This afternoon, the US District Court for the Northern District of California set aside two rules issued by the Trump administration pertaining to employer sponsorship of H-1B workers, both of which bypassed notice-and-comment rulemaking as required by the Administrative Procedures Act (“APA”):

  • The Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States rule, by which the Department of Labor increased the wages employers were required to pay to H-1B workers by 43 to 71% as of October 8, 2020 (the “DOL Rule”), when the rule took effect;
  • The Strengthening the H-1B Program rule, by which the Department of Homeland Security would have severely restricted the definition of who would be eligible for H-1B status and imposed limitations on duration of H-1B status for those employed by large IT staffing companies (the “DHS Rule”), had the rule taken effect on December 7, 2020 as planned.

Together, these rules represented the most substantial shift in eligibility, wage levels, and third-party worksite supervision of H-1B workers in the past 30 years.

Judge Jeffrey S. White granted partial summary judgment in Chamber of Commerce of the United States of America, et al., v. US Department of Homeland Security, et al (Case No. 4:20-cv-7331-JSW), ruling in favor of the plaintiffs, which included the US Chamber of Commerce, the National Association of Manufacturers, and the other plaintiffs from the business and academic sectors.  The court concluded that the government “failed to show there was good cause” to implement the two rules.  Echoing themes presented by the plaintiffs and amici, including amici represented by Mayer Brown, the court concluded:

The COVID-19 pandemic has wreaked havoc on the nation’s health, and millions of Americans have been impacted financially by restrictions imposed on businesses, large and small, during the pandemic; the consequences of those restrictions has been a fiscal calamity for many individuals. However, “[t]he history of the United States is in part made of the stories, talents, and lasting contributions of those who crossed oceans and deserts to come here.  The National Government has significant power to regulate immigration. With power comes responsibility, and the sound exercise of national power over immigration depends on the Nation’s meeting its responsibility to base its laws on a political will informed by searching thoughtful, rational civic discourse.”  Arizona v. United States, 567 U.S. 387, 41 (2012).

The court’s order mandates that the relevant administrative agencies set aside the DOL Rule and DHS Rule and revert to previously established standards for reviewing H-1B eligibility and the wages required to be paid to H-1B workers.  We expect the agencies to signal their intent to appeal the court’s decision and for the DOL to confirm when it will revert to prior wage standards shortly.

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