Exchange Visitor Program Sponsor Can Challenge Sanctions

By Leslie E. Wallis Nov 13, 2015

The company sponsor of a Japanese exchange visitor to the United States may challenge in court sanctions imposed on the company by the U.S. State Department, the 9th U.S. Circuit Court of Appeals ruled.

Noriko Amari, a 31-year-old Japanese national, was issued a J-1 visa by the State Department permitting her to participate in an exchange program in the U.S. She located her exchange program through ASSE International Inc., a vendor organization that contracts with the U.S. State Department to select qualifying visitors to the United States, find them educational or training opportunities, and monitor their welfare during their programs.

Shortly after Amari began her foreign exchange program, which was hosted by a restaurant in Hawaii, she contacted the State Department to lodge a complaint about her training conditions. ASSE had not found this program itself; instead, the host company was identified through another organization, American Career Opportunities (ACO), with which ASSE had contracted to assist in finding opportunities for exchange visitors from Japan. Amari alleged that, while at the restaurant, she had been subject to labor exploitation, excessive work hours, inadequate compensation for the work she performed, and harassment. When ASSE tried to communicate with Amari and offer her assistance, she failed to respond.

Following receipt of Amari’s complaint, the State Department did a review of ASSE’s compliance with the exchange visitor program (EVP) regulations and determined that sanctions against ASSE were warranted. The State Department found that ASSE had violated the department’s regulations even though ASSE had not directly participated in any harassment, and ASSE had also responded appropriately to Amari’s complaints.

The State Department found three violations: 1) Amari did not have sufficient English to participate in the program, leaving her vulnerable to abuse; 2) ASSE had failed to ensure that Amari’s placement was in a genuine training program; and 3) ASSE had not sufficiently educated and overseen ACO or the restaurant where Amari had been placed.

The State Department issued a notice of intent to impose sanctions—including a written reprimand, a corrective action plan and a 15 percent reduction in the number of trainees ASSE could sponsor—and gave it 10 days to respond. The company responded, but the State Department nevertheless imposed the sanctions.

ASSE sought review in district court of the State Department’s decision, but the court dismissed the action, ruling that it did not have the power to review State Department sanctions of foreign exchange programs. ASSE appealed, and the 9th Circuit reversed, ruling that a government agency does not have unbridled discretion to impose sanctions against organizations that contract with that agency.

The appellate court found that to support an award of sanctions, the government must provide substantial evidence that the company has violated agency regulations. The government agency must provide “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,” and the agency must also provide adequate procedural protections to the company once it is charged with wrongdoing. These protections include permitting the company a meaningful opportunity to rebut the government agency’s evidence.

In this case, the appellate court specifically found that ASSE was not provided with the complete transcript of Amari’s interview with the State Department or with additional evidence included in the reply to ASSE’s opposition to the charges. Based on these findings, the appellate court ruled that ASSE had provided sufficient information to put the State Department’s sanctions order into question and that, therefore, the lower court needed to review the matter.

ASSE Int'l, Inc. v. Kerry, 9th Cir., No. 14-56402 (Oct. 9, 2015).

Professional Pointer: A company that provides foreign exchange programs either directly or in conjunction with other organizations should ensure that candidates are appropriately vetted and that they are genuinely receiving training and not being used as low-cost labor.

Leslie E. Wallis is an attorney in the Los Angeles office of Ogletree Deakins, an international labor and employment law firm representing management.


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