Two federal courts recently issued decisions in favor of H-1B employers that could have an impact on the adjudication of H-1B petitions, especially information technology (IT) firms and those that seek to place employees at third-party worksites. Below is a summary of each case and its potential effect on the adjudication of future H-1B petitions.
InspectionXpert Corporation v. Cuccinelli
In InspectionXpert, No. 1:19cv65 (March 5, 2020), U.S. Citizenship and Immigration Services (USCIS) denied an H-1B visa petition because the employer was willing to accept a candidate with a general engineering degree. USCIS determined that the degree requirement was too broad to qualify as a specialty occupation.
In 2017, the Trump administration issued the " Buy American and Hire American" (BAHA) executive order directing USCIS to implement policy changes to protect U.S. workers and to "suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid" employees. As a result, USCIS shifted toward a more rigid interpretation of what qualifies as a specialty occupation.
Prior to BAHA, the agency generally recognized a candidate as eligible for an H-1B visa as long as the candidate had a degree related to the role. For example, a candidate for a marketing position might have qualified for the position with a general degree in business, a more specialized degree in marketing, or a distantly related degree in psychology. In recent years, however, USCIS has taken the stance that a specialty occupation must require a specialized degree in a very closely related discipline or even a singular discipline. As a result, the agency has significantly increased the number of requests for evidence (RFEs) and denials issued with respect to petitions with wider-ranging degree requirements. Many employers have seen their approval rates drop due to this revised interpretation of the law.
The U.S. District Court for the Middle District of North Carolina held that USCIS cannot require a degree in just one singular subspecialty in order for a job to qualify as an H-1B specialty occupation. The court, relying on the holding of the Supreme Court of the United States in Kisor v. Wilkie, found that USCIS's interpretation of its H-1B regulation was unreasonable and not entitled to deference: "an engineering degree requirement meets the specialty occupation degree requirement." Further, the court affirmed that the adjudicating officer's negative decision conflicted with USCIS's own long-standing tradition of recognizing that "a position can qualify as a specialty occupation even if it permits a degree in [a broad field encompassing] more than one academic discipline."
InspectionXpert provides a strong counterpoint to the now-common RFEs wherein USCIS challenges an H-1B petition based on broad degree requirements for the role. These degree requirement RFEs have particularly affected approval rates among IT companies and others that routinely hire employees with engineering degrees. While it remains unclear whether this decision will directly impact current USCIS policy, this case represents a welcome change in response to the recent trend of increased USCIS scrutiny of specialty occupations.
In ITSERVE Alliance, Inc., (March 10, 2020), the U.S. District Court for the District of Columbia consolidated multiple lawsuits from separate IT firms challenging USCIS's new interpretation of the employer-employee relationship, non-speculative work assignments, and itinerary requirements for offsite workers.
In 2018, USCIS issued a policy memorandum (the "2018 Third Party Worksite Memo") that created stricter documentation requirements for employers that place H-1B workers at third-party client sites. In particular, the memo required H-1B petitioners to provide detailed statements from end clients, copies of client contracts, and work itineraries. Following the implementation of the memo's directives, USCIS began to shorten the period of validity of many approved H-1B petitions from the standard three-year period to six months, or less in some cases. The policy change created some confusion and increased costs for companies, especially those in the IT and consulting industries that regularly place employees at client sites.
The D.C. District Court ruled that the 2018 Third-Party Worksite Memo was invalid and unenforceable. In a lengthy and well-documented decision, the court specifically struck down the requirement that employers provide an itinerary for the anticipated employment. The court also threw out the requirement that the petitioning employer provide contracts that span the entire requested period of stay and held that the recent USCIS practice of limiting the H-1B validity period to less than three years without setting forth a legitimate reason was arbitrary and capricious.
The court's decision specifically addressed significant concerns held by the IT industry, finding that there was no regulatory support for requiring an employer to provide specific and non-speculative details of day-to-day assignments for the duration requested in the H-1B petition. According to the court, "requiring contracts or other corroborated evidence of dates and locations of temporary work assignments for three future years ... is, in fact, a total contradiction of the Plaintiffs' business model of providing temporary IT expertise to U.S. businesses." The Court also directly addressed shortened H-1B validity periods, stating that moving forward, USCIS would be required to provide a legitimate reason when granting a validity period for less than the time requested in the petition.
Though the court held that USCIS could not enforce the Third Party Worksite Memo, USCIS has not yet confirmed whether it will appeal the decision, or if the prevailing parties will seek an injunction to prohibit USCIS from adjudicating H-1B petitions in accordance with the agency's current guidance.
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