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Court Finds That An H-1B Visa Application Establishes An Employment Contract

H-1B immigration status involves an application by a company for work authorization for a specific employee who holds a college degree in a job which requires a college degree. In a recent state court decision in New York, the Court held that a petition for H-1B status, by itself, constituted an employment contract.

In Kousal, the Court found that the petition filed by the company identified both the employer and the employee, and set forth the terms of the agreement, which the Court found to include the duration of the employment (presumably because the approval of the petition would cover a three-year period) and described the salary.

The employee filed a lawsuit and alleged that he worked for the company for the required period of time but was not paid by the defendant pursuant to the terms of the immigration petition. The Court found that the existence of a contract had been proven and required the company to pay the unpaid portion of the described salary.

This decision is odd from several perspectives. First, the plaintiff need not have gone into court to recover his wages, but could have filed a simple complaint with the Department of Labor. The Department of Labor regulations require the employer to pay the salary described in the petition and the Department of Labor would have filed a lawsuit for the employee to recover the unpaid salary. Second, the Court’s rather bare-boned analysis did not reveal the existence of any other terms and conditions of employment which would normally be found in an employment agreement. Obviously, the Court did not approach the issue of whether a “just cause” for termination provision could be implied, and the decision seemed to confine itself to doing what the Department of Labor would have done anyway, that is, ordering the payment of the wages mandated by the Department of Labor.

This decision, by itself, should not be cause for alarm, and we will monitor subsequent legal developments in this area.