Corporate merger and acquisition often bring up complex immigration issues.
This article will address these complex issues that arise in connection
with the PERM process and I-140 Immigrant Petition for Alien Worker.
PERM Labor Certification
PERM labor certification is the first step of most employment-based immigration
petitions. Under PERM, no amendment, modification or correction to a PERM
application (ETA Form 9089) is permitted. Merger and acquisition may potentially
invalidate a pending or approved PERM application. Therefore, when there
is a change in the corporate structure, it is important to know where
the case is in the PERM process when making the decision as to whether
to restart the PERM application or proceed forward with the existing application.
Corporate Change Occurring BEFORE PERM Application is Filed with DOL
Often times, merger, acquisition, or other corporate changes take place
in the midst of the PERM recruitment process. For example, Company A is
bought out by Company B, but all the recruitment activities, including
advertisements, Notice of Job Posting, were done in Company A’s
name. The question turns to whether all the recruitment activities can
be used despite the corporate change. The good news is that the Department
of Labor (DOL) has published the following Q&A:
Q: After completing our recruitment, but before filing the ETA Form 9089,
our company's name was changed after it was wholly acquired by another
company. Does the company name used in the advertisements used for recruitment
have to match the company name used on the ETA Form 9089?
A:The employer must conduct recruitment using its legal name at the time
of the recruitment. However, an Application for Permanent Employment Certification
(ETA Form 9089) must be filed in the name of the employer's legal
name at the time of submission. If a merger, acquisition, or any other
corporate change in ownership occurs between the time of recruitment and
the time of submission, resulting in a disparity between the employer's
name shown on the advertising used to recruit for a job opportunity and
the employer's name on the submitted ETA Form 9089, the employer must
be prepared to provide documentation -- in the event of an audit -- proving
that it is the successor in interest, a determination made based on the
totality of the circumstances, including whether the current employer
has assumed the assets and liabilities of the former entity with respect
to the job opportunity.
In addition to the above Q&A, it is good practice to considering the
- Has the employer laid off any employees in the occupation (i.e. Systems
Analyst) or related occupation as a result of the corporate change?
- Has the position (job titles/duties/requirements) changed as a result of
the corporate change?
Corporate Change Occurring while PERM Application is Pending with DOL
If the merger, acquisition, or other corporate changes take place after
a PERM application is filed with the DOL, employers are not permitted
to request an update to the PERM application to reflect the changes. Nevertheless,
the employer should document the corporate change in anticipation of a
PERM audit, such as stock transfers, Security Exchange Commission (SEC)
Form 10-K, financial statements, etc.
Regardless of whether the merger or acquisition takes place before, during,
or after approval of a PERM application, an employer must prepare to make
a successor-in-interest argument at the I-140 stage.
Before August 06, 2009, USCIS permitted a successor employer to continue
with the original employer’s I-140 petition or approved PERM application
only if the successor employer assumed all of the assets and liabilities
of the original employer and continued to operate the same type of business
as the original employer.
On August 06, 2009, Donald Neufeld, then Acting Associate Director for
USCIS Domestic Operations Unit published a memorandum (hereafter the “Neufeld
Memo”) that amended USCIS policy with respect to review of I-140
successor-in-interest amendments. Under the new policy, employers need
not show that all of the assets and liabilities have been assumed. Rather,
the adjudicating officers should focus on the following factors when determining
whether a previously approved or pending PERM application remains valid
for I-140 petition adjudications:
- 1. The job opportunity offered by the successor must be the same as the
job opportunity in the original labor certification.
- 2. The successor company bears burden to establish continuing eligibility
in all respects, including ability-to-pay.
- 3. The successor must fully document the transfer and assumption of ownership.
The successor employer must present evidence of the merger or acquisition, such as:
- a. Contract of sale or similar document of the acquisition;
- b. Mortgage closing statements;
- c. SEC Form 10-K;
- d. Audited financial statements;
- e. Documentation of the transfer of real property and business licenses;
- f. Copies of financial instruments used to executed the transfer; an
- g. Media or other reports of the business transfer.
In conclusion, the Nuefeld Memo has relaxed the “successor-in-interest”
standard from assumption of all assets and liabilities of the original
employers to purchase of all assets with essential rights and obligations
of the original employers.
It should be noted that I-140 petitions filed in connection with employment-based
immigrant visa categories that do not require labor certifications (EB-1,
EB-2 NIW) remain valid even if a business transfer has occurred. There
is no need of I-140 successor-in-interest amendments in these cases. However,
an employer seeking to classify the alien as an EB-1 Multi-National Executive
or Manager or EB-1 Outstanding Professor or Researcher, must file a new
I-140 petition and establish the alien’s eligibility under the requested
category’s specific eligibility requirements.
If you have any question on how the corporate change will affect your PERM
application or I-140 petition, please
schedule a legal consultation