IT Consulting Firms Victorious in H1B Lawsuit Against USCIS

The U.S. District Court for the District of Columbia recently ruled in IT Serve Alliance v. L. Francis Cissna that the U.S. Citizenship and Immigration Services (USCIS) overstepped its authority in issuing its February 2018 memorandum heightening the evidentiary requirements for H1B petitions filed by IT consulting companies. The court ruled that USCIS could not enforce its policy that limits the definition of an “employer” to solely focus on the employer’s right to control.

While this was a significant victory for the plaintiffs, it is important to understand that the ruling only applies to those particular plaintiffs. The USCIS can still continue to enforce the rules challenged in this lawsuit against all other H1B employers.

Background on Lawsuit

As previously reported in the MurthyDotCom NewsBrief, Lawsuit Challenges H1B Policies Targeting IT Consulting Companies (30.May.2019), a group of IT consulting firms that are members of IT Serve Alliance, filed suit against the USCIS after receiving numerous H1B denials or shortened approval periods. The lawsuit challenged USCIS polices that seemed to target IT consulting companies, or any company that has employees working at a third-party location.

Although the Murthy Law Firm was not involved in filing this lawsuit, Sheela Murthy is a legal advisor for IT Serve Alliance and has strongly encouraged employers and IT consulting companies to file lawsuits to challenge the USCIS when the agency violates the law and its own regulations.

The IT Serve Alliance lawsuit involved a total of 60 H1B petitions with 33 employers, and challenged USCIS policies as applied to the companies. Specifically, the lawsuit challenged the USCIS on all of the following four grounds:

• USCIS requirement for establishing a bona fide employer-employee relationship
• USCIS requirement for consulting companies to establish non-speculative work
• USCIS itinerary requirement for H1B workers working at multiple locations
• The authority of USCIS to approve H1B petitions for less than the full three-years requested

Court Rules in Favor of IT Serve Alliance

In its decision, the court examined the wording of the regulations and changes made by various USCIS memoranda that were issued over the past several years.

The court found that the USCIS had used a February 2018 memo to impermissibly alter the definition of “employer” without going through the notice-and-comment rulemaking process as required under the Administrative Procedure Act (APA). An overview of this memo is available in the MurthyDotCom NewsBrief, Analysis of USCIS Memo on H1B Workers Placed Offsite (01.Mar.2018).

The court noted that, under current regulations, a U.S. employer is defined as an entity that “may hire, pay, fire, supervise, or otherwise control the work of [the] employee.” While the regulation explicitly uses or, the court found that the USCIS was impermissibly focusing solely on an employer’s ability to “otherwise control” an employee, ignoring the other ways the regulation allows an employer to evidence its relationship with H1B workers as employees.

Requirements for Non-Speculative Work and Itinerary Violate the APA

The court also ruled that USCIS requirement that an employer show there was non-speculative work for the entire duration of the H1B petition, accompanied by a detailed itinerary of assignments for the entire requested validity period, was also improper as violating the APA, as this was imposed without going through the required notice-and-comment rulemaking process.

USCIS Must Justify its Rationale for Shorter Term Approvals

Likewise, the court found that, if the USCIS decides to approve an H1B petition for a period that is shorter than the duration requested by the employer, the agency must provide a justification for its decision.

Limitations of Court Order

While the trial court’s decision is welcomed, its direct impact is limited to the plaintiffs in the case. The USCIS is still permitted to continuing enforcing these rules against all other parties.

Conclusion

The real takeaway from this court ruling is that H1B employers should not be afraid to sue the USCIS if a case is improperly denied. The Murthy Law Firm has experienced litigators available to assist with challenging the USCIS when there are improper denials. H1B employers who are considering a lawsuit against the USCIS for unjust H1B denials are invited to schedule a consultation with a Murthy Law Firm attorney to determine the best course of action.

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