LAWSUIT FILED AGAINST USCIS ON NEUFELD MEMO IMPLEMENTATION

At long last a law suit was filed against USCIS to prevent it from implementing the Neufeld Memo guidelines. The Neufeld memo, issued on January 8, 2010, changed the definitions of employer-employee in the context of H-1B visa applications, and changed the immigration regulations, decisions and policies, as well as employment law provisions in Federal and state laws.
This law suit articulates what is wrong with the memo which changed the definition of employer-employee relationship from a company which may hire, pay, fire, supervise, or otherwise control the work of the employee to a different rule which relies on eleven factors under common law analysis to determine whether an employer has the right to control that employee. However the common law analysis under the supreme court case in Darden only applies in cases which lack statutory definition. The Immigration and Nationality Act clearly defines an "employer".
This Neufeld memo specifically declared that third-party placement contractors lack the necessary control over their employees even though the immigration regulations specifically authorize them as valid employers to file for visas for their employees, and so many of the staffing companies and the consulting companies that place employees at third party sites are specifically excluded from applying for H-1B visas for their employees following the issuance of the memo (even though they are permitted to do so by the Act and regulations and were previously approved by the agency prior to the January memo).
This law suit attacks the immigration agency on multiple grounds, but its main arguments are that USCIS changed the rules and regulations in violation of the regulatory and statutory authority to do so, in violation of the Notice and Comment requirements of the Administrative Procedure Act, failed to perform a regulatory Flexibility Act analysis (to study how this change would impact H-1B employers, such those of the staffing agencies), and that the memorandum is arbitrary or capricious agency action because it redefines the employer-employee relationship without justification to eliminate an entire, lawful business sector, and not in accordance with the law - all of them very valid points.
With this law suit, the Plaintiffs seek that the court issue a declaratory judgment against USCIS stating that this memorandum and policy is invalid, and they also seek a preliminary injunction to immediately enjoin the government from implementing or using the memorandum’s definition pending final decision on the merits by the court, because the Plaintiffs have already received several denials from the agency (for example for H-1B renewals) following the January memorandum.
Since the Immigration Service did not follow the government’s process for rulemaking, including publishing the proposed change in the Federal Register, it could be voided by the court as illegitimate rulemaking, and the prior regulations and policies reinstated. This rule already caused significant damage to many employers and will continue to cause damage estimated over $100 Million to the staffing industry.
The complaint was filed in the Federal Court in Washington, D.C. Broadgate, Inc., et al v. USCIS, et al, Case number: 1:10cv00941. Judge Gladys Kessler will be hearing the case. Stay tuned... we will for sure.