Since the early days of this blog, I’ve chastised immigration bureaucrats who use specious reasoning to treat small businesses petitioning for employment-related immigration benefits more harshly than their large-cap counterparts.

The latest assault on fairness and reason is reflected in a trend affecting several categories of employment-based visas — the H-1B (Worker in a Specialty Occupation), the L-1 nonimmigrant (Intracompany-Transferee Manager or Executive) and the EB1-3 (Multinational Manager or Executive). An example of this trend is a recently released EB1-3 decision (decided May 1, 2009) of the USCIS Administrative Appeals Office (AAO) denying an immigrant visa petition for a multinational manager from abroad who owned a controlling stake in the company petitioning for the visa. The basis for the visa denial was the asserted lack of an employer-employee relationship and the supposition that the terms, “employer,” “employee,” and “employed” are undefined.

The AAO apparently has forgotten that it is an agency bound by precedent decisions issued by the Attorney General:

[D]ecisions of the Attorney General . . . shall be binding on all officers and employees of the Department of Homeland Security.

[8 CFR § 103.37(g)].

Ever since 1958, the Attorney General in the precedent case of Matter of M (p. 49 et seq.) has held that a corporation may legitimately petition for its owner to receive an immigrant visa. See also, Matter of Aphrodite Investments Limited. Likewise, a Federal District Court, interpreting the L-1 visa category, ruled that a sole proprietorship can form the basis for its foreign owner to qualify under the L-1 category. See Johnson-Laird, Inc., v. INS, 537 F. Supp. 52 (D. Ore 1981). Indeed, USCIS’s own regulations recognize that if the sponsored employee, in immigration parlance, “the beneficiary,” is a major stockholder of the petitioning company, an L-1 visa is permitted:

If the beneficiary is an owner or major stockholder of the company, the petition must be accompanied by evidence that the beneficiary’s services are to be used for a temporary period and evidence that the beneficiary will be transferred to an assignment abroad upon the completion of the temporary services in the United States.

[8 CFR § 214.2(l)(3)(vii)].

While this evidentiary provision is essentially a dead letter because the Immigration Act of 1990 eliminated the requirement of proof of the intention to return abroad, its continuing presence in the Code of Federal Regulations stands as a testament to the agency’s longstanding recognition that an owner of a company may qualify as an employee of the petitioning entity.

This is not the first time I’ve railed against the lawless behavior of USCIS officials. The sad truth is that the targets of their lawlessness — small businesses — are the very “first responders” who lead the economy out every recessionary swoon. President Obama at the Brookings Institution this week in his “Remarks on Job Creation and Economic Growth” placed the issue in stark relief:

Over the past 15 years, small businesses have created roughly 65 percent of all new jobs in America. These are companies formed around kitchen tables in family meetings, formed when an entrepreneur takes a chance on a dream, formed when a worker decides it’s time she became her own boss. These are also companies that drive innovation, producing 13 times more patents per employee than large companies. And it’s worth remembering, every once in a while a small business becomes a big business — and changes the world.

At this labor-management summit, the President solicited the best ideas available to create new jobs in America. Well, Mr. President, I have one: Send the Attorney General to the USCIS AAO and the Regional Service Centers and have him stop their sophistic slaughter of small businesses.