Judge calls H-1B policy changes ‘very troubling’

A federal judge overseeing 60 lawsuits brought by IT consulting companies that challenge stricter H-1B policies for third-party placements called the government’s policy change “very troubling” at a hearing on Thursday.

In February 2018, U.S. Citizenship and Immigration Services (USCIS) issued a policy memorandum that imposed numerous new requirements on companies petitioning for H-1B workers who intend to work off-site. The changes primarily affect IT consulting companies that petition for H-1B visas and place the workers at client sites. A group of IT consulting companies filed dozens of lawsuits in federal court in Washington, D.C., alleging that the government evaded proper administrative rulemaking procedures, including a public notice and comment period. They argue that the changes have led to lengthy processing delays, shorter durations for approved H-1B visas than the permissible three-year period, and a huge increase in denials, effectively putting the IT consulting industry out of business. They are asking the judge to strike down the new policy.

During oral arguments, U.S. District Court Judge Rosemary M. Collyer expressed skepticism regarding the government’s argument that the change merely re-interpreted existing policy. She pressed the government lawyer on why the policy has led to a sharp rise in denials and chastised him for not being able to explain why the agency is taking up to one year to adjudicate these H-1B petitions instead of 30 days. H-1B denial rates for IT consulting companies have soared to up to 40%. The judge ordered additional briefing before she makes a decision.

The case is ITServe Alliance v. USCIS, No. 1:18-CV-02350, U.S. District Court for the District of Columbia.

BAL Analysis: While it is notable that the judge explicitly criticized the government’s arguments, it is too early to predict a decision, as she also noted that her decision may hinge on the Administrative Procedure Act, which could favor the government’s argument. The February 2018 policy changes for third-party H-1B placements remain in effect at this time. BAL is continuing to monitor the progress of the lawsuits.

This alert has been provided by the BAL U.S. Practice group. For additional information, please contact berryapplemanleiden@bal.com.

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