HOW LONG IS A LAWYER OBLIGATED TO CORRECT FALSE EVIDENCE THAT WAS SUBMITTED ON BEHALF OF THE CLIENT?

By Cyrus D. Mehta

One of the cardinal ethical rules governing a lawyer’s conduct is the prohibition, with some exception, from revealing a client’s confidential information. This information, which must be kept confidential, is normally gained during the course of the representation of the client. Still, at the same time, a lawyer is also prohibited from offering or using evidence before a tribunal that the lawyer knows to be false.  If a lawyer gets to know about the submission of false evidence to the tribunal, the lawyer is required to take reasonable remedial measures, and in some states, when the lawyer is unsuccessful in obtaining the client’s cooperation to remedy the fraud, the lawyer is also required to inform the tribunal. ABA Model Rule 1.6 governs a lawyer’s duty of confidentiality while ABA Model rule 3.3 governs a lawyer’s duty of candor to the tribunal. These two rules are often in tension. 

The modern trend in legal ethics is that the lawyer’s duty of candor to the tribunal will almost always trump his or her duty of confidentiality to the client. This is especially true in New York. New York’s Rule 3.3 not only prohibits a lawyer from offering evidence that he or she knows to be false, but requires a lawyer to take reasonable remedial measures, including, if necessary, disclosure to the tribunal. The proper course, when the lawyer learns that false evidence has been submitted, is to first remonstrate with a client confidentially, and seek the client's cooperation with respect to the withdrawal or correction of the false statement. Most clients will likely understand that taking such a measure is also in their best interests, and that a lawyer is likely to take steps that are least damaging to the client. For instance, if an asylum claim otherwise includes truthful elements but some false information or evidence, the withdrawal of the damaging evidence may be presented at the same time as part of a packet of evidence that is otherwise truthful and supportive of the client's claim. If the client is uncooperative and withdrawal from the representation cannot remedy the false statement, the lawyer, under Rule 3.3(b), must make disclosure to the tribunal as is reasonably necessary to remedy the situation, even if such disclosure is protected under the attorney client rule of confidentiality.

Prior to April 1, 2009, New York did not require a lawyer to reveal a client’s submission of false evidence to a tribunal if it was protected as confidential information between an attorney and the client, but all that changed when New York adopted Model Rule 3.3. After this sea change in New York, I wrote from an immigration lawyer’s perspective, What Remedial Measures Can A Lawyer Take To Correct False Statements Under New York’s Ethical Rules? When writing the article I puzzled on how long does the lawyer’s obligation to correct a client’s false statement last. Does it last till the completion of the case or forever?  Unlike Comment 13 to ABA Model Rule 3.3, which clearly suggested that the obligation lasts till the conclusion of the proceeding, there is no similar comment to New York’s Rule 3.3. 

This has now been answered in New York City Bar’s Formal Opinion 2013-2.  Recognizing that the New York rule does not contain a similar limiting comment like the ABA Model Rule, the New York City Bar concludes that the lawyer’s obligation to correct the presentation of false evidence survives the conclusion of proceedings. However, agreeing with opinions of its sister NY State Bar (see State 831, fn 4 and State 837), the NYC Bar opinion states that this obligation does not last forever, and “should end when a reasonable ‘remedial’ measure is no longer available.” Still, a lawyer is required to take remedial measures even after the conclusion of the proceeding if the tribunal in question, or a reviewing tribunal,  is still in a position to review the new evidence, which in turn could result in an amendment, modification or vacatur of the prior judgment.  Action that cannot result or is highly unlikely to result in such a reversal or modification of the judgment cannot be said to be “remedial,” and then the obligation of the lawyer under Rule 3.3 may end. The opinion also cautions, “The amount of work involved in fulfilling the 3.3 obligation should neither force the lawyer into insolvency or jeopardize the lawyer’s ability to continue to diligently and competently perform legal services on behalf of the lawyer’s other clients [citations omitted].”

How does the lawyer’s continuing obligation even after the conclusion of the case to take remedial measures under Rule 3.3 work in immigration practice?  The term “tribunal” is broadly defined in Rule 1.0(w) to encompass not just a court but even an “administrative agency or other body acting in an adjudicative capacity.” But the definition of “tribunal," and its reference in Rule 3.3, as well as in the NYC Bar opinion, with respect to an administrative agency still connotes a court-like adversarial proceeding involving two parties and opposing counsel. At issue is whether the United States Citizenship and Immigration Services, along with the Department of Labor and Department of State, would be considered “tribunals” under this definition. The definition of tribunal goes on to state: “A legislative body, administrative agency or other body acts in an adjudicative capacity when a neutral official, after the presentation of evidence or legal argument by a party or parties, will render a legal judgment directly affecting the party’s interests in a particular matter.” There is no question that a proceeding before an Immigration Judge or the Board of Immigration Appeals,  would be before a “tribunal,” but there is ambiguity as to whether it would extend to the above governmental agencies too as it is unclear whether there is a neutral official who will render a legal judgment "after the presentation of evidence or legal argument by a party or parties" when one files an application with the USCIS or with a U.S. Consulate.  There is also no opposing counsel in such instances. It is thus arguable whether such agencies constitute a “tribunal,” and whether the 3.3 obligation exists regarding the need to take reasonable remedial measures to correct a client’s false statement or submission of false evidence, even after the case has been completed. 

As a practical matter, though, whether an immigration-related agency is a tribunal or not should not matter. If an attorney knowingly assists a client in filing a false application, such conduct may trigger criminal liability regardless of whether the application was made to a tribunal or not. An attorney is also required to be truthful to third persons, governmental or otherwise, under Rule 4.1. Moreover, Rule 1.6(b)(3), while not mandating it, allows a lawyer to withdraw a written or oral opinion or representation relied upon by a third person (even if not with a tribunal), where the lawyer belatedly learns of its falsity. In such a situation, as confirmed by NY State Opinion 837, a noisy withdrawal may constitute a reasonable remedial measure under Rule 3.3.  Finally, a similar duty of candor applies to immigration agencies under parallel ethical rules in 8 C.F.R. §1003.102(c) and 8 C.F.R. 292.3(b), governing the conduct of private immigration attorneys, although the requirement is to “take appropriate remedial measures” without a specific requirement to disclose to the tribunal.

Regardless of the ambiguity in the definition of tribunal with respect to immigration agencies, it behooves a lawyer to ensure at the outset of the representation, and prior to filing an immigration application, that there is no false, misleading or inaccurate statement. For example, it always makes sense to meet with both the spouses, and run some typical questions by them, to ascertain that the marriage is bona fide prior to taking on the case and filing the applications.

Let’s examine how the NYC Bar Formal Opinion 2013-2 requiring a lawyer to take remedial action works in immigration practice. In the most obvious case of a tribunal setting, which is a proceeding before an Immigration Judge, a lawyer would have a continuing obligation to take “reasonable remedial measures” even after the case has concluded based on the NYC Bar opinion. So in the example of the client who submitted material false evidence in her asylum claim, and the lawyer learns of it after the client has been granted asylum by the Immigration Judge, to what extent does the lawyer’s obligation last? First, the lawyer must have actual knowledge that such evidence was false, although such knowledge “may be inferred from circumstances.” Rule 1.0(k). The false evidence that was submitted must also be “material,” which is whether the evidence could have changed the result of the outcome.  Assuming that the lawyer has actual knowledge of its falsity and it is material, a case can only be reopened no later than 90 days after the issuance of a final administrative order. INA 240(c)(7); 8 CFR 1003.2(c)(2), 8 CFR 1003.23(b)(1). If the lawyer has actual knowledge of the false evidence after 90 days from the final order, can a lawyer argue that the law does not allow for a motion to reopen, and thus any action will not result in a modification of the grant of asylum by the Immigration Judge? 

The NYC Bar Opinion was not written for immigration practitioners, but there are exceptions to the 90 day time limitation, such as the BIA’s sua sponte reopening authority under 8 CFR 1003.2(a). Also, reopening is possible when both parties, including the government, agree to reopen under 8 CFR 1003.2(c)(3)(iii) or 8 CFR 1003.23(b)(4)(iv). Even after the foreign national gets lawful permanent residence, the government can start rescission proceedings within 5 years or place her once more in removal proceedings. And even after this client naturalizes, it is possible for the government to start de-naturalization proceedings against her on the ground that she did not properly obtain permanent residence due to the false evidence that resulted in her grant of asylum. 

In the immigration context, it may appear that a lawyer’s obligation to remedy a client’s fraud or false statement, if it was made to a tribunal, could last in perpetuity. It could result in draconian results, if say, a child or a spouse derived a green card, or even a derivative citizenship benefit innocently based on the false evidence that was submitted by the principal applicant.  As I had suggested in my previous article, there are very good policy reasons to limit the obligation to the end of the proceeding, or at least when the statutory limit for filing a motion to reopen has passed. As time passes, the undoing of previously committed fraud implicates the status and rights of other people, such as spouses, children and other relatives. Indeed, even the Board of Immigration Appeals has held in an unpublished decision, Matter of Gumapas, that a person who became a citizen through fraud is still a citizen, and can sponsor a spouse for permanent residence.  The imposition of such a limitless obligation on an attorney would also diminish the purpose of the ethics rules themselves in preventing fraudulent representations to the tribunal. In this example, the lawyer acted in good faith before the tribunal even though the client may have presented false evidence without the knowledge of the lawyer. Also, there are other processes in place that can rectify the situation, such as the government’s ability to commence de-naturalization proceedings against her through their own investigations, without relying on the attorney to inform them.   And last, there are reasons to end the obligation at the conclusion of the proceeding similar to why statutes of limitation exist.   Over time, witnesses and documents may not be available and memories fade.  This author has heard speeches by distinguished personalities whose parents may have entered the US as immigrants where they wax lyrical about how their parents perpetrated a small misrepresentation in order to immigrate to the US so that their children could succeed and realize the American dream. If a lawyer who represented this distinguished person’s parents is in the audience, is this lawyer today under a 3.3 obligation to inform the relevant immigration agency regarding the parent’s fraud even if the parent is deceased? 

Indeed, Comment 13 to ABA Model Rule 3.3 is clearer than the New York rule:

A practical time limit on the obligation to rectify false evidence or false statements of law and fact has to be established. The conclusion of the proceeding is a reasonably definite point for the termination of the obligation. A proceeding has concluded within the meaning of this Rule when a final judgment in the proceeding has been affirmed on appeal or the time for review has passed.

Even NY State Bar Opinion 831, supra,  tempers the absurd effects of rule 3.3 by holding that if the client’s fraud on the tribunal took effect before April 1, 2009, then the old NY Disciplinary Rule 7-102(B)(1) applies where any confidence or secret that arose in the attorney-client relationship could not be disclosed even if it was false at the time of submission to the tribunal. Footnote 4 in Opinion 831 is also worth noting: 

It is unclear when the disclosure obligations under the new rule end.  In past opinions, we appear to have assumed that the disclosure obligations in DR 7-102(B) where information was not “protected” as a confidence or secret ended when the proceeding in question concluded.  N.Y. State 674 (discussing whether a lawyer must reveal perjury “discovered after the fact when the proceeding in which the perjury was committed (and later discovered) has not yet concluded”); N.Y. State 466 (“since the existence of the negotiable instrument is not relevant to any pending proceeding”).  The New York State Bar Association proposal for the new rule, adopting the language of the ABA Model Rules, would have codified this interpretation in Rule 3.3.  The proposal stated, “The duties stated in paragraphs (a) and (b) continue to the conclusion of the proceeding and apply even if compliance requires disclosure of information otherwise protected by Rule 1.6.”  New York State Bar Association Proposed Rules of Professional Conduct 160 (Feb. 1, 2008) (emphasis added) (available at www.nysba.org/proposedrulesofconduct020108.  As noted in the text, Rule 3.3 as adopted by the courts omits the phrase “continue to the conclusion of the proceeding and.”  There is thus an argument that the courts in adopting the rule intended the obligation to continue past the end of the proceeding and, potentially, indefinitely – or at least for some reasonable period of time.  The broadest version of this interpretation seems to us implausible.  We believe the obligation extends for as long as the effect of the fraudulent conduct on the proceeding can be remedied, which may extend beyond the end of the proceeding – but not forever.  If disclosure could not remedy the effect of the conduct on the proceeding, but could merely result in punishment of the client, we do not believe the Rule 3.3 disclosure duty applies.

As interpretations regarding the continuing obligation of an attorney under Rule 3.3 evolve in New York and elsewhere (at least in states where the obligation does not end at the conclusion of the case), it is hoped they take into account how an attorney’s potential obligation to report a client’s fraud  in perpetuity might impact foreign nationals who may have obtained immigration benefits a very long time ago, as well as their impact on innocent families.

(The views expressed in this blog are solely those of the author and do not necessarily reflect the views of any of the organizations that he may be involved with.)

MEET OUR NEW FRIEND: WHO IS AN "H-1B SKILLED WORKER DEPENDENT EMPLOYER" IN SENATE IMMIGRATION BILL, S. 744?

By Gary Endelman and Cyrus D. Mehta

Since we last wrote about the H-1B visa provisions in Senate Immigration Bill, S. 744, Workable Or Unworkable? The H-1B And L-1 Visa Provisions In BSEOIMA, S. 744, there have been several changes to this portion of the bill. The amendment proposed by Senator Hatch (after reaching a compromise with Senator Schumer), which passed the Judiciary Committee, sought to water down some of the restrictions that would otherwise make the H-1B visa program unworkable. Seeking to advance the interests of the many high tech companies that have settled in Utah, an accommodation with Senator Hatch implicitly held out the promise of attracting other GOP Senators to vote for the bill when it reached the Senate floor. A bi-partisan Senate bill that passed with 70 votes might serve to provide political cover for embattled Speaker John Boehner to maneuver around the objections of Republican obstructionists and pass CIR with the aid of Democratic votes.

The main concern of many technology companies in Silicon Valley was that the new recruitment requirement would make it impossible for them to use the H-1B visa program, despite the increase in the H-1B visa cap. Under the bill’s original provision, the employer would first have to offer the job to any US worker who applied, who is equally or better qualified than the nonimmigrant H-1B worker. It was feared that this would allow the Department of Labor (DOL) to micromanage the employer’s recruitment processes, and also determine who an equally or better qualified US worker would be rather than leave it to the employer’s best judgment. To the extent that the Hatch amendment shifted power over the H-1B away from the DOL in favor of more market-oriented forces, it represents a significant attempt to rely upon such influences rather than direct federal regulation as the operating principle of protection for US workers in the immigration context. 

As a result of the Hatch amendment, an employer who is not an H-1B Skilled Worker Dependent Employer (SWDE) or a Dependent Employer (DE), which we will explain below,   is required to use recruitment procedures that meet industry wide standards and offer compensation that is at least as great as that required to be offered to H-1B nonimmigrants. It no longer requires such an employer to offer the job to an equally or better qualified US worker. Still, it is hard to determine how this would be interpreted by the DOL  Does the employer need to establish that there were no qualified US workers who applied or does the employer only need to demonstrate that it does normally also recruit US workers for the same position? We believe that the latter interpretation is more consistent with the language of the Hatch amendment. An employer that is not a SWDE and not a DE will not be subject to the  non-displacement  attestation unless it files the petition with the intent or purpose of displacing a specific US worker for the position to be occupied by the beneficiary, or workers are displaced who provide services at worksites owned, operated, or controlled by a Federal, State, or local government entity that directs and controls the work of the H-1B worker, or workers are displaced who are employed as public school kindergarten elementary, middle school or secondary school teachers.

But here’s the catch. The Hatch amendment also creates a new concept – the SWDE. The SWDE is different from the H-1B dependent employer (DE) as we have known it under the existing law. An SWDE is “an employer who  employees H-1B nonimmigrants in the United States in a number that in total is equal to at least 15 percent of the number of its full time equivalent employees in the United States employment in occupations contained within Occupational Information Network Database (O*Net) Job Zones 4 and Job Zones 5.” Under this definition, many employers will be SWDE even if they are not dependent employers. Even if they hire thousands of US workers at lower skill levels, one needs to count how many workers are hired at Job Zone 4 and 5, and if the number of H-1B workers exceed 15% of that number, the employer becomes a SWDE. One can imagine the kind of intricate investigations and calculations that an immigration attorney may need to make on behalf of an employer client to find out how many people it hires at Levels 4 and 5 so as to determine whether the employer is a SWDE or not. As long as an employer employs even one US worker at a Level 4 or 5 positions, the hiring of an H-1B worker will render this employer a SWDE (as the hiring of this one H-1B worker will be more than 15% of the number of employees hired in Level 4 or 5). Once the employer is a SWDE, such an employer would  be required to have offered the job to any US worker who applies and is equally or better qualified for the job than the H-1B worker.. 

The SWDE is not based on a gradation like the traditional Dependent Employer (DE) as defined in Section 212n)(3) of the Immigration and Nationality Act:

• An employer is considered H-1B-dependent if it has: 25 or fewer full-time equivalent employees and at least eight H-1B nonimmigrant workers; or 
• 26 - 50 full-time equivalent employees and at least 13 H-1B nonimmigrant workers; or 
• 51 or more full-time equivalent employees of whom 15 percent or more are H-1B. 

To qualify as an SWDE, you do not have the less than 25, 12-50 and 50+ to do the calculation.  Under the new SWDE definition where you need 15%, even if you have 1 employee in Job Zone 4 or 5, and hire one H-1B, you become a SWDE. This never happened under the DE definition, as you needed to have 7 H-1Bs if less than 25, or 12 H-1Bs if between 25 and 50, or 15% after that. Unlike the DE category, which was supposed to be the exception rather than the norm, the SWDE is more easily satisfied precisely. 

Our colleague David Isaacson properly points out that, because of the different rules for small numbers, it will be relatively easy for a small employer to be a SWDE but not a DE.  If an employer has 20 or 25 full-time equivalent employees (FTEEs), and 5 of them are H-1Bs who are not intending immigrants, then that employer will be a SWDE even if all of its U.S. workers are in Job Zone 4 or 5, because the 5 H-1Bs are necessarily more than 15% of however many of the 20 or 25 total FTEEs are in Job Zones 4 or 5, but that employer won’t be a DE because it has fewer than 7 non-intending-immigrant H-1Bs and one must have more than 7 to be a DE.  It is also possible to be a SWDE and not a dependent employer as a large employer, if your total number of H-1B employees who are not intending immigrants is more than 15% of your total “number that in total is equal to at least 15 percent of the number of its full-time equivalent employees in the United States employed in occupations contained within Occupational Information Network Database (O*NET) Job Zone 4 and Job Zone 5” but is less than 15% of your overall FTEEs, because of your employees in Job Zones 1 through 3 who count towards the denominator of the DE calculation but not the denominator of the SWDE calculation.

Is a dependent employer in a more advantageous position than a SWDE after the Hatch amendment? As a practical matter, it would be very difficult for an employer to be a dependent employer without being a SWDE. So long as an employer hires at least one US worker in a Job Zone 4 or 5 positions, as noted earlier, the hiring of even one H-1B worker would make this employer a SWDE. But there may exist a company that does not hire anyone in a Level 4 or 5 Job Zone. Although Level 4 or 5 Job Zones generally require bachelor’s degrees, or higher, there are many Level 3 occupations in O*Net that may require bachelor’s degrees some times, but not all of the time. For instances, Business and Operations Managers,  Lodging Managers or Food Service Managers are in Zone 3, which can qualify under the H-1B visa,  and one can conceive of a hotel establishment hiring both US workers and  H-1Bs for such positions that are only in Zone 3. 

Has the SWDE made the traditional H-1B employer definition redundant? That might be an incautious overstatement for notable differences still remain. The SWDE has to attest that for 90 days before and after the filing of the Labor Condition Application, it has not and will not displace a US worker. By contrast, an employer who is a dependent employer but not a SWDE, will have to attest that for 180 days before and after the filing of the Labor Condition Application, it has not and will not displace a US worker. Also, strangely, the bill as it exists in its current form, does not require a dependent employer to first offer the job to an equally or better qualified US worker. Is this an oversight where a dependent employer is exempt from the more onerous recruitment procedures that SWDE have to go through, but is still subject to a more vigorous anti-displacement attestation?  Only a dependent employer, but not a SWDE,  is  prohibited from  outplacing H-1B workers to third party sites. 

The SWDE definition was introduced to catch US-based tech companies than the Indian IT companies, as the latter are in any event dependent employers.  In a twist of fate, while the Indian IT companies have been most affected by the H-1B provisions in the bill, the SWDE concept may wind up most severely affecting the very IT giants in this country who looked to Senator Hatch for legislative relief. The end result may well be to subject them to recruitment obligations that would otherwise not have applied under the traditional H-1B dependent employer definition. Such are the unintended consequences of a compromise that Senator Hatch had to make with other Gang of 8 members, such as Senator Durbin, who have been vehemently opposed to the H-1B visa program. In exchange for a more liberal recruitment regime, the law will make more employers SWDEs and subject them to the restrictive recruitment procedures. Not only may Facebook and Google, to name but two of many such companies, have to adjust to this unwelcome and rude surprise, but it is likely that many IT start-ups, the very entrepreneurs that the Obama Administration claims to want to encourage, will find their growth stymied by the SWDE recruitment obligations that likely were never intended by Senator Hatch to apply to them at all.

This bring us finally to the definitions of “covered employer” and “intending immigrant.” A SWDE will not be subject to the more onerous recruitment requirement, and a DE as well as an SWDE will not be subject to the anti-displacement attestations if they fall under the definition of “covered employer” and are filing an H-1B visa for an “intending immigrant.” The Hatch amendment slightly modified the definition of a “covered employer,”  in fact making it easier for a SWDE or DE to get out of the more restrictive requirements. An “intending immigrant” is one who intends to live and work permanently in the US as demonstrated by a pending or approved labor certification that was filed by a “covered employer.” An intending immigrant can also be the beneficiary of a pending or approved I-140 petition  A “covered employer,” as amended by Hatch,  is an employer who during the year before filing the labor certification on behalf of the intending immigrant, has filed an immigrant visa petition for 90 percent of current employees who were beneficiaries of approved labor certifications during the one year ending six months before the petition in question is filed. 

How does this work? The employer who is filing an H-1B on behalf of an “intending immigrant” (for whom a labor certification or an I-140 petition has been filed or approved) needs to look back six months. If the employer had approved labor certifications during the one year period ending six months prior to filing the H-1B petition,  and filed immigrant visa petitions for 90% of them during that look back period six months prior, the employer qualifies as a covered employer. One can conceivably argue that if the employer did not have any approved labor certifications during that look back period, it might still qualify as a covered employer. The covered employer definition applies only to approved labor certifications, out of which 90% have I-140s filed on their behalf. So, if there are no approved labor certifications or no labor certifications even filed, the employer may still be a covered employer, provided the beneficiary of the H-1B petition currently has an approved or pending labor certification or I-140 petition filed on his/her behalf.

The Senate Judiciary Committee's report on BSEOIMA has some alarming language regarding the "covered employer" definition: 

"Intending immigrants are not counted as H-1B or L nonimmigrants for the purposes of determining whether an employer is an H-1B dependent company or a L visa dependent company.  Intending immigrants are defined as persons for whom their employer has started the green card process, including those for whom an Immigrant Petition for Alien Worker (Form I-140) or Application to Register Permanent Residence or Adjust Status (Form I-485) has been filed. However, employers may only take advantage of this counting rule if the employer has actually filed immigrant status petitions for not less than 90 percent of current employees for whom the company filed labor certifications in the previous year."

Despite this language in the report, it can still be argued that Congress has intended that an employer who has approved labor certifications in the "look back" period follow through with the green card process (as opposed to nominally only filing labor certifications), and thus the requirement that the employer has filed I-140 petitions for not less than 90% of the relevant approved labor certifications.  Congress just does not want an employer to push paper and file labor certifications, but to actually carry through with the green card process for its employees.  However, if there is no filed or approved labor certification during the relevant period, an employer should still be treated as a "covered employer."  If interpreted literally, only a covered employer can invoke the "intending immigrant" exception. Because the Hatch-Schumer amendment narrowed the definition of "covered employer" to require a labor certification as a condition precedent to an I-140 submission, the eligibility of any I-140 petition that does not  depend on a labor certification approval is suddenly and surprisingly called into question. Thus, outstanding researchers, persons of extraordinary ability, beneficiaries of approved national interest waivers, multinational managers, and advanced US degree STEM holders,  may never be considered as "intending immigrants" as no labor certifications need to be filed on their behalf.   The very people we need to keep most will not benefit.   At a time when there are more green card routes around PERM, can it possibly be that H-1B status will be withheld, or made more difficult, from those who take advantage of these new options?  Surely this cannot be the intended result of such imprecise drafting.  The most vociferous critics of the H-1B programs, such as the IEEE, claim to favor unlimited green cards for advanced US STEM degree holders.  Will it be necessary for them to forego, or so drastically curtail, the H category entirely in order to arrive the finish line? Despite this, as explained above, we believe that an employer who files no labor certifications can still seek protection under the chimera of "covered employer." Moreover, despite not having to file a labor certification for the priority worker, the employer may have filed labor certifications for other sponsored employees so that the mantle of "covered employer" does not have to be alien centered so long as it applies generally to the employer in question. Doubtless, it may take a technical amendment to simplify the matter and to bring clarity to the perplexed. 

Notwithstanding the exception that has been created for employers to get out of the more restrictive H-1B requirements, it would not be easy for an employer to file a labor certification in order to create an intending immigrant. It takes 60+ days of recruitment before an employer can file a PERM labor certification. An employer who wishes to quickly hire an H-1B worker, may not be able to wait for that long to file a labor certification before filing an H-1B petition, and may rather go through the recruitment requirement for an SWDE under the H-1B provision. Moreover, for a permanent labor certification, the employer has to demonstrate that there were no minimally qualified US workers who applied for the job, which is even more onerous than the recruitment requirement for a SWDE, where the standard is equally or better qualified. On the other hand, a SWDE would not have a choice and may be compelled to file a labor certification to establish that the worker is an “intending immigrant.” For instance, an employer whose business model relies on outplacement of employees to client sites will need to first have an “intending immigrant” before it can file an H-1B visa petition. 

While an employer may ultimately desire to file for green cards on behalf of their employees,  the H-1B visa, like dating before marriage,  allows time for both the employer and employee to try each other out before making a commitment to sponsor the worker for permanent residence and expend resources, including considerable governmental resources to process and adjudicate a labor certification application. BSEOIMA will turn this logical progression upside down. Employers will be forced to start the green card processing for potential H-1B workers even before they have come on board under the H-1B visa, where they can be tested out first.  BSEOIMA is transformational as it gives more emphasis to green card sponsorship than temporary sponsorship. Employers will look to ways to avoid the H-1B process altogether, as well as the PERM labor certification process. They will be able to directly sponsor STEM advanced degree students on an F-1 visa for a green card without even having to go through the labor certification process. A merits based point system will kick in four years after BSEOIMA takes effect, which will also allow employers to bypass the H-1B and PERM labor certification.  Even for those employers who must resort to the H-1B visa, they may not have to depend on the H-1B visa for too long as one of the provisions in the Hatch amendment will allow a foreign national to apply for adjustment of status even before the priority date becomes current. If the foreign national gets an employment authorization after filing for adjustment of status, it may obviate the need to apply for a renewal of the H-1B status. Finally, BSEOIMA may have unintended consequences for the Indian heritage IT firms, which it seeks to disrupt and put out of business. These firms, besides being forced to file for more green cards, will change their business models and will hire more US workers or will merge with firms that would reduce their dependence on H-1B workers. Thus, in the long run, these firms may be more competitive in the US rather than weakened. 

If BSEOIMA does take effect, how will it impact existing H-1B workers? The new recruitment and displacement provisions won’t kick in for existing workers. So, even if an employer files an extension for existing employees, these new provisions will not apply even after enactment. On the other hand, the ban on outplacement will take effect even for existing employees with respect to any application filed after enactment. It would thus be incumbent on employers to start planning in advance and file labor certifications on behalf of H-1B employees they were in any event planning to file in the future. This would allow a SWDE to become a covered employer and thus be able to file H-1B visas under the more liberal provisions. Still, BSEOIMA has made the H-1B visa, which was already complex, even more maddeningly difficult. The whole idea of a temporary visa is to provide employers with flexibility to bring in much needed foreign skilled workers. BSEOIMA utterly and completely fails in this department, and it remains to be seen whether employers will be able to cope with this new temporary visa regime, or whether the drumbeat for further reform will begin soon after the law’s enactment.

SAY WHAT? DID BALCA JUST SAY THAT HEALTHAMERICA HAS BEEN OVERRULED?

by
Cora-Ann V. Pestaina

I hang onto every word of the Board of Alien Labor Certification Appeals (BALCA). It’s the only way to make it through the preparation and filing of labor certification applications under Program Electronic Review Management (PERM) as not knowing what BALCA has said on a particular issue could be fatal to any PERM.  This recent statement by BALCA stopped me in my tracks for a moment. 

In Matter of Sushi Shogun, 2011-PER-02677 (May 28, 2013), BALCA said, “HealthAmerica has effectively been overruled by the promulgation of 20 C.F.R §656.11(b).” Practitioners who file numerous PERM applications can empathize with my initial panicked gasp at seeing “HealthAmerica” and “overruled” in the same sentence. 

As a background, over six years ago, BALCA issued HealthAmerica, 2006-PER-0001 (BALCA July 18, 2006). In this important en banc decision, BALCA held that the Certifying Officer (“CO”) should have reconsidered the denial of a PERM application where documentation held by the employer pursuant to the recordkeeping requirements of PERM conclusively established that the apparent violation was an unintentional typographical error on the ETA Form 9089. The Form 9089 contained an erroneous date indicating that the employer had placed a Monday ad instead of the required Sunday placement, when in fact the employer had acted to place the ad on Sunday and had the newspaper tear sheets of the advertisement to prove it. BALCA rejected the CO’s position that no new evidence could be submitted as the advertisement tear sheets were part of the PERM compliance recordkeeping requirement and thus was constructively submitted by the employer.

Since then, HealthAmerica has saved many PERM applications from certain doom and many employers from the Department of Labor’s (DOL) hyper-technical claws. BALCA even broadened HealthAmerica beyond typographical errors. In Matter of Pa’Lante, 2008 PER 00209 (May 7, 2009), the employer filed the ETA Form 9089 neglecting to list the alien’s experience gained before joining the employer and upon which he qualified for the offered position. But the alien’s substantial prior experience had been introduced in the employer’s response to the DOL’s audit notification through a September 2000 report of an Educational Consultant, who reviewed the alien’s education and experience credentials. The report clearly established that the alien had the requisite qualifications for the job well before he started work for the employer. BALCA reasoned that since the employer was able to introduce detailed evidence in its audit response and motion for reconsideration that was not fabricated or prepared after the filing, it would forgive the omission of experience and applied HealthAmerica.

After all this, does BALCA’s statement in Matter of Sushi Shogun now mean that employers can no longer cite HealthAmerica? In Matter of Sushi Shogun, the employer filed a PERM labor certification for the position of “Cook Assistant, Japanese Cuisine.” The application was audited and then denied because the ETA Form 9089 listed the prevailing wage as $10.04 per hour when the prevailing wage determination listed the prevailing wage as $10.14 per hour. The employer argued that this was a minor typographical error and a clerical mistake of minor importance; that the Notice of Filing listed the correct wage; that the offered wage was not listed in any advertisements or on the posting with the State Workforce Agency (SWA); and that no potential job applicant could possibly have been misled by the error. BALCA acknowledged that the error was likely just a result of someone mistyping the wage on the ETA Form 9089 and to deny the application essentially elevated form over substance (HealthAmerica at 19), but held that its hands were tied since the case was being considered after the promulgation of 20 C.F.R §656.11(b) which states that requests for modifications to an application will not be accepted for applications submitted after July 16, 2007. BALCA even went on to “reject the approach of the majority” in another case, Jesus Covenant Church, 2008-PER-200 (Sept. 14, 2009), in which case the employer listed a wage in the SWA job order that was the same as the prevailing wage determination, but 28 cents less than the wage offered to the alien.  The majority found that this was a harmless typographical error that did not lead to a conclusion that the job was not clearly open to any U.S. worker. In Matter of Sushi Shogun BALCA stated that it is “reluctant to second-guess the Secretary’s policy determination requiring applications filed after July 16, 2007, to be error-free.”

BALCA is taking a more firm stand in Matter of Sushi Shogun. But its holding can be limited to only preclude the use of HealthAmerica in situations involving a modification on the ETA Form 9089. This means that the employer in HealthAmerica and even in Pa’Lante whose harmless errors would essentially require a modification of the ETA Form 9089 would probably not be as successful in their appeals now. But HealthAmerica is still good law and can still be cited in cases where the denial of a PERM application is not consistent with notions of fundamental fairness and procedural due process; where the substantive integrity of the process was preserved; the test of the availability of US workers was valid; the Employer’s good faith is evident; the error is harmless; and does not require a modification of the ETA Form 9089. 

HealthAmerica lives on by way of cases like Denzil Gunnels, 2010-PER-00628 (BALCA Nov. 16, 2010) and Federal Insurance Co., 2008-PER-00037 (Feb. 20, 2009). Under Denzil Gunnels (which Cyrus Mehta has blogged about here) if a PERM application is denied without an audit and the employer submits supplemental evidence that could be considered as part of the record under HealthAmerica, the CO should treat it as a request for reconsideration rather than a request for review. But, even in cases where the circumstances of a generic audit may not have been specific enough to put the employer on notice regarding a specific deficiency, the request for review should be treated as a request for reconsideration so that the employer has a fair opportunity to present supplemental evidence to the CO. For example, if the employer’s labor certification was denied because the DOL determined that a particular newspaper was not adequate, an employer could argue that the generic audit did not provide adequate notice of the deficiency and thus find its way around a strict application of the prohibition to present supplementary evidence that would otherwise be barred under 20 C.F.R. §656.24(g)(2)(ii). HealthAmerica via Denzil Gunnels can be influential in such a case which does not involve a modification of the ETA Form 9089.

In Federal Insurance Co., 2008-PER-00037 (Feb. 20, 2009), the fact that certain mandatory language pertaining to an alternative requirement under Matter of Francis Kellogg, 1994-INA-465 (Feb. 2, 1998) (en banc), did not appear on the ETA Form 9089 was not fatal as there is no space on the Form for such language. BALCA held that a denial in that instance would offend fundamental fairness and due process. A case with a similar type of issue, not involving a modification of the ETA Form 9089 can still be approved today despite BALCA’s grand statement in Matter of Sushi Shogun. 

HealthAmerica is still alive and is still important to the preservation of the integrity of the PERM process in cases where there has been no demonstration of bad faith or after the fact fabrication and a modification of the ETA Form 9089 is not required.