H-1B Conundrum - Establishing the Employer/Employee Relationship -


On August 13, 2010, U.S. District Judge for the District of Columbia, Gladys Kessler, issued a memorandum opinion in Broadgate Inc. v. USCIS concluding that the memorandum issued on January 8, 2010 regarding the required employer/employee relationship in the H-1B nonimmigrant context by USCIS Service Center Operations Associate Director, Donald Neufeld , “establishes interpretative guidelines for the implementation of the Regulation, and does not bind USCIS adjudicators in their determination of Plaintiff’s H-1B visa applications. In addition, the Court is satisfied that the Memorandum does not amend the Regulation by repudiating or being irreconcilable with it. The Memorandum therefore does not constitute a legislative rule.”

If the Neufeld Memorandum does not bind USCIS adjudicators, then why do we need an article about it? Judge Kessler went further to note in the Broadgate decision that “…the Memorandum does not determine, as a matter of law, the rights or obligations of H-1B visa applicants, the agency, or any other entity, and no discernible legal consequences flow from it.” I would argue that the Memorandum has resulted in a paradigm shift as to the USCIS interpretation of what constitutes a qualifying employer/employee relationship for H-1B purposes as well as the documentation necessary to establish this relationship to USCIS. Basically, the agency has managed indeed to create a legislative rule via the issuance of this alleged guideline without compliance with the Administrative Procedure Act (“APA”). Where is the evidence of this alleged change? One indicia is located in the USCIS Ombudsman’s Annual Report for 2010 published on June 30, 2010. The Ombudsman’s Annual Report states that H-1B requests for evidence (“RFE”) from USCIS between fiscal year (“FY”) 2008 and 2009 doubled with the Vermont Service Center (“VSC”) moving from 14.1 to 29.3 percent and the California Service Center (“CSC”) moving from 13.3 to 25 percent. This same pattern of increased RFEs was experienced in the L-1A intracompany transferee category during the same time frame.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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