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Rami Fakhoury on IT Immigration

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  1. The Fight Back Book: Introduction Part A, B

    Rami Fakhoury and Mark Levey
    Copyright@2010 Fakhoury Law Group/ Rami Fakhoury
    I.    INTRODUCTION : Part A and Part B
     

    A.     BACKGROUND: Business Immigration - "Casciate Ogni Speranza Voi Che Entrate"?

    1. About This Book
    This volume of the ILW publishers practice guides offers a practical step-by-step approach to overcoming a wide range of appellate issues encountered in business immigration today.
    If you employ or represent H-1B Specialty Workers, L-1 Intracompany Transferees, or have filed a PERM labor certification you already know the system is gamed by its administrators to deter access, and how difficult and costly it has become to obtain approvals and visas.  For some categories of petitioners, particularly companies that place sponsored employees at client sites, U.S. immigration often defeats all but the most determined and well-prepared.   Under the guise of national security, DHS has usurped the Labor Department's statutory enforcement role over wage and hour matters, and imposes an often impossibly high burden of proof upon outsourcing firms to establish a notional standard of employer "control" over H-1B workers.
    But, there are strategies for success, even in this challenging environment.  Lawyers and their clients must now be prepared to confront U.S. agencies head-on, and if necessary appeal and litigate cases to obtain a just result. 
    But, there are legal strategies for survival and, maybe, even hope of making the U.S. business immigration system work according to Rule of Law principles, again.
     
     
     
    For those who have struggled with USCIS adjudications, and found the process to be arbitrary and capricious, and the results contrary to law, it may now finally be time to try the courts.  The Labor Department's administration of the PERM program has become equally if not more irregular, prone to delay, and inconsistent with law.  Both agencies practice a kind of results- driven rulemaking through adjudication, and have attempted to kill outsourcing by administrative means while Congress has refused thus far to do so by statute.  
    Neither agency follows the "publish-and-comment" requirement of the Administrative Procedures Act (APA).  Instead, they impose sudden changes in policy by edict, unannounced and with retroactive effect.  This system has become unpredictable, inconsistent with published regulations, and without support in statute.  The courts have held that agencies may not impose "de facto rules and binding norms"[1] -- bureaucrats do not have Czar-like powers to dictate rulings by "ukase"[2] --  and neither "USCIS nor AAO may unilaterally impose novel substantive or evidentiary requirements beyond those set forth"[3] at regulation.  That is simply not permitted under American administrative law, and it need not be allowed to continue. Congress seems to have taken notice, as both versions of the 2010 Comprehensive Immigration Reform (CIR) Bills contain provisions that would legalize some of these ad hoc USCIS practices for H-1B.  But, CIR appears to be unlikely to pass in the particularly polarized environment of the 111th Congress.  So, a window may be opening in which litigation is now possible for those who act quickly.
     This book will give you an overview of case preparation tips and strategies needed for successfully overcoming arbitrary denials, and provides a legal guide and brief citations and extracts for litigation against common types of agency abuses in H-1B, L-1 and PERM adjudications, along with appellate strategies for several alternative categories, including National Interest Waivers, E-3, and Trade North America (TN) visas.
     
    ***
    This volume is directed at the reader who already has an understanding of basic visa processes and the law, either as an attorney or as a company manager who deals frequently with immigration issues.  It is intended to provide litigation tools for lawyers and their clients, as well as an in-depth discussion of legal issues that must be understood and taken into account prior to filing an appeal with an agency or going to federal court.    
    But, this book is not just a how-to of appellate citations, administrative procedures, regulations and practices.  It is also about how the law operates as a reflection of shifting politics and economic interests, and provides insight into navigating through the political barriers and minefields being thrown up to market entry of some industries in the United States.  An understanding of this context will go a long way toward informing any decision to litigate.
    There is not a great amount of quality cross-disciplinary material written for legal professionals who want to understand how legislative politics, trade economics and national security policy impact the practice of immigration law.  Even less is written for business professionals about administrative appeals.  Articles in the professional journals tend to be perhaps too esoteric or technical in approach, and may not be particularly assessable and user-friendly to many non-specialists.  This book is intended to address that underserved need in the literature.
     
    2. The Real World Context of Changing Immigration Law
    By most measures, 2009 was a disastrous year for international trade in services, and U.S. immigration in particular.  The Wall Street Journal reported that the volume of overall world trade declined by 9 percent from the previous year, amidst a global slowdown and also in part due to a rise in protectionism.[4]  For the first time in several years, the annual H-1B lottery did not result in applications being received for the full allotment of 65,000 available visa numbers for specialty workers until the last days of the calendar year.  The number of non-immigrant worker admissions was down substantially from previous years in the H-1B, L-1, and E-1 Investor classes across the board.[5] 
    Employment-based immigrant visa filings also dropped sharply.  Businesses filing to sponsor foreign nationals for PERM labor certification encountered a wall of audits resulting in huge delays in processing by the U.S. Department of Labor.  That story is reflected in the Department's quarterly reports, which illustrate the rising barriers at the front end of the employment-based immigration process.  In the first half of 2009, PERM case completions dropped to a level of less than 15 percent of the previous year, the result of a sharp increase in case audits and other "integrity activities" [6]:
    PERM program performance has risen slightly from 11 percent in the previous quarter to 17 percent. - The overall decrease in this measure from one year ago is due to the impact of increasing integrity activities in light of the declining economy and continued filings for positions where there are US workers. (Increased integrity activities are being implemented to protect U.S. workers and satisfy statutory responsibilities and require additional processing time.) - The Office of Foreign Labor Certification has developed an enhanced PERM performance measure and a new PERM integrity measure. These measures are scheduled for approval and implementation at the beginning of FY 2010.
       
     By the end of 2009, the rate of PERM completions within nine months of filing dropped to a mere 4 percent, according to the latest data, with implementation of yet another layer of audits of completed applications.[7]
     2010 is shaping up to be little improved for business immigration.  Again, the H-1B quota has not been taken in the months after the initial filing date.  This follows publication of the Neufeld memo, a policy guidance to USCIS Service Centers, which lays out categories of H-1B petitions that will not be approved - including self-employed executives and so-called Job Shops - and imposes a vast range of new documentary requirements on petitioners which place H-1B workers at third-party sites.  There has been little or no apparent movement toward the promised PERM backlog reduction by the Department of Labor.  When asked at a stakeholder's meeting to clarify the percentage of approved cases selected for additional post-completion "integrity review", the DOL refused to provide additional information about the new audits beyond the fact that USDOL expects that fully 40 percent of approved cases will eventually be denied after an additional post-completion audit.[8]
    On the other hand, one finds some hope in the fact that certain officials in the Obama Administration are avowedly more willing than their predecessors to work with the Immigration Bar and other stakeholders at resolving issues.  A new USCIS General Counsel, Roxanna Bacon - herself, a prominent immigration lawyer -- indicated at a meeting with AILA shortly after her appointment last year that she intends to at least bring back a measure of regularity and predictability to the process.   [See, INTRODUCTION, Sec. 6]
    This does not mean, however, that the practitioner will find that USCIS and the Labor Department are turning back the clock to a simpler, easier time when the chances were that any case that passed a quick sniff test was likely to be approved on first try.  One should instead be prepared for the prospect that, in the coming years, cases will continue to be scrutinized closely, the weight of documentation demanded will remain heavy, and that it will not again be easy to obtain business immigration benefits.  But, that's not the real problem.  The issue the Immigration Bar is confronted with is an essential lawlessness and bias that has intruded into adjudications, which this Administration does not yet seem willing to fix on its own initiative.
     

    1.      DHS Has Exploited Judicial Review Limitations to Impose Arbitrary and Capricious Rulings

    Behind the heavy-handed restrictions imposed by USCIS is the fact that Congress, while it has repeatedly resisted past efforts to enact an outright ban on H-1B outsourcing, has given the agency a restrictive tool that, in effect, has been almost as effective.  That is the series of "court-stripping" measures including the REAL-ID Act of 2005.  That law clarified and amended several statutes passed in the 1990s that limited judicial review over deportation matters and, as most courts have found, Congress extended the preclusion to review to discretionary decisions over business immigration matters, including H-1B, L-1, B-1, and I-140 petitions.  That narrows the issues involving visa petitions that can be brought before the courts to "questions of law and constitutional claims."[9] 
    Conducting itself as largely unfettered by judicial oversight of abuse of discretion issues, USCIS has become increasingly arbitrary and capricious in adjudications and rulemaking.  In recent years, DHS has refused to publish regulations as required by the Administrative Procedure Act (APA) to reflect substantial changes in the rules by which it adjudicates non-immigrant visa petitions.  The agency's methods and standards employed are now unabashedly unfounded in statutory authority and openly deny due process to certain targeted groups of benefits seekers, particularly companies in the IT consulting industry.        
    This fact was driven home by issuance in January 2010 of the Neufeld memo[10], a directive from USCIS Central Office to Service Centers, specifying the types of petitions - including those filed by so-called job shops, self-employed executives, and independent contractors -- to be denied for lack of documentation of employer "control," which the memo locates in common law doctrine rather than the agency's own enabling statute or regulations.  The broader implications of that memo will be discussed at length in this book, as will the agency's adoption of the common law definition of "control" as a basis to deny several categories of nonimmigrant visa petitions.  Previous to the memo, USCIS was, in effect, carrying out much the same policy, but was not as open and specific about the practice and had not publicly acknowledged that the basis for the Neufeld rules cannot be found either in the Immigration & Nationality Act (INA) or in Department of Homeland Security (DHS) regulations governing USCIS.  With this acknowledgment, USCIS may have finally painted itself into a legal corner, where it is truly vulnerable to individual or class action suits -- if Congress does not amend the Act -- as the following sections explain.  
    The essential issue for litigation is that USCIS has imposed informal measures - "de facto rules and binding norms" -- that discriminate against companies that place non-immigrant workers at client sites.  The agency imposes a prohibitively elevated burden of evidence upon this category of petitioners to establish "control", with the effect of improperly denying and delaying visas, and has done so without lawful authorization in statute or regulation.   This is clearly contrary to APA requirements for rulemaking at Sec. 553[11], which mandates "publish-and-comment" for all substantive rulemaking. [Secs. 551-557, 701-706, reproduced at Appendix]
    Furthermore, USCIS treats all H-1B filers who place employees at client sites as de facto "willful violators" or "H-1B dependent employers," imposing a heightened burden of evidence, subjecting them to "random audits" and special scrutiny that the INA states should be reserved for those found by a USDOL administrative hearing to be willful violators and H-1B dependent employers.  [8 USC 1182(n)(1)(G)(i)] [See, INTRODUCTION, C. The Litigation Option, Sec. 16, below] That violates the agency's own regulations as well as APA standards for hearings along with standards for adjudications. This, in total, presents an open challenge: what is the Immigration Bar to do about it? 
    The litigation strategies that can end these sorts of abuses must be tailored to the limits of curtailed jurisdiction over discretionary decisions imposed by amendments to the INA, so most of this book deals with "questions of law and constitutional claims" that Congress preserved for review.  The bulk of this volume will examine the practical range of an employer's right to seek jurisdiction in the federal courts, along with procedural issues, legal standards, and a review of case law in the circuits that present particular barriers to court review and will also review those decisions that take a more permissive view.  The book examines how various courts have ruled on a variety of jurisdictional and procedural issues, and suggests litigation approaches by which plaintiffs can best protect their due process rights to obtain benefits unlawfully denied by USCIS or USDOL.      
     

    1.   USCIS Reliance Upon Common Law Doctrine Not Owed Judicial Deference

    For several years previous to release of the Neufeld memo, USCIS adopted a 5th Circuit decision, Defensor v Meissner (2000, CA5 Miss) 201 F3d 384 , citing that case in many hundreds of H-1B and some L-1 decisions by the Service Centers.  Defensor was the principal legal support of the bureau's requirement for an extraordinary burden of additional documentation in excess of requirements stated in regulation for outsourcing companies.  Although that decision had limited application in the Fifth Circuit, it was nonetheless the authority cited nationwide for a new, nationwide evidentiary standard of "control" imposed upon employers that place H-1B workers at third-party sites.   The Defensor decision is still cited, after Neufeld, as common law authority in many Service Center notices and denials bearing on the issue of employer control, so we will also discuss approaches to responding to denials that cite and rely upon Defensor.
    The reason the agency has fallen back on common law authority is that the Immigration and Nationality Act (INA) does not define the "employee-employer" relationship to require control and says nothing about any additional requirement for documenting "control" over workers at third-party sites.  The regulations are also ambiguous about the element of control, and instead present the employer with the ability to establish the "employer-employee relationship" by an overall showing involving six enumerated factors, only one of which is "control".  A valid H-1B employment relationship is "indicated by the fact that it may hire, fire, supervise, or otherwise control the work of the employee." [emphasis added].  The last element of "control" may be read as an alternative factor, one among six.  Even read as an inclusive element, it allows for a showing of control by any variety of other alternative factors.  It is not an overriding or exclusive consideration, as interpreted by USCIS.  The existing regulation at Title 8 Code of Federal Regulations actually states: 
    Pursuant to 8 C.F.R. 214.2(h)(4)(ii), United States employer means a person, firm, corporation, contractor, or other association, or organization in the United States which:
    (1)               Engages a person to work within the United States; 
    (2)               Has an employer- employee relationship with respect to employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee; and
    (3)               Has an Internal Revenue Service Tax identification number.
    The existing regulatory definition of employer, above, is consistent with what a line of leading U.S. Supreme Court decisions say it should be: inclusive and not to stress any one particular element to the exclusion of the others.  The Court's Clackamas[12] decision observes: "Rather, the answer to whether a shareholder-director is an employee depends on " 'all of the incidents of the relationship ... with no one factor being decisive.' "[ 503 U.S., at 324 (quoting NLRB v. United Ins. Co. of America, 390 U.S. 254, 258 (1968)].
     But, Associate Director Neufeld is not, in fact, satisfied with such an inclusive, open-ended definition of control, and his memo imposes as a new eligibility requirement a list of 38 documents in eight separate categories in order to establish the common-law element of "control" that is nowhere to be found in the Act.  This is a substantial (and dubious) reinterpretation of the regulations, one that, in addition, contradicts the letter and spirit of the Supreme Court decisions the memo cites for authority.
     In the Neufeld memo, USCIS has essentially conceded that its own interpretation on a range of related issues, including evidentiary requirements, are not based in statute or regulations.   The memo acknowledges[13]:
     To date, USCIS has relied on common law principles and two leading Supreme Court cases in determining what constitutes an employer-employee relationship.  The lack of guidance clearly defining what constitutes a valid employer-employee relationship as required by 8 C.F.R. 214.2(h)(4)(ii) has raised problems.
    In order to establish common law "control," nonetheless, the January 8, 2010 memo imposes new requirements for several dozen documents upon initial petitions for H-1B status, and a number more for renewals. [Memo Reproduced at Appendix]  It does this despite the fact that existing regulations may not require any sort of documentation of "control" if the petitioner clearly shows it will "hire, fire and supervise" the H-1B beneficiary.  The memo goes on to state that no petitions will be approved, regardless, unless the USCIS's newest and very specific and novel interpretation of control - departing from existing agency regulation and long-accepted interpretation and practices - are met.  In order to satisfy that novel interpretation, the memo demands production of a long, detailed list of mandatory documents, a requirement that is binding upon USCIS Service Center examiners and places new obligations for evidence upon the public. 
     To carry out this rulemaking, USCIS has issued what is effectively an ukase, an edict in memo form, authored by the Associate Director for Service Center Operations.  That memo commands, orders and imposes new obligations beyond those and in contradiction to existing regulation without citing any law or regulation for this change.   The ukase is binding on Service Center examiners and imposes new obligations for production of documents upon petitioners.  The substance of the memo has not been published in the Federal Register, and the public has been given no opportunity to comment or respond in any meaningful fashion to which the agency is obligated to answer.  
    An informal approach to rulemaking may be acceptable for some interpretative matters, but not for substantive rulemaking actions that disturb existing regulatory requirements. [Shalala v. Guerney Mem'l Hosp., 514 U.S. 87, 100 (1995)]   Substantive rulemaking impacts the interests of the public or create new obligations.  [Croplife America v. Environmental Protection Agency 329 F3d 876 (D.C.Cir.2003)]  They also substantially deviate from existing definitive interpretation. [Alaska Professional Hunters ***'n, Inc. v. FAA, 177 F.3d 1030, 1035 (D.C. Cir. 1999)]  That makes Neufeld a substantive rulemaking, which under the APA must be published in the Federal Register before it can take effect, regardless of the authority cited for the new rule if not found in statute or Congressional intent.[ US. Chamber of Commerce v USDOL - OSHA, 174 F.3d 206 (D.C. Cir. Apr. 9, 1999]  USCIS has not met its "publication-and-comment" requirement. [APA Sec. 553]
     





     [C]ourts approach administrative interpretations not only by looking to the formal or informal character of a rule, but also by examining the authority under which the rule is made. Three different "levels" of deference can apply. These standards are not so much levels, at least not in the same sense as rational, intermediate, and strict levels of judicial review, but are rather rules that dictate whether the action should be accorded binding or persuasive weight. First, Chevron deference applies to agency actions which carry out an express or implied delegation by Congress to the agency to interpret an ambiguous statute through rules carrying the force of law. The Chevron standard is extremely deferential--an interpretation owed Chevron deference is binding unless it is unreasonable. Second, deference under Auer v. Robbins, 519 U.S. 452 (1997), applies to agency interpretations of its own ambiguous regulations. The Auer standard is analogous to Chevron and is also highly deferential--interpretations under Auer are binding unless they are plainly erroneous or inconsistent with the regulation. Third, if a regulation does not warrant deference under Chevron or Auer, deference under Skidmore v. Swift, 323 U.S. 134 (1944), applies. Under Skidmore, agency interpretations are not binding, but may receive varying amounts of weight according to their power to persuade.

     






    [NOTE: It might be helpful to the reader at this point to note the distinction between various standards of deference that the courts apply to agency rules.  There are basically three standards that are applied, and have been usefully summarized in the side-bar, at left.[14]]
    The Syllabus[15]  in the Clackamas decision by Justice Stevens states that when the statute is ambiguous about the definition of control, the common law definition of master-servant relationship may be used to "fill the statutory text's gap" in formal rulemaking.  Specifically, that reading of the decision states, "the common law's definition of the master-servant relationship provides helpful guidance: the focus on the master's control over the servant."  
    The Court did not say, however, that agencies can concoct their own eccentric reading of common law and apply it in place of published regulations.  The Neufeld memo cites for its authority a pair of cases[16] that dealt with the common law definition of employee,[17] only one of which, Clackamas, is an administrative law case.   That decision dealt with the question of an agency's interpretation of statute, finding it acceptable that a "gap" in the statute's definition of employee could be filled by common law meaning of the term "employer".   The published source the agency relied upon in that case is the EEOC's Compliance Manual that a number of circuits have held is owed Skidmore deference, but does not hold the force of law.[18]  
    While they have some similarity as informal interpretation, the Neufeld memo would not be accorded the same level of deference as the EEOC Manual.   No issue was addressed in the Clackamas decision as to the propriety, in substance or in the way it was promulgated, with the EEOC Manual.  The same certainly cannot be claimed for the Neufeld memo.  Thus, in both its content and the way it has been imposed, the Neufeld memo cannot be viewed as having comparable status as "authoritative" agency interpretation. 
    Common law principles may be applied to "fill" gaps in statute, but they may not be used in lieu of legislative change in contradiction of existing statute or regulation.   The courts have long and consistently found that agency interpretation based in common law are owed less judicial deference than rules that are firmly based in the agency's own enabling statute and regulations.[19]  Common law is not viewed as adequate support for agency rules because, fundamentally, the Supreme Court ruled long ago there is no general federal common law to apply. [Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938)]  It is also well-established that common law is not to be applied as the sole determining factor in agency rulemaking, and is limited by the context of the overall facts in any agency determination. [NLRB V. HEARST PUBLICATIONS, INC., 322 U. S. 111 (1944)]  In cases where there is any apparent conflict in agency interpretation of its own standards between the common law and the APA, the Court has more recently held that legal standards based in the APA trump regulatory standards found in common law. [DICKINSON V. ZURKO, 119 S.Ct. 1816 (1999); cites, Darby v. Cisneros, 509 U.S. 137 (1993)]     
    Furthermore, the Neufeld memo is not really a comparable forms of agency interpretation, and they are substantially dissimilar.  The Neufeld memo and the changes to the Examiner's Handbook it announces are binding on agency adjudicators, but are not binding on the AAO.  It is therefore not the same sort of authoritative, binding agency interpretation as the EEOC Manual.  The Neufeld memo is, instead, de facto rulemaking, which the Supreme Court has never condoned, and the Neufeld memo, unlike the EEOC Manual, would not pass a Skidmore test for deference.  
    USCIS has misinterpreted the meaning of Supreme Court decisions cited in yet another way.  These cases say that an agency may look to common law "right of control" as one of a number of elements which in the totality must be weighed in deciding whether a bona fide employment arrangement exists.  Yet, USCIS does something quite different.  The Associate Director has taken this as a mandate to require a definitive showing of "actual control", and that has been applied as the decisive factor in agency adjudications.   
    The bulk of documentation required by the Neufeld memo go to actual control not the "right of control", which is the proper standard under common law.  The Neufeld memo concerns itself primarily with third-party relationships, rather than the validity of the employer-employee relationship and the right of control, which is largely an issue that involves consideration of the validity of the employment contract as it has been interpreted under the common law of torts and liability.  A review of the common law related to employment contracts and the Law of Agency in the sections below show that the USCIS approach is inconsistent with the way the courts and other agencies have dealt with the same issues. [See,H-1 Chap., Secs. (B)10-20, and (C)]     
    Plaintiffs do not contest the requirement to produce employment contracts, as this has been a traditional and long-term requirement for H-1B.  The category of documents that are found most egregious in Neufeld are confidential third-party documents - contracts between the petitioner and its clients -- that are largely extraneous to a valid employment contract.  Many third-parties are averse to disclosure of this type of document, for reasons that will be explained below, and refuse to produce them.  This places H-1B employers at a grave competitive disadvantage in tendering bids for service contracts with such third-parties.  Enforcement of demands for third-party documents as a de facto rule of adjudications has to date resulted in large losses in revenue to H-1B employers as well as other substantial damages.
    The Neufeld memo is an unreasonable interpretation of the statute, existing regulations, and the bulk of federal case law and administrative decision on the subject of what constitutes a valid employment relationship, and how that should be documented.  The agency's existing regulations (and Court decisions) are apparently unsatisfactory to Mr. Neufeld because they expressly permit a number of alternative factors to establish the "employer-employee relationship," as well as a mandate that no one factor will determine the outcome.   USCIS demands third-party contracts, and will not approve this type of case without them.  The reason for this is that the agency seeks a predetermined outcome to the adjudications process, which is to deny petitions and restrict the business operations of technical consulting companies that place their foreign workers at third-party sites.     
     The Associate Director is asserting his imperative to interpret regulation so as to reduce "problems", he writes, but in a way that defies the letter and spirit of these Supreme Court decisions and clearly violates the APA.  An agency cannot change its evidentiary standards set in regulation and practice without promulgating proper regulations that meet the "publication-and-comment" requirement.  USCIS also cannot demand sensitive third-party documents to establish actual "control" by the petitioner over H-1B workers when this is not required by statute and regulation.  USCIS is in effect requiring documentation of actual control, and will not accept alternative documentation, such as the employment contract and other materials establishing the right to "hire, fire, and supervise" that establish the petitioner's "right of control", which is the actual regulatory standard.  While the common law definition of "control" is "relevant" but not decisive, the Clackamas Opinion states it is only one of many factors that must be taken into consideration in determining whether the employer-employee relationship exists[20].  It bears repeating:
    Rather, as was true in applying common law rules to the independent-contractor-versus-employee issue confronted in Darden, the answer to whether a shareholder-director is an employee depends on " 'all of the incidents of the relationship ... with no one factor being decisive.' " 503 U.S., at 324 (quoting NLRB v. United Ins. Co. of America, 390 U.S. 254, 258 (1968)).
    That opinion is clearly mirrored in the existing regulation at 8 C.F.R. 214.2(h)(4)(ii) that lays out a range of elements that indicate a valid employment relationship.  The requirement that the agency consider the full range of factual elements, and that common law definitions are not alone adequate to determine valid employment, follows the reasoning in a line of Supreme Court decisions going back to the 1944 NLRB v Hearst decision, as will be discussed at length below.  The Neufeld memo fixation on the element of control is in stark contrast to actual U.S. Supreme Court holdings on the subject of how a legal employer-employee relationship is to be determined.
    In formulating the memo, the Associate Director may not have looked at the case law closely enough.  These cases dealt with formal interpretation carrying the "weight of law", but the Nuefeld memo is perhaps the least formal of all forms of agency interpretation, de facto rulemaking without basis in either statute or regulations.   The Glackamas decision cites Skidmore, a significant pre-APA case that laid down a test for determining when an agency's interpretation of its own regulations deserves deference by a reviewing court.  Glackamas also cites Skidmore for its application of six-part test of the employer-employee relationship, which is reflected in the existing regulation[21]:
    We are persuaded by the EEOC's focus on the common-law touchstone of control, see Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944),9 and specifically by its submission that each of the following six factors is relevant to the inquiry whether a shareholder-director is an employee:
    "Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work
    "Whether and, if so, to what extent the organization supervises the individual's work
    "Whether the individual reports to someone higher in the organization
    "Whether and, if so, to what extent the individual is able to influence the organization
    "Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts
    "Whether the individual shares in the profits, losses, and liabilities of the organization." EEOC Compliance Manual 605:0009.10
    It is ironic and notable that the Neufeld memo should appeal to this particular line of cases[22] for a common law definition of control, because they actually state APA principles that in a larger sense forbid what USCIS is trying to do.  Skidmore is better known as the namesake of a four-part test the Supreme Court later cited in Justice Souter's decision in the 2000 Mead case.[23]  That decision held that under the APA, unpublished agency rules do not carry "the force of law," and are owed a lower level of deference by the courts than formal, published rules that receive Chevron-level deference.  Mead dealt with question of whether Customs classification rulings should be accorded force of law and Chevron-style deference.  Justice Souter's decision  instructs us as follows[24]:
    The fair measure of deference to an agency administering its own statute has been understood to vary with circumstances, and courts have looked to the degree of the agency's care,7 its consistency,8 formality,9 and relative expertness,10 and to the persuasiveness of the agency's position, see Skidmore, supra, at 139--140. The approach has produced a spectrum of judicial responses, from great respect at one end, see, e.g., Aluminum Co. of America v. Central Lincoln Peoples' Util. Dist., 467 U.S. 380, 389--390 (1984) (" 'substantial deference' " to administrative construction), to near indifference at the other, see, e.g., Bowen v. Georgetown Univ. Hospital, 488 U.S. 204, 212--213 (1988) (interpretation advanced for the first time in a litigation brief). Justice Jackson summed things up in Skidmore v. Swift & Co.:
    "The weight [accorded to an administrative] judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control." 323 U.S., at 140.
    [ . . .]
    [C]lassification rulings are best treated like "interpretations contained in policy statements, agency manuals, and enforcement guidelines." Christensen, 529 U.S., at 587. They are beyond the Chevron pale.
    Justice Souter concludes by explaining why the majority in this 8-1 case was rejecting the dissent offered by Justice Scalia:
    Although we all accept the position that the Judiciary should defer to at least some of this multifarious administrative action, we have to decide how to take account of the great range of its variety. If the primary objective is to simplify the judicial process of giving or withholding deference, then the diversity of statutes authorizing discretionary administrative action must be declared irrelevant or minimized. If, on the other hand, it is simply implausible that Congress intended such a broad range of statutory authority to produce only two varieties of administrative action, demanding either Chevron deference or none at all, then the breadth of the spectrum of possible agency action must be taken into account. Justice Scalia's first priority over the years has been to limit and simplify. The Court's choice has been to tailor deference to variety.17 This acceptance of the range of statutory variation has led the Court to recognize more than one variety of judicial deference, just as the Court has recognized a variety of indicators that Congress would expect Chevron deference.18
    ***
    The Neufeld memo is so irregular in form and inconsistent with existing statute and regulation that it would not garner deference, even if published.  The memo imposes evidentiary requirements that are substantially different from existing regulation governing eligibility for H-1B status, and cites the common law doctrine of "control" as authority to raise those requirements.   The agency has, in effect, abandoned its existing regulation and substituted common law interpretation, conducting substantial rulemaking without publication in violation of the APA. No court is going to show such an unlawful agency construction any particular deference - instead the Neufeld memo is likely to be struck down under the Skidmore standard, along with a large number of USCIS decisions based upon it and its predecessor interpretation, the Defensor dicta.
    The courts have long and consistently found that agency interpretation based in common law[25] are owed less judicial deference than rules that are firmly based in the agency's own enabling statute or regulations.[26]  Furthermore, when there is a conflict between the common law and the APA over which standard governs agency regulation, the courts have held that APA standards trump regulatory standards found in common law.[27]  
    Furthermore, agencies are held by some courts to have lesser expertise interpreting their enabling statutes than their own regulations.  USCIS cannot even find support for such heightened evidentiary requirements in its own existing regulations, so it has fallen back on "common law" decisions that have no direct binding power over the agencies or the public, and which do not independently provide "legal authority" for regulation. [APA  553(b)(2)] Finally, unable to promulgate a regulation of its own mandating "control" - there is no basis in the statute to do so - USCIS further acknowledges in the memo that it has borrowed its interpretation from another agency, and relies upon USDOL interpretation of common law[28]:
    USCIS has also relied on the Department of Labor definition found at 20 C.F.R. 655.715 which states: Employed, employed by the employer, or employment relationship means the employment relationship as determined under the common law, under which the key determinant is the putative employer's right to control the means and manner in which the work is performed.
    Administrative common law, however, is not an entirely bad thing, as far as it also protects the status quo and the interests of the public who rely upon a regular and predictable system of benefits adjudications.  When unpublished practices remain in place long enough and gain consensus acceptance, some courts have held they become "definitive interpretations" that constitute an "administrative common law", which agencies may not significantly revise without first meeting the Sec. 553 publication requirement.  The implications of this are discussed, below [see, INTRODUCTION, USCIS Violates APA Rulemaking Requirements; also, see, H-1B Section] 
     

    2.   USCIS Rulemaking Not Based In Enabling Statute or Regulation

    That's a problematic and vulnerable position for any agency to take.  Normally, agency rules must be based in regulations derived from the agency's own enabling statute.   Sometimes, agencies can get along temporarily (if not challenged) by "borrowing" doctrines from other agencies.  But, such second-hand rules had better conform with accepted policies and interpretations, otherwise they are vulnerable to being overturned in court.  The USCIS reference to the two U.S. Supreme Court decisions[29] for authority is peculiar, particularly as they do not provide firm legal foundation for the policy, and in fact, they hold that the agency's interpretation will not be given much deference by the courts.   
    USCIS's reliance upon common law doctrine to support the Neufeld memo is idiosyncratic and the courts need not show it deference.  The memo amounts to substantial and binding changes to long-established USCIS eligibility and evidentiary rules for H-1B, but imposes these new rules without publishing new regulations.  This violates APA Sec. 553.  That failure to follow the "publish-and-comment" requirement is certainly unjustified by reference to common law, which is the sole authority cited in the document for the rule changes.   
    More fundamentally, common law, with nothing more, is a suspect basis for agency interpretation of statute. In 1938, the Supreme Court ruled in the Erie Railroad decision that "there is no general federal common law" that federal agencies or courts might apply.  Six years later, in the Hearst case the Court ruled that the common law doctrine of control, alone, is an inadequate basis for statutory interpretation.  The Court also held in that 1944 decision that common law precedent is not binding in employer-employee law, and that courts may consider fact circumstances.  That decision also marked the Court's departure from the "pure question of law" doctrine that had once bound judicial review of employer-employee relationships to common law precedent.  Later, in the milestone 1978 Chevron decision, the Supreme Court all but threw out consideration of common law approach and "mixed question of law and fact" procedural issues in favor of the now almost universally accepted "two-step" approach that is the contemporary accepted method for determining judicial deference to agency interpretation of statute in formal rulemaking.  
    Most recently, the Supreme Court ruled in the 2001 Mead case[30] that where an agency rule is not published, it is not owed Chevron-style deference, and instead should be subjected to a Skidmore test, which examines the rule more closely for "(1) the thoroughness of the agency's investigation; (2) the validity of its reasoning; (3) the consistency of its interpretation over time; and (4) other persuasive powers of the agency."[31]   Skidmore is a less deferential standard of review, cited in Clackamas, which is one of the Supreme Court cases USCIS references in the Neufeld memo.
    Even if an agency interpretation is permitted to fill in a gap in the statute with reference to "the common law doctrine of control," the APA 553 publication requirement still applies, and no court need give any deference to an unpublished agency interpretation that aggrieves or otherwise negatively affects the interests of the public.  The publication requirement applies even if it merely impacts the interests of any party.  The Court in Clackamas was clear that such informal agency rulemaking is not controlling [ftn. 9]:
    [T]he EEOC's Compliance Manual is not controlling-even though it may constitute a "body of experience and informed judgment" to which we may resort for guidance. Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944); see also Christensen v. Harris County, 529 U.S. 576, 587 (2000) (holding that agency interpretations contained in "policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law[,] do not warrant Chevron-style deference").     
    Glackamas also cites Skidmore for its application of six-part test of the employer-employee relationship:
    We are persuaded by the EEOC's focus on the common-law touchstone of control, see Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944),9 and specifically by its submission that each of the following six factors is relevant to the inquiry whether a shareholder-director is an employee:
    "Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work
    "Whether and, if so, to what extent the organization supervises the individual's work
    "Whether the individual reports to someone higher in the organization
    "Whether and, if so, to what extent the individual is able to influence the organization
    "Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts
    "Whether the individual shares in the profits, losses, and liabilities of the organization." EEOC Compliance Manual 605:0009.10
    Yet, the Neufeld memo contains a demand list of documents that does even vaguely resemble the six-factor test in Skidmore endorsed in Clackamas.  It, instead, fixates upon the common law element of control, to the exclusion of the others, imposing new demands for documentation that go to the issue of actual control of H-1B workers at third-party sites, not the "right of control" by the petitioner, the actual common law standard.  Case law on the subject, discussed later in this book, establishes that the issue of the "right of control" focuses on the validity of the employment contract, not on third-party arrangements, which are held under the Rule of Privity to be largely extraneous to contractual employer-employee relationships.  [See, H-1B, SAMPLE RFE RESPONSE or AAO APPEAL LANGUAGE, Secs. 9-20]
    There is yet another major issue that disfavors the DHS construction of its new rules for nonimmigrant visa petitions and the system of compliance checking it has devised.  As this book shows, with passage of the 1990, 1998, and 2004 amendments to the INA, Congress has intentionally limited and separated the powers of legacy INS (later USCIS) and USDOL over administration and enforcement of H-1B.  Authority over workplace practices and violations attendant to Labor Condition Attestations (LCAs) remain legally reserved to USDOL, with USCIS barred by statute from policing wage and hour provisions that the original 1990 law vested solely with the Labor Department Wage and Hour Division. [See, INTRODUCTION, C. THE LITIGATION OPTION, Secs. 14-19]
     Subsequent amendments did not broadly extend jurisdiction over this subject matter to the legacy Immigration & Naturalization Service or to DHS.  Inasmuch as the current USCIS policy is not based in its own enabling act and conflicts with statute, it cannot be formulated as a valid regulation.  A policy that operates outside of a regulation and contrary to statute would likely be overturned, if challenged by a competent litigant with a solid cause of action.   
    Nonetheless, despite its lack of subject-matter jurisdiction, after INS was absorbed by the Department of Homeland Security, DHS assumed law enforcement powers to investigate and enforce LCA wage and hour provisions with regard to H-1B employers, assigning much of the investigatory function to USCIS.  Since 2006, DHS has operated a new investigations branch inside USCIS called the Fraud Detection and National Security - Data System (FDNS-DS).   That system, described in detail in the last volume of this ILW Publishers series by these authors[32], is essentially a giant data-mining engine that collects and organizes information from immigration applications and the millions of widely related documents scanned into the DHS system.  After a petition is approved, auditors and field investigators working for FDNS conduct worksite inspections - audit teams visited hundreds of H-1B worksites last year, with thousands more scheduled for 2010 -- reviewing records, collecting documents, interviewing US employees, green card holders, along with non-immigrants, alike, probing to detect any unauthorized off-site employment or violations of terms of petitions.
     The creation and operation of FDNS-DS, as its name suggests, was justified by a perceived threat to national security that sophisticated terrorists would fraudulently use the H-1B and L-1 programs to plan and carry out attacks upon the U.S.  After an investment of hundreds of millions of dollars, and massive adverse impact upon benefits seekers, proof of the existence of such a threat has not been validated.  
    What has actually occurred is the USCIS has morphed itself into a quasi-law enforcement and intelligence collection agency and now conducts investigations, a role for which it has no statutory authority, one which it has usurped from the US Department of Labor and the Bureau of Immigration and Customs Enforcement (ICE).  FDNS auditor teams regularly check where H-1B workers are working, what work they perform and by whom they are paid, and the hours they work -- in other words, wage and hour provisions -- and then feed their findings back into the Data System (DS), a distributed computer network and data-mining system that scores these results and shares them with USDOL and 16 other federal law enforcement and intelligence agencies.  That is not a casual encroachment upon another agency's turf - it is a massive undertaking by DHS involving hundreds of federal employees and contractors, and its operations are entirely without statutory basis and perform functions given (in a more restrictive form) to DOL.   FDNS-DS worksite compliance usurps wage and hour compliance powers reserved by law exclusively to the Labor Department - which was restricted by statute from initiating similar field investigations of most H-1B employers.   DOL may not initiate investigations of most H-1B petitioners on the basis of information provide by USCIS from petitions received triggering further DOL enforcement activities.
    To justify the worksite inspections and data-mining operations of FDNS-DS, along with the imposition of a heightened burden of evidence than allowed under present law and regulations, USCIS has concocted a requirement that employers document actual legal "control" over offsite H-1B employment.  This in turn creates a pretext and the means to investigate and limit the operations of outsourcing companies - a restriction that is entirely without basis in law. 
    The doctrine of H-1B control, furthermore, is without basis in DHS enabling law or in the agency's regulations, and the system of USCIS compliance checking also operates outside the agency's statutory authority.  FDNS-DS is not a straightforward system of inspections exempt from rules for adjudications under APA Sec. 554(a)(3), but is instead part of a larger enforcement regime operating without regulatory authority that impacts heavily the interests of petitioners.  In the US Chamber of Commerce decision (1999), the DC Circuit lays out the standard by which it distinguishes acceptable procedural rules from improper, unpublished substantive rules in the context of agency inspections and enforcement schemes [12-13]:
    A procedural rule is one that does not itself "alter the rights or interests of parties, although it may alter the manner in which the parties present themselves or their viewpoints to the agency." Batterton v. Marshall, 648 F.2d 694, 707 (D.C.Cir.1980). A substantive rule, in contrast, has a "substantial impact" upon private parties and "puts a stamp of [agency] approval or disapproval on a given type of behavior." American Hosp. ***'n v. Bowen, 834 F.2d 1037, 1047 (D.C.Cir.1987).
    [. . .]
    [T]he Directive imposes upon employers more than "the incidental inconveniences of complying with an enforcement scheme," Bowen, 834 F.2d at 1051; it has a substantive component. [15]
    Under these standards, therefore, FDNS is the instrument of an altogether improper unpublished rule and lawless enforcement regime.  In its operation of FDNS-DS, the USCIS is in flagrant violation of the INA and the Administrative Procedure Act (APA), as this book shows at length.
    The reason this blatantly unlawful system has been allowed to rise up and operate thus far without challenge - there have been no major industry law suits filed - is because of fear and politics.  Some of this has to do with lingering post-911 hysteria about security threats.  Much of the permissiveness toward informal DHS policies, undoubtedly, is also a function of the near-collapse of the U.S. financial and trade systems last year, and continuing high rates of unemployment in the IT sector.   U.S. unemployment in technical occupations remains at unprecedented levels, double the rates prior to 2009, affecting tens of thousands of highly-skilled (and vocal) workers who formerly enjoyed job security in the same industries which use H-1B non-immigrant workers.  As a result, there is a well-founded fear in the IT consulting industry that a successful court challenge to H-1B outsourcing restrictions and FDNS might result in something worse - an outright legislative ban on H-1B and other severe statutory restrictions on business immigration.  This is a real but publicly unspoken threat.  The politics of H-1B have become so poisoned, amidst joblessness in the IT industry and continued off-shoring by U.S. business, that a critical mass might finally be reached.  The House and Senate versions of the Comprehensive Immigration Reform (CIR) Bill both contain measures that come close to an effective ban on H-1B. 
    However, there is another, largely unrecognized interest that militates strongly against shutting down H-1B and other business immigration programs, one that is only tangentially related to law, international trade and commerce.  All that collection of documents about foreign companies, processes, technologies, finances, employee backgrounds, and webs of ownership and connections with foreign states, banks, companies, agencies, military, and its analysis, has a far greater value to certain U.S. agencies than anything having to do with law enforcement, trade regulation or immigration control.  FDNS-DS acts as a giant vacuum cleaner for information connected to the flow of international commerce that goes to many places of great interest that might not otherwise be so assessable and forthcoming with sensitive commercial information.  Given the value of this information access, it is unlikely that the U.S. Government will ever truly close off the flow of business immigration.  Nonetheless, if the restrictive measures in the CIR Bill are passed, one should expect that many U.S. companies in the global IT consulting field will simply close their doors and move the remainder of their operations offshore.
    By the same token, it is unlikely that DHS would voluntarily ease baseline documentary requirements for immigration benefits.  The collection of documents, and surveillance and data mining of employers of foreign workers, appears to have become the major raison d'etre for USCIS.   But, Immigration lawyers have an unseen ally, of a sort, against the complete closure of the golden door, a factor that needs to be taken into consideration in how industry approaches the problem of litigating and negotiating the removal of unreasonable restrictions on business immigration.  Whatever specific legal and regulatory reforms industry pushes for, it must bear in mind the overriding mission of DHS, which administers immigration, is national security.
     The Obama Administration does not seem to view the basic mission of DHS as having changed or threats as having subsided; since January 2009, DHS has maintained most of the programs and policies related to FDNS-DS expansion and automation of information gathering, analysis, and verification initiated in recent years without substantial change.[33] Demands for documentation are more systematic, but no more legal (supported by statute or regulation) than under the Bush Administration.  FDNS-DS Worksite compliance audits are expanding, and will be carried out by the tens of thousands in 2010.  It has become practically impossible for some firms - particularly smaller, newer IT consulting companies that don't have their own proprietary processes and expansive in-house product development programs - to get the visas they need in order to do business in the U.S. Language in the Neufeld memo suggests that USCIS is now trying to apply the same heightened requirements for proprietary knowledge required in L-1B to H-1B, despite there being no statutory or regulatory basis for doing so.    Because of the mounting restrictions and costs of compliance, many of these firms have been forced to move their operations in whole or greater part offshore. This sort of wholesale discrimination against some categories of employers by DHS and USDOL started during the Bush years has not subsided.  Things haven't changed much since 01/20/2009, and industry has been forced up against the wall and to reassert its rights to business survival through the courts.
     

    3.   Improving ...
  2. THE FIGHT BACK BOOK: Table of Contents

    THE FIGHT BACK BOOK: Table of Contents
    THE FIGHT BACK BOOK:A Litigator's Guide to APA Suits Against the USCIS and the Department of Labor
    By Rami Fakhoury, Mark Levey
    Copyright 2010 Fakhoury Law Group/ Rami Fakhoury, And ILW.COM
    A Casebook in Business Immigration Appellate and Litigation Strategies
    TABLE OF CONTENTS
    Introduction:
    A.BACKGROUND: Business Immigration - Casciate Ogni Speranza Voi Che Entrate?

    About This Book
    The Real World Context of Changing Immigration Law
    DHS Has Exploited Judicial Review Limitations to Impose Arbitrary and Capricious Rulings
    USCIS Reliance Upon Common Law Doctrine Not Owed Judicial Deference
    USCIS Rulemaking Not Based In Enabling Statute
    Improving Prospects for Successful Litigation of Immigration Cases
    Recent Decisions Show Courts Affording Closer Review of USCIS Decisions
    Economic Factors and Due Process Concerns Spark Renewed Judicial Intervention

    B.THE LEGISLATIVE OPTION

    Comprehensive Immigration Reform (CIR) Appears Unlikely to Pass in the 2009-10 Congress, but Restrictive Amendments Still Present a Threat
    CIR Compared to Other Legislative Initiatives
    The CIR Problem: Proposals for H-1B "Reform" Pose an Existential Threat to Global IT Firms

    C. THE LITIGATION OPTION

    Why Sue, and on What Basis?
    Unlawfully Withheld and Unreasonably Delayed H-1B Petitions Reviewable Under the APA
    Jurisdiction Retained for Review of Constitutional Claims or Questions of Law, Standard Overview
    Imposition of Novel Substantive or Procedural Standards Forbidden
    Agency Rulemaking Without Publication Violates APA
    USCIS Coopts Compliance Powers Reserved by Law to USDOL in Order to Carry Out an Impermissible Purpose Venue
    Issues Related to Deference and Reasonableness
    USCIS Interpretation of Defensor Dicta Not Owed Chevron-level Deference, APA Publish and Comment Requirements
    USCIS Neufeld Memo Interpretation of Common Law Doctrine of "Control" Contrary to APA Principles and Other Federal Administrative Interpretation of Common Law
    USCIS Disregards Its Own Regulations
    Line of APA Cases Bar Similar Legacy INS Practice of Applying Defunct Regulations
    Doctrine of "Control" Found In Common Law Not Consistent With APA Standards
    No Chevron-style Deference For USCIS "Control" Dicta and Related Doctrine Employed in the Neufeld Memo
    USCIS Assumes Investigative and Compliance Powers Reserved by Statute to the Sole Jurisdiction of Another Agency
    USCIS Violates Statutory Prohibition Against DHS Initiation of LCA Enforcement - USDOL Barred From Enforcement Action Pursuant to Information Received by USCIS as Part of the I-129 Petition
    Legislative History Indicates Congress Intended LCA Enforcement Limited to USDOL "Random" Investigations of H-1B Dependent Employers and Sanctions of "Willful Violators
    FDNS-DS Justified by Skewed H-1B Compliance Assessment
    Unlawful USCIS Investigations: H-1B and L-1 Data-mining
    LCA Enforcement: DOL Changed Its LCA Procedures in Anticipation of Change in Law that Did Not Materialize.
    H-1B Fraud Assessment not "Random" Sample: Results Based Upon FDNS-DS Investigative Files of Suspected H-1B Dependent Firms and Willful Violators
    DHS Criminalizes Lawful Practices: Temporary Assignment of H-1B Employees to Client Work Sites,Short-Term Placement: A Question of Time, Roving Employee, Long-Term Assignment: A Question of Control
    DHS Policy is Discriminatory: Selectively Targets Business Immigration, Particularly Indian and Chinese IT Firms

    D.Signs of Change at USCIS, or Worse to Come? Incoming Agency Leadership Signals Some Positive Change in Business Immigration, Worksite Inspection Policies , Hard-Line on Evidentiary Issues to Continue.
    CHAPTER I. - H1B
    A.OVERVIEW

    USCIS Becomes a Wannabe Intelligence and Law Enforcement Agency
    H-1B and L-1 Strategies

    B. HISTORY
    C.LEGAL AUTHORITIES
    D.LEGAL ISSUES
    USCIS Abandons a Statutory Basis for H-1B Adjudications - The Long, Strange Trip From Defensor, to Neufeld, to Common Law to . . ?
    A. BACKGROUND - Defensor Issues and Related Litigation Points: Unlawful RFEs, Delayed Adjudications, Prejudicial Denials
     

    UNLAWFUL RFEs, DELAYED ADJUDICATIONS, PREJUDICIAL DENIALS
    DEALING WITH DENIALS

    Sample Response to RFE or Appeal to AAO (U.S. Employer Requirement)
    "Specialty Occupation" of the Work Performed at Client Sites - Ongoing Control over Employment
    Inappropriate Application by DHS of Dicta Read Into Defensor Decision as "De Facto Rule or Binding Norm" in Adjudications of H-1B Petitions
    Inapplicability of Defensor Case as USCIS Authority to Define "Control" Over H-1B Workers
    Citation of Defensor v. Meissner is not proper legal grounds for conclusion that petitioner is a "token employer". The petitioner has met the burden of evidence that it will be the employer, in fact, of the beneficiary.



    B. SAMPLE RFE RESPONSE or AAO APPEAL LANGUAGE
     

    The RFE Misinterprets the "U.S. Employer" Requirement (8 CFR 214.2(h)(4)(ii))
    "Specialty Occupation" of the Work Performed at Client Sites - Ongoing Control over Employment
    RFE Misinterprets the "U.S. Employer" Requirement (8 CFR 214.2(h)(4)(ii))

    COMMON LAW ISSUES
     

    Doctrine of Control Found In Common Law Does Not Support USCIS Position Regarding Requirements for Complete Itineraries and Third-Party Contracts
    Common Law Does Not Presume Employees Assigned to Third-Party Work Sites Are Not Under the Control of their Employers
    Application of Defensor Dicta Contrary to Law and Regulation

    CONTRACT LAW
     

    Contract Law Determinative: USCIS Interpretation of Third-Party "Control" of Employment Ignores the Binding Effect of Employment Contract and Privity of Contract
    Contracts Presumed to be Valid, Binding, and Exclusive of Control by Third-Party Interests
    Employment Contract Has Non-Compete Clause Which Specifically Forbids Beneficiary to Accept Employment by Third-Party Clients
    Waiver of Common Law Rights and Duties By Contract
    Privity of Contract Is Generally Unaffected by Third-Party Arrangements
    "No-Privity" Rule for Subcontractors
    Third-Party Intrusion Upon Contract is a Breach of Contract
    Employee-Independent Contractor Distinction
    Right to Supervise not the Actual Exercise of Control Determines a Valid Employer-Employee Relationship Under Regulations

    C. DOCTRINE OF AGENCY
     

    USCIS Assumption of Agency Unfounded: Enforcement of Implied Contract Discouraged
    Employee or Independent Contractor - The 10-part Test in the Restatement (Second) of Agency, Section 220
    Actual History of H-1B or L-1B Specialty Work Performed Supports Conclusion that Nature of H-1B Employment By the Same Firm Will Continue to be in a Specialty Occupation
    Preponderance of the Evidence Supports Approval of the Petition - Mere Fact that Petitioner Places H-1B Workers at Client Sites is No Reason to Doubt Veracity and Accuracy of Petitioner's Representations.
    Reviewing Court Would Owe No Particular Deference to USCIS Definitions or Standard of Evidence Not Based in Published Regulations

    D.USCIS TEST FOR "CONTROL" DOES NOT DISTINGUISH EMPLOYEE FROM INDEPENDENT CONTRACTOR: No Single Factor is "Decisive" in Definition; Alternative Multi-Factor Legal Standard Should Apply
    E. USCIS STILL LACKS AN ACCURATE, RIGOROUS, AND USABLE DEFINITION OF OPERATIVE TERMS: "Control", "Employer", "Employee", "Independent Contractor", and "Agent", and Fails to Distinguish Between Them 1. Defensor does not Apply a Rational Definition of Control - No Meaningful Distinction Drawn Between "Supervision" and "Control" of H-1B Worker
    F. IRS DEFINITIONS

    IRS Twenty-factor Test
    IRS Abbreviated Test of Independent Contractor vs. Employee
    IRS Status Reporting Definition

    G. TORTS LIABILITY - A Legal Indicator of the Employer-Employee Relationship
    H. THE PLAIN-LANGUAGE DEFINITION
    I. THE THIRD STEP IN THE ALTERNATIVE ANALYSIS - Employer or Agent?
    J. OTHER LEGAL ISSUES RELATED TO DEFENSOR AND NEUFELD

    "Speculative Employment" Not Found in Law; Agency's Reliance on Phantom Regulations and Rejection of Definitive Interpretation on Itineraries
    Agency Interpretation Contrary to Congressional Intent
    HISTORY OF USCIS POLICY REGARDING "COMPLETE ITINERARY" - Implementation of Defunct Proposed Rules Without Final Publication
    VIOLATES APA "LOGICAL OUTGROWTH" RULE: Application of Standards Amounting to Substantive Agency Rules Without Publication of Final Agency Rules Violates APA Requirements.
    Evidentiary Requirements Under Neufeld Memo Imposed Without Meeting APA Requirements for Notice and Comment; Violate , Violate Chenery II Principles, and Contrary to Raungswang and Patel Line of Decisions
    Adverse Impact of the Application of USCIS Dicta Derived from Discarded Proposed Regulations Regarding Evidence of "Control" and "Complete Itineraries" Requirements
    Unreasonable to Require Full Itinerary Six Months Prior to First Possible Start Date
    Petition Was Approvable at the Time of Filing Under 8 CFR 103.2(b)(1)
    Unfounded Revocations

    The Regulatory Standard for H-1B Revocation
    The NOIR Fails to State Substantial Evidence that Support the Grounds for Revocation Cited
    Reviewing Court Would Show Decision No Particular Deference - Power to Revoke Non-immigrant Visa Petition Not Statutory
    Notice Not Consistent with OI "Clearly Compelling Circumstances" Standard
    Spate of Recent Revocations of Immigrant Visa Petitions
    Developing Issues of Application of Neufeld to LCA Compliance and Revocations



    CHAPTER 2. LITIGATION ISSUES
    A. APPEALS TO THE AAO AND FEDERAL COURTS
     

    APA Presumption of Reviewability
    APA Actions: Prerequisites and Due Process Issues

    Final Agency Action or de facto Rule or Binding Norm
    Final Agency Action Must Have Legal Force or Practical Effect
    Right of Review of Persons Adversely Affected or Aggrieved
    Continued Judicial Review of Constitutional Claims or Questions of Law After REAL-ID
    The APA found to extend to H-1B matters
    v APA Actions Distinct From Due Process and Equal Protection Complaints Under the Fifth and Fourteenth Amendments


    The Rational Basis Standard
    The Invidious Discrimination Standard
    Congressional Intent
    Combined Standard
    Arbitrary and Capricious Decision-making

    B. EVIDENTIARY ISSUES
     

    Importance of Sufficiency of the Administrative Record
    Higher Burden of Proof in "Doubtful or Marginal" Cases
    The Effect of Minor Discrepancies and Factors Indicating Alleged Credibility Issues Not Raised On the Record
    Unreasonable RFEs: USCIS Demands for Contracts with End-User Clients, Other Third-Parties, and Other Unreasonable Agency Evidentiary Demands
    Denial Based on Failure to Produce Fully-detailed Itinerary Unreasonable
    Unreasonable Demands for Long-term Itinerary Distinguished From Requirement to Document Existence of Initial H-1 Caliber Position
    Sample Denial Based on Unsupported Assertion of "in-house project"
    Sample AAO Denial Based on Possible Change in Future Job Assignments
    Sample AAO denial Based Upon Unmet Demand for Documentation to Establish H-1B Caliber Requirement of the Position Offered
    Prima Facie Eligibility versus Clear and Convincing Evidence of Qualifications
    Avoid Reliance on Older Agency Policy Memos in Litigation


    C. THRESHOLD ISSUES: JURISDICTION, VENUE, STANDING & RIPENESS

    Jurisdiction - CDI Information Services: Dealing with the Presumption of Non-reviewability of USCIS Discretionary Determinations
    Venue
    Ripeness
    APA Final Agency Action Requirement- "De Facto Rule or Binding Norm"
    Additional Requirementsfor a Federal Injunctions: Showing of Substantial Damages or Imminent Harm


    D. LITIGATION ISSUES - Non-Discretionary Grounds of Appeal

    Background to Constitutional Claims - The Yick Wo Case (1886)
    There is no Discretion to Discriminate: Are Indian Outsourcing Companies being Treated as the Chinese Laundries of the 21st Century?
    THE CHENERY II "INFORMED DISCRETION" STANDARD: Rulemaking by Adjudication Valid Only When the Agency Exercises Expert Judgment Applied to Limited Cases.
    CHENERY II: Change in Substantial Agency Rules Without Notice and Comment is Restricted to a Case the Administrative Agency "Could Not Reasonably Foresee"
    Chevron Deference Standard: No Deference Accorded Unless Agency Action has "Force of Law"

    CHAPTER 3. L-1 ISSUES A.OVERVIEW
    B. HISTORY
    C.LEGAL AUTHORITIES
    D.LEGAL ISSUES
    E. THE GSTECHNICAL SERVICES CASE

    USCIS finds that IBM Subsidiary Is Not a "Real Employer"
    The "Puleo Memo" - Is It Binding on Adjudicators?
    Excerpt of GST Decision (AAO)
    May L-1B Workers Still Be Stationed Outside the Petitioner's Own Office?

    F. L-1B APPEALS ISSUES

    Deference Not Owed Ad Hoc Agency Policy
    USCIS Interpretive Rules Do Not Carry the "Force of Law"
    The Effects of Misinterpretation of the Specialized Knowledge Definition
    Other Threshold Issues - Injunctions
    Higher Burden of Proof in "Doubtful or Marginal" Cases
    Extract of GST Decision - Demand for Third-Party Contracts
    USCIS Worksite Enforcement
    Deference Normally Given to Agency Interpretation of its Own Regulations
    Abuse of Discretion Standards
    Litigation Options and Choices
    Conclusion

    CHAPTER 4. PERM LABOR CERTIFICATION ISSUES
    A.OVERVIEW: Background to Fragomen v Chao:

    Issues and Related Litigation Points
    Sharp Declines in Employment-Based Immigrant Applications
    The Longer-term Costs of Restriction of Employment-Based Immigration

    B. HISTORY
    C.LEGAL AUTHORITIES
    D.LEGAL ISSUES

    IS THE PERM REGULATORY SCHEMA CONSISTENT WITH STATUTE, CONGRESSIONAL INTENT, AND APA REQUIREMENTS?
    STRATEGIES FOR SELF-EMPLOYED ENTREPRENUEURS AND ALTERNATIVES TO LABOR CERTIFICATION

    CHAPTER 5. INTERMITTENT AND PART-TIME ALIEN COMMUTER L-1 VISAS
    A. Description, p. 2
    B. Purpose of the Category, p. 2
    C. Limitations, pp. 3-4
    D. Detailed Qualifications and Definitions, pp. 4-5
    E. Tax and Withholding Issues for L-1 Non-Resident Aliens, pp. 5-6
    F. Immigration Consequences of a Change from Intermittent L-1 Employment, p. 7
    G. Taxation of U.S. Source Income - the "Commercial Traveler" Exception, pp. 7-11

    Applicability to L-1 Visa Holders, pp. 7-9
    NOTE: The Start-Up L-1 May Have Sec. 861(a)(3) Coverage as a Commercial Traveler, pp. 9-11

    H. Reporting and Withholding Requirements on U.S. Employers, p. 11
    I. Tax Withholding for Non-U.S. Workers Authorized for Employment., pp. 11-12
    J. Social Security (FICA) Withholdings, pp. 12-13
    K. Determining Tax Residence, pp. 13-14
    CHAPTER 6. B-1 IN LIEU OF H-1B
    CONTENTS:
    A. Description, p. 18
    B. Purpose of the B-1 Category, Generally, pp. 19-20
    C. Purpose of Subcategory: B-1 in Lieu of H-1B, pp. 20-26

    B-1 AVAILABLE WHEN OTHER NON-IMMIGRANT VISA POSSIBLE
    B-1 VISA HOLDERS - GENERALLY

    B-1 Consultants
    B-1 Service Contract Workers
    B-1 in Lieu of H-1B



    D. Operational Issues, pp. 26 - 33

    OPERATIONAL ISSUES IDENTIFIED AND RECOMENDATIONS RELATED TO BILLING FOR B-1 WORKERS
    Other Operational Issues and Recommendations Regarding B-1 Workers - Billing and Expense Accounting
    Assignments of Non-Immigrant Workers - The Use of a Mix of B-1, L-1 and H-1B to Cover "Gaps" in Compliance
    B-1, L-1 and H-1B Compliance Issues Identified and Shared Solutions for Compliance Issues
    Recommendations Regarding Assignments and Roles Allowed Various Categories of Non-immigrant Workers

    E. HISTORY OF INTERPRETATION OF B-1 LIMITATIONS, pp. 33-36
    F. B-1 Service Contract Workers: "Specialized Knowledge" Definition and the GSTechnical Services Ruling, pp. 36-39
    G. RELATED ISSUE OF CONTROL: Longer-Term Assignments to Client Sites, pp. 39-42
    APPENDIX II
    Chapter 7. E-3 Visas: Australia-U.S. Free Trade Agreement A. Description
    B. Purpose and Similarities with Other Visas
    C. E-3 Dual Intent
    D. E-3 Application Procedures

    Applying for a Visa With a U.S. Embassy or Consulate
    Applying for an E-3 Visa from Within the United States
    Period of Stay/Extension of Stay
    Change of Employment
    5. Dependents of E-3 Visa Holders

    E. Visa Reciprocity with Australia
    F. Payment of Fees
    CHAPTER 8. TN STATUS - "TRADE NORTH AMERICA VISA"
    A. Description
    B. Purpose and Similarities with Other Visas
    C. Sec. 214(b) Issues Bona Fide Nonimmigrant Intent

    Bona Fide Nonimmigrant Intent and Temporary Entry
    FAM Interpretation: Immediate Visit Must be Temporary, but Future Immigrant Intent Permissible

    D. TN Renewal Applications at the USCIS Service Center

    TN Processing Times and Fees
    Initial TN Application - Documentary Requirements and Fees

    E. Problematic TN Categories

    Management Consultant - Issues and Solutions
    Computer Systems Analysts - Issues Over Degrees

    F. Overcoming TN Grounds of Denial
    G. Effect of Form I-275, Request to Withdraw Application for Admission
    APPENDIX I - NAFTA TN Visa Regulations
    APPENDIX II -- NAFTA Handbook
    CHAPTER 9. EB-1-3 VISAS: MULTINATIONAL EXECUTIVES AND MANAGERS
    A. Description
    B. Purpose and Similarities with Other Visas

    L-1A Intracompany Transferee
    EB-1-1 Extraordinary Ability in Business
    O-1 Nonimmigrant "Aliens of Extraordinary Ability
    Schedule A, Group II and Second Preference National Interest WaiversINA 203(b)(1)(A)(iii).

    C. EB-1-3 Eligibility Requirements and Definitions

    Basic Requirements: Certain Multinational Executives and Managers
    Qualifying Multinational Relationship
    Managerial or Executive Capacity

    D. Functional Managers APPENDIX I - Adjudicator's Field Manual, 22.2 Employment-based Petitions (Forms I-140)
  3. Comprehensive Immigration Reform (CIR) bills pending for US House and Senate

    One of America's strengths is the fact that it is an immigrant country, with family and commercial ties around the world.  It remains a country of vast human and natural resources, where people with a vision can make new businesses flourish.  This is unlikely to change in any fundamental way for several more years. This presents an opportunity for those with ingenuity and a willingness to take risks; at a time when a herd of competitors may cut and run, many believe this is the time to expand.    

    Recent U.S government reports show a lower demand for U.S business immigration compared to past years.  Months after the annual H-1B visa lottery, there are still lots of visa numbers available.  Demand for H-1B and other business visas in FY2009 was down by at least 15% overall from a year earlier.  Processing times in some cases are now shorter.  This presents an opportunity for consulting firms that still see an opportunity to pick up business in the U.S.

    American companies concerned with bottom-line savings, continue as before to concentrate on core business, outsourcing back-office operations offshore.  We believe that in-sourcing and near-sourcing will become an increasingly important part of most company's business models in the near future.  We have a White Paper, detailing the current situation and demand for H-1B and other U.S. business visas during the last decade available for inspection on our website.  

    The U.S remains the largest single market in the world for Information Technology, BPO, IPO and LPO services.  It is also becoming one of the most difficult countries to transfer essential foreign staff, particularly for companies that employ workers in a dual-tier business model.   Navigating U.S immigration laws in the IT consulting industry has become a challenge that only a few highly-specialised law firm, such as FLG can undertake successfully.  
    The U.S House and Senate both have Comprehensive Immigration Reform (CIR) Bills pending. These contain some provisions that would not be favorable to the business immigration community.  However, the present political environment does not seem favorable to passage of CIR in 2010. Nonetheless, we anticipate that the U.S. Immigration system will continue to change and will become more selective.  We are working with our clients to meet their changing regulatory and compliance needs.  Companies will have to adjust their business models, and we anticipate that in-sourcing and near-sourcing will become more prevalent in the IT consulting industry.
  4. The Neufeld H-1B Memo: Legally Enforceable Policy Directive or Grounds for Law Suit?


    The Neufeld H-1B Memo:  Legally Enforceable Policy Directive or Grounds for Law Suit?: A Position Paper by Rami D. FakhouryTP[1]PT and Mark LeveyTP[2]PT











    UBACKGROUND

    On January 8, 2010, USCIS issued a directive that is of importance to companies that utilize the H-1B program, particularly firms that place non-immigrant workers at client sites or have owners working on H-1B or L-1 visas.   The memo to Service Center Directors was written by Donald Neufeld, Associate Director Service Center Operations, hereinafter, the "Neufeld memo" .TP[3]PT 
    The Neufeld memo outlines new guidance to USCIS officers at Service Centers processing H-1B applications, and also signals a new focus for the agency's efforts to regulate outsourcing and so-called Job Shops.  It has also aroused concerns about what appears to be new restrictions on non-immigrant visas for upper managers who have an ownership interest in petitioning companies.  The Neufeld memo is important to all H-1B employers because it lays out an expanded list of documents in several categories that companies will now have to provide with initial petitions for H-1B workers.
     Significantly, the Neufeld Memo identifies a number of categories of outsourcing applications that the Service will approve and a list of documents that will be required.  It also describes several scenarios involving types of cases Service Center examiners should not approve, and provides what the agency now claims to be a legal rationale for how they are to make these decisions. 
    In addition to heightened documentary demands, the memo instructs examiners how they should deal with the issue of employer "control" over the work of H-1B beneficiaries assigned at third-party client sites.  While some of these issues are not new, this is a significant restatement of how USCIS will treat certain categories of applications, and a warning that the agency will be requiring all applicants to address and document issues related to control.  Finally, and of greatest concern to some observers, it communicates that USCIS will also be more strictly enforcing rules against the self-employment of investors, the hiring of independent contractors, and will be looking at certain indicators that H-1B petitioners are actually employment agencies, and will deny those determined to be operating outside the traditional "employer- employee relationship." 
    The memo has raised questions about the legality of what some comments see as new USCIS policies restricting eligibility for non-immigrant visas, potentially in the L-1 as well as H-1B category, of upper managers with a proprietary interest in the petitioning firm.  The American Immigration Lawyers Association (AILA) issued the following statement on that point, which calls on the agency to reverse the Neufeld directives that, according to AILA, violate "the intent of Congress in the INA as well as longstanding agency precedent and policy."  The AILA response is below:

    "The Neufeld Memorandum, the AAO's recent non-precedent decision and the adjudications at the Service Centers that are applying these decisions to current filings seek to overturn over fifty years of consistent precedent and regulatory interpretation to categorically deny eligibility for benefits to an entire class. Moreover, this longstanding line of precedent decisions is entirely consistent with the intent of Congress, which has amended the INA numerous times since the first decision in Matter of M, but has never taken action to specifically exclude working owners as beneficiaries of employment-based nonimmigrant and immigrant petitions irrespective of the degree to which the working owner controlled the petitioning entity. AILA urges USCIS to immediately rescind the Neufeld Memorandum, and issue a new policy memorandum that clearly sets out the agency's official position on this issue, provides a correct interpretation of the Darden, Clackamas and Yates decisions, and upholds the intent of Congress in the INA as well as longstanding agency precedent and policy. AILA believes this memorandum should include all employer-sponsored immigrant and nonimmigrant visa petitions, state that under Yates the Service must not resort to the common law definition of employee, that it is the agency's position, based on Congressional intent and longstanding precedent, that working-owners are employees for all such petitions and that any required employer-employee relationship is satisfied where the petitioner is a U.S. legal entity." Letter to USCIS dated Jan. 26, 2010; AILA InfoNet Doc. No. 10012760.

    UANALYSIS

    A.  Evidentiary Requirements Under Neufeld Imposed Without Meeting APA Requirements for Notice and Comment
    While it does not articulate entirely new policy, the Neufeld memo continues and amplifies an alarming trend toward USCIS departure from lawful regulatory requirements under the Administrative Procedures Act (APA) that agencies publish significant policies with broad application that deviate from published rules and procedures. 
    First, there are things that have not significantly changed by issuance of the Neufeld memo.  Under the APA, federal agencies and departments have flexibility in the way they can regulate.  Agencies can make rules either through publication of binding regulations or by a case-by-case adjudications method.  Both approaches to rule-making are perfectly acceptable pursuant to the Supreme Court's seminal  1947 Chenery II decision; that case sets out the original ground rules for such matters, allowing agencies a choice, but the decision also imposed limits on how rule-making may be done. For instance, under the Chenery principles, the agency may not issue case-by-case rulings that violate a previous published rule, and rulemaking by adjudication is only permitted to affect a small, specific class of applicants.  Any rule that has more general application must be published under the APA "notice and comment" requirement.  [5 U.S.C. Sec.  553]   Unless and until the agency eventually publishes its new rule in The Federal Register it does not have force of law.  Even the most deferential standard possible, embodied in the Chevron decision, mandates that agency decisions are not entitled to deference by the courts unless they hold the "force of law."TP[4]PT   The burden is on the agency to establish the rationality of such an informal interpretation under an older Skidmore standard, "according to its persuasiveness."TP[5]PT
    Recent decisions interpreting Chevron limit "Chevron deference" to agency rulings derived by APA 553  formal "notice and comment" process, and withhold it from more informal types of agency decision-making by the agency.  The vast majority of USCIS and DOL rulemaking is de facto rules and binding norms, not published regulations.  The limits on the use of the informal approach in the context of immigration have been interpreted in a line of federal decisions as follows:
     In Raungswang v INS, 591 F.2d 39 (9PthP Cir. 1978)TP[6]PT the Ninth Circuit held that legacy INS had abused its discretion in denying the investor visa petition by adding requirements without allowing for notice.  In that case, the panel considered the appropriateness of new requirements imposed through adjudication by the Board of Immigration Appeals on investor visa immigrants beyond those expressly stated in the then pertaining regulations.  The Circuit found informal rulemaking in that instance to be impermissible, applying the following analysis:
    We are aware that, as the INS argues, courts must give "great deference" and "controlling weight" to an agency's interpretation of its own regulations. E. g., United States v. Larionoff, 431 U.S. 864, 872, 97 S.Ct. 2150, 53 L.Ed.2d 48 (1977); Udall v. Tallman, 380 U.S. 1, 16-17, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965). That doctrine is inapplicable, however, when the agency's interpretation " 'is plainly erroneous or inconsistent with the regulation.' " United States v. Larionoff, supra, 431 U.S. at 872, 97 S.Ct. at 2156 (quoting Bowles v. Seminole Rock Co., 325 U.S. 410, 414, 65 S.Ct. 1215, 89 L.Ed. 1700 (1945)). We have thus refused to defer to an agency construction that "is clearly contrary to the plain and sensible meaning of the regulation." Hart v. McLucas, 535 F.2d 516, 520 (9th Cir. 1976). What is clear in this case is that the interpretation of the INS is contrary to the plain language of the regulation, and that there was no reason for Mrs. Ruangswang to expect, when she sought to comply with the regulation, that the requirements for receiving an adjustment of status would be anything other than the objective criteria set forth in the 1973 regulation.
    17
    Hence, under principles of agency interpretation, the Board's application of the law cannot be sustained. The objective criteria of the 1973 regulation were clearly met by Mrs. Ruangswang. There simply is no room for the agency to interpret the regulation so as to add another requirement.
    There is a second element applied by the Circuit in the Raungswang analysis [18-22].  The court ruled INS may not make use of informal rulemaking through adjudications "to change course in midstream" where the departure from previous agency practice has an adverse consequence on a party, and where the party had reliance on the previous rule:
    Our review of whether the proper law was applied, however, does not end when we determine that the added requirement is not justified by agency interpretation. We must still consider whether the Board may establish the standards that it sought to apply by the adjudicatory proceedings in this case and have them bind Mrs. Ruangswang.
    Through a series of cases commencing with its second decision in SEC v. Chenery Corp. (Chenery II), 332 U.S. 194, 67 S.Ct. 1575, 91 L.Ed. 995 (1947), the United States Supreme Court has held that administrative agencies may properly use adjudication to "announc(e) and (apply) a new standard of conduct," Id. at 203, 67 S.Ct. at 1580. In NLRB v. Wyman-Gordon Co., 394 U.S. 759, 89 S.Ct. 1426, 22 L.Ed.2d 709 (1969), Justice Fortas, speaking for a plurality of four, stated that although the NLRB could not, in light of the Administrative Procedure Act, establish binding prospective rules by adjudication, it could establish a new standard of conduct that would be binding on the parties before it in any particular case, and that such adjudications could have stare decisis effect.
    20
    More recently the Court again considered this question, and, relying heavily on the two former cases, held that the adjudicative forum can often be used to announce new principles applicable to the specific parties before the NLRB in particular cases, even if the principles involve a change from past policies. NLRB v. Bell Aerospace Co., 416 U.S. 267, 290-95, 94 S.Ct. 1757, 40 L.Ed.2d 134 (1974). The Court cautioned, however, that "there may be situations where the Board's reliance on adjudication would amount to an abuse of discretion or a violation of the Act . . . ." Id. at 294, 94 S.Ct. at 1771. The Court suggested that the "adverse consequences ensuing from . . . reliance (upon the NLRB's past decisions may be) so substantial that the Board should be precluded from reconsidering the issue in an adjudicative proceeding." Id. at 295, 94 S.Ct. at 1772. Adjudication might also be inappropriate where "some new liability" results from "past actions which were taken in good-faith reliance on Board pronouncements," or where "fines or damages" are involved. Id.
    21
    While the Court favors, whenever possible, the use of prospective quasi-legislative rule-making powers to formulate new standards rather than ad hoc adjudication, See, e. g., Chenery II, supra, 332 U.S. at 202, 67 S.Ct. 1575; NLRB v. Majestic Weaving Co., 355 F.2d 854, 860 (2d Cir. 1966), we have not received definitive limits on agencyHU6UH use of adjudicative proceedings to change course in midstream. We are, however, convinced that what the Board seeks to do in this case is beyond the bounds of that which is permissible under Bell. The adverse consequences voluntary departure at best, and deportation at worst are certainly substantial. In the sense that the requirement added to the 1973 regulation prevents an adjustment of status, there is some new liability. Finally, if there was good faith reliance on the 1973 regulation, Bell militates against allowance of the adjudication method.
    Following Ruangswang, the 9PthP Circuit further limited the ability of INS to informally expand the reach of its regulations by adjudications in its subsequent ruling, Patel v. INS.  As the Board of Immigration Appeals ruefully observed upon remand in Matter of Patel, 15 I&N Dec. 2842 (BIA, 1980)TP[7]PT:
    Subsequently, in Matter of Wang, 16 I&N Dec. 711 (BIA 1979), another case arising in the Ninth Circuit, we distinguished the Ninth Circuit's Ruangswang opinion holding that an alien who had made an investment more than a year after Heitland was decided had had adequate notice of its
    requirements and had to comply with them. However, the Ninth Circuit has recently rendered another decision which holds that the Heitland requirements cannot be added to the terms of the regulation even where there has been ample notice. Patel v. INS, 638 F.2d 1199 (9PthP Cir. 1980)  Accordingly, since the present case arose in the Ninth Circuit, the Heitland requirements will not be applied in determining whether the respondent has established eligibility for classification as an investor.  Consequently, on the basis of the immigration judge's finding that the respondent has satisfied the specific criteria set forth in 8 C.F.K. 212.8(b)(4), we conclude that the respondent is eligible for investor classification.
    As the BIA notes, the Patel decision is very significant inasmuch as it holds that the element of lack of notice is not the sole ground upon which abuse of discretion may be found in such cases.  Another impermissible practice, as the court finds in Patel, is the application as dicta of rules discarded from previous regulations that do not appear in those actually published as final regulations.   The Circuit observes in the Patel ruling [9]:

    After the promulgation of this new regulation in 1973, the Board decided Heitland, supra, 14 I. & N. Dec. 563, a case arising under the "substantial amount of capital" requirement of the pre-1973 regulation. Heitland overruled previous Board interpretations of "substantial," and stated that the alien's investment "must tend to expand job opportunities and thus offset any adverse impact which the alien's employment may have on the market for jobs ...." 14 I. & N. Dec. at 567. Although Heitland was concerned only with the pre-1973 "substantial amount of capital" requirement, it stated in dicta that the recently-promulgated and facially-objective 1973 regulation must also be construed to require that the investment expand job opportunities. Id. at 566-67. Thus, by adjudication, the Board attempted to add a requirement to the 1973 regulation which had been expressly discarded during its rule-making proceedings.HU2UH
    B.     USCIS is presently engaged in precisely the same agency practice that Patel barred.  Potential litigants are now adversely effected by the application by USCIS of dicta regarding heightened levels of evidence of control and "full itineraries" required of companies that outsource  H-1B workers to third-part client sites.   What, in fact, appears to have happened is that portions of Proposed Regulations published in 1998, but never published as Final Regulations, have been selectively implemented in order to carry out the Defensor decision and a de facto policy of restricting H-1B outsourcing.  This sort of selective implementation of proposed regulation is well outside the permissible limits of an agency's normal discretionary power to interpret its own regulations, and is ultra vires.  Once the regulatory process has commenced by publication of proposed rules, these can only be adopted by publishing final or superceding regulation.  Furthermore, application of such de facto rules or binding norms, where they conflict with existing law, regulation, agency rules or binding norms is an abuse of discretion, and they may not be relied upon in adjudications.  They certainly deserve no deference by courts of review.  Meanwhile, both the and Patel cases remain good law and both are widely cited in subsequent cases across the circuits.The stated purpose of the 1998 proposed regulationsTP[8]PT was as follows:  to amend the Immigration and Naturalization Service's (Service) regulations to accommodate the needs of certain United States employers with respect to the filing of new and amended petitions for H-1B nonimmigrant workers. This rule was written in response to a number of complaints received from certain industries which asserted that the current H regulations contain requirements with which some U.S. employers cannot comply. In addition, the current regulations contain certain procedures which are burdensome to both the Service and to the public. Specifically, this rule proposes to amend the Service's regulation with regard to the submission of itineraries with certain H-1B petitions. [30421]
    Specifically, those proposed rules laid out new regulatory provisions for H-1B petitions. A regulatory change was proposed regarding the potential placement of a beneficiary at multiple client sites, the regulatory change proposed at 214.2(h)(2)(i)(B) read:Services or training in more than one location.--(1) H-1B petitions. An H-1B petition which require services to be performed or training to be received in more than one location must include, to the extent possible, a complete itinerary with the dates and locations of the services or training to be performed. The petition must be filed with the Service Center having jurisdiction over the place where the petitioner is located. The address which the petitioner specifies as its location on the petition shall be where the petitioner is located for purposes of this paragraph. If the petitioner has not yet determined all of the locations where the beneficiary might be employed at the time of filing, the petitioner must provide an itinerary of all definite employment and provide a description of any proposed or possible employment for the period of time covered by the petition. Petitions filed by an agent must also comport with 8 CFR 214.2(h)(2)(i)(F).[30421-22]    
    Of course, proposed regulations have no real effect until published in final form, and this provision did not make it into the Code of Federal Regulations.  See, APA, Secs. 552, 553.  The actual regulation currently reads:
    214(h)(2)(i)(B) Service or training in more than one location. A petition that requires services to be performed or training to be received in more than one location must include an itinerary with the dates and locations of the services or training and must be filed with USCIS as provided in the form instructions. The address that the petitioner specifies as its location on the Form I-129 shall be where the petitioner is located for purposes of this paragraph.  
    The requirement for submission of "a complete itinerary" for H-1B workers assigned to multiple worksites clearly did, however, become a de facto norm, but without the allowance for "to the extent possible" and without becoming regulation, as the APA would require.  In the present matter, the Service is imposing a burden of evidence in excess of what is consistent with the regulations, and even exceeds what was in the proposed regulations. 
    Instead, a general statement of job duties and itinerary along the lines of those specified in the Aytes and Crocetti memos is no longer acceptable to the agency, as the present denial at issue makes manifest.  Similarly gone by the wayside is the guidance offered in the Aytes memo regarding the factors that a Service Center adjudicator should consider in deciding the credibility of a petitioner's itinerary:
    The petitioner's past hiring should also be considered in determining whether the petitioner has met the itinerary requirement as discussed in the regulation. Certainly a company's demonstrated past practice of employing H-1B nonimmigrants in conformity with the statute and regulation should be given significant weight in determining whether the itinerary requirement has been met. [Aytes memo, Ibid.][IBID.]

    C.   Application of standards amounting to substantive agency rules without publication of final agency rules violates APA requirements.The Administrative Procedure Act (APA) sets forth the requirements for "informal rulemaking," the process generally used by agencies to issue legislative rules. The informal rulemaking process, "notice-and-comment rulemaking," requires that DHS first issue a notice of proposed rulemaking (NPRM) and provide an opportunity for public comment on the proposal before it can issue a final rule. APA 5 U.S.C. 553.  That process normally follows a three-step sequence of publication of proposed regulations, public comment, and finally publication of final agency regulations.  However, publication of final rules is not mandatory if the agency finds good cause to adopt a rule without prior public participation. 5 U.S.C. 553(b)(3)(B). The good cause requirement is satisfied when prior public participation is impracticable, unnecessary, or contrary to the public interest.   Where the agency determines that it will implement its interim rule as final regulations they must be "a logical outgrowth" of the Agency's interim rule.  
    Here, the petitioner does not object to the Agency's decision to not adopt its proposed 1998 amendments to the regulations at 214(h)(2)(i)(B).  DHS may choose to not implement its proposed regulations if they are not published in final form.  See Am. Iron & Steel Inst. v. EPA, 886 F.2d 390, 400 (D.C.Cir.1989) ("One logical outgrowth of a proposal is surely, as [an agency] says, to refrain from taking the proposed step."). However, USCIS in this case did more, and less --after taking the first step in its rulemaking, USCIS adopted only a select portion of it in such a way as to cherry-pick its original 1998 mandate, contradicting the original stated purpose "to accommodate the needs of certain United States employers with respect to the filing of new and amended petitions for H-1B nonimmigrant workers."  Once a rules change is proposed, it may be completed or abandoned, but never partially implemented in such a way as to significantly alter the meaning of the original proposal.  As the US Court of Appeals for the District of Columbia Circuit found in Environmental Integrity Project v. EPA,  425 F3d. 992 (October 7, 2003) at 16, this type of:
    "flip-flop complies with the APA only if preceded by adequate notice and opportunity for public comment.  Compare Alaska Prof'l Hunters ***'n, Inc. v. FAA, 177 F.3d 1030, 1034 (D.C.Cir.1999) ("When an agency has given its regulation a definitive interpretation, and later significantly revises that interpretation, the agency has in effect amended its rule, something it may not accomplish without notice and comment."), and Paralyzed Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579, 586 (D.C.Cir.1997) ("Once an agency gives its regulation an interpretation, it can only change that interpretation as it would formally modify the regulation itself: through the process of notice and comment rulemaking."), with Hudson v. FAA, 192 F.3d 1031, 1036 (D.C.Cir.1999) (stating agency may change its longstanding policies without notice and comment, so long as "there is no dispute as to the regulation's meaning"), and Syncor Int'l Corp. v. Shalala, 127 F.3d 90, 94 (D.C.Cir.1997) ("[I]nterpretative rules and policy statements are quite different agency instruments. An agency policy statement does not seek to impose or elaborate or interpret a legal norm. It merely represents an agency position with respect to how it will treat--typically enforce--the governing legal norm.").If USCIS desires to modify or implement the 1998 rules in this instance, the requirement for a NPRM is mandatory - a requirement the agency itself recognized in its publication years ago of the Proposed Rules.  The agency may not now plausibly argue that rulemakings are exempted as mere "interpretation" or for "good cause" ("impracticable, unnecessary, or contrary to the public interest;" e.g., for such things as "emergencies"). In this case, clearly USCIS cannot now, eleven years later, claim that there is an emergency, or that it would be contrary to the public interest to delay formal publication of the rule.
    Similarly, a member of the public could not have anticipated that the 1998 proposal would result in the de facto rule, thus the APA requirements have not been satisfied.  That proposal expressly allowed an exception for production of itineraries to "the extent possible."  In fact, as the present matter illustrates, the agency is imposing on the petitioner an impossible or impractical burden for itineraries that detail unforeseeable future assignments. The de facto rules also defeat the purpose stated for the 1998 proposals, which were "written in response to a number of complaints received from certain industries which asserted that the current H regulations contain requirements with which some U.S. employers cannot comply."  The de facto rule and current actual agency practice do not even suggest a course of action similar to the proposed rule and, therefore, the de facto rule could not have been anticipated by the public.
    Furthermore, pursuant to the APA, the agency's decision has to be reasonable; and it must provide a basis for its decision and show how the rule will achieve its purpose. The APA notice-and-comment process recognizes that changes may be made to the proposed rule based on the public comments received, but the courts have required that any changes made in the final rule be of a type that could have been reasonably anticipated by the public - a logical outgrowth.  If the "logical outgrowth test" is not met, the agency needs to provide a second notice with an opportunity for public comment on the changes. The USCIS de facto rule violates APA 551(5), 553(c), because it was not a "logical outgrowth" of the Agency's proposed interim rule and therefore did not comport with the requirements of notice-and-comment rulemaking. See Sprint Corp. v. FCC, 315 F.3d 369, 375-76 (D.C.Cir.2003); Kooritzky v. Reich, 17 F.3d 1509, 1513 (D.C.Cir.1994).
    Once the comment period closes and the agency has reviewed the comments received and analyzed them, the agency has only three options: the agency may proceed with the rulemaking proposed, issue a new or modified proposal, or withdraw the proposal.  It may not partially implement the delayed rule in such a way that it evades the "logical outgrowth test."  Before issuing a final rule, the agency makes any appropriate revisions to the various supporting analyses prepared for the NPRM.  The final rule may be published in the Federal Register or personally served on affected interests. 
    Finally, the provisions contained in a final legislative rule cannot be made effective in less than 30 days after final publication, unless it is granting an exemption, relieving a restriction, or for "good cause," which includes such things as emergencies.  Sometimes agencies will set implementation or compliance dates that are later than the effective date of the rule.  This may be because the rule is being implemented in stages following its effective date, because the agency may want to allow compliance with the new rule before it is required, or for other reasons.  None of these latter exceptions apply in this matter.
    Furthermore, the agency's construction of its H-1B and L-1 rules fails the older Skidmore standard of deference test articulated as a four-factor test (which echoes Chenery), examining: (1) the thoroughness of the agency's investigation; (2) the validity of its reasoning; (3) the consistency of its interpretation over time; and (4) other persuasive powers of the agency.TP[9]PT
    By no imaginable legal standard, therefore, do USCIS dicta such as its broad reliance on the Defensor decisionTP[10]PT  carry the force of law, and they further fail under other standards of deference.   The articulation of the same unpublished rules in the Neufeld memoTP[11]PT, while better reasoned, have the same fatal shortcoming.   Even where better argued, the effect of certain key Service policies still discriminate against certain forms of technical consulting services predominantly offered by firms based in India and China.  Restrictions on cross border services of this kind remains in violation of trade treaty commitments the U.S. has signed and ratified.  The  courts do not owe these dicta Chevron deference.  [See, Sec ___] There is no legitimate doctrinal reason why the courts should or would choose to defer to such a procedurally defective construction by the agency, particularly since they violate law as well as constitutional rights .   As this book will show at length, these dicta are neither rational nor consistent with Congressional intent.  Finally, they violate the rights of U.S. firms who have a cognizable interest in benefits available under law, and guaranteed by Treaty.  If USCIS does not move on its own to abandon or modify its stance on these and related issues, there is good reason to expect relief may be available in the courts.
    The main reason this sort of informal rulemaking has gone largely unchallenged in recent years is fear in an extraordinary era of draconian government power over foreign entities, an era that may be passing. After 9/11, employers and immigration lawyers groups were understandably and justifiably afraid that they, too, would be targeted for retaliatory action. 
    Indeed, the immigration bar has started to fight back, as occurred in 2008, after the Labor Department moved to audit all of the PERM labor certifications filed by Fragomen, Del Rey, Bernsen & Loewy, a prominent and respected national immigration firm that is also the largest PERM filer with hundreds of pending cases.  FDB&L is not shy about filing law suits against the government, and it often wins the cases it files, and, indeed, the Labor Department backed down. TP[12]PT  
    These flawed agency policies have done a great amount of economic damage, and there is a class of aggrieved parties with standing in the courts.  Dozens, perhaps hundreds, of companies have suffered serious economic and reputational losses, particularly in targeted industries, such as Indian IT consulting and foreign-based financial firms that receive discriminatory treatment by USCIS and other agencies.   Should there be class-action suit against the agencies on these and related issues, the class could be both sizable and formidable, including large multinationals and numerous small entities.
    D. Persons who operate independently as consultants and those who direct companies in the U.S. on H-1B and L-1 visas should be particularly concerned about the Neufeld Memo
    The Neufeld Memo concerns itself heavily with the side-issue of common law of agency and cites several Supreme Court decisions that deal with the distinction between agents and employers, employees and independent contractors, and executives and investors. 
    Persons who are self-employed and independent contractors may not self-petition in the H-1B and several other categories.  In addition, USCIS restricts the use of agents as petitioners to a handful of occupational categories, such as fashion models, and often has used "control" as a basis to challenge the "employer-employee relationship" and deny H-1B and L-1 workers assigned to client sites.  The renewed emphasis in the memo on factors such as documenting benefits and tax treatment of beneficiaries, employer provision of tools, and suggests that this is a developing area where the Service intends to more closely review petitions.   
    The Neufeld memo specifically identifies its doctrine of control in a 1991 Supreme Court decision, HTNATIONWIDETTU MUTUAL UTTINSURANCETTU CO. ET AL. UTTvTTU. UTTDARDENTTU 503 U.S. 318 ...UTH ("Darden").  The Court stated in Darden that since no one factor was decisive in determining the distinction between agent and employer, "all of the incidents of the employment relationship must be assessed and weighed."   USCIS has taken that out of context to impose an excessive and unreasonable burden of documentation to establish the mandatory employer-employee relationship.  However, USCIS is limited by its own regulations to the types of documents it can ordinarily demand to establish the qualifications of the beneficiary and to describe the nature of the proposed duties to those stated at 8 CFR 214.2(h)(2)(I)(B). [See, Appendix I, below]  The Service appears to be exceeding its own regulations with regard to demands for evidence in H-1B cases.
    Another case cited by Neufeld is HTCLACKAMAS GASTROENTEROLOGY ASSOCIATESTTU, P. C. UTTvTTU. UTTWELLSTTU 538 U.S. 440.UTH  ("Clackamas").  That 2003 decision dealing with the Americans with Disabilities Act (ADA) examines the question of whether a Director-Shareholder in a professional corporation is, indeed, treated under common law as an "employee" of that firm, and that the "common law element of control is the principal guidepost to be followed whether director-shareholder physicians in this case should be counted as 'employees.'"  This case is helpful and should be cited when the Service takes an overly-restrictive view in cases of proprietors petitioning as L-1, O-1 or EB-1-3 executives or managers.   The elements that this decision cites as key to the employee relationship are:

    "Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work
    "Whether and, if so, to what extent the organization supervises the individual's work
    "Whether the individual reports to someone higher in the organization
    "Whether and, if so, to what extent the individual is able to influence the organization
    "Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts
    "Whether the individual shares in the profits, losses, and liabilities of the organization." 
    One should expect that in executive, manager and director cases that USCIS will now require additional documentation of these elements, the last one being held as a contra-indicator of employee status.

    E.  The Neufeld memo is an extension of the older basis for USCIS requiring the element of Control, which is not substantially rectified or changed by the Neufeld memo
    Shortly after DHS took over legacy INS, examiners at USCIS Service Centers expanded the practice of issuing denials and Requests For Evidence (RFEs) in H-1B cases citing a Fifth Circuit case, TUDefensorUT v Meissner (2000, CA5 Miss) 201 F3d 384.
    That panel decision, rendered against a Mississippi nurse placement agency, reached the overly-broad conclusion that employers in outsourcing industries are not "true employers" but are merely "token employers," and thus the stated job requirements of companies that place H-1B employees at client sites are "irrelevant."
    The Defensor decision has, in turn, been taken by USCIS to justify imposition of excessive evidentiary burdens on outsourcing companies, particularly a requirement that consulting firms provide a copy of contracts with third-party clients and other normally privileged information to prove that the consulting work that will be done is and shall continue to be professional in nature.  Quite predictably, in many cases, potential H-1B sponsors and their third-party clients, sensing potential compliance risks, refuse to produce such documents.  The entirely foreseeable result has been a dramatic decline in the number of petitions for this type of case that have been filed in recent years, with major H-1B users exiting the U.S. market, moving operations offshore.   That has produced a broad potential class of adversely effected parties, including firms that provided support and services to H-1B using companies.
    With minor variations in wording, USCIS and the AAO have issued thousands of RFEs and denials that incorporate Defensor language. 

    F.   The Neufeld Memo does not affect a potential litigant's ability to appeal an adverse H-1B decision
    Release of Neufeld Memo is Reaffirmation of Status Quo and Not a New Published Regulation. Petitioners who have received denials based upon Defensor dicta or who may receive denials based in similar objectionable grounds under the recent Neufeld memo may still appeal their decisions to the AAO or move to the Circuit courts for review and remand for re-adjudication consistent with law and regulation, bearing in mind the six-year statute of limitation for suits against federal agencies.TP[13]PT. 
    Looking closely at the January 8, 2010 Neufeld memo, we find far more substantive similarities than differences with previous prevailing USCIS policy, particularly Defensor dicta, and most of the legal issues that arise from unlawful agency procedures in recent years still apply.
     As we observed above, release of the memo does not amount to withdrawal of reliance upon Defensor or publication of a new agency regulation, and the courts will not necessarily show the Neufeld memo any particular deference.TP[14]PT 
    While it is a somewhat more coherent exposition of de facto policy than was the Defensor decision, it does not present much of an actual change or improvement in H-1B procedures and requirements from the petitioner's standpoint.  Furthermore, the Neufeld Memo does not correct the USCIS practice of failing to publish regulations to reflect substantial and widely applied agency policy.  Finally, while it is the latest expression of de facto policy and binding agency norms, the memo has no controlling effect upon the AAO or even the actual practices of Service Center examiners.  The memo states it is only intended for guidance and may not be relied on for a benefit, but is codified in Adjudicators Field Manual (AFM), which is binding authority, so it clearly contradicts itself.TP[15]PT   Nonetheless, it is most certainly not a rule published in The Federal Register that might be owed judicial deference under APA standards.   USCIS has still not brought itself into conformity with APA "publish and comment" requirements for its departure from published H-1B regulations.   
    To recap appellate implications:
       the Neufeld Memo does not substantially correct improper previous agency practices in its instructions to USCIS examiners or with previous Service Center interpretation; 
       It does not much change USCIS de facto procedures or binding norms that aggrieved some firms, and the prospects for litigation remain pretty much as they were previously when the Service relied upon the Defensor decision for support of substantially similar policies;
       Passages of the case authority cited appear to be taken out of context;
       The memo is an attempt to bypass rule making procedures under the Administrative Procedures Act (APA);
       The Memo does not appear to follow the plain language in the regulations, which is higher binding authority;
       The memo is clearly directed at IT companies with discriminatory intent and effect;
       The memo may embolden examiners to flout regulations, and treat H-1B s with inappropriately elevated standards in a manner similar to National Interest Waivers, O-1s, EB-1 extraordinary ability alien petitions;
       The memo states it is only intended for guidance and may not be relied on for a benefit, but is codified in AFM, which is binding authority, so clearly contradicts itself.
        Finally, the memo distinguishes between the Right of Control and Actual Control, and requires a showing of both.   Nonetheless, the regulations state the petitioner only has to show a Right of Control to establish an "employer-employee relationship."





    TP[1]PT HTURami D. FakhouryUTH is the founding and managing member of the "AV" rated boutique Corporate and Business Immigration Law firm of the Fakhoury Law Group, P.C. His practice focuses on business-based employment immigration, particularly in the information technology, engineering industry, health care workers, investors, academics and individuals of exceptional ability.

    TP[2]PT Mark Levey has 20 years immigration-related experience as a case manager, editor and international consultant. He has worked for major D.C. law firms and abroad as a USAID prime contractor Subject Matter Expert on immigration. Mr. Levey has numerous publications related to immigration law and procedure, global trade in services, and regulatory reform.

    TP[3]PT  See, Donald Neufeld, Associate Director, Service Center Operations, DHS, USCIS, HQ 70/6.2.8, AD10.24,  Memorandum for Service Center Directors, "Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements", Additions to Officer's Field Manual (AFM) Chapter 31.3(g)(15)(AFM Update AD 10-24)(Jan. 08, 2010), linked at: Hhttp://www.ilw.com/immigrationdaily/news/2010,0521-neufeld.pdf


    TP[4]PT    See, UCHEVRON U.S.A., INC. V. NRDC, 467 U. S. 837, 842-45 (1984) .U  

    TP[5]PT    See, HUUNITED STATES V. MEAD CORP.UH, T533 U.S. 218 (2001)T 185 F.3d 1304, op. cit. , HTUSkidmore v. Swift & Co.UTH, 323 U.S. 134 (1944).

    TP[6]PT  See,  HTUhttp://bulk.resource.org/courts.gov/c/F2/591/591.F2d.39.77-2375.htmlUTH


    TP[7]PT See, HTUhttp://www.justice.gov/eoir/vll/intdec/vol17/2842.pdfUTH 


    TP[8]PT  See, Federal Register/Vol. 63, No. 107/Thursday, June 4, 1998/Proposed Rules/pp. 30419-23, HTUhttp://ftp.resource.org/gpo.gov/register/1998/1998_30421.pdfUTH.

    TP[9]PT    See, HUCHRISTENSEN V. HARRIS COUNTYUH, 529 U.S. 576 (2000); op cit., Ibid..

    TP[10]PT    See,  HTUDefensorUTTU v Meissner (2000, CA5 Miss) 201 F3d 384 UTH.

    TP[11]PT  See,  Donald Neufeld, Associate Director, Service Center Operations, DHS, USCIS, HQ 70/6.2.8, AD10.24,  Memorandum for Service Center Directors, "Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements", Additions to Officer's Field Manual (AFM) Chapter 31.3(g)(15)(AFM Update AD 10-24)(Jan. 08, 2010), linked at: Hhttp://www.ilw.com/immigrationdaily/news/2010,0521-neufeld.pdf


    TP[12]PT  See, HUFRAGOMEN, DEL REY, BERNSEN & LOEWY, LLP v. CHAO et al.UH ,  DCDC,  Case No. 1:2008cv01387 (August 8, 2008); related, Department of Labor, 'U.S. Department of Labor auditing all permanent labor certification applications filed by major immigration law firm,' June 2, 2008. HUhttp://www.dol.gov/opa/media/press/eta/eta20080752.htmUH.


    TP[13]PT 28 U.S.C. 2401(a) states that "every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues."

    TP[14]PT One finds in a footnote attached to a Supreme Court decision cited at page 2. of the Neufeld memo an interesting  reference that may inadvertently point directly to the very limited degree of deference that Courts will show agency guidelines of this type.   See,  CLACKAMAS GASTROENTEROLOGY ASSOCIATES, P. C. v. WELLS 538 U.S. 440, 449, Ftn. 9.

    TP[15]PT  This memo makes it clear that the Neufeld directives are intended for "training and instruction purposes only."  In addition, USCIS binding policy memos bear a "P" in the title, which this does not. 
  5. The Neufeld Memo – New Ground Rules for H-1B Documentation (and a lot of the Same, Old Problems)



     The Neufeld Memo - New Ground Rules for H-1B Documentation (and a lot of the Same, Old Problems) 



    This Version Submitted January 19, 2010


    Copyright 2010 FLG/ ILW.COM




    EXECUTIVE SUMMARY

      Fakhoury Law Group produces occasional client alerts and background papers to alert clients to breaking news in the Immigration Law field. 
    This document outlines developments related to the release on January 8, 2010 of a USCIS Memo that is of importance to companies that utilize the H-1B program, particularly firms that may place non-immigrant workers at client sites.  The Memo was written by Donald Neufeld, Associate Director Service Center Operations.[1] 
    This document outlines new guidance to USCIS officers at Service Centers processing H-1B applications, and also signals a new focus for the agency's efforts to regulate outsourcing and so-called Job Shops.  The Neufeld memo is important to all H-1B employers because it lays out an expanded list of documents in several categories that companies will now have to provide with initial petitions for H-1B workers.
     Significantly, the Neufeld Memo identifies a number of categories of outsourcing applications that the Service will approve and a list of documents that will be required.  It also describes several scenarios involving types of cases Service Center examiners should not approve, and provides what appears to be a more solid legal rationale for how it makes these decisions. 
    In addition to heightened documentary demands, the memo instructs examiners how they should deal with the issue of employer "control" over the work of H-1B beneficiaries assigned at third-party client sites.  While some of these issues are not new, this is a significant statement of how USCIS will treat certain categories of applications, and a warning that the agency will be requiring all applicants to address and document issues related to control.  Finally, it communicates that USCIS will also be enforcing rules against the self-employment of investors, the hiring of independent contractors, and will be looking at certain indicators that H-1B petitioners are actually employment agencies, and will deny those determined to be operating outside the traditional "employer- employee relationship." 


    FAQs -  FREQUENTLY ASKED QUESTIONS ABOUT  ISSUES OF EMPLOYER "CONTROL" OVER H-1B WORKERS


    Q.  What are the attestations and/or documents that now need to be filed with H-1B petitions to demonstrate control?

    A. The memo signals that new filings of H-1B petitions will have to attest to, and where applicable, be accompanied by the following types of documents:
    A complete itinerary of engagements that specifies the dates of each service or engagement, the names and addresses of the actual employers, and the names and addresses of the establishment, venues, or locations where the services will be performed for the period of time requested;
    Copy of signed Employment Agreement between the petitioner and beneficiary detailing the terms and conditions of employment;
    Copy of an employment offer letter that clearly describes the nature of the employer-employee relationship and the services to be performed by the beneficiary;
    Copy of relevant portions of valid contracts between the petitioner and a client (in which the petitioner has entered into a business arrangement for which the petitioner's employees will be utilized) that establishes that while the petitioner's employees are placed at the third-party worksite, the petitioner will continue to have the right to control its employees;
    Copies of signed contractual agreements, statements of work, work orders, service agreements, and letters between the petitioner and the authorized officials of the ultimate end-client companies where the work will actually be performed by the beneficiary, which provides information such as a detailed description of the duties the beneficiary will perform, the qualifications that are required to perform the job duties, salary or wages paid, hours worked, benefits, a brief description of who will supervise the beneficiary and their duties, and any related evidence;
    Copy of position description or any other relevant documentation that describes the skills required to perform the job offered, the source of the instrumentalities and tools needed to perform the job*, the product to be developed or the service to be provided, the location where the beneficiary will perform the duties, the duration of the relationship between the petitioner and the beneficiary, whether the petitioner has the right to perform additional duties, the extent of petitioner's discretion over when and how long the beneficiary will work, the method of payment, the petitioner's role in paying and hiring assistants to be utilized by the beneficiary, whether the work to be performed is part of the regular business of the petitioner, the provision of employee benefits*, and the tax treatment of the beneficiary in relationship to the petitioner*;
    A description of the performance review process*; and/or
    Copy of petitioner's organization chart, demonstrating beneficiary's supervisory chain.
    The above requirements stated in the Neufeld memo are virtually identical to the demand-list of documents attached to a typical USCIS Request For Evidence (RFE) that Immigration Attorneys and clients have been receiving for years.  [* An asterisk denotes documents that were not commonly called for or provided previously] 
    This is a long list, and may seem an unduly burdensome requirement for additional documentation of "control" from H-1B employers with client site placements.  These   were previously most often seen in RFEs.  Now, the Service has articulated a requirement that these same documents be provided up front with initial H-1B filings, and is putting filers on notice that missing any of the eight listed elements will likely result in an RFE and a denial.

    Q.  What part of these documentary requirements appears to present a worrying new direction in H-1B enforcement?
    A.  Several elements stand out in the documentation  requirements stated in the Neufeld Memo

    A very close reading of the memo reveals USCIS citation of several court decisions that considered several key questions:
        when a beneficiary is actually an employee or an independent contractor,
        when a petitioning firm actually operates as an agent as opposed to exercising control a bona fide employer, and,
        the question of when is a director of a company actually employed as opposed to being a mere investor. 
    The decisions cited, the distinctions drawn in those decisions, along with several of the required documents listed in the memo, indicate that USCIS is looking more closely at the related issues of Self-employed Beneficiaries, Independent Contractors, and Agents as Petitioners.  We will examine these, below, in greater detail at pp. 7-8.

    Q.  What are the specific documents and elements that must now be demonstrated to enhance the chances that a petition will be approved or renewed under the new guidelines?
    A.  Here are some specific items identified in the Neufeld memo:
    1.    Contents of H-1B support letter

    -   Name supervisor, title, contract information, work location, frequency beneficiary reports to the supervisor, and how petitioning company exercises ongoing supervision  and control over the beneficiary.
    -   Mention petitioner has sole and exclusive authority to hire, promote, and fire the beneficiary.
    -   Mention any proprietary software, methodologies or tools utilized or developed by the petitioner as opposed to the third-party client or the foreign national, himself (NOTE: those that belong to the petitioner are weighed in favor of establishing the employer-employee relationship, while those provided by the third-party client indicate the petitioner may not have full control over the work; in addition, if the bulk of "tools and instrumentalities" are owned and brought to the job by the beneficiary,  this may indicate the beneficiary is an independent contractor, a factor which can also be used along with other factors to deny the petition.) 
    -   Mention any performance reviews that are conducted exclusively by the petitioner.
    -   Provide description of petitioner's performance review process.
    -  Describe how beneficiary's duties to be carried out are essential to petitioning company's core line of work
    - Describe direct and indirect company benefits and support the petitioning employer provides to the petitioner, such as paid education, paid or subsidized medical/dental, life or other insurance, job training, HR counseling, travel, transportation, childcare, and housing allowances, perks, and company leisure and community activities. 

    For managers, executives, directors or beneficiaries with equity interest in petitioning firm, specify the following:

    -    Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work either by employer's direct right of control or by right of partnership as specified in incorporation agreement.
    -    Whether and, if so, to what extent the organization supervises the individual's work, including the functional and project management authorities of others within the organization.
    -    Whether the individual reports to someone higher in the organization or must answer to other partners who may be able to combine to outvote the beneficiary.
    -    Whether and, if so, to what extent the individual is able to influence the organization and the functional and organizational limits thereupon.
    -    Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts.
    -    Whether the individual shares in the profits, losses, and liabilities of the organization (if a minority share, so state, if majority interest or joint venture, specify implied right of mutual veto and other constraints on powers of beneficiary, such as limits on powers specified in Articles of Incorporation or corporate by-laws.

    2. Include the employment offer/acceptance letter listing title and job duties of beneficiary, and make sure it is signed by both the petitioner and beneficiary.

    3.    Include organization chart listing the personnel above and below the beneficiary, and where all these individuals fall within the U.S. company

    4.   Include work itinerary (Scope of Work).

    5.   Include service agreement between petitioner and customer.

    -   Make sure there is language in the agreement that states the petitioner has "sole right to control the manner and means for accomplishing the services to be performed under the agreement" 
    -   If current existing agreement does not include this language, obtain amendment that incorporates this language
    -   Avoid any language in agreement that states services are to be provided by petitioner on an "as needed basis"

    6.     Letter from any third-party end customer, which has itinerary consistent with H-1B support letter, job title, duties, duration of project, states beneficiary is not an employee of the customer, and indicates the name of petitioner's supervisor to whom the beneficiary reports.

    7.    Neufeld Memo also lays out certain rules and procedures that will apply to the issuance of Requests For Evidence (RFEs)

    -       Examiners must specifically state the issue at hand
    -   Examiners must tailor RFE and request "specific illustrative types of evidence"
    -   Has potential to force examiners to do a better job reviewing evidence and may make them more accountable; may make it easier to respond to RFEs.

    8.    H-1B extension petitions and items to include to show maintenance of employer-employee relationship during prior H-1B period:

    -   All W-2s and paystubs for current year
    -   Copies of all of the beneficiary's time sheets with the petitioner or similar records of actual attendance at work
    -   Copies of the beneficiary's prior year's work schedule
    -       Copies of any promotion letters issued to the beneficiary by the petitioner
    -   Copies of any pay increase letters issued to the beneficiary by the petitioner
    -    Copies of any letters from petitioner to beneficiary transferring the beneficiary to a new work location
    -     Copies of any performance reviews of the beneficiary performed by the petitioner
    -     Evidence of any work product, achievements, bonuses, awards to the beneficiary (example:  e-mail communications acknowledging any milestones, achievements, etc.)
    -     Evidence of insurance or other cash value benefits provided to the beneficiary by the petitioner.



    Q.  What is the basis for the above list of required attestations and requirements?
    A.  The Neufeld memo lays out five scenarios of "valid employer-employee relationship," and three categories that are unacceptable for H-1B approval 
    The basis for requiring all these documents, particularly from companies that place  H-1B workers at client sites, is found by Neufeld in the common law principle of "control. " This amounts to an unstated acknowledgement by USCIS that previous USCIS policy interpretation lacked adequate legal support, as is explained in a section that follows at the bottom of this memo. 
    The criteria INS Service Center examiners will now use for determining whether the H-1B employer-employee relationship exists are stated by Neufeld as follows:

    Valid employer-employee relationship would exist in the following circumstances: [p.7]
    1)   Traditional Employment [Right to Control Scenario]
    2)   Temporary/Occasional Off-Site Employment
    3)   Long-Term/Permanent Off-Site Employment [Right to control specified and actual control exercised]
    4)   Long-Term Placement at a Third-Party Work Site
    5)   Agents as Petitioner - regulatory exception to No Exercise of Control Rule
    (Example given:  a runway model beneficiary with a modeling agency petitioner.  The third-party client fashion house is the "actual employer."   Nonetheless, an exception exists for "one who is traditionally self-employed or who uses agents to arrange short-term employment on behalf with numerous employers.")

    The following scenarios would not present a valid employer-employee relationship: [p.8]
    1)   Self-employed Beneficiaries [No separation Between Individual and Employing Entity; No Independent Control Exercised and No Right to Control Exercised]
    2)   Independent Contractors [Petitioner has No Right of Control; No Exercise of Control]
    3)   Third-Party Placement/"Job Shop" [Petitioner has No Right of Control; No Exercise of Control]


    Q.  Does this new policy mean that it is more likely that my company's petitions for H-1B workers will be denied?

    A.  That depends.  Release of Neufeld Memo is Reaffirmation of Status Quo H-1B Policies and Not a New Published Regulation

     First, we should observe that release of the Neufeld memo does not amount to publication of a new agency regulation.  Instead, it is a restatement of informal but binding policy USCIS has in fact been adopted and imposed on petitioners for several years.  The Neufeld Memo specifies that the petitioner must document four elements: 
    1) the "employer-employee relationship will exist between the petitioner and beneficiary,"
    2)  "establish that the employer has the right to control the beneficiary's work, including the ability to hire, fire, and supervise the beneficiary." 
    3) In addition, " The petitioner must also be responsible for the overall direction of the beneficiary's work. [8 CFR 214.2(h)(4)(ii)]
    4) Lastly, "the petitioner should be able to establish that the above elements will continue to exist throughout the duration of the requested H-1B validity period." 

    These elements will have already been documented or attested to previously in petitions submitted in recent years.  What is new about it is that the memo lays out a set of more coherent and extensive rules for qualifying companies that employ H-1B workers at client sites.  The memo also suggests that USCIS will look more closely at self-employed and independent contractors, groups that were previously barred from H-1B and several other visa categories.

    Q.  Why should persons who operate independently as consultants and those who direct companies in the U.S. on H-1B and L-1 visas be particularly concerned about the Neufeld Memo?
    A.  The Neufeld Memo concerns itself heavily with the side-issue of common law of agency and cites several Supreme Court decisions that deal with the distinction between agents and employers, employees and independent contractors, and executives and investors. 
    Persons who are self-employed and independent contractors may not self-petition in the H-1B and several other categories.  In addition, USCIS restricts the use of agents as petitioners to a handful of occupational categories, such as fashion models, and often has used "control" as a basis to challenge the "employer-employee relationship" and deny H-1B and L-1 workers assigned to client sites.  The renewed emphasis in the memo on factors such as documenting benefits and tax treatment of beneficiaries, employer provision of tools, and suggests that this is a developing area where the Service intends to more closely review petitions.   
    The Neufeld memo specifically identifies its doctrine of control in a 1991 Supreme Court decision, NATIONWIDE MUTUAL INSURANCE CO. ET AL. v. DARDEN 503 U.S. 318 ... ("Darden").  The Court stated in Darden that since no one factor was decisive in determining the distinction between agent and employer, "all of the incidents of the employment relationship must be assessed and weighed."   USCIS has taken that out of context to impose an excessive and unreasonable burden of documentation to establish the mandatory employer-employee relationship.  However, USCIS is limited by its own regulations to the types of documents it can ordinarily demand to establish the qualifications of the beneficiary and to describe the nature of the proposed duties to those stated at 8 CFR 214.2(h)(2)(I)(B). [See, Appendix I, below]  The Service appears to be exceeding its own regulations with regard to demands for evidence in H-1B cases.
    Another case cited by Neufeld is CLACKAMAS GASTROENTEROLOGY ASSOCIATES, P. C. v. WELLS 538 U.S. 440.  ("Clackamas").  That 2003 decision dealing with the Americans with Disabilities Act (ADA) examines the question of whether a Director-Shareholder in a professional corporation is, indeed, treated under common law as an "employee" of that firm, and that the "common law element of control is the principal guidepost to be followed whether director-shareholder physicians in this case should be counted as 'employees.'"  This case is helpful and should be cited when the Service takes an overly-restrictive view in cases of proprietors petitioning as L-1, O-1 or EB-1-3 executives or managers.   The elements that this decision cites as key to the employee relationship are:


    "Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work
    "Whether and, if so, to what extent the organization supervises the individual's work
    "Whether the individual reports to someone higher in the organization
    "Whether and, if so, to what extent the individual is able to influence the organization
    "Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts
    "Whether the individual shares in the profits, losses, and liabilities of the organization."  

    One should expect that in executive, manager and director cases that USCIS will now require additional documentation of these elements, the last one being held as a contra-indicator of employee status.


    Q.  What was the older basis for requiring the element of Control, and how does the Neufeld memo change things?
    A.  Shortly after DHS took over legacy INS, examiners at USCIS Service Centers expanded the practice of issuing denials and Requests For Evidence (RFEs) in H-1B cases citing a Fifth Circuit case, Defensor v Meissner (2000, CA5 Miss) 201 F3d 384.
    That panel decision, rendered against a Mississippi nurse placement agency, reached the overly-broad conclusion that employers in outsourcing industries are not "true employers" but are merely "token employers," and thus the stated job requirements of companies that place H-1B employees at client sites are "irrelevant."
    The Defensor decision has, in turn, been taken by USCIS to justify imposition of excessive evidentiary burdens on outsourcing companies, particularly a requirement that consulting firms provide a copy of contracts with third-party clients and other normally privileged information to prove that the consulting work that will be done is and shall continue to be professional in nature.  Quite predictably, in many cases, potential H-1B sponsors and their third-party clients, sensing potential compliance risks, refuse to produce such documents.  The entirely foreseeable result has been a dramatic decline in the number of petitions for this type of case that have been filed in recent years, with major H-1B users exiting the U.S. market, moving operations offshore.   That has produced a broad potential class of adversely effected parties, including firms that provided support and services to H-1B using companies.
    With minor variations in wording, USCIS and the AAO have issued thousands of RFEs and denials that incorporate Defensor language. 


    Q.  How does the Neufeld Memo affect my ability to appeal an adverse H-1B decision?
    A.   Release of Neufeld Memo is Reaffirmation of Status Quo and Not a New Published Regulation
    Petitioners who have received denials based upon Defensor dicta or who may receive denials based in similar objectionable grounds under the recent Neufeld memo may still appeal their decisions to the AAO or move to the Circuit courts for review and remand for re-adjudication consistent with law and regulation, bearing in mind the six-year statute of limitation for suits against federal agencies.[2]. 
    Looking closely at the January 8, 2010 Neufeld memo, we find far more substantive similarities than differences with previous prevailing USCIS policy, particularly Defensor dicta, and most of the legal issues that arise from unlawful agency procedures in recent years still apply.
     As we observed above, release of the memo does not amount to withdrawal of reliance upon Defensor or publication of a new agency regulation, and the courts will not necessarily show the Neufeld memo any particular deference.[3] 
    While it is a somewhat more coherent exposition of de facto policy than was the Defensor decision, it does not present much of an actual change or improvement in H-1B procedures and requirements from the petitioner's standpoint.  Furthermore, the Neufeld Memo does not correct the USCIS practice of failing to publish regulations to reflect substantial and widely applied agency policy.  Finally, while it is the latest expression of de facto policy and binding agency norms, the memo has no controlling effect upon the AAO or even the actual practices of Service Center examiners.  The memo states it is only intended for guidance and may not be relied on for a benefit, but is codified in Adjudicators Field Manual (AFM), which is binding authority, so it clearly contradicts itself.[4]   Nonetheless, it is most certainly not a rule published in The Federal Register that might be owed judicial deference under APA standards.   USCIS has still not brought itself into conformity with APA "publish and comment" requirements for its departure from published H-1B regulations.   
    To recap appellate implications:
       the Neufeld Memo does not substantially correct improper previous agency practices in its instructions to USCIS examiners or with previous Service Center interpretation; 
       It does not much change USCIS de facto procedures or binding norms that aggrieved some firms, and the prospects for litigation remain pretty much as they were previously when the Service relied upon the Defensor decision for support of substantially similar policies;
       Passages of the case authority cited appear to be taken out of context;
       The memo is an attempt to bypass rule making procedures under the Administrative Procedures Act (APA);
       The Memo does not appear to follow the plain language in the regulations, which is higher binding authority;
       The memo is clearly directed at IT companies with discriminatory intent and effect;
       The memo may embolden examiners to flout regulations, and treat H-1B s with inappropriately elevated standards in a manner similar to National Interest Waivers, O-1s, EB-1 extraordinary ability alien petitions;
       The  memo states it is only intended for guidance and may not be relied on for a benefit, but is codified in AFM, which is binding authority, so clearly contradicts itself.
       Finally, the memo distinguishes between the Right of Control and Actual Control, and requires a showing of both.   Nonetheless, the regulations state the petitioner only has to show a Right of Control to establish an "employer-employee relationship."

    CONCLUSION

    If you have questions about the Neufeld memo and related USCIS policies, or if you want to explore appellate options, the Fakhoury Law Group is ready to assist you.  You may find that while the issues are complex, and challenges facing H-1B employers remain formidable, your options for successfully achieving immigration goals are much wider than you previously believed.






    APPENDIX I



    A.   Regulatory Definition of the Term "Employer-employee Relationship"
    The Defensor dicta emerged as an attempt to fill the statutory vacuum of the term "employee" in such a way as to curtail benefits eligibility for H-1B workers at outsourcing companies.  The 5th Circuit decision effectively says that the Service need not accept the stated eligibility requirements by H-1B employers that outsource workers.  Instead, USCIS reads the decision to justify imposing a high burden of proof of the specialty nature of the employment at client sites than on other H-1B employers who keep their workers posted on-site.  Defensor has been cited many times to deny petitioners who cannot or will not provide sometimes staggering demands for evidence about specialty employment and employer control.   The Neufeld memo continues the movement away from the plain-language meaning of the statute and the regulations into results-oriented adjudications. 
    The INA quite simply states that an H-1B petitioner must be a "intending employer," and mentions nothing about making distinctions between companies that outsource beneficiary workers and those that don't. [8 USC Sec. 1101(a)(15)(H)(i)(B)]  The term "employee" for H-1B purposes is not defined in the Act.[5]
    The terms "employer", "employee" and "employer-employee relationship" found in the regulations are part of a brief and seemingly straight-forwardly worded passage.  Chapter 8, Sec. 214.2(h)(4)(ii) of the Code of Federal Regulations (CFR) defines a United States employer for H-1B purposes as follows:
    United States employer means a person, firm, corporation, contractor, or other association, or organization in the United States, which:
    1)   Engages a person to work within the United States;
    2)   Has an employer-employee relationship with respect to employees under this part, as indicated by the fact it may hire, pay, fire, supervise, or otherwise control the work of any such employee; and
    3)   Has an Internal Revenue Service Tax identification number. [emphasis added]

     With the Neufeld memo, the Service has continued to stray away from its own regulations.  Current USCIS doctrine bears little relationship with the regulatory definition of an H-1B employer contained in the operative phrase: "may hire, fire, supervise, or otherwise control the work of any such employee . . ."   The agency imposes elaborate tests for demonstration of control over the worker, and that is fundamentally at variance with standard of evidence provided by the regulation.  Even when the petitioner clearly demonstrates that it "supervises" the beneficiary, meeting the plain-language requirement of the regulation, USCIS still requires extensive documentation of control, even though control is merely an alternative element.  Even where the H-1B petitioner undeniably meets the first four elements, USCIS has interpreted this to mean that it can still impose a requirement for elaborate documentation of the element of control, and denies applications if this is not produced to its own satisfaction.  This is a clear abuse of discretion by USCIS.

    ###















    [1]  See, Donald Neufeld, Associate Director, Service Center Operations, DHS, USCIS, HQ 70/6.2.8, AD10.24,  Memorandum for Service Center Directors, "Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements", Additions to Officer's Field Manual (AFM) Chapter 31.3(g)(15)(AFM Update AD 10-24)(Jan. 08, 2010), linked at: http://www.aila.org/content/default.aspx?docid=30956 

    [2] 28 U.S.C. 2401(a) states that "every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues."

    [3] One finds in a footnote attached to a Supreme Court decision cited at page 2. of the Neufeld memo an interesting  reference that may inadvertently point directly to the very limited degree of deference that Courts will show agency guidelines of this type.   See,  CLACKAMAS GASTROENTEROLOGY ASSOCIATES, P. C. v. WELLS 538 U.S. 440, 449, Ftn. 9.

    [4]  This memo makes it clear that the Neufeld directives are intended for "training and instruction purposes only."  In addition, USCIS binding policy memos bear a "P" in the title, which this does not.  

    [5] See, 8 USC Sec. 1101, Definitions, http://www.law.cornell.edu/uscode/uscode08/usc_sec_08_00001101----000-.html; 
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