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Cyberworld Enterprise Technologies, Inc. v. Napolitano

April 12, 2010


Appeal from the United States District Court for the District of Delaware (D.C. Civil No. 1-06-cv-00402) District Judge: Honorable Joseph J. Farnan, Jr.

The opinion of the court was delivered by: Rendell, Circuit Judge.


Argued January 11, 2010

Before: RENDELL, AMBRO and CHAGARES, Circuit Judges.


In this appeal, we consider whether the Secretary of Labor retained jurisdiction to impose sanctions for violations of H-1B visa regulations when she failed to act until eighteen months after the time period prescribed by statute for her actions had expired. We conclude that, under the analysis prescribed by the Supreme Court in Brock v. Pierce County, 476 U.S. 253 (1986), the Secretary had jurisdiction to act after the deadline passed.

Cyberworld Enter prise Technologies is a temporary staffing company that obtains H-1B visas for its employees and then places the employees with other companies, known as "secondary employers." Under federal law, Cyberworld is required to inquire of the secondary employer whether the hiring of an H-1B employee will cause a "United States worker" to be laid off, or "displaced." On August 9, 2001, the Department of Labor received a complaint that Cyberworld had failed to comply with this requirement. Although the Department was required by law to determine within thirty days whether a "reasonable basis" existed for the complaint, it did not make this determination until March 20, 2003, when it found that Cyberworld had failed to make the required inquiries on fourteen occasions. As provided for by statute, the Secretary of Labor assessed a $3400 penalty and notified the Attorney General to deny Cyberworld's H-1B applications for the ensuing year.

After unsuccessfully challenging these sanctions through an administrative appeal, Cyberworld brought an action in federal district court against the Secretary and other officials under the Administrative Procedure Act ("APA"), contending that the Secretary was without jurisdiction to impose sanctions because she had failed to act before the thirty-day deadline. Cyberworld also contended that the Secretary's action was untimely under the doctrine of laches, that sanctions were improper because Cyberworld had not knowingly violated the statute, that the sanctions imposed were not authorized by Department of Labor regulations, and that the Secretary should have exercised her discretion not to impose sanctions. The District Court granted summary judgment to the Government defendants. Like the District Court, we are not persuaded by Cyberworld's arguments, and will affirm the District Court's order granting summary judgment.



The H-1B visa program is designed to allow professionals from other countries who are employed in "specialty occupations" to work in the United States on a temporary basis. 20 C.F.R. § 655.700. Employers obtain H-1B visas for their employees by filing certain applications with the Department of Labor and the Department of Homeland Security. See id. H-1B employees either work directly for the employer who obtained the visa or are placed with other employers in need of specialty labor. As a temporary staffing agency, Cyberworld places its H-1B employees with other employers and is therefore known as a "placing employer." Since the bulk of Cyberworld's workforce consists of H-1B employees, it is also known as an "H-1B-dependent employer."

In order to obtain H-1B visas for their employees, employers must file a "labor condition application" ("LCA") with the Department of Labor under procedures set forth by 8 U.S.C. § 1182(n), which was incorporated into the Immigration and Nationality Act ("INA") by the Immigration Act of 1990 (the "1990 Act") and later amended by the American Competitiveness and Workforce Improvement Act of 1998 ("ACWIA"). See Pub. L. No. 101-649 § 205, 104 Stat. 4978, 5021-22 (1990); Pub. L. No. 105-277 §§ 412-13, 112 Stat. 2681, 2981-642 to -650 (1998). As part of this application, an employer must make several attestations required by § 1182(n)(1), including that the employer will pay H-1B employees no less than the prevailing wage for that type of job; that the employer's current employees are not on strike; that the employer has notified its employees of its intent to hire H-1B workers; and that the employer has attempted to recruit employees in the United States to fill its positions.

The attestation requirement relevant here was enacted by the ACWIA, and requires that placing employers attest in the LCA that they have confirmed with secondary employers that the hiring of an H-1B employee will not displace a "United States worker" employed by the secondary employer. Specifically, 8 U.S.C. § 1182(n)(1)(F) provides that the LCA must state that:

the employer will not place the nonimmigrant with another employer (regardless of whether or not such other employer is an H-1B-dependent employer) where-

(i) the nonimmigrant performs duties in whole or in part at one or more worksites owned, o p e r a t e d , o r controlled by such other employer; and

(ii) there are indicia of an employment relationship between the nonimmigrant and such other employer; unless the employer has inquired of the other employer as to whether, and has no knowledge that, within the period beginning 90 days before and ending 90 days after the date of the placement of the nonimmigrant with the other employer, the other employer has displaced or intends to displace a United States worker employed by the other employer.

§ 1182(n)(1)(F) (emphases added).*fn1

The inquiry requirement is also contained in Department of Labor regulations:

The H-1B employer is prohibited from placing the H-1B nonimmigrant with another employer, unless the H-1B employer has inquired of the other/secondary employer as to whether, and has no knowledge that, within the period beginning 90 days before and ending 90 days after the date of such placement, the other/secondary employer has displaced or intends to displace a similarly-employed U.S. worker employed by such other/secondary employer.

20 C.F.R. § 655.738(d)(5) (emphases added). The regulations then set forth "standards and guidance" that apply to the inquiry obligation. Id.

The Secretary is required to certify an LCA within seven days unless she "finds that the application is incomplete or obviously inaccurate." § 1182(n)(1). Thus, she is not generally permitted to investigate the veracity of the employer's attestations on the LCA prior to certification. However, she is required to investigate complaints regarding an employer's "failure to meet a condition" of § 1182(n)(1) or "misrepresentation of material facts" in an LCA. § 1182(n)(2)(A). Such complaints "may be filed by any aggrieved person or organization," and must be "filed not later than 12 months after the date of the failure or misrepresentation." Id.

The statute mandates that "the Secretary shall provide, within 30 days after the date such a complaint is filed, for a determination as to whether or not a reasonable basis exists to make a finding described in subparagraph (C)." § 1182(n)(2)(B) (emphases added).*fn2 As relevant here, subparagraph (C) refers to "a failure to meet a condition of paragraph . . . (1)(F)," which sets out the inquiry obligation described above.

§ 1182(n)(2)(C)(i).

Department regulations delegate the "reasonable basis" determination to the Administrator of the Wage and Hour Division (the "Administrator"), see 20 C.F.R. § 655.815, and impose a thirty-day deadline for the Administrator to issue this determination.

If the Administrator determines that an investigation on a complaint is warranted, the complaint shall be accepted for filing; an investigation shall be conducted and a determination issued within 30 calendar days of the date of filing. The time for the investigation may be increased with the consent of the employer and the complainant, or if, for reasons outside of the control of the Administrator, the Administrator needs additional time to obtain information needed from the employer or other sources to determine whether a violation has occurred. No hearing or appeal pursuant to this subpart shall be available regarding the Administrator's determination that an investigation on a complaint is warranted.

20 C.F.R. § 655.806(a)(3) (emphases added).

If the Department ultimately determines that the inquiry requirement was violated, the statute provides for monetary penalties and a suspension of ...

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