On Mar 09 2022 by Myriam Jaidi

Higher Education: Immigration Consequences of University Mergers

Mergers and acquisitions pose significant immigration law challenges for any institution, public or private. This is no less true for educational institutions seeking to merge or acquire another school, or otherwise change ownership structure to meet their educational mission and strategic goals. This article provides an overview of the main immigration-related considerations for educational institutions planning a merger, acquisition, or similar endeavor.

The top priorities from an immigration law standpoint include the status of international students and the institutional infrastructure that supports them. This includes Designated School Officials (DSOs) and the status of international employees who may range from international faculty and research scholars to international employees who fill a host of essential roles at a university. A merger or other change in the school may impact their status and it is essential to identify these issues before any merger to ensure their ability to work for the school in the United States without interruption.

Starting with students, the main concerns are ensuring their ability to study, travel, and, if eligible, work while the merger approval is finalized by the relevant government agencies. To host international students in F or M nonimmigrant status, a U.S. educational institution must first be certified by the Student and Exchange Visitor Program (SEVP). SEVP is a part of the Department of Homeland Security, Immigration and Customs Enforcement (ICE) that provides approval and oversight to schools authorized to enroll students in F and M nonimmigrant status as well as guidance to both schools and students regarding compliance with program requirements.

In the event of a merger or acquisition of educational institutions, the change in ownership and/or change in type of school (public v. private, profit v. nonprofit) likely triggers the requirement of updating the school’s Form I-17, Petition for Approval of School for Attendance by Nonimmigrant Student, generally within 21 days of the date of the change. Failure to timely report the change in ownership can result in the withdrawal of SEVP certification, meaning that the school can no longer enroll international students, which can have a significant negative impact on the school and its cultural, academic, and financial life.

Updating the I-17 to reflect the change in ownership, new instructional sites, and new programs the educational institution may be gaining from the merger/acquisition process requires extensive and complete supporting evidence. SEVP notes that failure to submit all required evidence at one time can result in the cancellation of the I-17 petition. Thankfully, SEVP does provide extensive guidance on completing the I-17 and its definitions of evidence. SEVP adjudicates I-17 submissions on a first-in, first-out basis, and the adjudication can take significant time, sometimes many months to a year, depending on SEVP’s processing times and the number of changes being adjudicated, among other factors. Given the complexity of the process and the importance of timely processing, it is important to complete the application, maintain a good working relationship with the school’s SEVP field representative, and continually communicate any issues as soon as possible. Once the I-17 is submitted, it is locked, and making any further changes becomes more difficult.

Timing is important because new programs at the surviving entity cannot take on international students until approved. Some schools may opt to keep the SEVIS record of a school being acquired to protect its students’ ability to study, work, and travel (though students must be very careful of travel while a merger is pending and maintain contact with their DSOs). Student and Exchange Visitor Information System (SEVIS) guidance states that student permission to work off-campus ends when a student transfers from one school to another. To continue off-campus employment, the student must request the recommendation of the DSO from the new entity and file a new Form I-765 application with USCIS. This can cause a significant disruption to a student’s ability to work, as USCIS processing times of the Form I-765 have been extremely long, in many instances well beyond six months.

Addressing the schools’ J-1 students, if any, requires engaging with the Department of State (DOS) to amend an existing J-1 program, or to request designation of a new one. The application process with DOS is similar to that with SEVP, though the relevant DOS form (DS-3036) is not as complex as the I-17. While the DOS provides less guidance regarding what documentation to provide to update J-1 programs, much of the same information developed to update the I-17 is useful in updating a J-1 program, and effective communication and follow-up with DOS representatives is essential.

When considering the impact on international employees, a school experiencing a merger must carefully analyze the status of all affected employees with a nonimmigrant status in the United States before the merger or change in ownership occurs. Failure to analyze and act on any necessary changes can result in a person falling out of status (making them removable) and working without authorization, which can cause significant problems for both the employer and the employee. Family members should also be considered, as an employee’s spouse’s ability to work is often tied to the employee’s ongoing authorization to live and work in the United States. The ability of an employee to travel internationally for conferences (or any reason) can also be impacted, as can the ability of an employee who traveled abroad to return to the United States if the identity of their employer changes mid-trip.

A change in employment can also impact any pending green card process and must be carefully analyzed. Even where the surviving employer is a successor in interest to the prior entity, the employer may need to take certain steps to ensure that an employee’s green card case is protected, like filing an amended Immigrant Petition on Form I-140. In many cases, a significant change in employer requires that the green card process be restarted. In these cases, it is important to strategize with immigration counsel to protect and extend an employee’s ability to work while the process is pending.

Another issue that should be on the radar of any merging institution is ensuring that their Employment Eligibility Forms (I-9) are properly completed for new and existing employees. The I-9 regulations allow an employer that has acquired or merged with another company the option to maintain the previously completed Form I-9 instead of acquiring new I-9s, with the caveat that the new employer will be responsible for any errors or omissions on the forms. A change in ownership is an ideal opportunity to audit the organization’s I-9s to ensure compliance, and to determine which path is most appropriate, new forms or accepting previously completed forms.

Schools engaged in a merger or change in control deal with a multitude of significant issues. Given the seriousness of U.S. immigration rules and the deeply negative impact noncompliance can have on the school, its international students, and sponsored employees, the immigration impact of the change in the school should be among the first issues analyzed and addressed early in the process, and always under the consultation of qualified and experienced immigration counsel.

 

The material contained in this article does not constitute direct legal advice and is for informational purposes only.  An attorney-client relationship is not presumed or intended by receipt or review of this presentation.  The information provided should never replace informed counsel when specific immigration-related guidance is needed.

Reprinted with permission from the March 9, 2022 edition of The Legal Intelligencer© 2022 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. ALMReprints.com – 877-257-3382 – reprints@alm.com.