Panwar v. Access Therapies, Inc.

• Decision Date: 30 September 2013
• Docket Number: Case No. 1:12–cv–00619–TWP–TAB.
• Citation: 975 F.Supp.2d 948
• Parties: Rituraj Singh PANWAR, on behalf of himself and all others similarly situated, Plaintiff, v. ACCESS THERAPIES, INC., RN Staff, Inc., doing business as Rehability Care, and Ramon Villegas, Defendants.
• Court: U.S. District Court — Southern District of Indiana

975 F.Supp.2d 948

Rituraj Singh PANWAR, on behalf of himself and all others similarly situated, Plaintiff,

v.ACCESS THERAPIES, INC., RN Staff, Inc., doing business as Rehability Care, and Ramon Villegas, Defendants.

Case No. 1:12–cv–00619–TWP–TAB.

United States District Court,

S.D. Indiana,

Indianapolis Division.

Sept. 30, 2013.

Andrew P. Wirick, Hume Smith Geddes Green & Simmons, Indianapolis, IN, Daniel Aaron Kotchen, Eamon F. Redmond, Justin T. Ervin, Kotchen & Low LLP, Washington, DC, Michael F. Brown, Peterson Berk & Cross, S.C., Appleton, WI, for Plaintiff.

G. John Cento, Cento Law LLC, Indianapolis, IN, for Defendants.

ENTRY ON MOTION TO DISMISS

TANYA WALTON PRATT, District Judge.

This matter is before the Court on a Motion to Dismiss filed by Defendants Access Therapies, Inc. (“Access Therapies”), RN Staff, Inc. (d/b/a Rehability Care) (“RN Staff” or “Rehability Care”), and Ramon Villegas (“Mr. Villegas”) (collectively, “Defendants”) (Dkt. 68). Plaintiff Rituraj Singh Panwar (“Mr. Panwar”) filed this lawsuit against the Defendants on behalf of himself and all others similarly situated for violations of the Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. § 1962(c) (“RICO”), the Trafficking Victims Protection Act, 18 U.S.C., §§ 1589–90, 1595 (“TVPA”), the Indiana Statutory Wage Law, Ind.Code § 22–2–5–2 (“Indiana Wage Law”), the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”). Additionally, Mr. Panwar asserts claims under Indiana common law for breach of contract and unjust enrichment. Defendants argue that Mr. Panwar's claims actually allege violations of the Immigration and Nationality Act and must be dismissed because he did not exhaust his administrative remedies prior to bringing this lawsuit. For the reasons set forth below, Defendants' Motion to Dismiss is GRANTED in part and DENIED in part.

I. BACKGROUND

The following facts are from Mr. Panwar's Second Amended Class Action Complaint (Dkt. 63) (“Second Amended Complaint”) and are accepted as true for purposes of this motion to dismiss. Mr. Panwar is a citizen of India and currently resides in New York, New York. Mr. Panwar earned a Master's degree in Kinesiology from Southeastern Louisiana University and a second Master's degree in Hospital Management from the University of New Orleans while in the United States on a student visa. Access Therapies is an Indiana corporation with its principal place of business in Indianapolis, Indiana. RN Staff, which does business under the name Rehability Care, is an Indiana corporation with its principal place of business in Westfield, Indiana. Access Therapies and RN Staff share several of the same officers, including Prithvi Dhani, who is President of both Access Therapies and RN Staff, and Manuel Garcia, who is listed as an incorporator of both RN Staff and Vice President of Access Therapies.

A. The H–1B Visa Program

A United States employer can petition the federal government to allow a foreign national to work in the United States as an H–1B nonimmigrant worker in certain specialty occupations under the Immigration and Nationality Act (“INA”). Under the H–1B visa program, employees are required to perform services in specialty occupations that typically require a bachelor's or higher degree. Examples of specialty occupations include physical therapists, computer professionals, engineers, scientists, professors, and attorneys. H–1B employers are required to pay their H–1B employees the higher of (a) actual wages the employer pays co-workers in related positions, or (b) the prevailing wage for the specialty occupation, as determined by an independent survey of wages paid to workers similarly employed in the geographic area of intended employment. Employers are also required to pay H–1B employees for “non-productive time,” which are periods of time in which an H–1B employee is not assigned to a paid client position because the employer has no paid work for him to do or because the employee lacks a license or permit. The industry refers to periods of non-productive time as “benching.” The wage requirements are designed to prevent employers from luring foreign employees to sit idle, unpaid, while the employer attempts to find third-party client work, and also to prevent the influx of inexpensive foreign labor for professional services. Failure to pay an H–1B employee for “benched” time is considered fraud under the INA.

In order to receive an H–1B nonimmigrant classification from the federal government and employ H–1 B workers, employers must complete a Labor Condition Application (“Application”) and file it with the Department of Labor (“DOL”). The Application requires the employer to identify an H–1B employee's job, geographic location, and specific wage. The Application also requires the employer to certify that it will pay the H–1B employee for non-productive time. H–1B employers must file a new Application if the geographic location of an H–1B employee's job changes, and an H–1B visa is valid only as long as an employer who petitioned the government for an H–1B visa employs the H–1B employee. If the employer terminates the employee, the employee loses his immigration status and typically has to return to his home country unless another employer receives an H–1B visa for the employee at or about the time the employee is terminated, or if the employee otherwise obtains another valid immigration status. The employer may not require the H–1B employee to pay a penalty for leaving employment prior to any agreed date; however, the employer may seek liquidated damages from the employee's breach of contract that cover reasonably estimated damages. The employer also may not require the employee to pay the H–1B visa application fee.

B. Access Therapies' and RN Staff's Operations

Access Therapies actively recruits potential H–1B employees abroad, primarily in India and the Philippines, as well as domestically by recruiting students who are in the United States on student visas and are nearing graduation. Access Therapies promises potential employees that it will pay them a specific wage and sponsor their H–1B visa applications. If the individual accepts the employment offer, Access Therapies sends the employee a two-year employment agreement (the “Employment Agreement”) that, among other things, specifies the employee's wage/salary and position. However, the employment contract is between the employee and Rehability Care, not Access Therapies. Access Therapies tells the employee that it does business as Rehability Care, but RN Staff is actually the company doing business as Rehability Care. The employee is also required to execute a Promissory Note in which the employee agrees to pay Rehability Care $20,000.00 if the employee fails to complete the two-year employment term. Employees are also required to pay the application fees for filing the Application.

After recruiting potential employees and securing employment commitments from these individuals, Access Therapies then relies on RN Staff to file the necessary paperwork to obtain the H–1B visa, including filing the Application with the DOL and the U.S. Citizenship and Immigration Services. In the Application, RN Staff certifies that the employee for whom an application is filed will be paid a specified wage, including payments to be made during nonproductive time. Once the DOL approves an RN Staff Application, the H–1B employee for whom the Application was filed can legally work for RN Staff/Rehability Care.

C. Mr. Panwar's Employment

Mr. Panwar applied for a position as a physical therapist with Access Therapies around the time he was to graduate from the University of New Orleans in 2010. Mr. Villegas, a recruiter for Access Therapies, followed up with Mr. Panwar in April 2010 and informed him that Access Therapies was interested in hiring him and would assign him to one of its openings in the New York area once his H–1B visa was approved. Access Therapies e-mailed Mr. Panwar an Employment Agreement, which was between Mr. Panwar and Rehability Care. Rehability Care agreed to sponsor Mr. Panwar for his H–1B visa and complete the necessary paperwork on his behalf. In both the e-mail and in a telephone conversation, Mr. Panwar was told that Access Therapies did business as Rehability Care, not RN Staff. Under the terms of the Employment Agreement, Rehability Care was to employ Mr. Panwar as a physical therapist for a period of two years at a weekly net pay of $800.00 to $1,000.00. The Employment Agreement also provided that Rehability Care would provide housing for Mr. Panwar for the first three months of his employment, for up to $600.00 per month.

Mr. Panwar signed the Employment Agreement on June 10, 2010. After Mr. Panwar signed the Employment Agreement, Mr. Villegas called Mr. Panwar and demanded that he pay $1,500.00 for the filing of his H–1B application, falsely telling him that it was the employee's responsibility to cover his visa fees. Mr. Panwar responded that he could only afford to pay $750.00, which Access Therapies accepted. On July 8, 2010, RN Staff sent U.S. Citizenship and Immigration Services an Application to secure an H–1B visa for Mr. Panwar. RN Staff certified that Mr. Panwar would be paid the prevailing wage and that he would be paid at least on a monthly basis. Mr. Panwar was never provided a copy of the Application.

Mr. Panwar's H–1B visa was approved on April 5, 2011. On April 8, 2011, Mr. Villegas told Mr. Panwar that his H–1B visa had been approved and encouraged him to continue studying for the permanent physical therapy license exam, but did not provide him a job assignment. Mr. Panwar responded by requesting an immediate work assignment, but Access Therapies ignored his request. On August 18, 2011, Mr. Villegas told Mr. Panwar that Access Therapies was not required to pay him until he attained his physical therapy license, which is contrary to DOL regulations for the H–1B visa program. Mr. Panwar...