By Gary Endelman and Cyrus D. Mehta
If there is one visa uniquely suited to
advance America’s competitive position in the global marketplace, it is the L-1B
intra-company transferee visa for specialized knowledge employees. In an increasingly specialized economy where
expertise should trump nationality, the notion of “specialized knowledge” as it
affects L-1B adjudications has become increasingly contentious. For many years,
the L-1B visa, created in 1970 as Congress warmed to the realization that
American business had become international, sailed along in tranquil waters
unburdened by controversy. In recent years, much as its companion H-1B visa has
become embroiled in bitter dispute, immigration restrictionists have tended to
focus on the L-1B visa as a threat to domestic employment, thus ensuring that
the climate of adjudications would become rigid and restrictive. In response to
the resulting criticism from business and immigrant advocates, the
Administration promised a new and improved philosophy to guide L-1B
adjudicators. U.S. Citizenship and Immigration Services (USCIS) issued interim policy guidance on L-1B
"specialized knowledge" adjudications that supersedes and rescinds
certain prior L-1B memoranda. USCIS said it is issuing this memorandum now for
public review and feedback. USCIS will finalize the guidance effective August
31, 2015. It provides guidance on how L-1B petitioners may demonstrate that an
employee has specialized knowledge. In the case of off-site employment, it also
clarifies how to comply with the requirements of the L-1 Visa (Intracompany
Transferee) Reform Act of 2004. The question is whether this new guidance
will bring clarity and common sense into the morass of L-1B jurisprudence or
simply result in more of the same excessive inconsistency that has so plagued
it in the recent past.
When President Obama announced his executive
actions on November 20, 2014, there was acknowledgment in the memo entitled “Policies Supporting U.S. High Skilled Business and
Workers”
that the “L-1B visa program for ‘intracompany transferees’ is critically
important to multinational companies.”
It was recognized as “an essential tool for managing a global workforce
as companies choose where to establish new or expanded operations, research
centers, or product lines, all of which stand to benefit the U.S. economy.” The
memo, however, acknowledged that there was “vague guidance and inconsistent
interpretation of the term “specialized knowledge” in adjudicating L-1B visa
petitions created uncertainty for these companies.” As the applicable L-1B regulation defining
“specialized knowledge”, 8 CFR 214.2(l)(1)(ii)(D), dates back to implementation of the
Immigration Act of 1990, and merely parrots the statute, the lack of updated regulatory guidance in the
face of constantly changing business practices has created a vacuum that the
USCIS has attempted to fill with a series of memoranda promulgated without the
notice and comment opportunity afforded by the Administrative Procedures Act.
The law has not changed, Congress remains silent, but the legal standards
applied by the USCIS evolve according to its own initiative.
Contrary to what critics may say, the L-1B visa
guidance is not some new allegedly unconstitutional program that will allow
hundreds of thousands to immigrate to the United States via the backdoor. The absence
of an artificial numerical cap seized upon by L-1B visa critics ignores the
basic yet universal reality, noted below, that all L-1B beneficiaries are
existing international employees of the same corporate group or organization and
it is the perceived business needs of these companies, completely divorced from
immigration considerations, that explains the interest in L-1B sponsorship. When
the commercial realities change, the desire to retain or attract L-1B employees
also changes. What critics of the L-1B visa do not seem to realize or
appreciate is that L-1 petitions are a business decision. The L-1B visa
guidance only seeks to clarify the statutory definition of “specialized knowledge:
[A]n alien is considered to be serving in a capacity involving
specialized knowledge with respect to a company if the alien has a special
knowledge of the company product and its application in international markets
or has an advanced level of knowledge of processes and procedures of the
company
See Immigration and
Nationality Act (INA) 214(c)(2)(B).
The L-1B visa guidance starts off by
reminding USCIS adjudicators the very basics, which is that a petitioner
seeking L-1B classification must establish that it meets the “preponderance of
the evidence” standard. This is a lower standard than the “clear and convincing
evidence” or the “beyond a reasonable doubt” standard. Under the “preponderance
of the evidence” standard, even if an examiner has some doubt about the claim,
the petitioner would have satisfied this standard if after presenting all the
evidence it leads to the conclusion that the claim is “more likely than not” or
“probably” true. Ever too often examiners have had the tendency to apply the
“beyond a reasonable doubt” standard, which is the standard that the
prosecution has to meet in a criminal case to prove the guilt of a defendant.
There is no place for such an onerous standard in an administrative law setting
relating to L-1B visa petition adjudications. USCIS adjudicators do not have to
be “convinced” of the specialized knowledge claim; it should be enough that a
reasonable basis for this claim exists. Preponderance does not require nor should
it be conditioned upon a showing of absolute truth or complete faith.
Among
other things, the L-1B visa guidance notes that a beneficiary must possess
either special or advanced knowledge, or both. Determining whether a
beneficiary has "special knowledge" requires review of the
beneficiary's knowledge of how the company manufactures, produces, or develops
its products, services, research, equipment, techniques, management, or other
interests. Determinations concerning "advanced knowledge," on the
other hand, require review of the beneficiary's knowledge of the specific
employing company's processes and procedures, the L-1B visa guidance states.
While the beneficiary may have general knowledge of processes and procedures
common to the industry, USCIS's focus is primarily on the processes and
procedures used specifically by the beneficiary's employer. With respect to
either special or advanced knowledge, the petitioner ordinarily must
demonstrate that the beneficiary's knowledge is not commonly held throughout
the particular industry or within the petitioning employer. As discussed in
detail in the L-1B visa guidance, however, such knowledge need not be
proprietary in nature or narrowly held within the employer's organization.
The
L-1B visa guidance notes the following non-exhaustive list of factors USCIS may
consider when determining whether a beneficiary's knowledge is
specialized:
• The
beneficiary is qualified to contribute to the U.S. operation's knowledge of
foreign operating conditions as a result of knowledge not generally found in
the industry or the petitioning organization's U.S. operations.
• The
beneficiary possesses knowledge that is particularly beneficial to the
employer's competitiveness in the marketplace.
• The
beneficiary has been employed abroad in a capacity involving assignments that
have significantly enhanced the employer's productivity, competitiveness,
image, or financial position.
• The
beneficiary's claimed specialized knowledge normally can be gained only through
prior experience with that employer.
• The
beneficiary possesses knowledge of a product or process that cannot be easily
transferred or taught to another individual without significant economic cost
or inconvenience (because, for example, such knowledge may require substantial
training, work experience, or education).
• The
beneficiary has knowledge of a process or a product that either is
sophisticated or complex, or of a highly technical nature, although not
necessarily unique to the firm.
The
L-1B visa guidance notes that specialized knowledge cannot be easily imparted
to other individuals.
The L-1B visa guidance sets broad and flexible
parameters to establish specialized knowledge, and comes as a breath of fresh
air a few days after the release of a study
issued by the National Foundation For American Policy, which confirmed that
Indian nationals face the highest refusal rates in the L-1B visa program. The
L-1B visa facilitates the transfer of a specialized knowledge employee from an
overseas entity to a related US entity. This visa should allow US companies to
quickly transfer employees in order to remain globally competitive. Instead,
the overall denial rate, according to NFAP report, was 35%. Prior to 2008, the
overall denial rate was under 10%. Alarmingly, the denial rate for employees
coming from India was 56% in 2014 while the denial rate for employees
transferred from all other countries was only 13%. As expressed in Cyrus
Mehta’s blog, The Real Reason For L-1B Visa Denial Rates
Being Higher For Indian Nationals, the NFAP report is a damming
indictment of USCIS’s discriminatory adjudicatory practices towards Indian
national applicants. How does it advance US national interests to frustrate the
controlled migration of human capital across national boundaries from an
increasingly important trading partner precisely at a time when we seek to
create more enlarged and reliable channels of transmission for all other forms
of capital? Presumably it does not, yet it seems equally obvious that this is
not the USCIS’ concern since this new guidance, like its predecessors, focuses
far more on what should be allowed than what can be made possible. External opportunities
are subordinated to domestic anxieties. Immigration in the L1B context is or
should be aligned with our overall economic strategies as they affect our key
bilateral relationships. If trade and investment between the US and India are
to benefit both countries, as surely they are intended to and must do, then US
immigration policies must treat Indian nationals on an equal footing and not
employ a double standard animated by a climate of suspicion and a predisposition
to deny.
While
the L-1B visa guidance endeavors to clarify how a petitioner can establish
specialized knowledge on behalf of an employee in various ways, it is hoped
that it is implemented fairly. It is certainly salutary that the guidance
insists that eligibility for other classifications like the H-1B visa should
not preclude one from classifying for the L-1B visa. Critics have often tried
to unjustifiably portray the L-1B visa as an end run around the H-1B cap, and
thus falsely portray an employer’s use of the L-1B visa after the H-1B cap has
been met as an example of visa abuse. The L-1B visa guidance recognizes that
“[o]fficers should only consider the requirements for the classification sought
in the petition, without considering eligibility requirements for other
classifications.” Id. at 11. The USCIS should look for ways to approve L-1B
petitions that merit approval, not for ways to deny those whose claims are not
accepted.
On
the other hand, despite its positive features, there is enough ambiguity in the
guidance that would allow an examiner who is in the habit of saying “No” to an
L-1B request to continue to continue to say “No.” For example, even the earlier
1994 Puleo memo listed as a factor that the beneficiary is qualified to
contribute to the U.S, operation’s knowledge of foreign operating conditions as
a result of knowledge not found in the industry. However, the most recent memo
goes on to add that such knowledge must also not be found in “the petitioning
organization’s U.S operations.” Id. at 8. This may be an impossible standard to
meet if there are other employees who also possess similar specialized
knowledge. Indeed, in a business climate where almost all projects rely upon a
pooling of talent, a cadre of expertise must be built up for meaningful work on
a substantial scale to be accomplished with great planning and significant
expense. While the guidance appropriately cautions that the specialized
knowledge need not be narrowly held within the petitioning organization, it
provides the following ammunition to an examiner who is already predisposed to
denying the L-1B visa petition:
However, in
cases where there are already many employees in the U.S. organization with the
same specialized knowledge as that of the beneficiary, officers generally
should carefully consider the organization’s need to transfer the beneficiary
to the United States.
Id. at 10.
One
wonders where this standard comes from. If this is what Congress intended,
USCIS’ references to it in the legislative history of the L-1B seem
conspicuously absent. If, as seems to be the case, Congress did not mandate or
even suggest the adoption or such criteria, or even endorse its relevance,
whether directly or by implication, where and why does the USCIS find
justification for its inclusion? Indeed, this is all too typical of the USCIS
approach to the L-1B, and other work visas as well, whereby a standard is
announced and becomes justified largely because of its repeated invocation.
This indeed is the heart of the matter, namely that L-1 adjudicatory standards
change not when external realities or Congressional dictat require such a
change but when the USCIS for its own reasons shielded from public information
and discussion decides to make a change. As the L-1B becomes more distant from
the economic facts that gave rise to it in the first place, the value of the
visa diminishes just as the degree of difficulty in gaining an approval rises.
When a work visa such as the L-1B ceases to function the way the economy
functions, the underlying logic behind the visa becomes increasingly cloudy and
subject to challenge.
Other
language that has been introduced in this memo, which was not in the Puleo
memo, is the demonstration that that the knowledge cannot be easily transferred
to or taught to an individual. The Puleo memo stopped there, but the new guidance
adds that such transfer of knowledge cannot be done “without significant
economic cost or inconvenience (because, for exampl.e,
such knowledge may require substantial training, work experience, or
education).”
While
on first brush, showing economic inconvenience in the transfer of knowledge may
seem more onerous, the logic behind may be derived from the recent decision from
the DC Circuit Court of Appeals reversing an L-1B visa denial of a Brazilian gaucho chef. Fogo De Chao (Holdings) Inc. v. DHS, 769 F.3d 1127, 1142 (D.C. Cir. 2014). Noteworthy in Fogo
was the government’s dismissal of the
relevance of the economic hardship the restaurant would suffer if it had
to train another employee to perform the gaucho chef’s proposed duties. The
Fogo Court disagreed, emphasizing that economic inconvenience is
sometimes the most concrete evidence that can be used to determine whether
knowledge is specialized. According to the Fogo Court: “Consideration of
evidence of this type provides some predictability to a comparative analysis
otherwise relatively devoid of settled guideposts….That specialized knowledge
may ultimately be a ‘relative and empty idea which cannot have plain
meaning’...is not a feature to be celebrated and certainly not a license for
the government to apply a sliding scale of specialness that varies from
petition to petition without explanation. Suddenly departing from policy
guidance and rejecting outright the relevance of Fogo de Chao’s evidence of
economic inconvenience threatens just that.” Id. at 28 (citations
omitted).
It
is further noted that some language on page 14 of the guidance could still
snare L-1Bs working at third-party clients, and this will continue to plague
Indian-heritage IT companies. While offsite employment is not prohibited,
INA 214(c)(2)(F)(i) requires the petitioner to ultimately exercise control over
the beneficiary’s employment and this can be best demonstrated if L-1B workers
at third-party sites must be implementing the specialized knowledge of the
petitioner's unique products or services. But the guidance adds that specialized
knowledge derived from customized products or services rendered to the client
may complement but cannot substitute for specialized knowledge of the
petitioner's products, services, or methodologies. Sometimes the specialized
knowledge is intertwined. For example, the petitioner customized the product or
application for the client, and the L-1B is being sent to the United States to upgrade
it. Even though the product or application was rendered to the client, the
beneficiary possesses specialized knowledge of the product that was customized
for the client. This fact pattern could potentially cause problems. If the
petitioner has customized a product for a third party client, the employee
should still be considered to possess specialized knowledge of the petitioning
company’s product, especially if the business model of the petitioning company
is to provide customized products or solutions for third party clients.
We
do hope that the L-1B visa guidance is implemented in a spirit that is
consistent in the way it was intended, which is to provide more clarity on the
definition of “specialized knowledge” pursuant to INA 214(c)(2)(B). Indeed, the guidance can be improved to
reflect the view of the DC Circuit Court in Fogo
that scolded the USCIS for applying a rather wooden interpretation of
specialized knowledge. The Fogo Court held that there was nothing in INA
section 214(c)(2)(B) which precludes culturally acquired knowledge as a form of
specialized knowledge for a Brazilian goucho chef. Although Fogo applied
to a chef of a particular ethnic cuisine, it can arguably be applied to other
occupations involving specialized knowledge. Skills gained through certain
cultural practices may be relevant in determining specialized knowledge in
other settings, such as Japanese management techniques. Similarly, acquiring
deep knowledge in a particular software application through another employer
can equip the L-1B visa applicant with specialized knowledge that can stand out
in comparison to others.
The
L-1B visa should indeed be encouraged to make US corporations more globally
competitive in the face of Congress not
taking any action to increase the H-1B cap. Even if there is no requirement
for the payment of a prevailing wage to an L-1B visa holder as distinct to the
H-1B visa, that does not justify the unfounded criticisms against the L-1B visa
as it is a completely different creature. Only employees who have been working
for a related overseas entity of the US company for 1 or more years, and who
possess specialized knowledge, can be admitted on the L-1B visa to enhance the
employer’s competitiveness. A visa system that imposes artificial limitations
on H-1B visa numbers is already flying on one engine and is in distress. If we
abruptly shut down the L-1B visa too, the plane will crash. This guidance ought
to come as a life saver for US companies in order to remain globally
competitive. Let’s keep our fingers crossed!
(Guest author Gary Endelman is the Senior Counsel of Foster)
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