By Harold S. Berman, J.D.
Apple and an Indian company permissibly brought Indian nationals to the U.S. under a B-1 visa to train Apple employees. A more exclusive H1-B visa was not required, as alleged by a former employee in this qui tam action.
A former Apple and Infosys employee who brought a qui tam action against both companies for bringing Indian nationals to the U.S. to train Apple employees, could not plausibly allege that the employer incorrectly brought the Indians to the U.S. under a B-1 rather than an H1-B visa, ruled a federal district court in California. The court dismissed the employee’s False Claims Act claims, finding that training was permissible under a B-1 visa, given that the Indians were employed by an Indian company which was paid in India. The court also concluded that, even had the companies acted incorrectly, they could not have acted with scienter as required by the FCA, given the vagueness concerning permitted business activities under a B-1 visa (U.S. ex rel. Krawitt v. Infosys Technologies Limited, Incorporated, March 12, 2019, Koh, L.).
India training contract. Apple contracted with Infosys, an Indian corporation, to provide Apple with 16 live training sessions in the U.S., utilizing Indian nationals that Infosys was to bring to the U.S to conduct the training. The Indian nationals came to the U.S. on B-1 visas, which are issued to non-immigrants for temporary business activities, and not on H1-B visas, which allow employment in the U.S. for a set duration.
Concern about visa status. In September 2014, the employee (an American citizen) began working at Apple as an independent contractor for Infosys. He alleged he warned Infosys that the Indian nationals it planned to send to Apple lacked the H1-B visas they needed to conduct the training. He also claimed that senior management at Apple knew that the two Indian trainers were on B-1 visas, yet approved the Infosys training. The employee also drafted a memo for Apple managers concerning the Apple-Infosys contract, which informed them of the trainers’ visa status.
In late September, at Infosys’ request, Apple management provided letters to be used by the Indian trainers to enter the U.S. on their previously issued B-1 visas. The letters did not mention that the trainers would be conducting training sessions under an Apple-Infosys contract, or performing other substantive work on Apple’s systems. Instead, the letters stated the trainers would attend “education meetings” to share and learn about the relevant software development concepts and methodology. Allegedly, the letters falsely stated that the trainers would not be paid, even though the training and services the Indians were to provide were to be paid for under the Apple-Infosys contract.
When the employee learned of the letters, he notified his Infosys supervisor, who declined to discuss the matter. When he urged another Infosys coworker to ask Infosys’ legal department to investigate, the coworker instead warned Infosys executives that the employee had raised the issue, and that “it would be a potential problem.”
On October 8, an Infosys employee emailed other Infosys executives that the two trainers needed to return to India and then re-enter the U.S. “to avoid detection and suspicion for violating United States immigration laws.” The coworker who had previously warned Infosys executives then discussed with the employee a previous U.S. case against Infosys and stated that he would “pretend as if he knew nothing” if he was caught manipulating visa applications.
Training sessions. Although the training sessions at Apple continued with the two Indian nationals, in mid-October an Apple manager told Infosys he was unhappy with the training. Infosys then returned the trainers to India and the contract was cancelled. Apple then entered into a new agreement with Infosys, involving a U.S-based trainer. The employee alleged that Apple and Infosys deliberately omitted the term “training” from the new agreement.
In January 2015, the employee’s contract was not extended, which he alleged was in retaliation for whistleblowing on the visa issue. He then worked for Apple, which also did not extend his contract, allegedly after it investigated the visa issue. The employee filed a qui tam action against Apple and Infosys. Apple and Infosys moved to dismiss.
Trainers’ activities permissible under B-1 visas. The court dismissed the employee’s claims, first finding that the trainers’ activities were permissible under their B-1 visas. As required for a B-1 visa, the trainers indisputably maintained residence in India and entered the U.S. temporarily. Additionally, as also required for a B-1 visa, their principal place of business was in India, and the profit accrued there. Nor did the money Apple paid go directly to the trainers, but rather to Infosys, which was based in India. Consequently, the trainers were paid in India.
The court rejected the employee’s contention that under federal regulations, the employees needed an H1-B visa because they were working under a contract. To the contrary, foreigners entering the U.S. under a contract, including to train U.S. workers, could work under a B-1 visa. That the trainers engaged in paired training with U.S. employees was irrelevant because the trainers did not perform the U.S. employees’ jobs.
No scienter. The court next found that, even if the trainers had been incorrectly admitted to the U.S. under B-1 visas, Apple and Infosys did not possess the necessary scienter to have violated the False Claims Act. The permitted business activities under a B-1 visa were not well defined, and no case law or regulatory guidance existed stating training was not permitted under a B-1 visa. Consequently, Apple and Infosys could not be charged with knowledge or willful blindness concerning the correct uses of B-1 visas. Additionally, the employee simply notified his superiors at Apple and Infosys that it was illegal to use B-1 visas to bring trainers to the U.S, yet applicable regulations did not make clear that training was impermissible under a B-1 visa.
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