Federal Judge Dismisses H1B Visa lawsuit (for now)

[jcb]

http://www.nytimes.com/2016/10/14/us/judge-says-disney-didnt-violate-visa-laws-in-layoffs.html

The H1B Visa lawsuit received a lot of attention when it was filed. Disney allegedly fired workers (Disney says it offered them other jobs) and then contracted with companies to hire workers (whom the fired workers trained in the U.S.) who then went overseas to do the work.

Per the New York Times, the federal judge in Florida dismissed the workers' lawsuit alleging Disney and the contracting companies violated federal racketeering laws (laws designed to punish organized crime).

When I can, I'll try to link to the decision.

The decision gives the employees a chance to amend the complaint, so it isn't necessarily over, though the comments by the employee's attorney seems to indicate she has given up.

 

[Kindermouse]

What a bummer. I actually felt like what they did-even if it's not an unheard of business practice-it unethical. I couldn't imagine getting laid off and having to train my foreign replacement to ensure my severance when I had done nothing wrong other than being paid the current going rate for my position. How degrading to train someone who is less qualified and doesn't know how to do your job to do it so that they can do the work for less pay.

I know it happens all the time by many companies but I still dont think that makes it ok.

 

[OKW Lover]

Thanks for the update Jack.

 

[gmboy95]

I think this decision should make us be more concerned about what the law actually allows companies to do.....Because if what Disney did in this case is legal, then that is truly troubling

 

[jcb]

Here is a link (which I hope works) to one of the decisions. Let me know if it doesn't work.

There are two points about the decision worth mentioning. As I said, this case was brought as a civil RICO claim. RICO looks to whether there is a violation other statutes, one of which is the immigration statute, which prohibits false certifications on immigration forms. The employees alleged the contractors much have falsely certified the immigration forms they filled out for the H1B visas because the Disney employees working conditions were adversely affected.

The certification was not false, the contractors argued, because the immigration regulations only require a comparison between the working conditions of the contractors employees. The regulations states that the "working conditions requirement:"

shall be satisfied when the employer affords working conditions to its H–1B nonimmigrant employees on the same basis and in accordance with the same criteria as it affords to its U.S. worker employees who are similarly employed, and without adverse effect upon the working conditions of such U.S. worker employees.
​

Read literally, the contractors are correct. The regulation says what it says. By contracting out the work that Disney employees had performed, Disney and the contractors did not make a false certification.

The other point to remember is that this order was decided based solely on the allegations in the complaint. Neither Disney nor the contractors offered any evidence to show what was actually done. The procedural rule lets lawsuits be dismissed early in the process but the downside, in cases such as this, is that the only story which gets out in the public is the story offered by the employee. What is alleged in a complaint is often (though not always) not what actually happened, often not close to what happened.

It is easy to say, based on the publicity, that Disney took advantage of a loophole in the H1B visa regulations. Perhaps they did. But to be honest, we may never know what actually happened, what Disney offered the employees or why Disney did what it did.

 

[mcd2745]

Just about every company (including the one I work for) has done the same thing Disney did (primarily in IT divisions) - fire American workers and replace them with cheaper, foreign "contractors". Unfortunately, none of them have gotten the bad press that Disney has. It's one of those things that boggles the mind as to why it is still allowed. Those visas should be eliminated immediately.

 

[OKW Lover]

It is easy to say, based on the publicity, that Disney took advantage of a loophole in the H1B visa regulations. Perhaps they did. But to be honest, we may never know what actually happened, what Disney offered the employees or why Disney did what it did.

Of course if Disney is in the right, it won't be "newsworthy".

 

[SorcererHeidi]

Thanx, as always, for the updates, and helpful insights, @jcb !!

 

[Accident]

I'm confused, why would they need an h1b visa if they were going to be doing the work from another country? sounds to me like disney decided to send them home when the lawsuit showed up to actually be doing it legally. Am I understanding the h1b visa correctly here?

 

[pjweaver]

I would have assumed Disney had its lawyers check every detail to make sure they had a good chance before even attempting this. Even so and even with the courts backing, it still isn't great publicity for them so I hope they are saving a ton and their shareholders see it.

 

[jcb]

I'm confused, why would they need an h1b visa if they were going to be doing the work from another country? sounds to me like disney decided to send them home when the lawsuit showed up to actually be doing it legally. Am I understanding the h1b visa correctly here?

H1B is a temporary work permit for specialty occupations. https://www.uscis.gov/eir/visa-guide/h-1b-specialty-occupation/understanding-h-1b-requirements They had to have it to do work in the U.S. even if the plan was to move the work out of the country.

 

[jcb]

Just to follow up on a couple of thoughts alluded to during yesterday's podcast.

Because I want to be as clear as I can (and there was a bad connection at one point) here is Disney's explanation for why it decided to outsource the IT positions:

In October 2014, WDPR announced a reorganization of its information-technology ("IT") department through which certain IT functions would be assumed by outside IT consulting firms. The reorganization was intended to transition WDPR's IT department from one concentrated on maintaining existing IT systems to one more focused on developing new technologies. To accomplish this, WDPR outsourced IT maintenance, quality-assurance, and related work to specialized, independent commercial vendors, including to defendant HCL America, Inc. ("HCLA").​

I'm still not sure why the Department of Labor limits protection for U.S. employees when the replacement worker will earn $60k and has a masters degree. It appears most of the H1B dependent employers target unskilled, lower wage jobs so the situation with higher skilled, higher wage jobs doesn't arise all that often and thus isn't as big a concern to the government (it is, obviously, to the U.S. worker). I did notice the $60k threshold has not been raised in at least 10 years. It is still above $50k (ballpark) which will (on December 1) be the minimum salary level for most U.S. jobs to be considered exempt from overtime requirements.

Disney's brief did not deny or try to justify requiring existing Disney workers train their replacements.

My basic point was that this was the wrong forum for the employees to complain. There are some enforcement decisions that the government reserves for itself, even when the allegedly illegal practice causes (or could cause) harm to workers. The federal government tightly controls immigration laws and letting individual employees try to enforce those laws (and the inconsistent results which would invariably result) would likely be rather disruptive. I believe the U.S. workers can file a complaint with the U.S. Department of Labor, who could investigate and determine whether the contractors violated the H1B requirements. The DOL would not be limited to deciding whether the certification on the form was false. I do not know whether a complaint has been filed with the DOL.

As for preventing companies from moving jobs overseas, that is typically not been something the immigration laws have tried to regulate. There have been proposals to impose excise taxes on companies that do so (or credits on companies that move jobs back to the U.S.). So far as I know, there are no such tax laws in place at present. Using the tax laws for this also poses enforcement headaches and incentive questions. For example, tax incentives could encourage moving jobs out when revenues are low and back when they are high. That would not help the impacted workers.

 

[Aerin75]

Thanks jcb! It was great to see you on the podcast!

 

[CampbellzSoup]

I just don't understand why we need this program in the first place if there are plenty of American workers who can do these jobs. It seems the program is a legal guise for companies to hire low wage workers to fill costly jobs.

It's a sad situation all around however it's more upsetting when you're replaced simply due to cost not your skill or skill work ethic.

 

[mcd2745]

I just don't understand why we need this program in the first place if there are plenty of American workers who can do these jobs. It seems the program is a legal guise for companies to hire low wage workers to fill costly jobs.

It's a sad situation all around however it's more upsetting when you're replaced simply due to cost not your skill or skill work ethic.

If I had to guess, it probably didn't start out that way. Although, it's abundantly clear that's all it is now. It was probably set up initially with a couple of specific job types in mind for which we may not have had the properly skilled workers here in this country. Then, eventually corporate lawyers and bigwigs saw it as a loophole to be able to replace workers making an honest wage with foreigners they will pay significantly less. It's needs to be eliminated, or at the very least, capped where any given company can only have a couple of these workers at one time.