Nation of Immigrators - A public policy blog on America’s dysfunctional immigration system

With the President's supporters pleading for action, Barack Obama at last has pivoted to jobs.  "Pass this bill [the American Jobs Act]" has become his oft-shouted mantra. Surprisingly, however, career bureaucrats within the Departments of State and Homeland Security apparently haven't read his September 8 speech to Congress and instead are taking affirmative steps to prevent job creation.  Examples of this misbehavior are abundant across all work visa categories, as this blog has shown. 

For the sake of illustration, however, let's get granular and consider the latest trends in visa refusals for a single category, the L-1B  "intracompany transferee" visa, available to workers within a global firm possessing "specialized knowledge."

The problem has become especially acute with the recent flood of L-1B petition and visa denials involving citizens of India, thus raising the concern that the Indian refusals may be founded on unlawful bias, such as citizenship status, national origin, or race discrimination, or, upon the counterintuitive Congressional and media claims that the inbound dispatch of L-1 workers contributes to the claimed offshoring of jobs. 

American businesses count on L-1B workers to design and develop innovative products, fulfill contracts and manage important projects on which U.S. jobs for American workers depend.  With global competition accelerating, a significant delay in granting L-1B visa benefits to a deserving candidate, such as by a consular officer's unexplained return of an approved petition to USCIS for readjudication, a burdensome, boilerplate USCIS request for additional evidence, or an outright denial by either agency -- any one or all of these actions can lead to the loss of American jobs to employees of our competitors abroad.   

For those unfamiliar with this nonimmigrant category, the L-1B intracompany transferee classification, together with the L-1A for executives and managers, has been around since 1970.  The L-1B allows a U.S.-based business to transfer workers from the employ of a foreign affiliate that is under at least 50% common ownership or control with the U.S. petitioner in the combined global enterprise.  The visa applicant must have been employed for at least one year abroad by a foreign affiliate out of the last three years, performing in a job involving specialized knowledge, and must seek to work for a related entity in the U.S. in a like capacity. Individual petitions for L-1B visa classification are submitted to U.S. Citizenship and Immigration Services (USCIS), Regional Service Centers (RSCs), which forwards their petition approvals to a U.S. consulate or embassy abroad where the consul interviews the L-1B visa applicant.  Consular officers also interview "blanket" L-1 visa applicants from larger companies to determine whether either of the alternative definitions of specialized knowledge apply and an L-1B visa should be issued.

A few years back, larger global enterprises could instruct their candidates (specialized-knowledge professionals with a relevant college degree) to apply directly at a U.S. consular post abroad under an approved blanket L-1 petition as long as he or she had gained only six months' worth of specialized knowledge, rather than the one year minimum required now, which in either case is still a comparatively brief period required by statute. 

The term "specialized knowledge" has had a tortuous and tortured history within the legacy immigration agencies.  The trend as late as 1988 had been to interpret the term very strictly, culminating in a case, Matter of Sandoz Crop Protection Corp., which equated specialized knowledge with a level significantly above even "proprietary" or "patented" knowledge:

The petitioner's proprietary interest must be such that the knowledge required is clearly different from that held by others employed in the same or similar occupations. Different procedures are not a proprietary right within this context unless the entire system and philosophy behind the procedures are clearly different from those of other firms, they are relatively complex, and they are protected from disclosure to competition.

A petitioner's ownership of patented products and processes or copyrighted works, in and of itself, does not establish that a particular employee has specialized knowledge. In order to qualify, the beneficiary must be a key person with materially different knowledge and expertise which are critical for performance of the job duties; which are critical to, and relate exclusively to, the petitioner's proprietary interest; and which are protected from disclosure through patent, copyright, or company policy.

Later that year, however, a policy memorandum from legacy Immigration and Naturalization Service (INS), clarified that this interpretation of specialized knowledge was “more restrictive than Congress or the [INS] intended" and instructed adjudicators to apply the new clarification so that the L-1B would be "more flexible and useful to international businesses": 

The problem stems from using a too literal definition of the term "proprietary knowledge" wherein the knowledge must relate exclusively to or be unique to the employer's business operation. Using this narrow interpretation of proprietary knowledge excludes numerous employees of international companies who were intended by Congress to be accommodated under the L classification.

Since the passage of the Immigration Act of 1990 (IMMACT 90), "specialized knowledge" has required (consistently with the 1988 INS clarification) either "special knowledge possessed by [the applicant] of the petitioning organization's product, service, research, equipment, techniques, management, or other interests and its application in international markets," or "an advanced level of knowledge or expertise in the organization's processes and procedures."

In addition, in the preamble to the proposed regulations implementing IMMACT 90, the former INS acknowledged that “the intent of [IMMACT 90] as it relates to the L classification was to broaden its utility for international companies." Two INS Headquarters memos, in 1994 and 2003, and a 1994 State Department cable to the post in Madras (now Chennai), India reaffirmed the IMMACT 90 expansion of L-1B specialized knowledge. The 1994 State Department cable is significant because -- as shown below -- the very same Visa Office and consular post are at the epicenter of unlawful, revisionist and newly restrictive interpretations of specialized knowledge: 

Consuls should satisfy themselves that the applicant possesses knowledge that is not general knowledge held commonly throughout the industry but is truly specialized. The [Visa Office] notes this should not be construed to mean that an individual's expertise must be narrowly held within the company. The fact that the knowledge is held widely within the sending entity does not preclude it from being specialized.

With respect to the issues of remuneration of L-1 employees, there is no requirement (as for H-1Bs) that an individual be paid the prevailing wage. [Consular officers] must be satisfied that the applicant will not become a public charge. Beyond that, it does not appear to [the State Department's Visa Office] that the applicant's compensation may be addressed by [Consular officers].

Nothing of legal substance has changed since the IMMACT 90 Congress legislated an expansive interpretation of the specialized knowledge eligibility criteria, save for rogue (and now off-message) actions to restrict L-1B approvals, especially if the applicant is an Indian citizen. 

The trouble began in earnest with a 2004 Visa Office cable described as "clearly of greatest significance to the Indian Posts," and then with the USCIS Administrative Appeals Office (AAO), which published a 2008 non-precedent case involving an Indian software engineer, followed by USCIS adjudicators at the RSCs who have relied on that case to issue unwarranted L-1B RFEs and petition refusals, and by January, 2011 changes of heart by the State Department's Visa Office (relying on the same AAO case) and the consular posts in India.

More recently, however, the USCIS Office of Public Engagement (OPE), responding commendably to stakeholder concerns, held a May 12, 2011 Listening Session on the L-1B category.  The OPE's notes understate the intensity of complaints voiced during the call: 

An overwhelming majority of stakeholders asserted that the existing regulatory definition of “specialized knowledge” and USCIS policy memoranda which relate to this issue are fine as written, and there is no need to issue any new policy memorandum. Some stakeholders provided feedback indicating that the definition of “specialized knowledge” should be interpreted more broadly than is currently being practiced at the Service Centers. Stakeholders noted that USCIS is interpreting the definition too narrowly as evidenced by the Requests for Evidence (RFE) and denials which are being received by many petitioners for this category. One stakeholder stated that it appears that USCIS has made a change in its interpretation in recent years without any change in the law. . . .

Next Steps

USCIS will provide additional guidance and training to USCIS officers adjudicating L-1B petitions.

If the USCIS has indeed offered "additional guidance and training to USCIS officers adjudicating L-1B petitions," the lessons have not been learned.  Job destruction by way of L-1B denials at the RSCs continues unabated, notwithstanding the President's jobs campaign.  The same can be said of the consular posts in India where, especially since March, employers and immigration lawyers have witnessed a steady increase in unwarranted L-1B refusals. 

Applicants have reported that interviews -- lasting but a few minutes -- are perfunctory, supporting documents are ignored.  Consular officers are prejudging the case (often filling in the L-1B visa refusal notice at the start of the interview), and concluding that any passing reference to a company other than the petitioner warrants the unjustified conclusion that the knowledge must not be specialized. Moreover, notwithstanding the 1994 State Department cable, consuls are asking irrelevant questions about wages paid, while disregarding the value of supplemental stipends for housing, food and travel in the U.S., and ignoring the instruction that specialized knowledge may be held widely within the foreign affiliate ("[the] fact that the knowledge is held widely within the sending entity does not preclude it from being specialized").

The State Department defends its high Indian refusal rate by suggesting that the posts in India receive more L-1B applications and approve more L-1B visas than any other U.S. consulates or embassies worldwide.  Neither State nor USCIS has explained, however, why "specialized knowledge" is simply far more difficult to establish for citizens of India than for nationals of any other country, and why an outdated set of L-1B eligibility standards applies much more to Indians than to other visa applicants.

In the absence of clear answers by State or USCIS to these apparently discriminatory and unlawful practices adversely affecting Indian applicants and their petitioning U.S. employers, the task of revealing the truth and redressing wrongs must turn to another government agency or the media.  Within the federal government, the Department of Homeland Security's Office of Civil Rights and Civil Liberties (OCRCL) is endowed with explicit legal authority to investigate.  All that is required to initiate an OCRCL investigation is for disadvantaged parties to file a well-documented complaint alleging that invidious discrimination has occurred or that the cherished, constitutionally-derived (5th Amendment) civil liberty -- due process of law -- has been violated. 

While some Indian L-1B aspirants may pray to the "Visa God," they and others can also seek and hopefully receive more immediate relief by pursuing the OCRCL's decidedly terrestrial solution. 

The dog days of August are behind us, yet the economic doldrums persist.  Unemployment remains unchanged and unacceptably high at 9.1%. The White House forecasts that it will stay there through the New Year and then likely drop only a tenth of a percentage point for all of 2012. 

Congress returns this week to Washington. Vituperation in lieu of legislative action will soon begin. The media kerfuffle over the timing of the Obama-Jobs speech enraged most citizen observers. Meantime, pundits are asking about the content of the President's speech:  Will he go large to appease dispirited Progressives?  Or, will he propose modest measures that "the Left [won't] understand" in the hope of winning bipartisan support. 

American politicians and special interests seem to have forgotten the "vigorous virtues [of self-reliance, personal responsibility, industriousness and a passion for freedom]," as David Brooks, op-ed columnist for the New York Times, observes. Brooks argues, convincingly, that as a result of this forgetfulness (I would call it blind and callous indifference) a "specter [is] haunting American politics: national decline."

The descent, however, is not inevitable.  It can be reversed.  A largely unseen, silent, law-abiding yet shackled group within our midst embodies all of the vigorous virtues. They are the sojourners from abroad who are yoked to the constricting terms and conditions of a U.S. employer's work visa petition. These hard-working souls are prohibited by law and dubious agency interpretations from using their ideas, talents, capital and energy to start companies and hire American workers.

Fortunately, no act of Congress is required to unleash these innovators, entrepreneurs and job creators and empower them to work their magic. 

The White House already knows it possesses the authority through executive action in immigration matters.  The Administration's recalibration of its immigration enforcement priorities has evoked little public outcry.  Disinformation, however, is spreading but failing to gain much traction.  The "Backdoor Amnesty" dog has no legs and won't hunt.

If unauthorized immigrants with positive equities warrant legitimate administrative relief, as they clearly do, why not reward the more deserving foreign citizens who have patiently waited and played by the rules?  

The President should therefore continue trying to jump start job-creation and allow the next generation of Apples, Googles and as yet unimagined supercompanies to take root in American soil and thrive. The White House's early steps "to Promote Startup Enterprises and Spur Job Creation" have been criticized, however, in this blog and elsewhere, as overly narrow and unhelpful. These missteps are not failures.  They are merely invitations to persist, as the iconic American innovator, Thomas Edison, reminds us ("I have not failed. I've just found 10,000 ways that won't work").

Here then are my suggestions to President Obama for administrative reform of the legal immigration system, as presented to attendees at an outstanding event convened on August 31 in Los Angeles by January Contreras, the USCIS Ombudsman ("Listening Session to Explore Small and Start-Up Business Immigration Issues"):

• Instruct U.S. Citizenship and Immigration Services (USCIS) to rescind the January 8, 2010 "Neufeld Memorandum" on employer-employee relationships and replace it with a regulation expressly allowing immigration self-sponsorship by owner-entrepreneurs in a broad array of work visa categories for employment on company premises and at customer sites.
• Instruct USCIS and the State Department to issue -- on an expedited basis -- replacement or initial regulations interpreting the following laws in the expansive and job-creating spirit that Congress intended: The Immigration Act of 1990, the American Competitiveness and Workforce Improvement Act of 1998, and the American Competitiveness in the Twenty-First Century Act of 2000. These regulations should, e.g., broaden eligibility for all categories of the L-1 Intracompany Transferee visa, particularly for start-up operations, function managers and specialized knowledge personnel.
• Instruct USCIS to focus on improving the quality of adjudications by improving the corps of adjudicators who make employment-based immigration decisions:
  • Impose stricter hiring requirements, including the minimum of a relevant bachelor's degree (if it takes that to receive an H-1B visa, the same should apply to grant one), strong writing and analytical skills.
  • Cause the Small Business Administration to provide training to adjudicators on the characteristics, contributions and challenges of small businesses and startups.
  • Review performance metrics and institute sanctions for improper issuance of Requests for Evidence, Notices of Intent to Deny and Revocation notices, while rewarding positive behaviors.
• Instruct USCIS to grant nonimmigrants in lawful immigration status the benefits of “parole in place” and open-market work authorization upon submission of proof that they will open a business, buy a home, hire U.S. workers or devise an innovative technology, good or service.
• Instruct USCIS to allow beneficiaries of approved employment- or family-based immigrant visa petitions whose place in the visa queue is backlogged to apply for adjustment of status (thereby entitling them to open-market work permits until they reach the front of the visa line and can receive green card approval).
• Instruct USCIS to allow Premium Processing of employment-based Administrative Appeals Office appeals and all Motions to Reopen or Reconsider along with the tolling of unlawful presence penalties and the grant of employment authorization during the pendency of non-frivolous filings.
• Instruct the Labor Department to add entrepreneurs and investors to the pre-certified Schedule A labor certification exemption, and allow an entity owned by such individuals to self-sponsor for green card status.
• Instruct USCIS to publicize its 2008 Notice prohibiting internal retaliation against small businesses, define “retaliation” broadly and pursue violations aggressively.
• Instruct USCIS to eliminate the Directorate, Fraud Detection and National Security (FDNS), and instruct U.S. Immigration and Customs Enforcement (ICE) to exercise all investigative and enforcement functions involving alleged immigration benefits fraud and immigration-related national security concerns.
• Instruct ICE to investigate only those small business violations based on articulable and reasonable cause that a violation of the INA has occurred. Stop the guilty until proven innocent approach currently in use. 
• Instruct USCIS to appoint an Associate Director who reports directly to the Director and who is solely responsible for promoting and facilitating the grant of employment based immigration benefits and reporting actions by USCIS personnel that impede, impair or deny the grant of such benefits to deserving parties. This Associate Director would also have authority to intervene under the Homeland Security Act when the State Department takes actions that unreasonably interfere with or deny immigration benefits to startups and small businesses.
• Require strict compliance by all immigration agencies with the notice-and-comment requirements of the Administrative Procedure Act and the small-business-impact analysis required under the Regulatory Flexibility Act, and phase out the practice of issuing guidance by policy memorandum.
• Instruct and empower the Small Business Administration’s Office of Advocacy to review and recommend changes to DHS, DOL and DOS rules that adversely affect job creation, entrepreneurship, investment and innovation by small businesses and start-ups.

As we await the President's address to a joint session of Congress, many anticipate that at least one proposal will be to rebuild our nation's existing infrastructure -- the roads, bridges, waterways, and rails.  Let's hope he also includes legitimate administrative fixes to our creaking and crotchety LEGAL immigration infrastructure.  American citizens looking for jobs deserve nothing less.