Neufeld "Employer-Employee Relationship" Memorandum Upheld
In a blow to employers, a federal district court has upheld a USCIS memorandum that set out factors to determine whether an employer-employee relationship existed for H-1B nonimmigrant visa petition adjudication purposes.
The case was brought by an IT staffing firm that, along with other IT staffing firms and trade associations, challenged the validity of the USCIS’s January 8, 2010, Memorandum for “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements” (HQ 70/6.2.8 AD 10-24) (“Neufeld Memo”). The case was dismissed, with prejudice, by the federal district court for the District of Columbia on August 13, 2010. Broadgate Inc. v. U.S. Citizenship and Immigration Services, No. 1:10-cv- 00941-GK, (D. D.C.). The Neufeld Memo set out 11 factors and hypothetical examples for when an employer-employee relationship did and did not exist for H-1B nonimmigrant visa petition adjudication purposes. The plaintiff argued that the Neufeld Memo failed to comply with the Notice of Proposed Rule Making requirements of the Administrative Procedures Act and, therefore, was invalid. Additionally, they argued the memorandum set out new substantive rules that were binding upon USCIS service center adjudicators. Siding with the USCIS, the Court found the Neufeld Memo to be valid as it is “interpretive” in nature and was intended to be used by adjudicators in the application of the five tests set forth in the regulation for determining whether the requisite employer-employee relationship had been satisfied by the petitioner.
It is no secret that with the current recession and corresponding high unemployment rate, there is intense government scrutiny of immigration-related filings by U.S. employers seeking to secure employment work visas for foreign workers. Statutory and regulatory requirements are now being applied strictly, as evidenced by the Neufeld Memo.
What is most troublesome with the Broadgate decision is that the door is now open for the USCIS to create potentially unlawful “interpretive” memorandums for the adjudication of such filings, leaving the employer with the ability to challenge their unlawfulness only when the filing has been erroneously denied. It is not uncommon for 24 or more months to elapse from the time of denial of an application by the Service Center and affirmation by the Administrative Appeals Office before the Petitioner can challenge the legality of the standard in federal district court. In agreeing with the government’s “interpretation defense,” the Court created a Trojan horse for the USCIS and other federal agencies, such as the Office of Foreign Labor Certification at USDOL, to render erroneous decisions that deny immigration benefits to those legally entitled to them.
