Aleutian Capital Partners, LLC v. Scalia

• Decision Date: 22 September 2020
• Docket Number: August Term, 2018,No. 17-3810,17-3810
• Parties: ALEUTIAN CAPITAL PARTNERS, LLC, Plaintiff-Appellant, v. Eugene SCALIA, sued in his official capacity, Secretary, United States Department of Labor, United States Department of Labor, Wage and Hour Division, United States Department of Labor Employment Standards Administration, United States Department of Labor, Administrator, United States Department of Labor Employment Standards Administration Wage and Hour Division United States Department of Labor, Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

975 F.3d 220

ALEUTIAN CAPITAL PARTNERS, LLC, Plaintiff-Appellant,

v.Eugene SCALIA, sued in his official capacity, Secretary, United States Department of Labor, United States Department of Labor, Wage and Hour Division, United States Department of Labor Employment Standards Administration, United States Department of Labor, Administrator, United States Department of Labor Employment Standards Administration Wage and Hour Division United States Department of Labor,^* Defendants-Appellees.

No. 17-3810

August Term, 2018

United States Court of Appeals, Second Circuit.

Argued: February 6, 2019

Decided: September 22, 2020

Christopher C. Heisenberg, Hinckley & Heisenberg LLP, New York, N.Y. (Michael T. Stolper, The Stolper Group, P.A., New York, N.Y., on the brief), for Plaintiff-Appellant.

Benjamin H. Torrance, Assistant United States Attorney (Natasha W. Teleanu, Assistant United States Attorney, on the brief), for Audrey Strauss, Acting United States Attorney for the Southern District of New York, New York, N.Y., for Defendants-Appellees.

Before : Pooler, Lohier, and Carney, Circuit Judges.

Carney, Circuit Judge:

Aleutian Capital Partners, LLC ("Aleutian") appeals from the September 29, 2017 judgment of the United States District Court for the Southern District of New York (Ramos, J. ) affirming a decision by the Administrative Review Board ("ARB") of the United States Department of Labor ("DOL"). In that decision, ARB ordered Aleutian, a private equity investment group in New York, to pay back wages to an employee and a former employee, both of whom it had hired under the H-1B temporary foreign worker program (the "H-1B Program" or the "Program").

Established by the Immigration and Nationality Act ("INA"), the H-1B Program allows employers, under closely regulated circumstances, to hire non-immigrant foreign individuals for work in certain temporary positions. See 8 U.S.C. § 1101(a)(15)(H)(i)(b) ; id. § 1182(n)(1). Congress charged DOL with implementing the H-1B Program and enforcing the Program's standards. Id. § 1182(n)(2)(A).

This appeal arises from a 2013 complaint filed with DOL by one such H-1B employee—Shakir Gangjee ("Gangjee")—who alleged that Aleutian violated Program standards by underpaying him for several months of his approximately one-and-a-half year period of employment there, from August 2011 through December 2012. The ensuing DOL investigation showed that the monthly salary payments Gangjee received during that period frequently fell below the amount he was due under H-1B Program standards but, because Aleutian overpaid Gangjee in other months, the end result was that Gangjee received in total compensation for 2012 somewhat more than what the Program required.¹ DOL nonetheless determined that applicable regulations called for Aleutian to pay Gangjee back wages for each of the months in which it failed to remit in wages the full amount due, regardless of any bonuses or overpayments that it made in other months. See App'x 37-38 (citing 20 C.F.R. § 655.731 ).

Aleutian challenges this interpretation of the relevant statute and regulations, arguing that because by the end of the year it paid Gangjee the wage specified in its H-1B Program application—in fact, it paid Gangjee more than that wage—DOL cannot order it to pay any back wages at all. This argument failed in the agency proceedings and in the District Court, and we now affirm the District Court's judgment. Agency regulations duly promulgated under the statute unambiguously require H-1B employers to make wage payments in "prorated installments," "no less often than monthly." 20 C.F.R. § 655.731(c)(4). We therefore conclude that an employer's failure to satisfy this requirement constitutes a failure to comply with the INA's overall "required wage obligation"—a conclusion that supports DOL's award of back wages to Gangjee. Id.

Additionally, during its investigation of Gangjee's complaint, DOL requested that Aleutian provide wage documentation as to any other H-1B Program worker that it had employed since January 15, 2012. In response, Aleutian produced records corresponding to its employment of Minh-Thuong Horn ("Horn"), its one other H-1B employee, whom Aleutian hired in 2010 and whose employment with the company ended in early January 2013. Reviewing these records, the agency discovered that Aleutian underpaid Horn for her work in the month of December 2012, and so ordered the company to pay her back wages for that month.

On appeal, Aleutian contests the agency's authority to investigate its employment of Horn, who had not herself filed a complaint. Aleutian urges us to impose limits on DOL's investigatory authority by holding that DOL's investigation into an H-1B Program complaint may not exceed the specific allegations of misconduct made in that complaint—which would mean that the agency stepped beyond the bounds of its authority when it investigated Aleutian's employment not only of Gangjee, but also of Horn. We decline to adopt the proposed restriction. Rather, we affirm DOL's authority to investigate Aleutian's compliance with the H-1B Program's wage requirement as to Horn, as well as to Gangjee. Such an inquiry was reasonably within the scope of DOL's investigative authority into the allegations made in Gangjee's complaint and is lawfully contemplated by Program regulations.

BACKGROUND

I. Legal Framework

The INA authorizes the United States Citizenship and Immigration Services ("USCIS") to issue work visas to certain non-immigrant foreign workers permitting their temporary employment in the United States in statutorily defined "specialty occupation[s]." 8 U.S.C. § 1101(a)(15)(H)(i)(b) ; see also id. § 1184(i)(3) (defining "specialty occupation" for purposes of H-1B Program). Foreign workers employed under this authority are known as "H-1B Program employees" or "H-1B workers," after the provision authorizing their temporary work visas. The H-1B Program is implemented by regulations promulgated by DOL. See 20 C.F.R. Part 655, subparts H and I.

Our focus here lies primarily on those statutory and regulatory provisions that establish the amount of wages an H-1B Program employee is due and when those wages must be paid. As to the amount, an employer seeking to hire under the H-1B Program must commit, in a Labor Condition Application ("LCA") filed with DOL, to paying the prospective employee at the "required wage rate." 20 C.F.R. § 655.731(a) ; see also 8 U.S.C. § 1182(n)(1)(A) ; 20 C.F.R. § 655.730(a) (detailing process for filing LCA). That amount is defined by statute as being the higher of (1) "the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question," or (2) "the prevailing wage level for the occupational classification in the area of employment." 8 U.S.C. § 1182(n)(1)(A) ; 20 C.F.R. § 655.731(a) ; see also 8 U.S.C. § 1182(p) ("Computation of prevailing wage level"). As to the timing, the regulations dictate that employers satisfy their obligation to pay the required wage when they pay "the employee, cash in hand, free and clear, when due"—subject only to certain narrowly defined exceptions² —"prorated installments (e.g., annual salary divided into 26 bi-weekly pay periods, where employer pays bi-weekly) paid no less often than monthly." 20 C.F.R. § 655.731(c).

Also important for our purposes is the fact that the statute creates an initial presumption of an application's acceptability: So long as DOL does not find that an LCA is "incomplete or obviously inaccurate," it must certify the LCA within seven days of receipt. 8 U.S.C. § 1182(n)(1) ; see also Cyberworld Enter. Techs., Inc. v. Napolitano , 602 F.3d 189, 193 (3d Cir. 2010) (explaining that DOL "is not generally permitted to investigate the veracity of the employer's attestations on the LCA prior to certification"). Armed with a certified LCA, the employer and employee turn to USCIS to obtain the H-1B visa itself. But though the statute provides DOL little leeway to investigate an employer before certifying its LCA, section 1182(n)(2) authorizes the Secretary of Labor (the "Secretary") to conduct a post -certification compliance investigation in response to a complaint that an employer is not meeting one or more conditions specified in the LCA. To trigger such an investigation, the complaining party—which may be "any aggrieved person or organization (including bargaining representatives)"—must submit a written complaint to the Administrator of DOL's Wage and Hour Division (the "Administrator"). 8 U.S.C. § 1182(n)(2)(A) ; 20 C.F.R. § 655.806(a). Complaints must be filed within one year of the employer's latest offending act, but DOL has authority to assess remedies for violations occurring "prior to one year before the filing of a complaint." 20 C.F.R. § 655.806(a)(5).

Should the Secretary find that an employer failed to meet a specified condition or made a material misrepresentation in its LCA, section 1182(n)(2) authorizes the Secretary to impose administrative remedies. Thus, as relevant here, "[u]pon determining that an employer has failed to pay wages" at the wage level specified in the LCA, the agency "shall assess and oversee the payment of back wages" to the affected H-1B Program employee in an amount "equal to the difference between the amount that should have been paid and the amount that actually was paid." 20 C.F.R. § 655.810(a) ; see also 8 U.S.C. § 1182(n)(2)(D).

We evaluate Aleutian's arguments against this legal landscape.

II. Factual Background³

Aleutian is a private equity investment group established in 2003 and operating in the State of New York. Beginning in 2010, and continuing through 2013, Aleutian employed two H-1B Program employees: Horn and Gangjee.

Horn was Aleutian's first H-1B Program employee: In March 2010, Aleutian submitted an LCA to support hiring her as a market research analyst. In that LCA, Aleutian represented that it would pay Horn an annual salary of $42,453—an amount...