Employers and Visa Applicants May Challenge H-1B Lottery Process

By Sharon A. Lim Nov 9, 2016

Two small businesses and their would-be H-1B visa recipients may challenge the legality of the H-1B lottery process in court, according to the U.S. District Court for the District of Oregon.

The H-1B visa program allows U.S. companies to employ foreign nationals in high-skilled jobs. Only 65,000 new H-1B visas are available each year. An additional 20,000 H-1B visas are available for foreign nationals with advanced degrees from U.S. institutions of higher education. U.S. Citizenship and Immigration Services (USCIS) currently uses a computer-generated lottery system to randomly select which H-1B applications will be processed each year. Because of the popularity of the H-1B visa program, USCIS receives substantially more H-1B applications than available H-1B visas; thus, USCIS must reject thousands of H-1B applications each year to comply with the statutorily mandated cap.

[SHRM members-only toolkit: Understanding and Obtaining U.S. Employment Visas]

Two foreign nationals and two small businesses that unsuccessfully sponsored the foreign nationals for H-1B visas sued USCIS after the foreign nationals' H-1B applications were rejected. The plaintiffs argued that the lottery process is illegal and violates 8 U.S.C. §1184(g)(3), which states that H-1B visas will be issued "in the order in which petitions are filed for such visas or status."

USCIS sought to have the lawsuit dismissed by arguing that only employers may challenge the H-1B lottery process. The agency also maintained that the employers in this case could not proceed because they could not prove that they had been injured by USCIS's use of a lottery system.

The court rejected USCIS's attempt to dismiss the lawsuit, holding that foreign nationals who are beneficiaries of visa applications may challenge the denial of such applications. The court also found that because it was likely that an employer would lose the opportunity to hire particular foreign nationals in future lotteries based on the current lottery system, the small businesses in this case sufficiently alleged an injury and thus were permitted to sue USCIS.

Tenrec Inc. v. U.S. Citizenship & Immigration Servs., No. 3:16-cv-995-SI (D. Or. Sept. 22, 2016).

Professional Pointer: While it is too early to determine whether the plaintiffs will prevail in their lawsuit, a victory would likely mean that employers will no longer be subject to the current H-1B lottery process. Instead, if the agency loses, USCIS would be required to implement an application process that operates under a first-come first-served basis.

Sharon A. Lim is an attorney with Marr Jones & Wang LLP, the Worklaw® Network member firm in Honolulu.

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