On Oct 28 2013 by William A. Stock

KILP Attorneys win “No Violation” Finding in District Court

We recently received a full vindication in United States District Court on behalf of our client, CAMO Technologies, an IT consulting firm based in Woodbridge, New Jersey.  Like many consulting firms in the IT space, CAMO sponsors a significant number of its employees for H-1B visas and permanent residence in the United States, as it provides IT services to fill the demands of US companies.  In 2010, the Department of Labor was brought in to investigate complaints of underpayment of wages, and finding none, instead charged the company with “willfully violating” the Labor Condition Application (LCA) regulations by failing to post notices of its LCA filings to its workers at some of the sites at which they were employed.

In fact, the company posted at its own location, gave a copy of each employee’s LCA to that employee, and made a good faith effort to post at third-party sites where those employees worked.  They also maintained documentation of their posting efforts at third party sites.  DOL, however, charged them with a “willful violation” of the LCA regulations, and claimed CAMO owed approximately $193,000 in civil money penalties (CMP) and should be debarred from filing H-1B and other immigrant and nonimmigrant petitions for a period of two years.

I represented CAMO Technologies before the Administrative Law Judge, who looked at CAMO’s records and determined that they had made a good faith effort to comply with the regulations, and that they believed their posting procedures to be compliant based on their past interactions with DOL investigators.  The ALJ sided with CAMO, and found that their good faith negated any willfulness, and accordingly dismissed the DOL’s claims for CMPs and debarment.  The DOL then appealed the ALJ’s decision to the Administrative Review Board (ARB) within the Department of Labor, where the DOL obtained a final agency determination that CAMO had willfully violated the regulations, and accordingly ordered that CAMO should pay the $192,625 in CMPs and be debarred for two years from the H-1B and immigration program.

The final agency action needed to be challenged in federal court under the Administrative Procedures Act (APA), which governs all federal agencies such as the Department of Labor.  The APA allows a federal court to set aside any final agency action which is “arbitrary or capricious” or otherwise not in accordance with the law or evidence in the record.  I assembled a team of attorneys from Hangley Aroncheck, partner Alan Promer and associate Dylan Steinberg, as well as KILP associate Matt Galati,  and brought suit on CAMO’s behalf against the DOL under the APA challenging the ARB’s order.  We argued that there was no substantial evidence in the record supporting the ARB’s decision, and that the ARB could not find that CAMO had willfully failed to comply without considering the evidence of their good faith attempts at compliance.

Judge William Martini of the District of New Jersey granted CAMO’s motion for summary judgment, denied the government’s cross-motion for summary judgment, and vacated the ARB’s order imposing CMPs and debarment.  We are very pleased with this result for CAMO, which upholds the original decision in their favor by the Department of Labor’s administrative law judge. The government has 60 days to decide whether to appeal Judge Martini’s decision to the Third Circuit Court of Appeals.

While we are happy CAMO’s good faith efforts were recognized, H-1B employers are reminded that the regulations do require actual posting of notices to the worksites where H-1B employees perform services, and that the Department of Labor is becoming much more aggressive in enforcement of this posting requirement, particularly against companies in the IT space.  For further guidance or a review of your company’s LCA practices, please contact a member of our worksite enforcement team.