Liability for Foreign Worker Layoffs

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Employers may be liable for damages for undertaking the residence process for an employee and then stopping it, or making errors resulting in delays or a denial.

 

Once an employer undertakes the permanent residence process on behalf of an employee, courts have held the employer has a special duty to competently manage and pursue the process.  While there is little case law in this area, employees have done well challenging employers on this ground.

There is no requirement that an employer withdraw an I-140 petition when the employment relationship ends.  And the law does require the employer to notify USCIS under certain circumstances involving many types of nonimmigrant visas.  See, 8 CFR 214.2(h)(11), Amtel v. Yongmahapakorn, Alien Labor Review Board, 2006.  The fact that the law specifically requires an employer to notify USICS in certain circumstances, but does not require an employer to withdraw an I-140 petition upon termination of the employment makes a strong argument that neither Congress, nor the Department of Homeland Security intended to require employers to withdraw I-140 petitions upon the termination of employment.  If the employer was required to notify USCIS upon the termination of employment.  Regardless of the employee’s status, or type of application pending, Congress and DHS arguably would not have listed this requirement for other types of situations, but not for I-140 petitions had it intended an I-140 withdrawal requirement.

It is difficult to prove a negative.  That is to say, it is difficult to prove that the law does not require something because the law is written affirmatively and thus customarily speaks only of things it does require and not things it does not require.  For example, there is no written law confirming that employers of H‑1B workers need not phone USCIS weekly to provide an update on the employee’s work habits and no law relieving H-1B workers of the need to wear purple jackets on Tuesdays.  But because the law does not compel these things, no one need do them.

The CSC Liaison Minutes October 29, 2003 question:

The regulations (8 C.F.R. § 205.1(a)(3)(iii)) require "a written notice of withdrawal" to revoke an I-140... [will USCIS] deny a pending adjustment... application... if the I-140 petitioner did not revoke the I-140 but merely notified CSC that the beneficiary was no longer employed?

The CSC Liaison Minutes October 29, 2003 USCIS’s answer:

If an alien is the beneficiary of an approved Form I-140 and [filed] form I-485 [which remains] pending 180 days or longer, [and] the employer withdraws the Form I-140 on or after the date that the Form I-485 has been pending 180 days or more, the I-140... remains valid under... section 106(c) of AC21.

The liaison minutes refer to the USCIS Memo by William R. Yates dated August 4, 2003 regarding I-140 portability.  In that memo Mr. Yates writes just after noting that an employer “may” revoke an I-140 petition that, “It should be noted that there is no requirement in statute or regulations that a beneficiary of a Form I-140 actually be in the underlying employment until permanent residence is authorized.  Therefore, it is possible for an alien to qualify for the provisions of §106(c) of AC21 even if he or she has never been employed by the prior petitioning employer or the subsequent employer under section 204(j) of the Act.”

In response to direct questioning at the October 29, 2003 California Service Center liaison meeting, the CSC authorized representative did not mention any affirmative duty of a petitioner to withdraw the I-140 petition upon termination of employment.

Employer’s Duty Once Undertaken to Support Employee’s Application for Residence

Although most states are “at will” employment states, courts in at least two states have held that where an employer undertakes the role of preparing and filing a labor certification and I-140 petition for an employee, the employer’s failure to continue that process is a breach of duty that results in liability.  One case involved an employer that said it would file an I-140 petition and failed to, and the other case involved an employer’s law firm that believed it did not have a fiduciary duty to the employee who was in fact also its client.  The plaintiff claimed that the employer’s law firm represented him and the employer and had a fiduciary duty to him as much as to the employer.  The jury and the judge agreed.  The plaintiff’s lost wages occurred during his unemployment of only two months, and the total award was mostly to compensate for non-economic damages, pain and suffering.

In the Saraswati case, expert witness Nancy Fuller-Jacobs, Esq. testified that the employer had no duty to withdraw the original I-140 petition that it had filed even though the employment relationship was terminated.  Indeed, in Saraswati, it appears that the employer may have withdrawn the I-140 petition maliciously to try to pressure Saraswati to leave the United States during an employment law dispute after Saraswati was no longer working for the company.

In another case called DerKervorkian, the employer failed to file a labor certification and I‑140 petition within a reasonable time, and the court awarded $366,250 in non-economic damages and $313,570.20 in economic damages for a total damage award of $679,820.20.  In this case, the plaintiff was a translator earning approximately $57,000 per year.  It is generally true that economic damages are a function of the employee’s annual pay.  In a case where the employee earns four times as much as in DerKervorkian and suffers a similar period of unemployment, one can generally expect four times the economic damages.

In Saraswati, the plaintiff earned about $80,000 per year and the economic damages were $65,000 while the non-economic damages were $300,000.  Defendants made a post trial motion to reduce the damage award as excessive, but the trial judge refused.

Conclusion

For these reasons, the company has no duty to withdraw the I-140 petition.  Additionally, if the company receives advice from an outside law firm that the best course of action is to withdraw the petition, in an effort to protect the company and its shareholders from liability, it should require the law firm to certify in an opinion letter on letterhead that it is certain that (1) the law compels the company to withdraw the I-140 petition (regardless of the inability to point to any law, or regulation stating this), and (2) withdrawing the petition will certainly not result in civil liability to the company.  In this way, the company can avoid all liability regardless of the outcome by obtaining indemnification in the event that withdrawing results in actual liability to the employee.

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