Aleutian Capital Partners, LLC v. Hugler
| Decision Date | 28 September 2017 |
| Docket Number | 16 Civ. 5149 (ER) |
| Parties | ALEUTIAN CAPITAL PARTNERS, LLC, Plaintiff, v. EDWARD HUGLER, 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; and ADMINISTRATOR, United States Department of Labor Employment Standards Administration Wage and Hour Division, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Ramos, D.J.:
Aleutian Capital Partners, LLC ("Plaintiff" or "Aleutian") brings this action under the Administrative Procedures Act ("APA"), 5 U.S.C.A. § 702, seeking judicial review of a final decision and order of the Administrative Review Board of the Department of Labor ("ARB").1 This action concerns Plaintiff's alleged violations of statutory and regulatory requirements governing the H-1B temporary foreign worker program concerning its two H-1B employees. Before this Court is Plaintiff's motion for summary judgment seeking to vacate the ARB'sdecision, and Defendants' cross-motion for summary judgment seeking to affirm the ARB's decision.
For the following reasons, Plaintiff's summary judgment motion is DENIED, and Defendants' summary judgment motion is GRANTED.
H-1B employees are a class of non-immigrant temporary alien workers eligible to work in the United States in "specialty occupation[s]." 8 U.S.C. § 1101(a)(15)(H)(i)(b). This visa program is governed by the Immigration and Nationality Act ("INA"), 8 U.S.C. § 1101(a)(15)(H)(i)(b) and § 1182(n), and regulations promulgated at 20 C.F.R. Part 655, subparts H and I, by the Department of Labor ("DOL"), the agency that Congress charged with administering the H-1B program.
An employer intending to hire an H-1B employee must first submit a Labor Condition Application ("LCA") to the DOL. See 8 U.S.C. § 1182(n)(1); 20 C.F.R. § 655.730(a). In the LCA, the employer must promise to pay the employee a specified required wage rate and provide certain working conditions. See 8 U.S.C. § 1182(n)(1)(A). The required wage rate is the higher of either the actual wage or the prevailing wage level for the occupational classification in the area of employment. Id.
The regulatory framework outlines the employer's obligations with regards to satisfying the required wage obligation. "The required wage must be paid to the employee, cash in hand, free and clear, when due. . . . " 20 C.F.R. § 655.731(c)(1). "Cash wages paid" can only consist of payments meeting the criteria listed in 20 C.F.R. § 655.731(c)(2)(iii)-(v). Notably, "[f]uture bonuses and similar compensation (i.e., unpaid but to-be-paid) may be credited towardsatisfaction of the required wage obligation if their payment is assured (i.e., they are not conditional or contingent on some event such as the employer's annual profits)." 20 C.F.R. § 655.731(c)(2)(v). There is also a timing requirement for wage payments to salaried employees:
For salaried employees, wages will be due in prorated installments (e.g., annual salary divided into 26 bi-weekly pay periods, where the employer pays bi-weekly) paid no less often than monthly except that, in the event that the employer intends to use some other form of nondiscretionary payment to supplement the employee's regular/pro-rata pay in order to meet the required wage obligation (e.g., a quarterly production bonus), the employer's documentation of wage payments (including such supplemental payments) must show the employer's commitment to make such payment and the method of determining the amount thereof, and must show unequivocally that the required wage obligation was met for prior pay periods and, upon payment and distribution of such other payments that are pending, will be met for each current or future pay period. . . .
The DOL reviews LCAs for completeness and obvious inaccuracies. See 8 U.S.C. § 1182(n)(1). If it does not find that the LCA is "incomplete or obviously inaccurate," the DOL must certify the LCA within seven days of receipt. Id. Indeed, DOL is generally prohibited from investigating the veracity of the LCA prior to certification. See, e.g., Cyberworld Enter. Techs., Inc. v. Napolitano, 602 F.3d 189, 193 (3d Cir. 2010). However, the Secretary of Labor (the "Secretary") may conduct certain compliance investigations after certification.2 8 U.S.C. § 1182(n)(2)(A). The Secretary may conduct investigations under the following circumstances: (1) upon receiving aggrieved party complaints under 8 U.S.C. § 1182(n)(2)(A); (2) "random investigations" of certain employers under 8 U.S.C. § 1182(n)(2)(F); (3) investigations after he personally certifies that he has "reasonable cause" to believe the employer is non-compliant under 8 U.S.C. § 1182(n)(2)(G)(i); or (4) investigations based on "specific credible information" of a willful violation of certain requirements from a reliable source under 8 U.S.C.§ 1182(n)(2)(G)(ii). As relevant to this action, an aggrieved party complaint must be filed not later than 12 months after the latest date on which the violation occurred, but the scope of remedies may be assessed "for a period prior to one year before the filing of the complaint." See 20 C.F.R. § 655.806(a)(5) (emphasis added). If the Administrator finds that the employer has violated the wage requirements, he/she may order the employer to pay back wages to the H-1B employee. See 8 U.S.C. § 1182(n)(2)(D); 20 C.F.R. § 655.810(a).
The employer may challenge the Administrator's determination by requesting a hearing with an Administrative Law Judge ("ALJ"). See 8 U.S.C. § 1182(n)(2)(B); 20 C.F.R. § 655.820(a)-(b). The ALJ's decision may then be appealed to the ARB. 20 C.F.R. § 655.845(a).
Aleutian is a private equity investment group established in 2003 to acquire, operate, and grow middle market companies. AR 36. As relevant to the instant motions, Aleutian employed two H-1B salaried employees: Minh-Thuong Horn ("Horn") and Shakir Gangjee ("Gangjee"). Id. at 7-8, 36-37. Horn was employed as a market research analyst and Gangjee was employed as a financial analyst. Id. at 7, 37.
In March 2010, Aleutian submitted an LCA for Horn. Id. at 37. Aleutian represented that it would pay her the prevailing wage for market research analysts of $42,453. Id. It compensated Horn monthly, and thus, her monthly pro-rated salary should have been $3,537.75.Id. at 7, 10. However, in December 2012, she was paid $350, plus a $250.73 monthly contribution to her healthcare plan. Id. at 8, 38. On January 2, 2013, Aleutian terminated Horn. Id. at 8.
On August 4, 2011, Aleutian submitted an LCA concerning Gangjee, attesting that it would pay him an annual wage of $65,000 as a financial analyst (Aleutian represented that the prevailing wage was $62,566). Id. at 7, 37. He was also compensated monthly, and thus, his prorated monthly salary should have been $5,416.67. Id. at 7. However, Gangjee's salary was not given in monthly prorated installments. Id. at 38-39. In 2012, Gangjee's monthly compensation was a combination of a $3,000 base pay and a bonus calculated at 3% of any revenues earned and received by Aleutian that month. Id. at 7, 38. Accordingly, if Aleutian did not receive any revenue, Gangjee would not receive a bonus. Id. at 38. This salary structure was not reduced to writing, Id. at 297, in contravention of 20 C.F.R. § 655.731(c)(4). During Gangjee's tenure at Aleutian, he was compensated the following amounts each month:
Month/Year Total Paid August 2011
$1,875 September 2011
$1,649 October 2011
$2,649 November 2011
$2,649 December 2011
$9,822 January 2012
$5,711 February 2012
$10,266 March 2012
$5,285 April 2012
$4,111 May 2012
$9,456 June 2012
$3,060 July 2012
$3,060
| August 2012 |
| $3,600 |
| September 2012 |
| $3,060 |
| October 2012 |
| $3,060 |
| November 2012 |
| $3,060 |
| December 2012 |
| $3,780 |
Id. at 38-39. Gangjee's total annual compensation for the calendar year of 2012 was $57,509. Id. at 7. On December 31, 2012, Gangjee was terminated by Aleutian. Id. at 251.
On January 14, 2013, Gangjee filed a complaint with the Administrator, alleging, inter alia, that Aleutian failed to pay him the required wage from August 6, 2011 to December 31, 2012. Id. at 7, 141-43, 289-91. The Administrator was assigned to investigate Aleutian on April 3, 2013. Id. at 146. He requested from Aleutian its public H-1B documents and payroll records for all H-1B workers it employed after January 15, 2012. Id. at 146, 414.
On January 9, 2014, the Administrator issued a notice of determination. Id. at 10. He first noted that the prorated monthly installment for the prevailing wage rate of $62,566 was $5,213.82. Id. at 147. Then, he adjusted the prevailing monthly wage rate for months during which Gangjee took vacation or sick days.4 Id. at 129, 147. The sum of these adjustments was $49,370.99 for the 2012 calendar year, which is less than the $57,509 Gangjee received for the 2012 calendar year. Id. 215. However, the Administrator did not credit any overpayments. Id. at 147. Instead, he found that Gangjee was paid less than what he was owed during four months in 2011 and six months in 2012,5 added those deficits, and found that Gangjee was owed a totalof $19,776.296 in back wages. Id. The Administrator also determined that Horn was paid $2,937.02 less than the required monthly rate in December 2012. Id. at 10-11, 148. In total, the Administrator found that Aleutian owed $22,713.317 in back wages. Id. at 148.
Aleutian challenged the Administrator's decision to an ALJ, who was referred the case on January 14, 2014. Id. at 5. Aleutian and the Administrator both moved for summary decision. Id. at 6. On July 9, 2014, the ALJ granted the Administrator's motion for summary decision, and directed Aleutian to pay $22,713.30 in back wages. Id. at 11. Specifically, he determined the following: (1)...
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