Greater Mo. Med. Pro-Care Providers, Inc. v. Perez

• Decision Date: 14 December 2015
• Docket Number: No. 14–3717.,14–3717.
• Parties: GREATER MISSOURI MEDICAL PRO–CARE PROVIDERS, INC., Plaintiff–Appellant v. Thomas E. PEREZ; United States Department of Labor; Administrator; Wage and Hour Division, Defendants–Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

812 F.3d 1132

GREATER MISSOURI MEDICAL PRO–CARE PROVIDERS, INC., Plaintiff–Appellant

v.Thomas E. PEREZ; United States Department of Labor; Administrator; Wage and Hour Division, Defendants–Appellees.

No. 14–3717.

United States Court of Appeals, Eighth Circuit.

Submitted: Sept. 22, 2015.

Filed: Dec. 14, 2015.

Brent N. Coverdale, Scharnhorst Ast Kennard Griffin, PC, Kansas City, MO, argued (Michele F. Sutton, on the brief), for appellant.

Sarah Stevens Wilson, U.S. Dept. of Justice, Office of Immigration Litigation, Washington, DC, argued (Joyce R. Branda, Acting Asst. Atty. Gen., Glenn M. Girdharry, Geoffrey Forney, Senior Litigation Cnsl., on the brief), for appellees.

Before RILEY, Chief Judge, BYE and GRUENDER, Circuit Judges.

RILEY, Chief Judge.

Greater Missouri Medical Pro–Care Providers, Inc. (GMM) provides physical and occupational therapists to serve in hospitals, nursing homes, and similar facilities. GMM appeals the district court's decision to uphold a final decision and order of the United States Department of Labor (DOL) Administrative Review Board (ARB) that found GMM violated several provisions of the Immigration and Nationality Act (INA), 8 U.S.C. § 1101 et seq., relating to the H–1B visa¹ program, and awarded damages and interest to some GMM workers. Having jurisdiction under 28 U.S.C. § 1291, we reverse.

I. BACKGROUND

GMM hired physical and occupational therapists from the Philippines through the H–1B program for temporary foreign workers. As part of the H–1B process, GMM filed numerous labor condition applications (LCAs) with the Secretary of Labor (Secretary) for the workers GMM wanted to hire. In the LCAs, GMM agreed to provide prescribed wages and working conditions for its H–1B employees. See 8 U.S.C. § 1182(n)(1)(D) ; 20 C.F.R. §§ 655.730 –.733.

The INA and the implementing regulations require H–1B employers like GMM to pay certain wages when an H–1B employee becomes "available for work or otherwise comes under the control of the employer, such as by waiting for an assignment, reporting for orientation or training, going to an interview or meeting with a customer, or studying for a licensing examination." 20 C.F.R. § 655.731(c)(6)(i) ; see also 8 U.S.C. § 1182(n)(1)(A)(i)(II). Employers must pay prescribed wages to employees in a "nonproductive status due to a decision by the employer (e.g., because of lack of assigned work), lack of a permit or license, or any other [unexpected] reason," 20 C.F.R. § 655.731(c)(7)(i) —a decision referred to as "benching"—and cannot require employees to pay for the employer's attorney fees, costs, or other business expenses incurred filing LCAs and H–1B petitions, 8 U.S.C. § 1182(n)(2)(C)(vi)(II) ; 20 C.F.R. § 655.731(c)(9)(ii), (iii)(C). And an employer may not impose a penalty for early termination but, under certain conditions, may receive "bona fide liquidated damages" from an H–1B employee who leaves employment before an agreed upon date. 20 C.F.R. § 655.731(c)(10)(i)(A), (B).

Under 8 U.S.C. § 1182(n)(1), the Secretary reviews the LCAs an H–1B employer has filed "only for completeness and obvious inaccuracies" and, in the absence of any such deficiencies, must certify the LCA within seven days of filing.² Thus, the INA generally does not permit the Secretary to challenge the employer's attestations in an LCA, nor does the INA otherwise contemplate a comprehensive pre-certification review. See id. § 1182(n). Instead, the INA generally provides four situations for initiating an investigation of potential violations: (1) investigations based on a complaint from an "aggrieved person or organization," id. § 1182(n)(2)(A) ; (2) "case-by-case ... random investigations" of an employer within five years of a prior willful violation, id. § 1182(n)(2)(F) ; (3) investigations where the Secretary "personally certif[ies]" he "has reasonable cause to believe that the employer is not in compliance with [subsection (n)]," id. § 1182(n)(2)(G)(i) ; and (4) investigations based on "specific credible information" of a willful violation of certain requirements from a reliable source, id. § 1182(n)(2)(G)(ii).

On June 22, 2006, Alena Gay Arat, one of GMM's H–1B therapists from the Philippines, filed a complaint with Missouri state regulators alleging GMM had violated several H–1B requirements. Specifically, Arat alleged she paid all of the fees to file and extend her H–1B visa, including attorney fees. Arat complained, "My Employer ... made me and the rest of us (therapist) [sic] stay [ ] in a company-paid apartment to review for [a licensing exam] and during that non-productive period, my employer just gave US$50.00 per week for food allowance." Noting she arrived in the United States on February 21, 2005, but did not work until May 6, 2005, Arat alleged GMM did not pay her promised salary until Arat passed the exam and obtained her license. Arat also questioned whether the fee GMM proposed to recover for "breach of contract" upon Arat's early termination of her employment contract was legal.

The state regulators forwarded Arat's complaint to the DOL, which treated it as an "aggrieved party" complaint. See 8 U.S.C. § 1182(n)(2)(A). After reviewing the complaint, DOL investigator Erica Simon concluded the Secretary had "reasonable cause" to investigate the charge that GMM "[r]equired or attempted to require [Arat to pay] a penalty for ceasing" her employment early. Simon initiated an investigation on July 18, 2006, later explaining that date was "when we knew we had a potentially valid complaint, something that we would have a reasonable cause to move forward with." In accordance with the DOL's standard practice for all H–1B investigations, Simon initiated a "full investigation under the H–1B provisions of the IMA [sic]" "to see if there [we]re violations to any employee during [the relevant] time period."

On August 4, 2006, Simon sent GMM a "standard" DOL form letter notifying GMM it had "been scheduled for investigation under [the H–1B LCA] provisions" and, per the Secretary's standard practice, requesting all of GMM's H–1B documents and records, including LCAs for all of GMM's H–1B employees. Based on the sole allegation that GMM improperly attempted to collect an early termination penalty from Arat, the Secretary demanded sixteen different subcategories of evidence related to GMM's H–1B program and its H–1B employees. The Secretary's request for information did not mention Arat's allegations or otherwise indicate the Secretary's comprehensive investigation was based on an aggrieved-party complaint. In addition to obtaining GMM's payroll and other records, Simon interviewed Arat and other H–1B workers as well as representatives of GMM.

Based on Simon's investigation, the Secretary decided GMM violated the INA. Among other things, the Secretary concluded GMM (1) improperly failed to pay required wages to employees GMM had placed in nonproductive status, including employees studying to obtain occupational licenses; (2) made improper deductions from employee wages for attorney and H–1B petition fees; and (3) "required or attempted to require" improper penalty payments for early termination from some employees. The Secretary ordered GMM to pay $372,897.93 in back wages to forty-four employees—later amended to $382,889.87 to forty-five employees.

GMM timely requested a hearing before an administrative law judge (ALJ), and GMM and the Secretary filed cross-motions for summary judgment. Among other things, GMM argued "[t]he applicable statute and regulation limit an aggrieved-party complaint to the specific issues of the Complaint and to the aggrieved party's LCA." On October 23, 2009, the ALJ granted partial judgment to the Secretary, opining "[n]othing in the [INA] or its implementing regulations supports GMM's theory that the [Secretary] is limited in investigatory power to a specific complainant and his or her complaints." The ALJ decided the Secretary's broad investigation of GMM was within his statutory and regulatory authority.

The ALJ also rejected GMM's argument that "[t]he applicable statute and regulation impose a 12–month time limit for investigating violations outside of twelve months prior to the filing of a complaint." The ALJ reasoned, "While it is true that an aggrieved party must file a complaint within one year of the last violation or misrepresentation, the regulations make clear that this is a jurisdictional bar only to the filing of a complaint, and it does not limit the scope of remedies." Deciding there were "no genuine issues of material fact" as to whether GMM failed to pay required wages to some employees during nonproductive employment and made improper deductions from employee wages, the ALJ granted judgment to the Secretary on those issues and set a hearing to consider "[a]dditional proof regarding which H–1B employees were affected by" GMM's violations and the proper remedies for those violations. The ALJ also determined GMM illegally withheld some employees' paychecks.

After the hearing, the ALJ issued a decision ordering GMM to pay (1) $338,042.19 of back wages to forty employees for benching violations; (2) $8,160.00 to seventeen employees for illegal fee deductions; and (3) $8,284.23 to four employees for illegally withholding paychecks. The ALJ also awarded pre- and post-judgment interest on the awards. The ALJ ultimately did not find GMM had attempted to collect an improper penalty from Arat—the sole allegation that prompted the Secretary's comprehensive review of GMM's H–1B practices.

GMM petitioned the ARB for review, which affirmed in part and reversed in part over a partial dissent by one board member. Like the ALJ, the ARB decided the Secretary's aggrieved-party complaint investigation was not limited to timely allegations in the complaint. "Based on the plain language of the statute and regulations, [ARB] precedent, and a broad reading of the relevant legislative and regulatory history," the ARB held "that the [Secretary] had the authority to...