First, I would like to thank Christian S. Allen, Esq., who wrote an article on this topic for the PERM BOOK II. I have written a blog article about this topic before, however, since I was asked to speak about this on an ILW.COM Teleconference last week, I decided to add some new perspectives in today's Blog. As I will explain, although the PERM Rule does not permit substitutions of any kind, substitution of employers is sometimes possible at the DHS during the I-140 petition Process, and, of course, under AC-21 during the adjustment of status process.
The problem with the PERM Rule is that no changes are permitted to the Form 9089 during the processing of the case by DOL or to approved PERM Cases. Although some ministerial typographical errors have been permitted by BALCA, under the ruling in HealthAmerica, such changes may not include material matters such as name of alien or name of employer.
The rule permitting substitution of Employers at DHS has its roots in pre-PERM BALCA cases which recognize that justice is will served if substitution of employers is permitted under certain circumstances. BALCA had approved the substitution of an employer in the Jean-Pierre Karnos case 2002-INA-18, May 20, 2004, where the first employer died (an attorney) and his colleague, a solo practitioner who practiced law in the same office space, requested that he be substituted as Employer in the pending application for labor certification.
In a 1981 decision, Matter of Dial Repair Shop, 19 I & N Dec. 481 (Comm., 1981), the concept emerged that substitution may occur if the employer has purchased an existing business, merged with another company, or otherwise has evolved into a new form of ownership. The now-familiar conditions based on successor-in-interest doctrine are that the new employer must show that it assumed all of the rights, duties, obligations, and assets of the original employer and continues to operate the same type of business as the original employer.
The rule also appears in the USCIS Adjudicator's Field Manual (AFM) which states that "Successor in interest occurs when the prospective employer of an alien (and the entity that filed the certified labor certification application form) has undergone a change in ownership, such as an acquisition or merger, or some other form of change such as corporate restructuring or merger with another business entity, and the new or merged, or restructured entity assumes substantially all of the rights, duties, obligations and assets of the original entity."
There is of course a long line of adjudications, both published and anecdotal, about I-140 petition approvals for new employers involving everything from a complete corporate take-over of all assets and liabilities, to the somewhat more vague termination and rehire of the entire staff of an employer, without any transfer of physical assets at all. In fact, DHS has acknowledged that the meaning of the rule is that only the immigration-related obligations must be transferred, and not the corporation itself. Under this interpretation, a mere letter or other document memorializing the transfer of personnel with immigration cases pending would be justified under the successor in interest theory.
Keep in mind, of course, that no labor certification is valid, if the place of employment is in a different commuting area or SMSA (Standard Metropolitan Statistical Area than the original. This is so because the prevailing wage in the labor certification was calculated at the original place of intended employment, and the prevailing wage determination will not be valid in a new work area. Obviously, roving employees might present an exception to the requirement of same work area. The prevailing wage for roving employees would be the place where the employer's headquarters is located.
The principles that applied in the Jean-Pierre Karnos case to permit employer substitution are the following: (1) Same job opportunity, (2) Same area of intended employment, (3) Same job duties, and (4) Same Wages. It seems that these same principles would support a request for substitution of Employer at BALCA, along with a document proving successor in interest status, at least for employment and immigration purposes.
The implication of existing substitution law is that the PERM Law may have gone too far in prohibiting any changes to the PERM Form, since the mandate of the statute is to determine if US workers are available and whether the employment of an alien worker will be adverse to working conditions for US workers. The Karnos criteria above works well because it relates to the mandate of the statute, which concerns the job opportunity and not the identity of the person who will fill that job opportunity.
A job opportunity may cease to exist, if the parties no longer have the intention to maintain an employment relationship. This would occur if the original employer stops functioning. During the gap between the old employment relationship and the new, it might be argued that the labor certification was no longer valid, especially if the employer and the alien worker no longer intended to continue with the immigration case.