Aleutian Capital Partners LLC v. Perez et al

Filing 41

OPINION AND ORDER: re: 35 MOTION for Summary Judgment . filed by Aleutian Capital Partners, LLC, 37 CROSS MOTION for Summary Judgment . filed by Wage and Hour Division, Thomas E Perez, United States Department of Labo r, Administrator. For the aforementioned reasons, Plaintiffs motion for summary judgment is DENIED, and Defendants motion for summary judgment is GRANTED. The Clerk of the Court is respectfully directed to terminate the motions, Docs. 35, 37, and close the case. (Signed by Judge Edgardo Ramos on 9/28/2017) (js)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ALEUTIAN CAPITAL PARTNERS, LLC,
Plaintiff,
-againstEDWARD HUGLER, sued in his official capacity,
Secretary, United States Department of Labor;
UNITED STATES DEPARTMENT OF LABOR;
WAGE AND HOUR DIVISION, United States
Department of Labor Employment Standards
Administration; and ADMINISTRATOR, United
States Department of Labor Employment
Standards Administration Wage and Hour
Division,

OPINION AND ORDER
16 Civ. 5149 (ER)

Defendants.

Ramos, D.J.:
Aleutian Capital Partners, LLC (“Plaintiff” or “Aleutian”) brings this action under the
Administrative Procedures Act (“APA”), 5 U.S.C.A. § 702, seeking judicial review of a final
decision and order of the Administrative Review Board of the Department of Labor (“ARB”). 1
This action concerns Plaintiff’s alleged violations of statutory and regulatory requirements
governing the H-1B temporary foreign worker program concerning its two H-1B employees.
Before this Court is Plaintiff’s motion for summary judgment seeking to vacate the ARB’s

1

Edward Hugler is the current acting Secretary of the Department of Labor, and is substituted for former Secretary
Thomas E. Perez as a defendant in the instant action, pursuant to Federal Rule of Civil Procedure 25(d).

Also, Defendants note in passing that the Wage and Hour Division and the Administrator are improper defendants to
this action since an APA action “may be brought against the United States, the agency by its official title, or the
appropriate officer” and these Defendants do not qualify. See 5 U.S.C. § 703. Plaintiff does not address the issue in
summary judgment. In any event, the instant action is terminated on summary judgment, and thus, the Court need
not comment on this issue.

decision, and Defendants’ cross-motion for summary judgment seeking to affirm the ARB’s
decision.
For the following reasons, Plaintiff’s summary judgment motion is DENIED, and
Defendants’ summary judgment motion is GRANTED.
I.

BACKGROUND
A. Statutory and Regulatory Background
H-1B employees are a class of non-immigrant temporary alien workers eligible to work

in the United States in “specialty occupation[s].” 8 U.S.C. § 1101(a)(15)(H)(i)(b). This visa
program is governed by the Immigration and Nationality Act (“INA”), 8 U.S.C.
§ 1101(a)(15)(H)(i)(b) and § 1182(n), and regulations promulgated at 20 C.F.R. Part 655,
subparts H and I, by the Department of Labor (“DOL”), the agency that Congress charged with
administering the H-1B program.
An employer intending to hire an H-1B employee must first submit a Labor Condition
Application (“LCA”) to the DOL. See 8 U.S.C. § 1182(n)(1); 20 C.F.R. § 655.730(a). In the
LCA, the employer must promise to pay the employee a specified required wage rate and provide
certain working conditions. See 8 U.S.C. § 1182(n)(1)(A). The required wage rate is the higher
of either the actual wage or the prevailing wage level for the occupational classification in the
area of employment. Id.
The regulatory framework outlines the employer’s obligations with regards to satisfying
the required wage obligation. “The required wage must be paid to the employee, cash in hand,
free and clear, when due. . . . ” 20 C.F.R. § 655.731(c)(1). “Cash wages paid” can only consist
of payments meeting the criteria listed in 20 C.F.R. § 655.731(c)(2)(iii)-(v). Notably, “[f]uture
bonuses and similar compensation (i.e., unpaid but to-be-paid) may be credited toward

2

satisfaction of the required wage obligation if their payment is assured (i.e., they are not
conditional or contingent on some event such as the employer’s annual profits).” 20 C.F.R.
§ 655.731(c)(2)(v). There is also a timing requirement for wage payments to salaried employees:
For salaried employees, wages will be due in prorated installments (e.g., annual
salary divided into 26 bi-weekly pay periods, where the employer pays bi-weekly)
paid no less often than monthly except that, in the event that the employer intends
to use some other form of nondiscretionary payment to supplement the employee’s
regular/pro-rata pay in order to meet the required wage obligation (e.g., a quarterly
production bonus), the employer’s documentation of wage payments (including
such supplemental payments) must show the employer’s commitment to make such
payment and the method of determining the amount thereof, and must show
unequivocally that the required wage obligation was met for prior pay periods and,
upon payment and distribution of such other payments that are pending, will be met
for each current or future pay period. . . .
20 C.F.R. § 655.731(c)(4).
The DOL reviews LCAs for completeness and obvious inaccuracies. See 8 U.S.C.
§ 1182(n)(1). If it does not find that the LCA is “incomplete or obviously inaccurate,” the DOL
must certify the LCA within seven days of receipt. Id. Indeed, DOL is generally prohibited from
investigating the veracity of the LCA prior to certification. See, e.g., Cyberworld Enter. Techs.,
Inc. v. Napolitano, 602 F.3d 189, 193 (3d Cir. 2010). However, the Secretary of Labor (the
“Secretary”) may conduct certain compliance investigations after certification. 2 8 U.S.C. §
1182(n)(2)(A). The Secretary may conduct investigations under the following circumstances:
(1) upon receiving aggrieved party complaints under 8 U.S.C. § 1182(n)(2)(A); (2) “random
investigations” of certain employers under 8 U.S.C. § 1182(n)(2)(F); (3) investigations after he
personally certifies that he has “reasonable cause” to believe the employer is non-compliant
under 8 U.S.C. § 1182(n)(2)(G)(i); or (4) investigations based on “specific credible information”
of a willful violation of certain requirements from a reliable source under 8 U.S.C.

2

The Secretary delegated to the Administrator of the Wage and Hour Division (the “Administrator”) the authority to
perform all investigative and enforcement functions under the INA. See 20 CFR 655.502; 20 C.F.R. § 655.800(a).

3

§ 1182(n)(2)(G)(ii). As relevant to this action, an aggrieved party complaint must be filed not
later than 12 months after the latest date on which the violation occurred, but the scope of
remedies may be assessed “for a period prior to one year before the filing of the complaint.” See
20 C.F.R. § 655.806(a)(5) (emphasis added). If the Administrator finds that the employer has
violated the wage requirements, he/she may order the employer to pay back wages to the H-1B
employee. See 8 U.S.C. § 1182(n)(2)(D); 20 C.F.R. § 655.810(a).
The employer may challenge the Administrator’s determination by requesting a hearing
with an Administrative Law Judge (“ALJ”). See 8 U.S.C. § 1182(n)(2)(B); 20 C.F.R.
§ 655.820(a)-(b). The ALJ’s decision may then be appealed to the ARB. 20 C.F.R.
§ 655.845(a).
B. Factual Background 3
Aleutian is a private equity investment group established in 2003 to acquire, operate, and
grow middle market companies. AR 36. As relevant to the instant motions, Aleutian employed
two H-1B salaried employees: Minh-Thuong Horn (“Horn”) and Shakir Gangjee (“Gangjee”).
Id. at 7-8, 36-37. Horn was employed as a market research analyst and Gangjee was employed
as a financial analyst. Id. at 7, 37.
In March 2010, Aleutian submitted an LCA for Horn. Id. at 37. Aleutian represented that
it would pay her the prevailing wage for market research analysts of $42,453. Id. It
compensated Horn monthly, and thus, her monthly pro-rated salary should have been $3,537.75.

3

The following facts are based the administrative record submitted under seal. Doc. 31 (“AR”). Neither party has
submitted statements of undisputed facts pursuant to Local Civil Rule 56.1 in support of their respective summary
judgment motions. Because this action turns entirely on the administrative record and presents only legal issues,
Rule 56.1 statements are unnecessary. See Singh v. Bd. of Immigration Appeals, No. 15 Civ. 5541 (PKC), 2017 WL
727541, at *1 n.1 (S.D.N.Y. Feb. 23, 2017) (noting that the parties’ failures to submit Rule 56.1 statements do not
impede the court from adjudication of the summary judgment motions where the case turns on the administrative
record and there are no factual disputes); see also Just Bagels Mfg., Inc. v. Mayorkas, 900 F. Supp. 2d 363, 372 n.7
(S.D.N.Y. 2012) (noting that an appeal based on an administrative record presents only a question of law and thus
Rule 56.1 statements are not necessary).

4

Id. at 7, 10. However, in December 2012, she was paid $350, plus a $250.73 monthly
contribution to her healthcare plan. Id. at 8, 38. On January 2, 2013, Aleutian terminated Horn.
Id. at 8.
On August 4, 2011, Aleutian submitted an LCA concerning Gangjee, attesting that it
would pay him an annual wage of $65,000 as a financial analyst (Aleutian represented that the
prevailing wage was $62,566). Id. at 7, 37. He was also compensated monthly, and thus, his
prorated monthly salary should have been $5,416.67. Id. at 7. However, Gangjee’s salary was
not given in monthly prorated installments. Id. at 38-39. In 2012, Gangjee’s monthly
compensation was a combination of a $3,000 base pay and a bonus calculated at 3% of any
revenues earned and received by Aleutian that month. Id. at 7, 38. Accordingly, if Aleutian did
not receive any revenue, Gangjee would not receive a bonus. Id. at 38. This salary structure was
not reduced to writing, Id. at 297, in contravention of 20 C.F.R. § 655.731(c)(4). During
Gangjee’s tenure at Aleutian, he was compensated the following amounts each month:
Month/Year

Total Paid

August 2011

$1,875

September 2011

$1,649

October 2011

$2,649

November 2011

$2,649

December 2011

$9,822

January 2012

$5,711

February 2012

$10,266

March 2012

$5,285

April 2012

$4,111

May 2012

$9,456

June 2012

$3,060

July 2012

$3,060

5

August 2012

$3,600

September 2012

$3,060

October 2012

$3,060

November 2012

$3,060

December 2012

$3,780

Id. at 38-39. Gangjee’s total annual compensation for the calendar year of 2012 was $57,509.
Id. at 7. On December 31, 2012, Gangjee was terminated by Aleutian. Id. at 251.
C. Procedural Background
On January 14, 2013, Gangjee filed a complaint with the Administrator, alleging, inter
alia, that Aleutian failed to pay him the required wage from August 6, 2011 to December 31,
2012. Id. at 7, 141-43, 289-91. The Administrator was assigned to investigate Aleutian on April
3, 2013. Id. at 146. He requested from Aleutian its public H-1B documents and payroll records
for all H-1B workers it employed after January 15, 2012. Id. at 146, 414.
On January 9, 2014, the Administrator issued a notice of determination. Id. at 10. He
first noted that the prorated monthly installment for the prevailing wage rate of $62,566 was
$5,213.82. Id. at 147. Then, he adjusted the prevailing monthly wage rate for months during
which Gangjee took vacation or sick days. 4 Id. at 129, 147. The sum of these adjustments was
$49,370.99 for the 2012 calendar year, which is less than the $57,509 Gangjee received for the
2012 calendar year. Id. 215. However, the Administrator did not credit any overpayments. Id.
at 147. Instead, he found that Gangjee was paid less than what he was owed during four months
in 2011 and six months in 2012, 5 added those deficits, and found that Gangjee was owed a total

4

Notably, the Administrator found that Aleutian did not owe Gangjee any wages for August and September 2012 as
Gangjee was outside of the United States during that time. Id. at 39, 215.

5

The Administrator determined that Gangjee was paid less than what he was owed during August, September,
October, and November 2011, and April, June, July, October, November, and December 2012. Id. at 38-39.

6

of $19,776.29 6 in back wages. Id. The Administrator also determined that Horn was paid
$2,937.02 less than the required monthly rate in December 2012. Id. at 10-11, 148. In total, the
Administrator found that Aleutian owed $22,713.31 7 in back wages. Id. at 148.
Aleutian challenged the Administrator’s decision to an ALJ, who was referred the case on
January 14, 2014. Id. at 5. Aleutian and the Administrator both moved for summary decision.
Id. at 6. On July 9, 2014, the ALJ granted the Administrator’s motion for summary decision, and
directed Aleutian to pay $22,713.30 in back wages. Id. at 11. Specifically, he determined the
following: (1) each pay period must be viewed separately to determine compliance with the prorata payment requirement; (2) Aleutian failed to pay the minimum monthly wage it was required
to pay Gangjee for certain months in 2011 and 2012; (3) Aleutian’s contingent bonus structure
did not excuse it from the pro-rata payment requirement; (4) the Administrator can look beyond
one year before the filing of the complaint in awarding remedies; and (5) the Administrator did
not exceed his authority by investigating Horn’s compensation. Id. at 8-10.
On July 23, 2014, Aleutian sought review of the ALJ’s determination by the threemember ARB panel. Id. at 498-502. On June 1, 2016, the ARB issued its final decision and
order, stating that the Administrator was entitled to summary decision against Aleutian. Id. at
293-98. The ARB upheld the ALJ’s order in its entirety and directed Aleutian to pay $22,713.30
in back wages. Id. Notably, the ARB declined to follow an Eighth Circuit decision which held
that the permissible scope of investigation arising from an aggrieved party complaint is limited to
the allegations in that complaint. Id. at 297; see Greater Missouri Medical Pro-Care Providers,
Inc. v. Perez, 812 F.3d 1132, 1138-1141 (8th Cir. 2015) (“Greater Missouri”). One ARB member

6

The ALJ subsequently noted that this amount should be $19,776.28 after correcting a minor calculation error. Id.
at 10, n.4.
7

The ALJ held that this amount should be corrected to $22,713.30. Id. at 10 n.5.

7

wrote a partial concurrence and dissent. Id. at 298-300. He noted that he would reverse the
summary decision that Aleutian underpaid Gangjee during 2012 because violating the timing
requirement does not mean that Aleutian failed to ultimately pay the amount owed in 2012. Id.
298-99. He further stated that the Administrator penalized Aleutian for overpaying during the
first quarter of 2012. Id. at 299. However, the dissenting member still found that Aleutian
violated the manner in which it was required to pay the LCA wage obligation to Gangjee during
2011 and the last quarter of 2012, and failed to pay all that was owed to Gangjee in 2011. Id. at
298.
On June 29, 2016, Aleutian filed the Complaint, initiating the instant action. Doc. 1. On
July 11, 2016, it filed the First Amended Complaint. Doc. 13. On January 26, 2017, it filed a
motion for summary judgment, stating that the ARB ruling was in contravention of the facts,
statute and regulations. Doc. 35. On January 30, 2017, Defendants filed a cross motion for
summary judgment. Doc. 37.
II.

LEGAL STANDARD
A. Summary Judgment
Summary judgment is only appropriate where the “materials in the record” show “that

there is no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a), 56(c)(1)(A). “An issue of fact is ‘genuine’ if the evidence
is such that a reasonable jury could return a verdict for the non-moving party.” Senno v.
Elmsford Union Free Sch. Dist., 812 F. Supp. 2d 454, 467 (S.D.N.Y. 2011) (citing SCR Joint
Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009)). A fact is “material” if it might

8

affect the outcome of the litigation under the governing law. Anderson v. Liberty Lobby, 477
U.S. 242, 248 (1986).
“Summary judgment is properly granted when the non-moving party ‘fails to make a
showing sufficient to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial.’” Abramson v. Pataki, 278 F.3d 93, 101
(2d Cir. 2002) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). In that situation,
there can be no genuine dispute as to any material fact, “since a complete failure of proof
concerning an essential element of the nonmoving party’s case necessarily renders all other facts
immaterial.” Celotex Corp., 477 U.S. at 322-23.
B.

Judicial Review Under the APA

Where a party seeks judicial review of an agency action under the APA and there is only a
question of law, summary judgment is generally appropriate. Noroozi v. Napolitano, 905 F.
Supp. 2d 535, 541 (S.D.N.Y. 2012) (citation omitted). Under Section 706 of the APA, legal
conclusions are reviewed de novo. J. Andrew Lange, Inc. v. F.A.A., 208 F.3d 389, 391 (2d Cir.
2000) (citing 5 U.S.C. § 706). However, the reviewing court must defer to the interpretation of
an ambiguous statute adopted by the agency charged with administering it unless the
interpretation is “arbitrary, capricious, or manifestly contrary to the statute.” Chevron U.S.A.,
Inc. v. NRDC, 467 U.S. 837, 843-44 (1984); see also National Cable & Telecomms. Ass’n v.
Brand X Internet Servs., 545 U.S. 967, 986 (2005) (“If the statute is ambiguous . . . we defer at
step two to the agency’s interpretation so long as the construction is ‘a reasonable policy choice
for the agency to make.’”) (citation omitted); Woods v. START Treatment & Recovery Ctrs., Inc.,
864 F.3d 158, 168 (2d Cir. 2017). Courts must also defer to the agency’s interpretation of its
own ambiguous regulation, even where that interpretation is advanced in a legal brief, unless the

9

interpretation is “plainly erroneous or inconsistent with the regulation” or when there is reason to
suspect that the interpretation “does not reflect the agency’s fair and considered judgment on the
matter.” Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 155 (2012) (citing Auer v.
Robbins, 519 U.S. 452, 461 (1997)).
For other agency findings, conclusions, and actions, a district court may “hold unlawful
and set [them] aside” if they are found to be, inter alia, “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law,” or “unsupported by substantial evidence.”
5 U.S.C. § 706(2)(A), (E). This deferential standard of review does not permit a court to
“substitute [its] judgment for that of the agency.” Nat. Res. Def. Council, Inc. v. F.A.A., 564 F.3d
549, 555 (2d Cir. 2009) (citation omitted). Furthermore, the reviewing court may only review
evidence produced in the administrative record. Pythagoras Gen. Contracting Corp. v. U.S.
Dep’t of Labor, 926 F. Supp. 2d 490, 496 (S.D.N.Y. 2013) (citation omitted). Nevertheless, the
inquiry must be “searching and careful.” Nat. Res. Def. Council, Inc., 564 F.3d at 555 (citation
omitted). The record must show that the agency examined the relevant data and articulated a
satisfactory explanation for its action and the agency decision must reveal a rational connection
between the facts found and the determination. Id. “[A]n agency determination will only be
overturned when the agency ‘has relied on factors which Congress has not intended it to
consider, entirely failed to consider an important aspect of the problem, offered an explanation
for its decision that runs counter to the evidence before the agency, or is so implausible that it
could not be ascribed to a difference in view or the product of agency expertise.’” Karpova v.
Snow, 497 F.3d 262, 267-68 (2d Cir. 2007) (quoting Motor Vehicle Mfrs. Ass’n of U.S., Inc. v.
State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

10

III.

DISCUSSION
A. Gangjee’s Compensation in 2012
Aleutian appeals the ARB’s finding that it owes Gangjee back wages for six months in

2012 because it failed to pay the prorated required wage rate for those months. It avers that it
exceeded the required annual wage obligation for 2012, and that it was exempted from the prorata payment obligation under 20 C.F.R. § 655.731(c)(4). As noted, 20 C.F.R. § 655.731(c)(4)
states,
wages will be due in prorated installments . . . except that, in the event that the
employer intends to use some other form of nondiscretionary payment to
supplement the employee’s regular/pro-rata pay in order to meet the required wage
obligation (e.g., a quarterly production bonus), the employer’s documentation of
wage payments (including such supplemental payments) must show the employer’s
commitment to make such payment and the method of determining the amount
thereof, and must show unequivocally that the required wage obligation was met
for prior pay periods and, upon payment and distribution of such other payments
that are pending, will be met for each current or future pay period. . . .
Aleutian argues that the bonuses it paid Gangjee in 2012, calculated at 3% of Aleutian’s
revenue for each month, are “nondiscretionary payment[s]” used to supplement Gangjee’s
regular pay in order to meet the required wage obligation, and thus, that Aleutian was excused
from paying Gangjee in prorated installments. However, the ARB found that Aleutian failed to
qualify for the exception in 20 C.F.R. § 655.731(c)(4) because, inter alia, it failed to provide the
documentation required under that provision. AR 297. 20 C.F.R. § 655.731(c)(4) requires the
employer to provide documentation that shows its commitment to make the nondiscretionary
payment and the method of determining the nondiscretionary payment amount. It is undisputed
that there is no documentation adequately memorializing Aleutian’s commitment to provide the
3% bonus. The only documentation that attempts to do so is an unsigned employment
agreement. Furthermore, the evidence Aleutian relies on—Aleutian’s purported oral promise to

11

make bonus payments to Gangjee, monthly and annual financial statements, and Gangjee’s
historical earnings record—fail to document its commitment to pay the 3% bonus. Accordingly,
because it did not comply with the requirements of the provision, Aleutian was not excused from
paying Gangjee in monthly prorated installments.
The foregoing is sufficient, in itself, to reject Aleutian’s objections to the ARB’s finding.
However, the ARB went further and found that the bonus structure was non-compliant because it
was not “guaranteed,” but rather, “completely contingent” on Aleutian’s revenue. Aleutian
argues that § 655.731(c)(4) only contains the word “nondiscretionary” and that
“nondiscretionary” does not mean non-contingent. Therefore, Aleutian argues, nondiscretionary
bonus structures may excuse an employer from abiding by the prorated payment obligation under
20 C.F.R. § 655.731(c)(4). Thus, the issue before this Court is whether Aleutian’s commitment
to make “nondiscretionary” bonus payments as provided for in 20 C.F.R. § 655.731(c)(4)
excuses Aleutian from otherwise guaranteeing Gangjee’s salary and ensuring that no part of it is
contingent as provided in 20 C.F.R. § 655.731(c)(2)(v).
In interpreting an agency’s regulations, the Court must first determine whether the
language is ambiguous. Halo v. Yale Health Plan, Dir. of Benefits & Records Yale Univ., 819
F.3d 42, 53 (2d Cir. 2016) (citing Christensen v. Harris Cty., 529 U.S. 576, 588 (2000)); see also
Mullins v. City of New York, 653 F.3d 104, 105-06 (2d Cir. 2011). If it is, then the Court must
defer to the agency’s interpretation, provided by the ARB in this action, unless it is plainly
erroneous or inconsistent. Id.
Aleutian states that the meaning of “discretionary” is expressly provided in 29 C.F.R.
§ 778.211. 8 However, 29 C.F.R. § 778.211(a) is a Fair Labor Standards Act (“FLSA”) regulatory

8

Specifically, 29 C.F.R. § 778.211 defines discretionary payments as payments for which “both the fact that
payment is to be made and the amount of the payment are determined at the sole discretion of the employer at or

12

provision that has no bearing on 20 C.F.R. § 655.731(c)(4). 29 CFR § 778.211(a) concerns
discretionary payments as it relates to the FLSA concept of the “regular rate” at which an
employee is compensated. As Defendants correctly point out, the legislative history
demonstrates that FLSA “regular rate” principles are not automatically applicable to INA and
DOL regulations. Specifically, in 1993, the DOL considered and rejected using FLSA’s “regular
rate” principles for the H-1B regulations. 9 See 58 Fed. Reg. at 52155. Accordingly, the
definition of “discretionary” in 29 C.F.R. § 778.211(a) is inapplicable.
There is no express definition of the term “nondiscretionary payment” in 20 C.F.R.
§ 655.731(c)(4) or any other provisions concerning the H-1B program, nor does the context
illuminate the specific meaning of the term. The one example of such nondiscretionary
payments in the provision, a quarterly production bonus, is insufficient to nudge the meaning of
the term from ambiguity to clarity. Indeed, Aleutian itself sought to define this term by looking
to an FLSA regulatory provision outside of the provision and the entire H-1B regulatory
framework.
Aleutian argues that nondiscretionary and non-contingent cannot have the same meaning
because the term “non-contingent” is used separately in a different sub-provision, 20 C.F.R.
§ 655.731(c)(2)(v). It avers that if the agency intended to mean “non-contingent,” it could have
easily used that word. The Court notes that this argument has some force, but falls short of
showing that the ARB’s interpretation is thus plainly erroneous or inconsistent. Moreover,
ARB’s interpretation that even a nondiscretionary payment must be guaranteed and non-

near the end of the period and not pursuant to any prior contract, agreement, or promise[,] causing the employee to
expect such payments regularly.”
9

Although a different proposed criteria that was considered instead was not adopted, see 59 Fed. Reg. 65646,
65652, the fact that the DOL rejected FLSA principles still stands.

13

contingent is reasonable in the context of H-1B employee compensation. For example, the
ARB’s interpretation is supported by the fact that § 655.731(c)(4) requires employers seeking to
make nondiscretionary payments to show “unequivocally” that the required wage obligation was
“met for prior pay periods” and “will be met for each current or future pay period.” It is
reasonable to conclude that such showing can be made only if the nondiscretionary payments are
guaranteed and not contingent. Accordingly, the Court defers to the ARB’s interpretation. Here
it is undisputed that the bonus structure was contingent, and not guaranteed. 10
It is undisputed that Aleutian did not pay Gangjee the correct prorated installments for six
months in 2012. A prior ARB decision states that each pay period 11 must be viewed separately,
and that no credit can be given for overpayments in certain months. See Adm’r v. Wings Digital
Corp., 2005 WL 774014, at *11 (DOL Off. Adm. App. Mar. 21, 2005), appeal dismissed on other
grounds, 2005 WL 1745152, at *3 (DOL Adm. Rev. Bd. July 22, 2005). Although Aleutian
protests that this holding was not grounded in any statute, regulation, or binding precedent, it
does not provide any reasons why the holding is not warranted Auer deference. Indeed, the
Court finds that 20 C.F.R. § 655.731(c)(4) is silent on whether overpayment in certain months
can be credited to excuse deficiencies in other months. Furthermore, Defendants assert that the

10
Defendants further argue that 20 C.F.R. § 655.731(c)(2)(v) separately bars contingent bonuses from being counted
towards the required wage obligation. 20 C.F.R. § 655.731(c)(2)(v) states that “future bonuses and similar
compensation (ie., unpaid but to-be-paid)” can contribute towards the required wage obligation if the payment is
“assured,” in other words, if they are “non-conditional or non-contingent.” Aleutian asserts that 20 C.F.R.
§ 655.731(c)(2)(v) only applies to not-yet-paid bonuses, and does not apply to bonuses at issue here since they have
all been paid. The Court agrees with Aleutian that the individual bonuses at issue are not “future” bonuses.
However, it is also inescapably true that the bonus structure was invalid from the start under 20 C.F.R.
§ 655.731(c)(2)(v) because it contemplated future, completely contingent bonuses to meet the required wage
obligation. Since the DOL must certify LCAs within seven days of receipt unless they are incomplete or contain
obvious inaccuracies, see 8 U.S.C. § 1182(n)(1), and the LCA did not reference the bonus, DOL’s initial
certification of the LCA concerning Gangjee’s compensation cannot save the bonus structure at issue here.
11

Aleutian argues that the relevant “pay period” is a year, but the plain language of 20 C.F.R. § 655.731(c)(4)
indicates otherwise. 20 C.F.R. § 655.731(c)(4) states that each prorated installment is its own pay period. Id. (“26
bi-weekly pay periods, where the employer pays bi-weekly”).

14

principle in Wings Digital prevents employers from paying its employees nominal salaries for
most of the year and a lump sum at the end of the year, and assures H-1B employees that they
will receive a particular amount each month. The Court finds this interpretation to be reasonable
and not plainly erroneous or inconsistent with the agency’s regulations and thus defers to the
ARB. Because Gangjee was not paid the prorated wage amount for six months in 2012, Aleutian
was in violation of its prorated wage requirements for those months. 12
B. Gangjee’s Compensation in 2011
Aleutian also contends that the Administrator improperly extended the scope of the
investigation to January 2011. Under 8 U.S.C. § 1182(n)(2)(A), “[n]o investigation or hearing
shall be conducted on a complaint concerning . . . a failure [to meet conditions in the LCA] or
misrepresentation [in the LCA] unless the complaint was filed not later than twelve months after
the date of the failure or misrepresentation, respectively.” Since Gangjee submitted his
complaint to the Administrator on January 14, 2013, Aleutian states that the Administrator lacked
the ability to investigate and impose back wages for any alleged violations prior to January 14,
2012.
Aleutian’s argument fails. Once a complaint is timely filed, the Administrator may assess
back wages for a period “prior to one year before the filing of a complaint.” 20 C.F.R. §

12

There is an additional dispute concerning how the exception to the prorated installment requirement operates.
Defendants argue that even if the exception available through § 655.731(c)(4) applies, an employer must show that
the H-1B employees have been paid and will be paid at least one-twelfth of the annual required wage each month.
Aleutian argues that the Defendants’ position reads out the fact that the provision expressly allows quarterly
production bonuses to help reach the required wage obligation. It contends that overpayments on certain months
during which these bonuses are paid can be credited towards other deficient months. The Court recognizes that
there is some ambiguity in the construction of this exception, and finds that Aleutian’s argument in this regard
would have more force if the payments here were structured so that Gangjee was never in a deficit position. For
example, the Administrator’s challenge would be more difficult to sustain if Gangjee was paid his entire annual
salary of $65,000 on day one of the year, than if he were paid the entire amount on the last day of the year.
However, the Court need not reach this issue as Aleutian’s bonus structure does not qualify as nondiscretionary
payments for other reasons discussed above.

15

655.806(a)(5). The twelve months requirement is only a jurisdictional limitation, and does not
affect the scope of remedies available to the Administrator. Id. There is no dispute that the
complaint was timely filed since the latest violation occurred in December 2012. Accordingly,
the scope of remedies for Aleutian’s violations may include back wages for 2011 under 20 C.F.R.
§ 655.806(a)(5). Aleutian does not argue that its failure to pay the prorated monthly salary to
Gangjee in 2011 is otherwise excused. Therefore, the Court affirms the ARB’s finding that
Aleutian owes back wages that were due to Gangjee in 2012 and 2011, in the amount of
$19,776.28.
C. Horn’s Compensation in December 2012
It is undisputed that the Administrator’s investigation was initiated based on Gangjee’s
aggrieved-party complaint pursuant to 8 U.S.C. § 1182(n)(2)(A), which states:
the Secretary shall establish a process for the receipt, investigation, and disposition
of complaints respecting a petitioner’s failure to meet a condition specified in an
application submitted under paragraph (1) or a petitioner’s misrepresentation of
material facts in such an application. Complaints may be filed by any aggrieved
person or organization (including bargaining representatives). No investigation or
hearing shall be conducted on a complaint concerning such a failure or
misrepresentation unless the complaint was filed not later than 12 months after the
date of the failure or misrepresentation, respectively. The Secretary shall conduct
an investigation under this paragraph if there is reasonable cause to believe that
such
a
failure
or
misrepresentation
has
occurred.
Aleutian argues that the statute only allows investigation into the specific allegations in the
complaint as they pertain to Gangjee. It asserts that the Administrator violated this statute when
he sought documents that did not concern Gangjee, and asks the Court to invalidate the award of
Horn’s back wages. Defendants argue that the DOL has the authority to determine the scope of
an investigation after receiving an aggrieved party complaint.
As discussed above, Chevron deference is appropriate where the statute is ambiguous or
Congress is silent on the specific question at issue. Woods, 864 F.3d at 168; see also City of
16

Arlington v. FCC, 569 U.S. 290, 296-300 (2013) (noting that the Supreme Court has employed
Chevron deference where an agency adopts a construction of a jurisdictional statutory provision
it administers). When engaging in statutory interpretation, courts must “begin with the text of
the statute to determine whether the language at issue has a plain and unambiguous meaning.”
Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 108 (2d Cir. 2012) (citations omitted).
“[W]hen deciding whether the language is plain, [courts] must read the words in their context
and with a view to their place in the overall statutory scheme.” King v. Burwell, 135 S. Ct. 2480,
2489 (2015) (internal quotations omitted). If, by doing so, the plain meaning of the statutory
language can be ascertained, courts must not look to extrinsic materials such as legislative
history. Id. at 2503; Kloeckner v. Solis, 568 U.S. 41, 55 n.4 (2012) (“Even the most formidable
argument concerning the statute’s purposes could not overcome the clarity we find in the
statute’s text.”); see also In re Ames Dep’t Stores, Inc., 582 F.3d 422, 427 (2d Cir. 2009) (“We
turn to the legislative history only when the plain statutory language is ambiguous or would lead
to an absurd result”) (internal quotations and citation omitted). If the statute is ambiguous or
Congress was silent on the issue at hand, courts must defer to the interpretation of the agency
charged with administering the statute unless the interpretation is “arbitrary, capricious, or
manifestly contrary to the statute.” Chevron, 467 U.S. at 844.
Aleutian relies on Greater Missouri, an Eighth Circuit decision, to support its argument
that the plain language of 8 U.S.C. § 1182(n)(2)(A) only allows investigation into the specific
allegations of the aggrieved-party complaint as it concerns the complainant. In Greater
Missouri, an employee filed an aggrieved-party complaint alleging that the employer violated
several H-1B requirements. Greater Missouri, 812 F.3d at 1134. Of those allegations, the
Secretary found that there was reasonable cause to investigate only one charge—that the

17

employer required or attempted to require the complainant to pay a penalty for terminating her
employment early. Id. On the basis of that individual employee’s complaint, the DOL conducted
a “full investigation under the H-1B provisions of the [INA] to see if there were violations to any
employee during the relevant time period.” Id. (modifications omitted, quotations omitted). The
Secretary requested sixteen different subcategories of evidence related to the employer’s H-1B
program and its H-1B employees, which the Eighth Circuit characterized as a “sweeping
investigation.” Id. at 1134, 1139. At the conclusion of the investigation, the Secretary awarded
back wages to forty-four employees after finding additional violations of the H-1B program not
alleged in the original complaint. Id. at 1134-35. Specifically, the Secretary determined that that
the employer improperly failed to pay required wages and made improper deductions from
wages in addition to imposing early termination penalty payments. Id. In justifying this award,
the Secretary argued that “finding of reasonable cause to investigate just one allegation by an
aggrieved party automatically justifies a comprehensive investigation of the employer as a whole
. . . [and their] compliance . . . in general.” Id. at 1137. The Eighth Circuit rejected this
understanding of the DOL’s authority. It held that the plain language of § 1182(n)(2)(A) does not
“authorize an open-ended investigation of the employer and its general compliance without
regard to the actual allegations in the aggrieved-party complaint.” Id. at 1138. However, the
Eighth Circuit expressly declined to answer the question of whether the Secretary may modify or
expand an investigation based on an aggrieved-party complaint if “additional violations . . . come
to light during a lawfully initiated and properly limited aggrieved-party complaint investigation.”
Id. at 1139. The Eighth Circuit further stated that it did “not pretend to ‘dictate the exact
contours of’ an aggrieved-party investigation, [and that it is] satisfied [its] decision does not
require the Secretary to ignore other potential violations it discovers in the course of a lawful

18

investigation.” Id. at 1140.
The ARB declined to follow Greater Missouri in the instant case, stating that 8 U.S.C.
§ 1182(n)(2)(A) provides broader investigatory powers than the Eighth Circuit recognized, and
that it is not bound to this Eighth Circuit decision since the matter arises in New York, which is
part of the Second Circuit. Defendants further argue that Congress delegated to the Secretary the
authority to establish a process for the investigation, 8 U.S.C. § 1182(n)(2)(A), and that it has the
authority to determine the appropriate scope of investigation pursuant to that delegation.
Reading 8 U.S.C. § 1182(n)(2)(A) in its entirety, the Court finds that while the provision
requires investigations arising from aggrieved-party complaints to be tethered to the alleged
violations, it delegates to the DOL authority to determine the appropriate process for the
investigation. In other words, Congress was silent as to what such investigation should entail in
particular, leaving that determination to the DOL. Based on this delegation of authority, the
DOL promulgated 20 C.F.R. § 655.800(b), which further delineates its investigatory authority.
The regulatory provision states:
The Administrator, either pursuant to a complaint or otherwise, shall conduct such
investigations as may be appropriate and, in connection therewith, enter and
inspect such places and such records (and make transcriptions or copies thereof),
question such persons and gather such information as deemed necessary by the
Administrator to determine compliance regarding the matters which are the subject
of the investigation.
20 C.F.R. § 655.800(b) (emphasis added). Importantly, it allows the DOL to conduct appropriate
investigations to obtain information that the Administrator deems necessary, thereby giving the
Administrator some level of discretion. The legislative history demonstrates that Congress was
aware that the DOL would “establish[] a system for the receipt of complaints, and their
investigation and disposition,” 56 Fed. Reg. 54,720-01; 54,721 (Oct 22, 1991), and did not at any
time hence invalidate 20 C.F.R. § 655.800(b). Therefore, it is presumed that Congress did not
19

find this discretion to be inconsistent with the INA. See Boesche v. Udall, 373 U.S. 472, 483
(1963) (examining the Secretary’s conduct with respect to the Mineral Leasing Act). The
legislative history further demonstrates that Congress gave the DOL thorough investigatory
authority in order to strike a balance between competing interests. 56 Fed. Reg. 54,720-01;
54,721 (Oct 22, 1991). In order to minimize interference with an employer’s ability to hire H-1B
employees and provide greater protections under the H-1B program at the same time, Congress
created a system of minimal front-end review coupled with more robust back-end
investigations. 13 Id.
Here, the Administrator deemed that it was necessary to procure information concerning
the two H-1B employees at Aleutian in ascertaining whether Aleutian abided by its required
wage obligations and requested “immigration documents and payroll records for all H-1B
workers it employed after January 15, 2012” from Aleutian. AR 146. The Court finds that the
DOL’s determination concerning the scope of the investigation was not arbitrary, capricious, or
manifestly contrary to the statute, but rather, was appropriately tailored to the alleged violation at
issue—Aleutian’s alleged failure to pay the required wages during a defined period of time. It is
not alleged that the Administrator inquired into any other types of misconduct Aleutian may have
engaged in, or required broad swaths of documents of tenuous relevance. The scope of the
investigation was also naturally limited by the fact that Aleutian had only two H-1B employees

13

Specifically, the DOL stated during the public comment period for regulations governing the filing and
enforcement of LCAs that “[t]he Department believes that Congress, in enacting the Act, intended to provide greater
protection than under prior law for U.S. and foreign workers without interfering with an employer’s ability to obtain
the H-1B workers it needs on a timely basis. Accordingly, the Department is providing that a labor condition
application be accepted if it is complete and that DOL review be limited to whether the application is complete, and
whether the Wage and Hour Division (Administrator) has previously disqualified the employer from employing H1B workers, thereby minimizing the time it takes to obtain approval of H-1B workers. However, in implementing
the protection for workers that the Act intends, the procedures and documentation requirements are sufficiently
specific to enable investigations of complaints against employers and enforcement of sanctions where necessary.
Under the Act, protection of U.S. workers is provided through the complaint process.” 56 Fed. Reg. 54,720-01;
54,721 (Oct 22, 1991).

20

during the relevant time period, after January 15, 2012. Id. at 146, 171. Thus, the resulting
award only pertained to Aleutian’s misconduct in paying required wage rates to its two H-1B
employees. In these respects, the instant case is readily distinguishable from the facts in Greater
Missouri in which the investigation swept broadly, concerned topics not at issue in the aggrieved
party complaint and discrete violations occurring outside the twelve-month period, and resulted
in findings involving more than forty employees.
Aleutian seeks a narrower application of 8 U.S.C. § 1182(n)(2)(A) so that the agency may
only investigate on the specific allegations of the complaint as it pertains to the complainant.
There is no such requirement in the language of the statute. Rather, both 8 U.S.C.
§ 1182(n)(2)(A) and 20 C.F.R. § 655.800(b) allow the DOL to tailor investigations of aggrieved
party complaints appropriately in order to obtain information it finds necessary to determine
whether the employer violated its obligations. Here, the Administrator found that wage
information for the one other relevant H-1B employee at Aleutian was necessary, and the Court
defers to the Administrator’s determination with regards to the appropriate scope of
investigation. Moreover, there is no statute or regulation requiring the Administrator to turn a
blind eye to additional misconduct discovered during an appropriate investigation. Indeed, the
Eighth Circuit recognized in its decision in Greater Missouri that the decision does not “dictate
the exact contours of an aggrieved-party investigation” and “does not require the Secretary to
ignore other potential violations it discovers in the course of a lawful investigation.” 812 F.3d at
1140 (internal quotations omitted). Accordingly, the Court affirms the award in its entirety,
including back wages owed to Horn.
***
In sum, the Court finds that in light of (1) the statutory delegation of authority to establish

21

a process for investigating complaints, 8 U.S.C. § 1182(n)(2)(A), (2) the regulatory grant of
authority to determine the appropriate scope of such investigations, 20 C.F.R. § 655.800(b),
(3) implied Congressional consent of the regulatory grant of authority, and (4) the legislative
history indicating that Congress intended to allow more robust back-end investigations of H-1B
employers than front-end review, it cannot be said that the DOL’s determination that it is
authorized to look beyond the four corners of a complaint in formulating an appropriate
investigation is arbitrary, capricious, or contrary to law. To the extent this conclusion conflicts
with the Eighth Circuit’s decision in Greater Missouri, this Court respectfully disagrees with that
decision. However, to the extent the DOL persists in its view, as described by the Eighth Circuit,
that reasonable cause to investigate any violation of the H1-B program automatically justifies an
“open-ended investigation of the employer and its general compliance,” 812 F.3d at 1138, the
Court agrees with the Eighth Circuit that no such expansive authority exists. Any investigation
must by necessity be limited to the subject of the investigation. See 20 C.F.R. § 655.800(b)
(“The Administrator . . . shall conduct such investigations as may be appropriate . . . and gather
such information as deemed necessary by the Administrator to determine compliance regarding
the matters which are the subject of the investigation.”) (emphasis added).
IV.

Conclusion
For the aforementioned reasons, Plaintiff’s motion for summary judgment is DENIED,

and Defendants’ motion for summary judgment is GRANTED.

22