The talk in Washington, on Wall Street and across America is all about the problem of zombie banks.  These are financial institutions that appear to be alive and operating normally (if you can believe their advertising), but are all virtually dead from infections caused by toxic assets and undeclared losses on overvalued real estate and other credit interests. One prophet of financial gloom and doom, Nouriel Roubini — an NYU Stern Business School professor — favors the dreaded “N” word, the nationalization of failing banks (”Merging two zombie banks is like having two drunks trying to help each other to stand up,” he says).

With talk of zombies in vogue, Congress ventured recently into the field of revivification when it enacted the stimulus legislation, the American Recovery and Reinvestment Act (ARRA).  Our legislators dug deeply into the cemetery of bad, but near-dead immigration laws to resurrect the notion of H-1B dependency, secreting it stealthily inside ARRA.  This provision in ARRA, Section 1611 — a short but powerful three sentences, dubbed the “Employ American Workers Act” (EAWA) — is a version of H-1B dependency on steroids. EAWA crams dependency down the throats of entities that received or will receive TARP (Troubled Assets Relief Program) funds, namely, several feeble financial institutions, two auto companies — Chrysler and GM, the wobbly insurer AIG, and GMAC, GM’s finance arm, as well as a host of financial institutions that availed themselves of credit from the Fed under Section 13 of the Federal Reserve Act.  

EAWA prohibits TARP- and Fed-funds recipients from hiring new H-1B workers (professionals in specialty occupations) unless the recipients first try to find and hire a U.S. worker who is at least as qualified as the H-1B candidate the employer wants to employ. EAWA allows refused American job applicants to file complaints with the Attorney General (AG) alleging unlawful refusal to hire or misrepresentation concerning a hiring decision, establishes a procedure for binding federal arbitration if the AG finds reasonable cause to believe that the statutory violations alleged in the complaint occurred, and permits imposition of unspecified “administrative remedies,” including civil fines and debarment from the employment-based immigration system, as the AG “determines to be appropriate.”

EAWA also prohibits TARP- and Fed-funds recipients from “displacing” (laying off) any U.S. workers and replacing them with an H-1B employee, whether at its own job site or at any worksite of a customer, for 90 days before and after (a) the filing of an H-1B petition (for work at the employer’s own facility), or (b) the placement of the H-1B worker at the customer site.  

H-1B dependency had been an immigration zombie of sorts because it was almost a dead letter that expired for several years with a sunset clause and then once automatically reactivated, applied to very few businesses. H-1B dependency is easily avoided by employing only “exempt H-1B workers” who are paid at least $60,000 per year or those with a masters or higher degree.    Under EAWA, however, TARP- and Fed-funds recipients may not escape the burdens of H-1B dependency by hiring exempt H-1B workers.

So in short, Congress has engaged in a perverse form of necromancy by using an immigration zombie to help zombie banks try to stand up. 

I call EAWA what it is — protectionist legislation that will anger our global trading partners and imperil the very businesses that the folks at TARP and the Fed are trying to save.  H-1B workers often are the bearers of bright ideas and innovation.  Why stifle their contributions?

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For a more extensive treatment of EAWA and H-1B dependency, read my article, co-authored with Ted Chiappari, THE EMPLOY AMERICAN WORKERS ACT: PROTECTIONIST TURDUCKEN, IMMIGRATION STYLE, published on Feb. 23 in The New York Law Journal, courtesy of the copyright holder, IncisiveMedia.  

For more on H-1B dependency, see “Awakening a Slumbering Giant: The Department of Labor’s Interim Final Rule on H-1B Dependency,” by A. James Vazquez-Azpiri and Angelo A. Paparelli.

E-Verify –- the Web 2.0 system created by the Department of Homeland Security (DHS) for PC-based verification of employment eligibility (”PC” in this case means “personal computer” and perhaps not “political correctness”) –- is a creature of contract. The contract in question, an agreement known as a Memorandum of Understanding (MOU), is a take-it-or-leave-it, non-negotiable “understanding” that in law meets the classic definition of an adhesion contract.

Some employers voluntarily participate in E-Verify; others are dragooned into participating under mandate of state law or consent decree to forestall criminal sanctions. In the future, federal contractors and their subs (unless exempted) will also be required to participate if the Obama Administration allows the Bush-era Federal Acquisition Regulations to become effective in May, 2009.

If the MOU is a contract, it is a strange one indeed, differing in many ways from traditional contracts. I’ll offer just a few examples.

The MOU expresses in its initial section the claimed “points of agreement” between DHS and a participating employer, but also sets out the responsibilities of the Social Security Administration. Under the MOU, the SSA is required to provide the employer with “available information that allows the Employer to confirm the accuracy of Social Security Numbers provided by all employees verified under [the] MOU and the employment authorization of U.S. citizens”. SSA must also give the employer “appropriate assistance with operational problems that may arise”. These obligations of SSA to the employer are extended in the MOU although no SSA official signs the “contract.” (Apparently, an unpublished agreement between SSA and DHS is all the assurance the employer receives from DHS that SSA will live up to its unsigned commitments.)

The MOU apparently prohibits an employer – once the document is signed – from seeking advice from an attorney concerning the scope of the employer’s legal obligations under the MOU or under federal law. The MOU provides:

The Employer agrees that it will use the information it receives from SSA or DHS pursuant to E-Verify and this MOU only to confirm the employment eligibility of employees as authorized by this MOU. The Employer agrees that it will safeguard this information, . . . to ensure that it is not used for any other purpose and as necessary to protect its confidentiality, including ensuring that it is not disseminated to any person other than employees of the Employer who are authorized to perform the Employer’s responsibilities under this MOU, except for such dissemination as may be authorized in advance by SSA or DHS for legitimate purposes. [Emphasis added.]

Unlike any contracts this blogger has seen, the MOU purports to grant an immunity breathtaking in scope:

[N]o person or entity participating in E-Verify is civilly or criminally liable under any law for any action taken in good faith based on information provided through the confirmation system.

Yet what the MOU gives, it also takes away. The document mandates that an employer engage in discriminatory conduct prohibited as “document abuse” under Immigration and Nationality Act (INA) § 274B(a)(6). Why so?

The MOU requires an employer to refuse to accept for E-Verify purposes a document of identity that is otherwise acceptable as a Form I-9 List B document if it lacks a photograph. A U.S. voter registration is a valid List B document even if it lacks a photograph. An employer cannot reject a voter registration card for purposes of I-9 compliance even if the card bears no photograph. If the U.S. citizen also presents a List C unrestricted Social Security card (one not restricting employment), the employer may not request more or different documents or refuse to employ that individual. Such conduct is prohibited under INA § 274B(a)(6), which provides:

A person’s or other entity’s request, for purposes of satisfying the requirements of section 274A(b) [the section imposing the duty of employment eligibility verification], for more or different documents than are required under such section or refusing to honor documents tendered that on their face reasonably appear to be genuine shall be treated as an unfair immigration-related employment practice if made for the purpose or with the intent of discriminating against an individual in violation of paragraph (1).

Under the cited “paragraph (1)” [prohibited under INA § 274B(a)(1)], a U.S. citizen is a protected individual for purposes of the prohibition outlawing citizenship discrimination. So if the U.S. citizen refuses to provide a List B document with a photograph, can the employer refuse to hire that person – who, after all, never signed the MOU – because under the MOU the employer cannot comply with the E-Verify photo ID requirement?

A plaintiff’s lawyer, or perhaps the Office of Special Counsel for Unfair Immigration-Related Employment Discrimination -– a unit of the U.S. Department of Justice (which also is not a signatory to the MOU) –- might just take a different view. If either should sue the employer, the employer must solely bear the costs of litigation and any damages. On this point, the MOU provides:

Each party shall be solely responsible for defending any claim or action against it arising out of or related to E-Verify or this MOU, whether civil or criminal, and for any liability wherefrom [sic] . . .

So the employer who apparently would be a document abuser under INA § 274B(a)(6) is liable even though complying scrupulously with the contractual requirements of the non-negotiable MOU.  This would be the outcome unless the MOU’s contractual immunity provisions quoted above are found by a court to prevail over federal immigration law.

In any case, the hapless employer must apparently be unrepresented in the citizen’s discrimination suit, because (as noted above) the employer cannot consult legal counsel, given that the employer is banned by the MOU from “disseminating any information to any person”!

I don’t envy the courts when they inevitably will be required to sort out the bizarre contract law principles reflected in the MOU.

The bicentennial of Abraham Lincoln’s birth is a fitting moment to ponder the state of our fractious and fractured nation of immigrants.  Ending his First Inaugural Address, President Lincoln spoke prophetically in words that could well describe the path America must pursue if the deep divide over immigration policy is ever to be bridged:

We are not enemies, but friends. We must not be enemies. Though passion may have strained it must not break our bonds of affection. The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearthstone all over this broad land, will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature.

The hate speech and hate crimes, the demonization of immigrants by some, cannot be allowed to represent to the world the values that America holds dear.  The hypocrisy and prejudice of non-native nativists, whose forebears displaced the indigenous peoples of North America, cannot be permitted to stanch the lifeblood of this country, its ever-vibrant tradition of renewal and reinvention through immigration. 

The justifiable fears of many Americans about an economy run amok ought not blind us to the manifold contributions to our prosperity that immigrants have always made and, if permitted, will continue to make.  Shekhar Gupta, editor of The Indian Express put the point eloquently to New York Times columnist, Thomas Friedman:

Dear America, please remember how you got to be the wealthiest country in history. It wasn’t through protectionism, or state-owned banks or fearing free trade. No, the formula was very simple: build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat, stir and repeat.

Others among our better celestial spirits, the Interfaith Immigration Coalition, held a press conference with Members of Congress on Feb. 11 to announce the launch of the campaign for “Prayer, Renewal and Action on Immigration” and to publish its Interfaith Platform on Humane Immigration Reform.  Serendipitously, the secular Migration Policy Institute just released a scholarly report and 36 recommendations on how our broken immigration system can be repaired and made to function.

Whether the motivation be a hard-nosed pragmatism founded on dollars and sense, a faith-based commitment (reflected in Bruce and Judy Hake’s article, The Scriptural Foundations Of An Open Immigration Policy, and Rev. Joan M. Maruskin’s accompanying compilation of passages from the Koran), or the studied views of respected immigration policy experts, the time is now to vivify President Lincoln’s profoundly humane and practical vision for America. 

Immigration reform cannot wait for a more appropriate day.  With courage in Congress, the White House and among the American people, comprehensive immigration reform will sooner than later be enacted, so that we can “yet swell the chorus of the Union, when again touched, as surely [we] will be, by the better angels of our nature.”

You might think from the title of this post that I’m all set to rant about the upcoming April 1 opening of the H-1B filing season — the period known in the trade as the time of Preparation H. You might think I’m poised to critique the annual government lottery that causes so much employer and foreign-worker hand wringing as they fret about whether the quota will dry up in a day or two, as it has in the recent past. If you thought so, you would be wrong.

I write instead to decry two other quotas, one alleged and the other well established, both involving the enforcement side of the immigration house.

The first is described in an Associated Press report. It seems that on Monday the U.S. Border Patrol mounted an investigation of allegations by agents in the Riverside (CA) region. These Border Patrollers complain that their January quota on apprehensions of unauthorized immigrants had jumped to 150 per month from 100 in November and December. A failure to meet the quota, agents allege, would result in some form of unspecified punishment. Reminiscent of arguments over affirmative action, the appointed government spokesperson hinted that the incident may be just one big misunderstanding: It’s about “numerical goals,” not quotas.

The second enforcement quota, dubbed Operation Endgame and developed in stealth by the Bush Administration, was initially intended to target foreign fugitives from our criminal justice system who presented clear and present dangers to national security or public safety. As the Migration Policy Institute recently reported, however, somewhere along the way that quota-driven strategy lost its raison d’être. Endgame’s denouement proved a mission too creepy. The agents began targeting run-of-the-mill immigration status violators instead.

With both of these benighted quotas, the drive to “make the numbers” seems to have blinded the quota cops from a clear sight of their statutory mission. The quest apparently became a daily numbers game. It should never be just about the numbers, although they do look impressive in an ICE press release, or in an appearance before Congress or Lou Dobbs. If foreign-born criminals or terrorists can’t be found, then pinching a visa overstayer instead will apparently just have to do.

I sense that the jig may soon be up, however, given this recent directive from Janet Napolitano, the new Secretary of Homeland Security:

Please provide the current metrics of fugitive apprehension and removal (clearly differentiate the number of fugitives that are actually removed versus those aliens unlawfully present who are simply encountered by the teams while on assignment). How can fugitives be more effectively prioritized for these purposes and what steps can be taken to expedite removal?

In just over two weeks, on Feb. 20, “relevant components and offices of the department” must respond to her politely phrased request (she did say “[p]lease”). Stay tuned for the answer, even if it only distracts us temporarily from the painful season of Preparation H.