide and not limited to one geographic region or group of plaintiffs, said Paul Hughes of McDermott Will & Emery, the lead counsel for plaintiffs in the Chamber lawsuit. He made the comments in a Facebook Live session hosted by attorney Greg Siskind.

Second, the ruling is for summary judgment. “That means we have a final judgment that sets aside these two rules, both the Department of Homeland Security (DHS) and Department of Labor (DOL) rules in their entirety are now set aside by order of Judge White,” said Hughes. He noted the administration could choose to appeal or ask for a stay, but he was confident in the “power of the ruling.”

He and others will watch how the Department of Labor addresses the issue of wage determinations for H-1B visa holders and employment-based immigrants. Companies have been required to use the much higher wage requirements contained in the DOL regulation since it was issued. Greg Siskind expects the Department of Labor quickly to “flip the switch” and return to the prevailing wage determinations in effect before the new wage rule.

The DOL rule took effect on October 8, 2020, and the DHS rule would have been effective December 7, 2020. Judge White’s ruling vacates both regulations.

During the November 23rd hearing, Paul Hughes said of the regulations: “We think this is an overt attempt to destroy the H-1B program.” In declarations, company executives and university personnel said the DHS rule would cause data scientists, software engineers, medical personnel and others to leave the United States. Many international students would not qualify under the DHS rule or would be priced out of the labor market by the DOL regulation, argued attorneys and employers.

The oral arguments on November 23, 2020, before Judge White foreshadowed the victory for businesses and universities. Plaintiffs’ attorney Paul Hughes drove home the high number of vacancies and the low unemployment rate in computer occupations (in research from the National Foundation for American Policy), the 6-month delay for publishing the regulations since the height of national unemployment in April 2020, and the administration’s questionable justifications for publishing the DHS and DOL H-1B regulations without allowing for public comment.

An analysis of the oral arguments concluded businesses had a good chance of prevailing: “On behalf of the plaintiffs, Paul Hughes appeared to make the stronger legal and factual arguments.” Judge White shared that belief.

“Plaintiffs . . . argue the Court must consider how the COVID-19 pandemic is affecting unemployment in the type of jobs held by H-1B workers and contend Defendants’ analysis is too broad,” wrote Judge White in his decision. “The Court finds Plaintiffs have the better argument. The good cause exception is to be narrowly construed, and, in light of that standard, the Court concludes it is appropriate to focus on how the pandemic is impacting domestic unemployment for the types of positions held by H-1B workers.”

Hughes argued at the hearing that DHS and DOL failed in their rules to connect the H-1B visa category to the coronavirus-related economic problems. He cited a National Foundation for American Policy (NFAP) analysis, which found, “The U.S. unemployment rate for individuals in computer occupations stood at 3.5% in September 2020, not changed significantly from the 3% unemployment rate in January 2020 (before the pandemic spread in the U.S.).”

Judge White wrote, “The statistics presented regarding pandemic-related unemployment still indicate that unemployment is concentrated in service occupations and that a large number of job vacancies remain in the areas most affected by Rules: computer operations which require high-skilled workers.” During his oral argument and in a declaration, Hughes pointed to an NFAP analysis that found over 655,000 active job vacancy postings advertised online in computer occupations in the United States as of October 2, 2020.

At the November 23, 2020, hearing, the best response the Trump administration attorney could offer is that the DHS rule showed the unemployment rate was higher in the Professional and Business Services sector. Hughes countered that argument as well. Judge White wrote: “Plaintiffs also proffer evidence that suggests DHS’s reference to rates of unemployment within the Business Services and Professional sectors does not account for the fact that ‘approximately 10% of the jobs (computer occupations with a B.S. or higher) in these sectors are in occupations similar to professionals in the H-1B category[.]’ (Hughes Decl., ¶ 17, Ex 17 (National Foundation for American Policy, NFAP Policy Brief October 2020, Employment Data for Computer Occupations for January to September 2020, at 8-9).) DHS did not counter that evidence.”

Another argument Hughes made in filings and during the November 23rd hearing the judge found persuasive: The administration’s lengthy delay in publishing the regulations belied claims the two regulations were issued to address an emergency. “Plaintiffs argue that Defendants unduly delayed in taking action and forfeited the ability to rely on the good cause exception,” wrote Judge White. “‘Good cause cannot arise as a result of the agency’s own delay’ [precedents cited] . . . Although both agencies cited to ‘skyrocketing’ and ‘widespread’ unemployment rates as a basis to find ‘immediate’ action was necessary, they did not do so for over six months.”

Judge White noted that “some semblance of the DHS Rule has been on DHS’s regulatory agenda since 2017.” He also pointed out the administration previewed the Department of Labor “adjust[ing] the wage scale” for H-1B visa holders during an April 2017 briefing on its “Buy American and Hire American” executive order. The judge affirmed the plaintiffs’ argument in another area: The administration “issued a number of proposed rules unrelated to the Covid-19 pandemic” between March and October 2020. “From that, it is reasonable to conclude Defendants are not entitled to a presumption of urgency,” wrote Judge White.

He cited in his opinion another area where the administration’s rhetoric and actions did not match: “The Court also finds it significant that, although each Rule allows for post-promulgation comments, Defendants did not suggest in the Rules – or at oral argument – that they are intended to be a temporary solution until the ‘emergency situation has been eased by [their] promulgation[.]’ Without any consultation with interested parties about the impact on American employers, DHS and DOL made changes to policies on which Plaintiffs and their members have relied for years and which are creating uncertainty in their planning and budgeting.” Judge White was also not persuaded the Department of Labor needed to publish its wage rule immediately to prevent employers from filing labor condition applications to get a lower wage determination.

The decision in U.S. Chamber of Commerce et al. v. DHS et al. has far-reaching consequences, the most important of which may be its impact on future administrations. Analysts note the Trump administration has been hostile toward high-skilled immigration for the past four years. The failure to make these H-1B regulations permanent means it will be much easier for future administrations to adopt more neutral or even welcoming policies toward high-skilled foreign nationals, including international students.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Andrew Stegmann
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Court Hearing Shows Businesses Could Prevail Against H-1B Visa Rules

Courtesy of Klug Law Firm.

On November 23, 2020, U.S. District Judge Jeffrey S. White heard arguments focused on a single question: Did the Department of Homeland Security (DHS) and Department of Labor (DOL) have “good cause” to bypass standard rulemaking procedures and publish emergency regulations to restrict H-1B visas? The plaintiffs – businesses and universities led by the U.S. Chamber of Commerce – argued case law, economic data and the Trump administration’s actions show good cause did not exist. The DOL rule took effect on October 8, 2020, and the DHS rule is effective December 7, 2020, unless blocked. The plaintiffs are asking the court to vacate both regulations.

The Administrative Procedure Act (APA) requires federal agencies to provide notice and the opportunity to comment before a regulation goes into effect. The Trump administration published the DHS and DOL H-1B rules “interim final” and claimed “good cause” reasons existed that justified the agencies publishing the regulations (and allowing them to go into effect) before allowing the public to comment. This is the central dispute between businesses and universities and the Trump administration in U.S. Chamber of Commerce et al. v. DHS et al. – whether the economic situation created by the coronavirus pandemic provides DHS and DOL with a “good cause” exception for its actions.

Paul Hughes of McDermott Will & Emery, the lead counsel for plaintiffs in the Chamber lawsuit, emphasized the high stakes during the November 23rd hearing. “We think this is an overt attempt to destroy the H-1B program,” said Hughes, and several company executives and university leaders provided declarations to that effect. Zane Brown said, “Many of Amazon’s most tenured employees,” including data scientists and software engineers, would have to leave the United States. At the same time, Hughes cited the reliance issue for the University of Utah and its 350 H-1B visa holders, five hospitals and 12 clinics. The university’s attorney said the DHS rule would cause “substantial irreparable harm.”

Hughes also cited the Trump administration as a source. Ken Cuccinelli at the Department of Homeland Security said up to 200,000 H-1B professionals could lose their jobs under the rule. The Department of Labor estimated its rule, which inflates H-1B wage requirements by 40% or more, would cost employers $198 billion over 10 years, making it potentially the most expensive regulation imposed on businesses in modern U.S. history, based on an analysis by the U.S. Chamber of Commerce.

During the court hearing, held via Zoom, the Trump administration did not offer strong responses to arguments plaintiffs put forward in their reply brief or in court. Below are the arguments central to the case.

First, at the hearing, Paul Hughes noted the DHS and DOL rules failed to connect the H-1B visa category to the coronavirus-related economic problems. He pointed to a National Foundation for American Policy (NFAP) analysis of Bureau of Labor Statistics data that showed: “The U.S. unemployment rate for individuals in computer occupations stood at 3.5% in September 2020, not changed significantly from the 3% unemployment rate in January 2020 (before the pandemic spread in the U.S.).” Hughes also noted from the NFAP analysis that there were over 655,000 active job vacancy postings advertised online in computer occupations in the United States as of October 2, 2020.

The data cited by Hughes was available to DHS and DOL before issuing the rules, along with DHS statistics that show most H-1B visa holders work in computer occupations. Hughes successfully litigated for a preliminary injunction against the Trump administration’s June 2020 proclamation (which restricted the entry of H-1B, L-1 and other visa holders). In granting the preliminary injunction in October (NAM v. DHS), Judge White cited NFAP research and other evidence indicating Covid-19 unemployment problems were not focused in computer jobs. During the November 23rd hearing, Hughes noted the government had an even higher burden of proof to show a “good cause” exception for its two recent rules than the standard it used to defend (unsuccessfully) the president’s authority to issue the June 2020 proclamation.

Second, the Trump administration’s attorney offered a limited response to the plaintiffs’ point that DHS and DOL did not address the lack of connection to H-1B visas and coronavirus-related unemployment. The government’s attorney repeated the argument in the DHS rule that the unemployment rate had increased in the Information sector and the Professional and Business Services sector. Hughes responded, citing the National Foundation for American Policy report, that these “sectors” include all employees of a company – and only approximately 10% of the jobs (computer occupations with a B.S. or higher) in the sectors are in occupations similar to professionals in the H-1B category.

The Trump administration’s attorney argued DHS was focused on the “health of the sectors.” Yet that argument appeared weak in light of the impact of the DHS and DOL rules: How would imposing $198 billion in additional regulatory costs on companies in these sectors improve the “health of the sectors”?

Third, the administration also did not appear to successfully respond to the plaintiffs’ argument that DHS and DOL waited more than 6 months to issue rules after the national unemployment rate reached its height in April 2020. “Courts routinely reject claims of good cause when an agency delays promulgating a rule in the face of an emergency and then claims that that very emergency leaves no time for notice and comment – just as the agencies have done here,” the plaintiffs argued in a reply brief. (The plaintiffs cited Air Transp. Ass’n of Am. v. DOT.)

The administration’s attorney said the agency was looking at the pace of recovery and long-term unemployment. Hughes argued DHS did not cite long-term unemployment in its rule, and DOL would have known about long-term unemployment as a consequence months ago. Besides, plaintiffs argued, the unemployment rate has improved significantly since April.

Hughes argued the two rules were on the administration’s agenda for years, and the emergency was the 2020 election (i.e., not an acceptable reason for a “good cause” exception). He also noted to make its case on unemployment, the administration cited an article back on March 27, 2020, but that since that time, DHS and DOL had published several rules that had nothing to do with H-1B visas, further evidence of a lack of emergency that warrants a good cause exception.

Fourth, the Department of Labor stated in its rule that companies would rush to submit labor condition applications (LCAs) under the rules in place for the past 16 years if companies had “[a]dvance notice of the intended changes.” Alexandra Saslaw, representing the administration, argued, “This is a case where the agency [DOL] has significant expertise regulating businesses, and they’re using their predictive judgment to determine what those businesses might do in response to a very clear economic incentive.”

Hughes responded that precedent shows “predictive judgment alone” is not enough for an agency. There also has to be evidence. More pointedly, Hughes said, “We don’t think this argument advances the government’s position because it relies on the notion that they had to keep the DOL rule change a secret, but the government didn’t keep it a secret.” He pointed out not once, but twice, the Trump administration declared it intended the Department of Labor to impose a rule virtually identical to the rule it published. The first time came in a press call with reporters on June 22nd and the second time, on August 2nd, the president mentioned the upcoming regulation during an Oval Office media event.

It is never easy to block government regulations by convincing a court to vacate them. On behalf of the plaintiffs, Paul Hughes appeared to make the stronger legal and factual arguments. Judge White will decide if what plaintiffs describe as an “overt attempt to destroy the H-1B program” will be stopped.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].