Employment Law Daily Union gets second shot to contest DHS regs allowing foreign students to stay for STEM jobs
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Tuesday, June 12, 2018

Union gets second shot to contest DHS regs allowing foreign students to stay for STEM jobs

By Brandi O. Brown, J.D.

In a lawsuit stemming from regulations allowing certain nonimmigrant aliens on student visas to remain in the United States for up to three years after finishing a degree in order to pursue related work, the D.C. Circuit returned the case to the district court that had dismissed all of a union’s claims. Partially reversing the lower court’s decision, the appeals court instructed the lower court to reconsider one of the counts related to a rule promulgated in 2016 that allowed the students to remain for up to three years working in STEM jobs (Washington Alliance of Technology Workers v. U.S. Dept. of Homeland Security, June 8, 2018, Henderson, K.).

STEM jobs for alien workers. The Washington Alliance of Technical Workers is a union that represents STEM workers throughout the United States’ labor market. In 2016 the union brought suit challenging federal regulations allowing nonimmigrant aliens who had been admitted as students to remain in the country after finishing their degree in order to pursue related work. The 1992 regulation allowed the student to remain for purposes of engaging in employment for one year after degree completion. The 2008 regulation allowed for an additional 17-month extension. Then, in 2016, the regulation authorized an extension of up to two years.

According to the union, the regulations exceeded their statutory authority, were arbitrary and capricious, and suffered from procedural deficiencies. In particular, the union complained that the rules adversely affected U.S. workers. Ruling on a motion to dismiss filed by the Department of Homeland Security, the district court found that all counts should be dismissed. The union appealed.

Union has competitor standing. First, the court explained that, contrary to the federal agency’s argument, the union had competitor standing to bring three of the counts included in the complaint—all were challenges to the 2016 rule. The union suffered an injury in fact under the competitor standing doctrine, the court explained. The complaint alleged that union members were forced to compete with the F-1 student visa holders who were part of the program created and continued by the regulations. It identified three members who applied for STEM jobs at companies within which F-1 student visa holders had applied for program extensions.

Furthermore, under its 2014 decision in Mendoza v. Perez, the appeals court explained, union members need not have filled out formal job applications. It was sufficient that it stated that three members were currently employed in STEM positions and that they continue to search for jobs and have affirmed their desire to work. Furthermore, the union alleged that the most recent rule increased the labor supply in the job market for STEM jobs and, thus, increased competition. Those allegations were born out by reports and other information outside of the complaint, which the court was allowed to consider. Therefore, the court explained, the union sufficiently pleaded that the regulations had increased competition against its members.

Moreover, the injury was caused by the 2016 rule—it was “directly traceable” to the agency’s actions that allowed the program participants to compete for jobs. The agency’s argument that the regulation leaves the decision up to the employer was unavailing, the court explained, under the competitor standing doctrine and had already been rejected in earlier cases, such as Bristol-Myers Squibb Co. v. Shalala. Finally, the court explained, the injury would be redressed by a decision favorable to the union. However, with regards to the 1992 rule, it was “less certain” that the union had standing, but the court made its decision denying the appeal on the ground that that claim is untimely.

One count heads back. With regard to the three counts related to the 2016 rule, the appeals court sent only one back to the district court for reconsideration. In that count, the union had complained that the 2016 rule exceeded the federal agency’s authority. The claim survived the Rule 12(b)(6) motion, the court explained, because it plainly identified the disconnect between what was allowed by the federal statute, which allowed nonimmigrant aliens to be admitted to the country as students, and what the regulations did by allowing the same aliens to remain to work after their time as students ended.

Nonetheless, the lower court concluded that the response was inadequate and dismissed, agreeing with the defendant’s argument that the issue was “conceded” under Local Rule 7(b). That argument should have also failed. In the context of a non-dispositive motion, the appeals court explained, it had affirmed district court decisions treating as conceded issues not addressed by the plaintiff in a timely response. And in dispositive motions the rule had been applied when the plaintiff failed to file a timely response. However, in this case the motion was dispositive and, moreover, the plaintiff had filed a timely response. While the union “would have been wise to more fully develop its argument” that it had satisfied the pleading standard under Rule 12(b)(6), it nevertheless did not “yield or grant” the argument nor did it “‘acknowledge’ or ‘accept’” the defendant’s position.”

District court to consider statute of limitations issue. That said, the court continued, whether the count could proceed is still in question. As framed, the count makes the claim that the entire program allowing the nonimmigrant aliens to remain is ultra vires, and thus it implicates the authority granted for the first time under the 1992 rule. Application of a six-year statute of limitations would appear to prohibit such a claim after 1998. The union, however, argued that under the “reopening doctrine,” the 2016 rulemaking restarted the statute of limitations because the agency reopened and reaffirmed its earlier decision. However, because the district court did not consider whether the claim was reviewable under that doctrine, it will have to address that question on remand.

With respect to the remaining counts—claims of procedural deficiencies and arbitrary and capricious rules—the lower court’s decision remained undisturbed.

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