Broadgate, Inc. v. Sec'y, Dep't of Labor

• Decision Date: 27 September 2022
• Docket Number: 22-11593
• Parties: BROADGATE, INC., Plaintiff, v. SECRETARY, DEPARTMENT OF LABOR, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

BROADGATE, INC., Plaintiff, v. SECRETARY, DEPARTMENT OF LABOR, Defendant.

No. 22-11593

United States District Court, E.D. Michigan, Southern Division

September 27, 2022

OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT [17] AND GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [16] [18]

LAURIE J. MICHELSON, UNITED STATES DISTRICT JUDGE

Following an investigation, an official at the Department of Labor concluded that Broadgate, Inc. willfully violated the Immigration and Nationality Act's requirements for the H-1B visa program. This official sent Broadgate a “determination letter” notifying it of her conclusion and imposing certain remedies. Broadgate appealed to an administrative law judge and the Department's administrative review board, arguing that: (1) the Department official who issued the determination letter failed to prove that she had the authority to do so and (2) the Department's investigation of Broadgate was overly broad violating federal regulations.

Both arguments were ultimately rejected by the administrative review board, so Broadgate now asks this Court for review. And it wants a decision quickly to prevent its pending H-1B petitions from being denied on October 1, 2022, as required by the determination letter. Accordingly, the Court entered an expedited scheduling order for cross-motions for summary judgment, which are now before the Court.

For the following reasons, the Court will DENY Broadgate's motion for summary judgment and GRANT the Secretary's motion for summary judgment.

I. Background

Before proceeding to the facts, a brief explanation of the Immigration and Nationality Act is in order.

A. Legal Framework

The INA permits employers to temporarily hire non-immigrant workers in “specialty occupations” under the H-1B visa program. See 8 U.S.C. §§ 1101(a)(15)(H)(i)(b), 1182(n)(4)(c). But employers seeking to participate in the H-1B program must first file a “Labor Condition Application” with the Department of Labor, promising to abide by certain labor standards and to follow certain procedures. 8 U.S.C. § 1182(n)(1).

Three Labor Condition Application requirements are relevant here. First, in the Application, the employer must commit to paying the H-1B worker “the greater of the actual wage rate . . or the prevailing wage.” See 8 U.S.C. § 1182(n)(1)(C); 20 C.F.R. § 655.731. Second-and perhaps most importantly here-the employer must post notices of the Application “in at least two conspicuous locations at each place of employment where any H-1B nonimmigrant will be employed.” 20 C.F.R. § 655.734. As one court recognized, the “Notice Requirements are designed to protect American workers from displacement by H-1B workers.” See Camo Techs., Inc. v. Solis, No. 12-CV-6050-WJM-MF, 2013 WL 5719249, at *1 (D.N.J. Oct. 18, 2013). To that end, the notices must provide particular information about the H-1B workers sought, their wages, and the locations where they will work, in addition to providing information about filing complaints with the Department. See 20 C.F.R. § 655.734(a)(1)(ii). Third, the employer must promise to make certain documents available to the public, including documentation of the H-1B worker's wages and documents showing that the employer satisfied the Notice Requirements at each location where an H-1B worker is employed. See 20 C.F.R. § 655.760(2), (5).

To ensure that employment needs are promptly met-and so long as the Department does not find that it is “incomplete or obviously inaccurate”-the Department must certify an Application within seven days of receipt. 8 U.S.C. § 1182(n)(1). From there, the employer must submit an “H-1B petition” and the certified Application to the Department of Homeland Security. 20 C.F.R. § 655.705(b). Upon DHS approval, the Department of State then issues the H-1B visa to the nonimmigrant worker. Id.

But the responsibility for “investigating and determining an employer's . . . failure to comply with [its Labor Condition Application]” remains with the Department of Labor. See 20 C.F.R. § 655.705(a)(2). Accordingly, the INA and its implementing regulations detail the procedures for filing complaints, initiating investigations, issuing determination letters, imposing penalties, and seeking appeals. See 8 U.S.C. § 1182(n)(2); 20 C.F.R. § 655.800 et seq. Specifically, an aggrieved (or non-aggrieved) party may submit complaints to the Department's Wage and Hour Division. See 20 C.F.R. §§ 655.806-807. Then the Administrator of the WHD “shall” investigate if there is “reasonable cause” to believe that an employer failed to meet a condition of its Application. 8 U.S.C. § 1182(n)(2)(A); 20 C.F.R. § 655.800. Following an investigation, the Administrator (or a redelegated subordinate) issues a “determination letter” to the employer setting forth the investigation's conclusions and any remedies sought. §§ 655.806, 816; Secretary's Order No. 01-2014, 79 Fed.Reg. 77,527 (Dec. 24, 2014) (available at 2014 WL 7275751). And if the Administrator finds “willful” violations of the INA, remedies include civil monetary penalties and “debarment” from the H-1B visa program, a remedy where the Department of Labor informs the Department of Homeland Security that it should not approve immigrant or non-immigrant petitions from that employer for a set period of time. See 20 C.F.R. §§ 655.810(b), (d).

After the Administrator issues a determination letter, the employer can challenge it at an evidentiary hearing before an administrative law judge (ALJ); the ALJ's decision can be further appealed to the Labor Department's administrative review board. §§ 655.820, 835, 845. The Secretary of Labor has discretion to review the Board's decisions, but if he or she does not do so, the Board's decision becomes the final decision of the Secretary. See Secretary's Order No. 01-2020, 85 Fed.Reg. 1318601 (March 6, 2020) (available at 2020 WL 1065013). The Secretary's final decision is, in turn, subject to judicial review. See 5 U.S.C. § 704. B. Factual and Procedural Background

Broadgate is a “global IT consulting company” which places IT workers in businesses all over the United States. (ECF No. 16-4, PageID.1433.) As part of that work, Broadgate regularly employs H-1B visa-holders. (Id.) Indeed, Broadgate currently has nine H-1B petitions pending before the Department of Homeland Security. (ECF No. 5, PageID.207.)

In February 2018, a former Broadgate employee (and H-1B visa-holder) filed a complaint with the Department's Wage and Hour Division alleging that Broadgate failed to pay him the wages required by the Application, which as explained is the higher of the actual or the prevailing wage. (ECF No. 16-4, PageID.1433; ECF No. 169, PageID.1495.) After determining that there was reasonable cause to investigate (ECF No. 16-9, PageID.1504), a WHD investigator interviewed and collected “many megabytes” of documents from the aggrieved party (ECF No. 16-2, PageID.1091). In time, the investigator requested public-access documents from Broadgate to determine what wages the former employee was due. (ECF No. 16-2, PageID.1093-1098; ECF No. 6-1, PageID.302-303.) After receiving those documents, he found that the actual wage documentation was incomplete and that the prevailing wage documentation was missing entirely. (ECF No. 16-2, PageID.1104.) And he found that the file lacked documentation showing that Broadgate satisfied the Notice Requirements at each location where it employed an H-1B worker; there was only “a document of notice at Broadgate's office.” (ECF No. 16-2, PageID.1104-1105.)

So in December 2018, the Detroit District Director (a subordinate of the Administrator) issued a determination letter concluding that Broadgate failed to pay the aggrieved party his legally required wages, failed to make its Application and other documents available for inspection, and failed to maintain other required documentation. (ECF No. 6-1, PageID.307-310.) But most importantly here, the District Director also found that Broadgate “willfully and substantially” failed to post notices of the filing of Labor Condition Applications on at least 14 occasions. (Id. at PageID.311.) For this violation, the District Director assessed about $70,000 in civil penalties and imposed a two-year debarment. (Id.)

In time, Broadgate appealed to an ALJ and stipulated to challenge only the failure-to-post violation and associated remedies. (ECF No. 6-1, PageID.273.) In August 2019, the ALJ concluded that Broadgate had willfully violated the notice requirements. (Id. at PageID.247-251.) But he also concluded that the determination letter was invalid and unenforceable. (Id. at PageID.271, 277.) Specifically, he held that the letter was invalid because the District Director failed to prove that she had the delegated authority from the Secretary or redelegated authority from the WHD Administrator to issue it. (Id.) In reaching that conclusion, the ALJ rejected the Administrator's argument that the “presumption of regularity” placed the “burden of proof' of that issue on Broadgate. (Id. at PageID.268-271, 276.) Accordingly, the ALJ vacated the remedies. (Id. at PageID.277.)

But that was just the beginning of this case's tortured procedural history. Following the ALJ's reversal, the Administrator appealed to the Department's administrative review board. And in April 2021, the Board reversed the ALJ and remanded the case. (ECF No. 6-1, PageID.325-332 (also available at 2021 WL 1886273).) The Board's decision provided a historical background of the presumption of regularity and concluded that “if the law imposes a relevant, official duty on an official, we presume that the official has been properly appointed to that position and performed that duty, unless there is evidence to the contrary.” (Id....