The B-1 Visa: Trap for the Tailor, Bricklayer and Tesla Motors

Many have gotten embroiled by the B-1 business visa in different ways. A tailor from Hong Kong who was accused of engaging in unauthorized work successfully argued that taking measurements on behalf of customers was a permissible business activity. Some years later,  a union of bricklayers successfully challenged a policy that allowed foreign construction workers to enter the United States on B-1 visas to install equipment purchased from abroad. Very recently,  electric car maker Tesla Motors got snared in a B-1 visa quagmire. The innovative company contracted with a German construction company, Eisenmann, which in turn sub contracted with a Slovenian company, ISM Vuzem,  to build a new paint shop at Tesla’s plant in Fremont, California. Vuzem  in turn facilitated the entry of a Slovenian worker, Gregor Lesnik,  on a B-1 business visa to help build Tesla’s new paint shop.  This would have gone unnoticed, but for the fact that Lesnik unfortunately suffered a serious injury.  It then came to light that he had no qualifications to oversee American workers, despite paperwork that said the contrary.

Although Tesla has not taken responsibility as it contracted with another company to build its paint shop, one frequently sees US businesses embarrassingly stumbling and tripping on the B-1 visa, which is not actually a visa that allows one to work or be employed in the United States. These stumbles also reflect the broken nature of the US immigration system that does not have pathways for businesses to legitimately and expeditiously use the skills of foreign nationals in an increasingly global economy.

The B-1 business visa remains one of the “most ill-defined” visas but still plays a crucial role in providing flexibility to businesses. While the B-1 visa is associated with visiting the United States to participate in meetings and negotiate contracts, it can have broader purposes. For instance, under 8 CFR 214.2(b)(5) and 22 CFR 41.31(b)(1), a foreign national can enter the US on a B-1 visa for “the purpose of supervision or training of others engaged in building or construction work, but not for the purpose of actually performing any building or construction work for themselves.” Lesnik availed himself of the B-1 visa under these regulatory provisions, although he did not come to the United States to supervise, but rather, simply install pipes and welding parts.

The reason why the current regulation insists that the foreign national only enter the United States on a B-1 visa to supervise and train other workers in building and construction work has its genesis in International Union of Bricklayers and Allied Craftsmen v. Meese, 616 F. Supp. 1387 (1985). In that case, the plaintiffs, a union of bricklayers and allied craftsmen, challenged the predecessor to 8  CFR 214.2(b)(5) and 22 CFR 41.31(b)(1). The predecessor was INS Operating Instruction 214.2(b)(5), which permitted a foreign national to come to the United States to “install, service, or repair commercial or industrial equipment or machinery purchased from a company outside the U.S. or to train U.S. workers to perform such service.” This B-1 visa holder under OI 214.2(b)(5) could not receive a salary from a United States sources, except for an expense allowance or other reimbursement of expenses incidental to the temporary stay.  The plaintiffs challenged OI 214.2(b)(5) on grounds that it violated 101(a)(15)(B) of the Immigration and Nationality Act (INA), which excluded an alien who is “coming for the purpose of ….performing skilled or unskilled labor.” The plaintiffs alleged that foreign workers in Bricklayers were German nationals coming on B-1 visas to complete the installation of a gold ore processing system that was purchased from a  then West German manufacturing company, and thus violated INA 101(a)(15)(B). The plaintiffs also claimed that OI 214.2(b)(5) violated INA 101(a)(15)(H)(ii), which allowed H-2 temporary workers to come to the United States only if unemployed persons capable of performing such service or labor could not be found in the country. The Bricklayers court agreed with the plaintiffs that the OI violated both 101(a)(15)(B) and 101(a)(15(H)(ii) of the INA, and struck it down, notwithstanding the fact that the temporary construction work was incident to installing equipment purchased by a US business from a German company.

After the decision, and after another lawsuit by the Bricklayers Union in the DC Circuit Court of Appeals became moot,  legacy INS and the Department of State proposed 8 CFR 214.2(B)(5)  and 22 CFR 41.31(b)(1), which restricted B-1 entries relating to construction to only supervisory personnel, and noted the reaction of foreign countries and corporations to the Bricklayers decision:

Following the District Court’s order, which precluded the admission of even the most highly specialized technicians, the Service and the Department of State received communications from U.S. industries and foreign governments which indicated a problem of crisis proportions. Industry predicted that equipment under warranty would not be repaired or serviced, with resultant losses of investment and lay-offs of American workers, and that access to state-of-the-art foreign technology would be limited with resultant losses of competitive position. Foreign governments generally viewed this new restriction as a constraint on trade and hinted at reciprocal action.

The Bricklayers case stands in direct contrast to the Board of Immigration Appeals decision in  Matter of Hira, 11 I. & N. Dec. 824. There the BIA  held that the term “business” does not include ordinary labor for hire, but is limited to intercourse of a commercial character. The BIA concluded that a Hong Kong based tailor, Mr. Hira,  entering with a B-1 visa to “study the US business market”, who on behalf of his employer (a Hong Kong based manufacturer of custom made men’s clothing), took orders from, and the measurements of, prospective customers in the United States whom he did not solicit; and who then sent the orders, together with the purchase price, to his employer overseas, was engaged in “intercourse of a commercial character,” and was eligible for B-1 visitor for business classification. The BIA specifically stated that Hira’s sojourn in the US was of a “temporary character” and he clearly intended to continue his foreign residence at the termination of his authorized stay. The profits of Hira’s B-1 activities also accrued to the foreign entity. The BIA, however, also clarified that the nature of the business activity itself need not be temporary. The BIA held that for B-1 purposes, the business relationship may be of a continuing or long standing nature. The only condition in this respect is that each visit be temporary in duration.

Thus, in Matter of Hira, so long as the performance of skilled or unskilled labor was incident to intercourse of a commercial character, and the labor was tied to and benefitted a foreign business, it was a permissible activity under the B-1 business visa. Still, there is not much of a dividing line between Matter of Hira and the Bricklayers case. In Bricklayers, the labor was tied to and incident to  a foreign employer,  which had sold equipment to a gold mine in the United States. Matter of Hira clearly appears to be the better decision, and provides a more realistic test of dealing with the short term needs of businesses with global operations. However, with respect to foreign nationals coming to the United States for construction work, they have to be supervisors and must adhere  to 8 CFR 214.2(B)(5)  and 22 CFR 41.31(b)(1).

The B-1 visa categories, and its many variants, play an important role in filling a gap in the available visa categories for short-term, skilled and professional workers.  In addition to permitting supervisors and trainers short term entry into the United States for construction work, other versions like the “B-1 in lieu of the H-1B, “B-1 in lieu of the H-3” and the “B-1 in lieu of the J-1”  also provide for short term flexibility for professionals and trainees, and obviate the need for a US employer to file a lengthy petition that is more suitable for longer term employment in the United States. Under all of these B-1 variations, the foreign national has to remain employed by the overseas employer and cannot be paid from a US source, except for expenses. A consul will deny a B-1 visa to one who does not have an intention to return to a foreign residence outside the United States.  Critics of the B-1 visa complain that the wages paid to these workers in foreign countries is nothing compared to the wage of a comparable American worker. However, the B-1 visa is meant for very short term assignments while the foreign worker is employed overseas. Longer term employment is only possible under the H-1B or H-2B visa, which mandates that the foreign worker be paid the prevailing wage. If we do not allow such flexibility through the B-1 visa, other countries will retaliate and will not permit US workers the same flexibility in other countries, where US corporations have subsidiaries or export their products and services. At the same time, US companies that contract with foreign firms for foreign labor must perform due diligence to ensure that the foreign workers are properly using the B-1 visa, and if construction work is involved,  B-1 visa holders must be providing supervision or training rather than  performing any building or construction work themselves.

Despite the Tesla stumble with the B-1 visa, and the unfortunate injury of Lesnik, the visa should be retained and the baby ought not to be thrown out with the bath water. There are laws that exist outside the INA that protect people from being injured at a worksite,  and if they do get injured, parties responsible for the injury can and should be held liable.  Indeed, the more realistic test under Matter of Hira  rather than Bricklayers be adopted so that so that the United States can remain globally competitive by allowing business to be conducted in a seamless and flexible manner. The notion of walling off the United States from the rest of the world, which has become fashionable in many quarters these days and eerily consistent with the Bricklayers case,  will ultimately diminish the country’s ability to do business with the rest of the world.

USA v. OLIVAR: Conspiracy To Commit Criminal Acts Prior To Naturalization Can Still Result In Revocation Of Citizenship

One of the advantages of becoming a US citizen is that one is no longer susceptible to being deported from the United States, especially if the person has been convicted of a crime. While being convicted of a crime results in criminal penalties, a US citizen can at least take comfort that that there will be no removal, and the United States will continue to remain home for the convicted person.

Think again.

In United States of America v. Olivar, the Ninth Circuit Court of Appeals on April 18, 2016 upheld the revocation of citizenship of a naturalized person who was convicted of criminal conspiracy for acts undertaken prior to applying for naturalization.  Olivar, a native of the Philippines,  was naturalized as a US citizen in May 2002. In the same year, according to a Law360 story, Olivar began working at a law firm in the Los Angeles area in 2002. Seven years later, in early 2009, he was indicted on conspiracy charges in connection with a visa fraud scheme. Olivar and a second invidual recruited  people who were not authorized to work in the U.S., charging them anywhere between $1,000 and $7,500 to find a business that would sponsor them for an employment-based immigrant visa. They filed applications with the Labor Department and immigration authorities claiming the individuals would be working in skilled positions, like accountants or public relations specialists, according to Law360. The businesses allegedly never actually intended to employ the individuals, the prosecutors alleged. Olivar was also accused of helping the immigrants falsify their education and work experience if they didn’t meet the requirements for the H-1B visa, by using false diplomas, transcripts and reference letters. Olivar eventually pled guilty to conspiracy to commit visa fraud in April 2009 in violation of 18 USC 2, 371 and 1546 and was sentenced to just over one year in jail. Federal authorities later started efforts to revoke his citizenship, claiming he lacked good moral character in the five year period leading up to naturalization in May 2002 based on unlawful acts that adversely reflected upon his good moral character. These acts involved a conspiracy to commit visa fraud, which was a crime involving moral turpitude.

While this sounds Kafkaesque, it is possible to lose the coveted US citizenship if a person is convicted of a crime, based on conduct that occurred prior to naturalization. While a person only knows for certain about the crime being committed at the point of conviction, prior acts, or even an agreement to commit acts in the future, can potentially lead a court to conclude retroactively that acts prior to conviction adversely reflected on the person’s good moral character.

The Form N-400, Application for Naturalization, asks broadly “Have you ever committed a crime or offense for which you have never been arrested?” In a prior blog,  “Crime Without Punishment: Have You Ever Committed A Crime For Which You Have Not Been Arrested?” this author puzzled on how an immigration attorney should advise a client to answer this overbroad question. It is impossible to know whether a person has committed a crime or offense, unless it is proven beyond reasonable doubt in the criminal justice system. It may thus be problematic to advise a client to admit to a commission of a crime on the N-400 application when one does not know what provision of the law was violated, and whether the applicant met all the elements of that offense. Since this overbroad question also requires admitting non-criminal offenses, it would be difficult, and frankly ridiculous,  to plumb through the memory of the client to recall every minor offense that may have been committed in this person’s life, which may include such insignificant offenses as jay walking  (a daily occurrence in New York City!) or driving above the speed limit.  Nevertheless, failure to disclose whether a person has committed a crime for which there was no charge or arrest can be used against the person if there is a conviction after the naturalization. In U.S. v. Bogacki, for example, the defendant was convicted for conspiracy to bring in and harbor aliens, make false statements, commit mail fraud and wire fraud, and fraud by misuse of immigration documents, among others, after he had naturalized. However, the government was successful in denaturalizing him for his failure to specifically mention the question about committing a crime for which you have not been arrested on the N-400 application.

In USA v. Olivar, the Ninth Circuit Court of Appeals avoided relying on this ambiguous question on the N-400 application, and instead found that he lacked good moral character during the five year period preceding his naturalization. According to the Court, “The district court made clear that the Appellant was denaturalized because he lacked good moral character during the statutory period, and did not find that Olivar should be denaturalized because he made a material misrepresentation on his naturalization form.”  What is unusual about USA v. Olivar is that he had only agreed to commit a criminal act in the future, and the essential element of conspiracy, the overt act, only occurred after his naturalization. Was Olivar a criminal during the five year period prior to his naturalization, and thus lacking in good moral character? The following extract from the Law360 story is worth noting:

During oral arguments earlier this month, his attorney, Nimrod Haim Aviad of Crowell & Moring LLP, acknowledged that authorities alleged the conspirators began discussing the visa scheme back in 2001, several months before Olivar became a citizen.

But Aviad said no one acted on the plan until after Olivar’s naturalization. So, when Olivar was sworn in as a U.S. citizen, he was not a criminal and had not committed an illegal act, Aviad argued.

“When I agree to commit an act, that does not mean that I committed it,” he said. “That is the very basic principle that underlies the law of conspiracy.”

Judges appeared to be skeptical of the argument.

“So somebody could decide to engage in four or five illegal conspiracies to smuggle drugs, smuggle aliens, do a whole bunch of stuff, and say ‘but hold off, I’m going to become a citizen next week and then we’ll start buying the guns?’” Circuit Judge Susan P. Graber asked. “And that’s okay?”

As a result of his conviction in 2009, Olivar is no longer a US citizen based on an agreement prior to his naturalization to commit criminal acts in the future, and is potentially deportable. His case is especially striking since conspiracy, in addition to proving that two or more people two or more people were in agreement to commit a crime,   also requires an “overt act” taken in furtherance of the crime.  In USA v. Olivar, the applicant could not have been accused of conspiracy during the statutory period requiring good moral character prior to naturalization as the overt act had occurred long after he had become a citizen.  This appears to be a case of first impression, and the Ninth Circuit’s conclusion seems to be at odds with the law of conspiracy. Even with respect to decisions involving deportation, the only relevant decision involving deportation as a result of conspiracy that this author found (with David Isaacson’s assistance) is Matter of T-, 2 I&N Dec. 95 (1944). In Matter of T, the respondent was found not to be deportable for a crime involving moral turpitude committed within 5 years after entry as the overt act in that conspiracy occurred prior to his entry into the United States. The respondent, however, was still found deportable for having admitted to the commission of a crime involving moral turpitude prior to this entry, but it is significant that the charge of deportability for the commission of a crime after entry was not sustained as the overt act took place prior to entry. Because the Ninth Circuit’s decision in USA v. Olivar does not appear to be crystal clear, this is not going to be the last word on whether citizenship can be revoked based on an agreement to commit a crime prior to naturalization, but where the overt act occurred after naturalization.

Matter of Z-A-, Inc.: Recognizing The Global Role Of The L-1A Manager In A Globalized World

Despite the shrill rejection of globalization in the current presidential election cycle, the Appeals Administrative Office (AAO) has thankfully bucked the trend. It recently designated Matter of Z-A- Inc. as an “Adopted Decision, “which means that such a decision “establishes policy guidance that applies to and binds all USCIS employees. USCIS directs its personnel to follow the reasoning in these decisions in similar cases.”

Under Matter of Z-A-, Inc., designated as an Adopted Decision since April 14, 2016, an L-1A intra-company manager who primarily manages an essential function can also be supported by personnel outside the United States within an international organization. A USCIS officer can no longer deny L-1A classification to such a manager because he or she is not supported by personnel within the United States.  This decision recognizes that we operate in a global world, and that an organization may rely on its resources outside the United States to produce products or provide services.

The foreign national manager seeking an L-1A visa extension in Matter of Z-A-, Inc. was the President and Chief Operating Officer of the US petitioning entity whose parent company was in Japan. His duties included: directing and managing the Petitioner’s financial, legal, trade, administrative, and sales activities; establishing financial and budgetary plans and goals; reviewing and monitoring sales activities performed by the Petitioner’s sales manager; liaising with the parent company; and interacting with customers and outside service providers. The Petitioner in the US only employed a sales manager and an administrative specialist. However, eight staff members within the parent company’s headquarters in Japan also exclusively supported the work of this manager.

The key issue is whether the Petitioner established that this manager would be employed in a qualifying “managerial capacity” pursuant to INA 101(a)(44)(A). The Petitioner asserted that this manager would manage an essential function of the organization, which is permitted under the statute, as opposed to managing other personnel. A functional manager under the L-1A visa classification must primarily manager as opposed to perform the essential function, and must also be senior in the organizational hierarchy. An employee who primarily performs the tasks necessary to produce a product or a service is not considered to be employed in primarily a managerial or executive capacity. See Brazil Quality Stones, Inc. v. Chertoff,  531 F.3d 1063 (9th Cir. 2008).

The L-1A visa classification does not require the organization to employ hundreds of people. Rather, the USCIS is required to take into account the reasonable needs of the organization as a whole, including any related entities within the organization, giving consideration to the organization’s overall purpose and stage of development. See INA 101(a)(44)(C). The AAO found that since Congress created the L-1A classification to “eliminate problems…..faced by American companies having offices abroad in transferring key personnel freely within the organization,” it was reasonable for a petitioner to assert that its organizational needs include those of its related foreign components.

In the instant case, the request to extend L-1A status was denied by USCIS Service Center Director on the ground that only a small number of employees worked in the United States, who would support the manager and relieve him from performing the duties of the function. It did not address the Petitioner’s substantial evidence relating to the staff that was located at the parent entity in Japan who also supported the manager in primarily managing the essential function of the organization. The AAO reversed the Service Center’s decision on this ground by noting:

“Here the record shows that the Beneficiary, in his role as Vice President, will continue to rely on the support of the eight staff members in Japan and two employees in the United States to accomplish non-managerial duties, and that the purpose of his transfer is to oversee the short-term and long-term expansion of the Petitioner’s presence in what is a new market. Given the overall purpose of the organization and the organization’s stage of development, the Petitioner has established a reasonable need for a senior-level employee to manage the essential function of developing its brands and presence in the United States, notwithstanding that the Petitioner employs directly only two other employees in the United States.

While the Beneficiary may be required to perform some operational or administrative tasks from time to time, the Petitioner has established by a preponderance of evidence that the Beneficiary will primarily manage an essential function, while day-to-day, non-managerial tasks will be performed by a combined staff of 10 employees of the Petitioner and its parent company, located in the United States and Japan, respectively.”

In a globalized world, where people are easily connected to each other by the internet, it is no longer necessary for a manager to rely on personnel in one location, namely in the United States. It is now common for teams of personnel within one organization to easily collaborate across different countries to produce a product or provide a service using cloud technology and even able to video conference on one’s smart phone through Skype or FaceTime.  The fact that the world is flat, as famously coined by Tom Friedman, is no longer a novelty but a given in a world that has become even more hyper connected since.  Despite unrealistic calls by politicians to have operations exclusively in America, the reality is that US businesses can thrive, compete, prosper, create new jobs and benefit the American consumer through international operations, made that much easier with rapidly evolving internet technology.

Until the AAO designated Matter of Z-A- , Inc. as an Adopted Decision, it was quite common to receive an objection from the USCIS that the persons supporting the L-1A manager were not in the United States, and would therefore not count in evaluating whether this individual would be performing in primarily a managerial capacity. This sort of reasoning was not consistent with the way businesses operate today, and  put the United States at a distinct competitive disadvantage if its corporations could not quickly bring in key personnel, who in turn would be supported by resources in foreign countries. Even if it was logical and commonsensical for a manager to qualify for an L-1A on this obvious basis, some USCIS officers obstructively still denied the L-1A petition. After Matter of Z-A- Inc.’s elevation to an Adopted Decision, it now firmly binds all employees of the USCIS even if their worldview may be colored by the clarion calls of politicians who reject globalization.  In the event that a USCIS employee still goes rogue and denies the L-1A petition on such a baseless ground, it certainly provides strong grounds for an appeal.

Is Hillary Clinton’s Silence On H-1B Visas Golden?

The USCIS announced on May 2, 2016 that it will be returning H-1B petitions that have not been selected in this year’s H-1B lottery. Since USCIS received 236,000 H-1B petitions subject to the quota for fiscal year 2017, which is 65,000 for regular H-1B petitions plus another 20,000 for those with advanced degrees from U.S. universities, there will be more H-1B petitions that will get rejected than accepted. The H-1B lottery undermines US employers who wish to hire talented foreign workers and it also crushes the hopes of prospective foreign workers who will no longer get an opportunity to work in the United States, and contribute to its growth and prosperity.

Presidential candidates like Trump, Cruz and Sanders have come out against the H-1B, and have promised to restrict it even further, even when the current status quo is completely unacceptable. Clinton has remained silent on H-1Bs, and this may be a good thing. Here is my take on Clinton’s position on H-1B visas that was recently published in The Economic Times,

Hillary Clinton has surprisingly not said anything about H-1B visas in her presidential campaign, unlike other candidates such as Trump, Sanders and Cruz who have come out stridently against so called H-1B abuses. The H-1B visa has become controversial since 2015 after the media reported on US workers being laid off upon American companies contracting with India-based IT firms to take over their IT functions. If Clinton does support an increase in H-1B visa numbers and understands the benefit that the H-1B program brings to US companies and to the consumer, perhaps it is strategic for her to not say anything at this point.

In the past, Clinton has spoken in support of increasing H-1B visas such as in a 2007 speech to Silicon Valley executives when she said, “I am reaffirming my commitment to the H1B visa and increasing the current cap. Foreign skilled workers contribute greatly to what we have to do in being innovators.” When Clinton was a Senator from New York in 2003 she inaugurated the offices of TCS in Buffalo. However, when America was in its worst recession in 2009, she said while visiting India, “Outsourcing is a concern for many communities and businesses in my country.”

Clinton, on the other hand, has spoken forcefully in favor of Comprehensive Immigration Reform in her campaign, which includes reforming the immigration system as a whole, and she is absolutely committed to pushing for CIR within the first 100 days of her presidency. If there is any compromise on H-1B visas as part of a deal on CIR, such as increasing the H-1B cap in exchange for imposing certain restrictions on IT companies, I believe she will go for a deal if it brings CIR into fruition.

Clinton’s silence on H-1B visas is a good sign when the visa program has become so poisoned in recent times. However, if she is pushed by Trump in the general election campaign, she may sound tougher on H-1B visas, although this may all be part of campaign rhetoric. Based on her past statements in support of H-1B visas, and her silence in this campaign, means that she will probably support the H-1B visa program if she is elected President, and will push Congress in the direction of expanding rather than curtailing the H-1B visa.