A federal judge in New Jersey refused to throw away a case questioning the new restrictions on H1-B visas filed by the Small and Medium Enterprise Consortium, a non-profit trade association headquartered in Edison, New Jersey, and two IT service providers.
The plaintiffs claim that the new policies effectively bar them from the H1-B program.
Judge Madeline Cox Arleo of the US District Court for the District of New Jersey denied a petition from the Department of Homeland Security (DHS) to dismiss the case. At the same time the judge also denied the request by the petitioners to issue a temporary restraining order and preliminary injunction to the DHS and US Citizenship and Immigration Services (USCIS.)
Jonathan Wasden, and Thomas Vinu Allen, attorneys for the petitioners, said the decision to deny the request of the DHS is a victory for their side. They cited a similar case, Broadgate v USCIS, in 2010, in which the court sided with the USCIS, at that time noting that a USCIS memo was no ‘final agency action,’ or a rule or a regulation and so could not be subject to a lawsuit. A similar defense was taken in this case by the USCIS. But here the court disagreed with the arguments of the USCIS.
The USCIS policy memo required staffing companies seeking H-1B visas to provide the worker’s full itinerary for the duration of the three-year visa. That’s an impossible task, the companies pointed out, asserting that their business model requires their workers to have the flexibility to move around as needed.
The judge ‘tore apart’ the USCIS’ arguments, Attorney Wasden told Bloomberg Law.
The USCIS argued that the original rules, framed in 1990, could not be questioned now. But the petitioners pointed out that the contentious USCIS policy, one that hurt SMEC members, was a recent one. The court apparently agreed, rejecting the argument that a statute of limitations applied and said the new memorandum that effectively limiting the staffing companies’ ability to file H-1B petitions ‘reopens’ the issue and hence there is no statute of limitations bar.
Wasden told Bloomberg Law that the inference was that the USCIS is not ‘going to win on the merits’ of the case, and so would have to go through a public notice and comment process to enact the policy.
He said that the Labor Department allows consulting companies to obtain visas on the same terms as everyone else. The DOL must approve employers’ labor condition applications before they can seek H-1B visas from the USCIS. The USCIS would have to explain why it is treating consulting companies differently when the DOL does not, Wasden said.
The lawsuit claimed that the USCIS has overstepped its bounds and that the severe restrictions imposed before H1-B workers could work at third-party worksites were decisions only Congress could take. It said the actions of the USCIS were arbitrary and capricious.
A second lawsuit over the same H-1B policy, also filed by Wasden, asserts the USCIS has been illegally approving H-1B visas only for as long as the staffing companies can list definite assignments. In some cases, that means an H-1B is valid for only days or weeks at a time.
The policy remains in effect despite the consortium’s request in May to block its enforcement.
The new regulations have severely impacted the IT industry, dominated by major Indian companies, including TCS, HCL, Infosys and Mahindra Satyam, and several small and midsize IT staffing companies. As Bloomberg Law pointed out, the Trump administration has been effectively rewriting the H-1B program by issuing several internal policy memorandums and agency regulations.
Last year the USCIS issued a new policy that resulted in the denial of several thousands H-1B applications, causing many people who have been in the US on H-1B visas for several years to leave with their families.
Plaintiff SMEC represents about 300 companies that provide information technology services.
