Scope of DOL's LCA Investigation Authority Limited in Aggrieved Party Complaint: Eighth Circuit

Practical Law Legal Update w-001-0950 (Approx. 6 pages)

Scope of DOL's LCA Investigation Authority Limited in Aggrieved Party Complaint: Eighth Circuit

by Practical Law Labor & Employment

Background

Greater Missouri Medical Pro-Care Providers, Inc. (GMM) petitioned for H-1B visas for Filipino physical and occupational therapists. As a prerequisite to the petitions, GMM first filed LCA with the DOL, attesting that it would provide prescribed wages and working conditions to the H-1B workers (INA § 212(n)(1)(D) (8 U.S.C. § 1182(n)(1)(D)); 20 C.F.R. §§ 655.730 to 655.733).

On June 22, 2006, one of GMM's H-1B therapists, Alena Gay Arat (Arat), filed a complaint:

Alleging LCA violations including that:
- she paid the fees and costs necessary to file and extend her H-1B status, including attorneys' fees; and
- GMM did not pay her promised salary between her US entry on February 21, 2005 and May 6, 2005, nonproductive time required for her to obtain her license, and during which GMM paid only a $50 weekly food allowance.
Questioning whether the fee GMM proposed to recover for "breach of contract" on Arat's early termination of her employment contract was legal.

The DOL treated Arat's complaint as one of an aggrieved party under Section 212(n)(1) of the INA (8 U.S.C. § 1182(n)(1)) and concluded it had reasonable cause to investigate the potential early termination fee in addition to the wage and fee payment violations.

On August 4, 2006, the DOL:

Notified GMM it was under investigation for violations of the LCA provisions.
Per its standard practice, requested all of GMM's H-1B documents and records, including LCAs and supporting documents for all H-1B employees.

The DOL's information request did not:

Mention Arat's specific allegations.
Indicate the investigation was based on an aggrieved-party complaint.

The DOL concluded GMM violated the INA by:

Failing to pay required wages to employees in nonproductive status, including those studying for occupational licenses.
Improperly deducting wages for fees, costs, and business expenses related to the H-1B visa.
Requiring improper penalties for early contract termination from some employees.

The DOL ordered GMM to pay back wages to 45 employees.

GMM requested a hearing before an administrative law judge (ALJ), arguing, among other things, that the applicable statute and regulation limit an aggrieved-party complaint to:

The specific issues of the complaint.
The aggrieved party's LCA.

On October 23, 2009, the ALJ:

Granted partial judgment to the DOL, holding that nothing in the INA or its implementing regulations supports GMM's theory that the DOL's investigatory power is limited to a specific complaint and complainants.
Decided the DOL's broad investigation of GMM was within its statutory and regulatory authority.
Rejected GMM's argument that statute and regulation impose a 12–month time limit for investigating violations.
Determined GMM illegally withheld some employees' paychecks.

The ALJ did not find GMM had attempted to collect an improper penalty from Arat.

GMM petitioned the Administrative Review Board (ARB) for review, which affirmed in part and reversed in part, and upheld the ALJ's determination that the DOL's aggrieved-party complaint investigation was not limited to timely allegations in the complaint. The ARB reversed the ALJ's finding that violations outside the 12-month time period were actionable.

GMM appealed the ARB's decision to the district court and on cross-motions for summary judgment, the district court:

Upheld the award, holding that the DOL's interpretation of INA Section 212(n)(2)(A) (8 U.S.C. § 1182(n)(2)(A)) was reasonable.
Agreed with the ARB that:
- Arat's complaint sufficiently alleged INA violations as to other H-1B employees during the relevant 12-month time period; and
- the DOL's investigation was within the authority granted by INA Section 212(n)(2)(A) (8 U.S.C. § 1182(n)(2)(A)).

GMM appealed to the Eighth Circuit.

Outcome

The Eighth Circuit reversed the district court's judgment and remanded, holding that under the INA Section 212(n)(2)(A) (8 U.S.C. § 1182(n)(2)(A)), reasonable cause to investigate a single allegation in an aggrieved-party complaint does not establish a reasonable cause to conduct a comprehensive investigation of an employer.

The Eighth Circuit noted that:

INA Section 212(n)(2)(A) (8 U.S.C. § 1182(n)(2)(A)):
- requires the DOL to establish a process for receiving, investigating, and disposing of complaints about an employer's failure to meet an LCA condition; and
- permits the DOL to conduct an investigation if there is reasonable cause to believe that such a failure occurred.
The DOL has taken an extremely broad view of its substantive authority to investigate an aggrieved-party complaint under INA Section 212(n)(2)(A) (8 U.S.C. § 1182(n)(2)(A)). Specifically, the DOL argues that reasonable cause to investigate any single violation alleged by an aggrieved party establishes a reasonable cause to investigate:
- the employer; and
- every action the employer has taken with respect to the H-1B program and its H-1B employees.
The Secretary's expansive understanding of his authority is inconsistent with the plain language and structure of INA Section 212(n) (8 U.S.C. § 1182(n)), which:
- does not authorize an open-ended investigation of the employer and its general compliance without regard to the actual allegations in the aggrieved-party complaint;
- expressly ties the DOL's initial investigatory authority to the complaint and its specific allegations of a failure to meet an LCA condition; and
- grants the DOL authority to conduct an initial investigation based on the Secretary finding reasonable cause to believe the employer's specific misconduct as alleged in the complaint violates the INA. That reasonable-cause finding limits the scope of the initial investigation.
INA Subsections 212(n)(2)(F) and 212(n)(2)(G)(i) (8 U.S.C. § 1182(n)(2)(F) and (G)(i)) authorize alternative avenues to investigate LCA violations. If Congress intended to authorize a comprehensive investigation of the employer based on a single allegation in an aggrieved-party complaint like it did in Section 212(n)(2)(F) based on past violations, or a general compliance review of the employer like it did in Section 212(n)(2)(G)(i), it could easily have said so (Kucana v. Holder, 558 U.S. 233, 248, 130 S.Ct. 827, 175 L.Ed.2d 694 (2010)).
The DOL's initial authority to investigate an aggrieved-party complaint is unambiguously limited by the plain meaning of Section 212(n)(2)(A) (8 U.S.C. § 1182(n)(2)(A)) to those timely allegations in the complaint for which the DOL has found reasonable cause to investigate.

The Eighth Circuit concluded that the ARB's awards cannot stand because its findings of violations were based entirely on the DOL's unauthorized investigation.

Practical Implications

This decision is a promising one for H-1B employers who should be reassured that an investigation of a single allegation of H-1B violations in an aggrieved-party complaint does not mean that the employer will be subjected to a comprehensive investigation. However, complainants who allege violations that implicate other H-1B workers or the employer's comprehensive program may still face a broad DOL investigation. Furthermore, the investigation of an aggrieved-party complaint may reveal additional violations that would subject the employer to an expanded investigation and penalties.

Scope of DOL's LCA Investigation Authority Limited in Aggrieved Party Complaint: Eighth Circuit | Practical Law