UNITED STATES DEPARTMENT OF LABOR
BOARD OF ALIEN LABOR CERTIFICATION APPEALS
Judges' Benchbook
Second Edition - May 1992


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CHAPTER 3

ALIEN OWNERSHIP OR CONTROL

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I. Alien's relationship to the sponsoring employer

II. Recruitment by the alien or his agent or attorney

I. Alien's relationship to the sponsoring employer

A. Requirement of a bona fide job opportunity

When an employer seeks labor certification for an alien who is in a position to control hiring decisions or who has such a dominant role in, or close personal relationship with, the employer's business that the employer probably would not replace the alien with a qualified U.S. applicant, the Board allows the CO to examine carefully whether the employer has complied with sections 656.21(b)(7) and 656.20(c)(8). Section 656.20(b)(7) requires the employer to show that U.S. workers who applied for the job were rejected solely for lawful, job-related reasons. Section 656.20(c)(8) requires the employer to show that the job has been and is clearly open to qualified U.S. workers; that is, that a bona fide job opportunity exists. See Chapter 6 (Bona Fide Job Opportunity).

The fact that an employer is an investor, or has some other special relationship with the employer, does not establish per se the absence of a bona fide job opportunity. Ultimately, the question of whether a bona fide job opportunity exists turns on "whether a genuine determination of need for alien labor can be made by the employer corporation and whether a genuine opportunity exists for American workers to compete for the opening." Modular Container Systems, Inc. , 89-INA-228 (July 16, 1991) ( en banc ), citing Hall v. cLaughlin , 864 F.2d 868 (D.C. Cir. 1989).

Note that an alien's investment in the employer may be so great that employment of the alien is tantamount to self-employment in violation of § 656.50. See Chapter 9, III (Definition of Employment).

B. Test for bona fides

In Modular Container Systems, Inc. , 89-INA-228 (July 16, 1991) ( en banc ), the Board clarified the test for the existence of a bona fide job opportunity where the alien is an investor or has some other special relationship with the employer. Before Modular Container , the Board had applied a variety of tests to determine whether a bona fide job opportunity existed. See , e.g. , Lignomat, U.S.A., Inc. , 88-INA-276 (Oct. 24, 1989) ( en banc ) (sham and inseparability); Keyjoy Trading Co. , 87-INA-5 (Dec. 15, 1987) ( en banc ) (significant ownership and control); B.F. Hope Construction, Inc. , 89-INA-182 (Feb. 27, 1990) (significant ownership and control/sham and inseparability); Ocean Paradise of Hawaii , 89-INA-188 (Nov. 21, 1989) (significant ownership and control). Modular Container sets a totality of the circumstances test which embraces the elements of the older tests and provides flexibility for looking at other relevant factors.

Under Modular Container , the factors to be examined may include, but are not limited to, whether the alien:

  • is in the position to control or influence hiring decisions regarding the job for which labor certification is sought;

  • is related to the corporate directors, officers or employees;

  • was an incorporator or founder of the company;

  • has an ownership interest in the company;

  • is involved in the management of the company;

  • is one of a small number of employees;

  • has qualifications for the job that are identical to specialized or unusual job duties and requirements stated in the application; and

  • is so inseparable from the sponsoring employer because of his or her pervasive presence and personal attributes that the employer would be unlikely to continue in operation without the alien.

Id . The totality of the circumstances standard also includes a consideration of the employer's level of compliance and good faith in the processing of the claim. Moreover, the business cannot have been established for the sole purpose of obtaining certification for the alien. Id .

C. Application of (bona fides) test

1. Significant investment or managerial involvement

Labor certification is frequently denied to aliens who are also investors, officers or directors of the sponsoring employer. The following cases (although not all decided under the totality of the circumstances test), illustrate instances in which the alien's level of investment or managerial involvement prevented a finding of a bona fide job opportunity:

  • Malone & Associates , 90-INA-350 (July 16, 1991) ( en banc ) (totality of circumstances test) (no bona fide job opportunity where the employer was a law firm, founded and wholly owned by the alien, bearing the alien's name, until recently located in the alien's home, and applications were reviewed by a permanent employee of the alien/employer).

  • Lignomat, U.S.A., Inc. , 88-INA-276 (Oct. 24, 1989) ( en banc ) (sham and inseparability tests) (genuine test of labor market unlikely where the alien and his wife were 49% shareholders, were two of three directors, comprised the officers of the corporation, and the alien was one of five employees and had developed the employer's product).

  • Keyjoy Trading Co. , 87-INA-592 (Dec. 15, 1987) ( en banc ) (significant ownership and control test) (no genuine test of labor market where the alien owned 10% of corporation and occupied several high-ranking positions).

  • Kafko Partnership , 89-INA-297 (May 14, 1991) (no bona fide job opportunity where the alien and his brother were partners, the alien exercised complete control, the alien was closely involved in creation and development of enterprise, and partnership relied on the alien's knowledge, experience and participation).

  • Rimaco, Inc. , 89-INA-362 (Nov. 16, 1990) (significant ownership and control/sham and inseparability tests) (no genuine test of labor market where the alien and one partner were incorporators, owners, directors and officers, the alien was only employee in U.S. and business would cease without the alien).

  • GHR Atlanta Realty, Inc ., 89-INA-123 (Mar. 26, 1990) (the alien was the sole employee, one of two directors and was transferred to U.S. to establish presence for South African parent company).

  • B.F. Hope Construction, Inc. , 89-INA-182 (Feb. 27, 1990) (significant ownership and control/sham and inseparability tests) (no bona fide job opportunity where the alien was one of two employees, had previously served as vice president and as one of two directors, had been 50% owner and may have retained financial interest in employer).

  • Hero-Son Corp., 88-INA-555 (Jan. 16, 1990) (the alien and his wife were 49% owners and sole officers).

  • Bulk Farms, Inc. , 89-INA-51 (Jan. 3, 1990) (the alien was president and sole stockholder, was involved in marketing business, and employer's brochure contained personal message from the alien and his wife to prospective customers).

  • Ocean Paradise of Hawaii , 89-INA-188 (Nov. 21, 1989) (significant ownership and control test) (genuine test of labor market impossible where the alien was sole shareholder, chairman of the board and president of corporation).

  • Shehrazade, Inc. , 88-INA-170 (July 29, 1988) (the alien held 48% ownership interest, the alien's immediate family held 52% interest, the alien was incorporator and president, the alien's wife was vice president, the alien and his wife were the only directors).

  • Kica, Inc. , 88-INA-169 (July 18, 1988) (the alien had served as the employer's president since 1983, was the parent company's president from 1972 to 1983, was a controlling shareholder, one of two officers, one of three employees and one of five directors).

  • Medical Equipment Designs, Inc. , 87-INA-673 (May 6, 1988) (the alien was intimate with foreign inventors of product, active in product development, owned royalty rights to product, was deemed essential by employer to manufacturing and marketing product in U.S. and to position offered, was sales director and had primary duty to direct marketing).

  • Peace on Earth Trading, Inc. , 87-INA-741 (Apr. 20, 1988) (the alien was the employer's president at least at time of application, incorporator, one of two directors, designated agent for service of process).

  • Amger Corp. , 87-INA-545 (Oct. 15, 1987) (the alien was 100% shareholder, director, president and founder of employer; single qualified U.S. applicant hired for another position).

  • To the same effect: Young Seal of America, Inc. , 88-INA-121 (May 17, 1988) ( en banc ); Pan Ocean Aquarium , 87-INA-691 (Feb. 17, 1988); Friendly Starts, Inc. , 87-INA-517 (Jan. 29, 1988).

  • See also Kaye & Litwin, "The Issue of Alien Ownership of the Employer -A Review of BALCA Decisions," Immigration and Nationality Law 1990 Annual , Volume II, Advanced Chapters, pp. 338-342.

2. Investment or involvement not significant enough to find lack of a bona fide job opportunity

Where, considering the totality of the circumstances, it appears that an employer is offering a genuine job opportunity, certification may properly be granted despite the alien's investment or management involvement in the employer. Accordingly, in Human Performance Measurement, Inc. , 89-INA-269 (Oct. 25, 1991) ( en banc ), the Board held that even though the alien had "a collegial and professional relationship with the sponsoring employer," and was a stockholder, member of the Board of Directors, Treasurer, and Vice President for Finance and Marketing, labor certification should be granted where it appeared that a genuine job opportunity existed. Circumstances found persuasive by the Board included:

  • the alien's ownership of just four percent of the employer's stock, along with thirty other shareholders made it unlikely that the alien had a controlling say regarding the hiring of employees (four Board members did not join in this finding, noting that the record did not establish that four percent was an insignificant level of stock ownership);

  • the alien had no family relationship with key company personnel;

  • the employer's history indicated that other persons were the prime movers in corporate affairs;

  • although the job requirements matched the alien's qualifications, the job was unique because it involved a new theory and new technology derived from original research, with which the alien was familiar because of his graduate studies;

  • the alien's work experience for the job was gained through an employer, which although engaged in joint research with the sponsoring employer, appeared to be independent;

  • the employer would have accepted U.S. applicants with experience in a related field, but none applied.

3. Alien's family relationship to the employer

One of the factors considered under Modular Container 's totality of the circumstances test is whether the alien for whom certification is sought is related to the employer's directors, officers or employees. See Chapter 2 (Bona Fide Job Opportunity; Test for Bona Fides). Prior to Modular Container , the family relationship between the alien and employer was the focus of only a few decisions.

In Young Seal of America , 88-INA-121 (May 17, 1989) ( en banc ), the Board held that no bona fide job opportunity existed where, inter alia , the alien's wife was director, chief financial officer and corporate secretary of the employer corporation. However, in Paris Bakery , 88-INA-337 (Jan. 4, 1990) ( en banc ), the Board stated that a close family relationship between the person having the authority to hire and the alien (brother of the owner) does not, standing alone, establish that the job is not bona fide or available to U.S. workers.

The Board stated in Paris Bakery that while a family relationship increases the level of scrutiny to be paid to the application, it is only one factor to be considered. If the employer genuinely needs an employee with the alien's qualifications, the job has not been tailored to the alien, and good faith recruitment has not produced qualified applicants, a family relationship does not per se require denial of certification. Id .; see also Japanese otors International, Inc. , 89-INA-246 (Jan. 30, 1991) (reversing denial based only on the alien's close family relationship to the employer's president).

In Altobeli's Fine Italian Cuisine , 90-INA-130 (Oct. 16, 1991), the panel noted that Paris Bakery invites a higher level of scrutiny where there is a family relationship. Nevertheless, applying the Modular Container totality of the circumstances test, the panel found that the employer had demonstrated that it was genuinely independent from the alien despite the alien's family relationship to two of the employer's board members and shareholders. Specifically, the panel noted that the alien had no ownership interest, was not an incorporator or founder, was not on the board of directors, and was not currently an employee. In addition, the panel noted that the job duties did not appear to be tailored to the alien's qualifications, that the business had been operating without the alien and there was no reason to think it would not continue to do so without him, and the CO did not challenge the propriety of the recruitment.

D. Documentation requested by the CO

1. Obligation to provide information reasonably requested

If a CO requests information about the relationship between the employer and the alien, the employer must provide it. Modular Container Systems, Inc. , 89-INA-228 (July 16, 1991) ( en banc ). See also Chapter 11, II (Evidence). A CO may reasonably request information regarding whether an alien possesses significant financial or other control over the sponsoring employer, and failure to provide such information constitutes a ground for denial of labor certification. Sato Pharmaceutical, Inc. , 88-INA-193 (Oct. 25, 1991); Rainbow Imports, Inc. , 88-INA-289 (Oct. 27, 1988). However, the CO should have reasonable grounds for requesting documentation, and should request documents reasonably related to the issue of ownership. Wild Heerbrugg Instruments, Inc. , 90-INA-197 (May 3, 1991).

2. Effect of § 656.20(c)(8) attestation

The fact that an employer makes an attestation required under § 656.20(c)(8) does not prohibit the CO from making reasonable inquiries regarding the alien's relationship to the sponsoring employer. Sato Pharmaceutical, Inc. , 88-INA-193 (Oct. 25, 1991). Thus, where a CO had made a routine request for information concerning the alien's relationship to the employer because the alien held a managerial position with the employer, the panel held that the request was reasonable and the employer's refusal to provide the information based on its § 656.20(c)(8) attestation was not justified. Id .

3. Confidentiality of information

In Rainbow Imports, Inc. , 88-INA-289 (Oct. 27, 1988), an employer's argument that "confidentiality" issues absolved it from disclosing the identity of the officers of its corporation as requested by the CO was found to be without merit. The panel found that the employer could not meet its burden of proving a bona fide job opportunity without disclosing information about the current officers, their relationships to the alien and their financial interest in the corporation where the alien was president of a corporation with a name almost identical to that of the sponsoring employer.

4. Responsiveness of evidence

An employer failed to establish a bona fide job opportunity where the CO requested a list of officers and their relationships to the alien, and the employer instead provided a letter from the employer's corporate counsel stating that neither the alien nor any relative of alien were current stockholders of the corporation. Rainbow Imports, Inc. , 88-INA-289 (Oct. 27, 1988).

In Crown USA, Inc. , 90-INA-113 (Sept. 23, 1991), the panel found that a broad response by the employer to the CO's broad question regarding the alien's ownership interest in the employer was adequate. The CO had directed the employer to "[s]how by copy of official corporate records, the owners and their financial interests," and said that "[i]f the alien owns part or all of the firm, show how the job offer is clearly open to a U.S. worker." The employer responded that the alien "DOES NOT now own, nor has he ever owned, any equity interest in our company (i.e., no stock, shares, debentures, etc.)" and provided copies of certificates showing stock ownership by four individuals and one corporation. The ownership of the corporate stockholder was not revealed, and the CO was concerned that the alien could have an indirect ownership interest in the corporate stockholder. The panel, however, held that the employer's denial that the alien has any interest in the employer must be read to mean any interest, direct or indirect. Nonetheless, the panel directed the employer to notify the Board immediately if in fact the alien does have an ownership interest in the employer.

E. Scope of issue preserved for appeal

The CO must preserve the issue of whether a bona fide job opportunity exists, independent of the issue of whether an employer-employee relationship exists. Patisserie Suisse, Inc. , 90-INA-131 (Oct. 16, 1991). In Patisserie Suisse , the panel refused to consider whether a bona fide job opportunity existed, because the CO failed to preserve the issue in his final determination.

Similarly, where the CO leads the employer to believe that she is challenging the existence of a bona fide job opportunity on narrow grounds, the panel held it would not undertake a review of all possible grounds for the challenge. Crown USA, Inc. , 90-INA-113 (Sept. 23, 1991). Crown indicates that the CO does not preserve the entire question of ownership and control merely by noting the alien's position in the sponsoring company and inquiring into his or her investment status. In Crown , the panel granted certification despite the alien being the employer's General Manager, where the CO failed to credit the employer's evidentiary showing and denial that the alien had any interest in the sponsoring employer, the CO only raised the question of whether the alien was an investor and did not inquire into whether the management position itself indicated control over hiring (i.e., non-investment control factors were not preserved as an issue), and it appeared that the employer had complied with regulatory guidelines and exhibited good faith in recruitment.

F. Appropriateness of remand

In Altobeli's Fine Italian Cuisine , 90-INA-130 (Oct. 16, 1991), a panel granted certification where the CO's narrow grounds for finding that the job was not clearly open to U.S. workers were meritless and the record contained no other evidence to sustain the finding. Although not reaching the § 656.20(c)(8) issue because it was not preserved by the CO, Patisserie Suisse, Inc. , 90-INA-131 (Oct. 16, 1991) indicates that a remand is appropriate where a CO based his or her denial on an erroneous ground, but the record contains other evidence that could support the finding. In Patisserie Suisse , the CO erroneously relied solely on the family relationship between the alien and stockholders and directors of the employer as establishing per se that there was not an employer-employee relationship, but the record contained other information, which when considered with the family relationship factor, could support a finding that the position was tantamount to self-employment. The panel did not rule on the appeal record, however, because the employer had not been provided an opportunity to rebut matters outside of the narrow family relationship issue.

In Modular Container Systems, Inc. , 89-INA-228 (July 16, 1991) ( en banc ), limiting its holding to the particular circumstances of that case, however, the Board remanded the case for the CO for further development because of inconsistencies in prior treatment of the statements of counsel as evidence by both the Board and the COs (see Chapter 9, Weighing of evidence) and because the Board had used that case to clarify the law to be applied in "investor" cases.

II. Recruitment by the alien or his agent or attorney

A. Applicable regulation

Section 656.20(b)(3) provides that it is contrary to the best interests of U.S. workers for the alien or his agent or attorney to participate in the interview or consideration of U.S. applicants for the job offered the alien. Therefore, the alien or his agent or attorney may not interview or consider U.S. workers unless the agent or attorney is also the employer's representative who normally interview or considers applicants for jobs such that offered the alien when labor certification is not involved.

B. Recruitment by the alien

The alien's participation in interviewing and considering U.S. workers per se taints the labor certification process. Master Video Productions, Inc. , 88-INA-419 (Apr. 19, 1989) ( en banc ); Summit Enterprises, Inc. , 88-INA-448 (Oct. 20, 1989); Eastern Trading Co., Inc. , 88-INA-144 (Aug. 4, 1988). Such alien involvement mandates the denial of certification whether or not any of the U.S. applicants were qualified and available for the job. Master Video Productions , supra . Because the violation is per se , the local job service or the CO may deny an application before giving the employer an opportunity to recruit, without violating the employer's due process rights. Eastern Trading , supra .

In Eastern Trading Co., Inc. , 88-INA-144 (Aug. 4, 1988), the alien signed an application seeking to certify himself for his current position as the employer's president, a position which gave him exclusive authority to hire and fire; then he attempted to begin the review of U.S. applicants. When the CO pointed out that, as the employer, the alien was seeking to hire himself, the alien unsuccessfully argued that as an individual employee he should be considered as an entity separate from the corporate employer.

In Summit Enterprises , 88-INA-448 (Oct. 20, 1989), the panel held that there was a per se violation of § 656.20(c)(8) where the alien, who was director of operations for the employer, conducted hiring and firing procedures and made recommendations for actions to be executed by the president. (The panel discussed § 656.20(b)(3), but based its holding on § 656.20(c)(8).)

C. Recruitment by the alien's agent or attorney

The alien's agent or attorney may not interview or consider U.S. applicants unless the agent or attorney is also the employer's representative who normally interviews or considers applicants for job opportunities such as that offered, but which do not involve labor certification. 20 C.F.R. § 656.20(b). Section 656.20(b)(3)(ii), which limits who can represent the employer in interviews with U.S. applicants, applies only if the employer's attorney is also the alien's attorney under § 656.20(b)(3)(i). Marcelino Rojas , 87-INA-685 (Mar. 11, 1988). A search firm hired by the employer to recruit and interview U.S. applicants is not an agent of the alien and § 656.20(b)(3) does not apply. Physicians Inc. , 87-INA-716 (July 12, 1988) (the employer-medical clinic hired a physician search firm).

Where the hiring official is the alien's direct subordinate, the alien exerts significant control even if the subordinate is "free" to select anyone he chooses. Ocean Paradise of Hawaii , 89-INA-188 (Nov. 21, 1989). Accord : Malone & Associates , 90-INA-360 (July 16, 1991) ( en banc ) ("independent" review of U.S. applicants undertaken by permanent employee of the alien, who founded and owned employer).

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