Matter of Intervid – Closely Held Corporation

BALCA Affirms Denial of Labor Certification for CEO of Closely Held Corporation. BALCA affirmed the CO’s denial, finding that the employer, a closely held corporation in which the alien had an ownership interest, failed to show that job opportunity for CEO position was bona fide.

Issue Date: 09 September 2010
BALCA No.: 2009-PER-00278
ETA No.: A-06093-03312

In the Matter of: INTERVID, INC.,
Employer, on behalf of COLLIN STEYN, Alien.

Certifying Officer: William Carlson
Atlanta Processing Center

Appearances: Lesley Amano, Esquire
Miles & Stockbridge P.C.
Baltimore, Maryland
For the Employer

Gary M. Buff, Associate Solicitor
Frank P. Buckley, Attorney
Office of the Solicitor
Division of Employment and Training Legal Services
Washington, DC
For the Certifying Officer

Before: Colwell, Johnson and Rae
Administrative Law Judges

DECISION AND ORDER AFFIRMING DENIAL OF CERTIFICATION

PER CURIAM. This matter arises under Section 212 (a)(5)(A) of the Immigration and Nationality Act, 8 U.S.C. §1182(a)(5)(A), and the “PERM” regulations found at Title 20, Part 656 of the Code of Federal Regulations (“C.F.R.”).

BACKGROUND

On April 4, 2006, the Certifying Officer (“CO”) accepted for filing the Employer’s Application for Permanent Employment Certification for the position of “Chief Executive Officer.” (AF 155-167).(1) The Employer indicated in section C-9 of the application that it was “a closely held corporation, partnership or sole proprietorship in which the alien has an ownership interest.” (AF 155).

On April 28, 2006, the CO issued an Audit Notification, finding that the application showed that the Employer is a closely held corporation, partnership or sole proprietorship. (AF 48-51). The CO directed the Employer to submit several documents showing its corporate structure and finances, as well as documentation evidencing recruitment. (AF 51).

On May 23, 2006, the Employer responded to the Audit, attaching: a copy of its Articles of Incorporation; a list of directors and officers and their titles and positions; financial history of the corporation, including total investment in the business entity and the amount of investment of each officer; corporate overview, including history and financial summary; a Board of Directors resolution consenting to sale of the company; audited/reviewed financial statements for several periods from 2002 through 2005; name of business official with primary responsibility for interviewing and hiring applicants for positions within the organization and the name of the business official having control or influence over hiring decisions; a copy of the ETA Form 9089; a copy of the Notice of Filing; and relevant recruitment documentation. (AF 45-154).

On November 9, 2007, the CO denied certification. (AF 16-18). The CO stated, “Where the employer is a closely held corporation or partnership in which the alien has an ownership interest, a presumption exists that influence and control over the job opportunity is such that the job opportunity is not bona fide, i.e., not open and available to U.S. workers.” (AF 18). The CO asserted that the documentation the Employer submitted to overcome this presumption was insufficient to demonstrate that the job was open and available. Id. The CO contended that the documentation showed that the foreign worker was “the President, Chief Executive Officer, and Treasurer of the corporation, holds 50% of the shares, and that hiring authority for the position is the Vice President of the corporation, who holds the remaining 50% of the shares in the corporation.” Id. The CO noted that 20 C.F.R. § 656.10(c)(8) requires that the job opportunity “is clearly open to any U.S. worker.” Id.

Subsequently, the Employer submitted a request for review. (AF 5-44). Citing Modular Container Systems, Inc., 1989-INA-228 (July 16, 1991) (en banc), the Employer asserted that the Department of Labor stated that no single factor would be controlling in a determination of whether a job opportunity is bona fide where the alien has an ownership interest in the employer, but that it would consider the totality of the employer’s circumstances. (AF 8). The Employer contended, “ETA’s decision focuses only on those few factors that go against the company, and ignores the majority of factors that favor approval of the application.” Id. Citing the factors in Modular Container Systems, the Employer asserted: the Alien was not involved in the recruitment process; no family relationship exists between the Alien and the directors or officers; the Alien was neither an incorporator nor a founder of the company; the Alien does possess an ownership interest in the Employer; the Alien does hold a management position and is on the Board of Directors, but does not control Board decisions; the Employer is small, but not tiny, employing 27 persons; the Employer did not require special or unusual job duties for the position; and the Employer was in existence 17 years prior to hiring the Alien, thus he is not inseparable from the company due to a pervasive presence. (AF 8-13).

On March 26, 2009, the CO issued a letter of reconsideration, finding that the Employer’s request did not overcome all of the deficiencies indicated in the determination letter. (AF 1). The CO asserted that the Employer did not prove that the job opportunity was actually open to qualified U.S. workers. Id. The CO contended that the Alien is involved in the management of the company, serving as Director, Chairman of the Board, CEO, and President, and his primary responsibilities include administrative and operational execution. Id. The CO further asserted that the Alien has an ownership interest in the company, is on the Board of Directors, and is so inseparable from the sponsoring employer that the employer would be unlikely to continue in operation without him. Id.

BALCA issued a Notice of Docketing on April 13, 2009. The Employer filed a Statement of Intent to Proceed on April 24, 2009. Neither party filed an appellate brief.

DISCUSSION

The regulation at 20 C.F.R. § 656.10(c)(8) requires the employer to attest that “[t]he job opportunity has been and is clearly open to any U.S. worker.” 20 C.F.R. § 656.17(l) provides, “If the employer is a closely held corporation or partnership in which the alien has an ownership interest, or if there is a familial relationship between the stockholders, corporate officers, incorporators, or partners, and the alien, or if the alien is one of a small number of employees, the employer in the event of an audit must be able to demonstrate the existence of a bona fide job opportunity, i.e., the job is available to all U.S. workers….”

In the instant case, the Employer acknowledged that it was a closely held corporation by indicating in section C-9 of its PERM application that it was “a closely held corporation, partnership or sole proprietorship in which the alien has an ownership interest.” (AF 155). The issue in this case is whether the Employer was able to demonstrate the existence of a bona fide job opportunity, and that the job was nonetheless available to all U.S. workers. In Modular Container Systems, Inc., supra, which isreferenced in the preamble to the PERM regulations, the Board held that the question of whether a bona fide job opportunity exists turns on an examination of the totality of circumstances. The Board stated the factors to examine include, but are not limited to, whether the alien:

-is in the position to control or influence hiring decisions regarding the job for which labor certification is sought;
-is related to the corporate directors, officers, or employees; was an incorporator or founder of the company;
-has an ownership interest in the company;
-is involved in the management of the company;
-is on the board of directors;
-is one of a small number of employees;
-has qualifications for the job that are identical to specialized or unusual job duties and requirements stated in the   application; and
-is so inseparable from the sponsoring employer because of his or her pervasive presence and personal attributes that the   employer would be unlikely to continue in operation without the alien.

Modular Container Systems, Inc., supra at 8-10 (footnotes omitted). The employer’s level of compliance and good faith in the processing of the claim is also relevant. Id.

In the instant case, as Chief Executive Officer and Managing Director, the Alien is clearly involved in the management of the company. It is also undisputed that the Alien is on the Board of Directors, and possesses a 50% ownership interest in the company.(2) Regarding the Alien’s hiring authority, although the Employer asserted that it took steps to remove the Alien from the hiring process, the Employer also stated in its audit response that the Alien generally had a role in the company’s hiring. Specifically, the Employer stated that its Vice President is responsible for hiring positions within the sales discipline, the Alien is responsible for hiring positions within the administrative discipline, and they are jointly involved in hiring for the operations discipline. Thus, the Alien was generally responsible for 50% of the company’s hiring. This fact makes it difficult to accept the Employer’s contention that the Alien, as the CEO and Managing Director, would have no control or influence over hiring decisions involving a managerial position, such as that of the CEO. Accordingly, we find that the Alien is in a position to control or influence hiring decisions regarding the job for which labor certification is
sought.

In the Employer’s favor, he is not related to the corporate directors, officers, or employees; the Employer’s requirements for the job are not overly specialized or unusual; and the Employer does not have an overly small number of employees.(3)

Regarding whether the Alien was an incorporator or founder of the company, as the Employer pointed out in its appellate brief, the Alien was not technically a founder since the original company was independent for 17 years before it became a subsidiary of a South African company. However, as is stated in the Employer’s corporate overview, (submitted with its audit response,) in 2001, the original company, Secur-Data Systems, Inc., was bought out by Intervid International AG. Subsequently, in 2004, senior management in North America, which included the company’s current Vice President and the Alien, negotiated a purchase of InterVid, Inc. (the current company), and reorganized it. Thus, although the Alien was not a founder of the original company, he has played a major role in a management buyout of this company, and served in a vital managerial position throughout its reorganization and restructuring. This action undoubtedly placed the Alien in an essential and influential role that gave him a pervasive presence in the company.

Taking into account the Alien’s position of control and influence, his managerial role as Director, Chairman of the Board, CEO, and President, and the fact that he possesses a 50% ownership in the company, we find that the Alien is so inseparable from the sponsoring employer that the employer would be unlikely to continue in operation without him.

Moreover, the Employer carries the burden of showing that it has a bona fide job opportunity that is open to all U.S. workers. As the Board found in Modular Container Systems, Inc., though it is a difficult task, the sponsoring employer can overcome the regulatory proscription that self-employment is a per se bar it if it can establish “genuine independence and vitality not dependent on the alien’s financial contribution or other contribution indicating self-employment.” Id. at 6. Viewed in the totality of the circumstances, the Employer has not met its burden of overcoming the presumption that the Alien has influence and control over the job opportunity. Accordingly, we find that the Employer has not established that it has a bona fide job opportunity.

Based on the foregoing, we affirm the CO’s denial of labor certification.

ORDER

IT IS ORDERED that the denial of labor certification in this matter is hereby AFFIRMED.

Entered at the direction of the panel by:

Todd R. Smyth
Secretary to the Board of
Alien Labor Certification Appeals

NOTICE OF OPPORTUNITY TO PETITION FOR REVIEW: This Decision and Order will become the final decision of the Secretary unless within twenty days from the date of service a party petitions for review by the full Board. Such review is not favored and ordinarily will not be granted except (1) when full Board consideration is necessary to secure or maintain uniformity of
its decisions, or (2) when the proceeding involves a question of exceptional importance. Petitions must be filed with:

Chief Docket Clerk
Office of Administrative Law Judges
Board of Alien Labor Certification Appeals
800 K Street, NW Suite 400
Washington, DC 20001-8002

Copies of the petition must also be served on other parties and should be accompanied by a written statement setting forth the date and manner of service. The petition shall specify the basis for requesting full Board review with supporting authority, if any, and shall not exceed five double-spaced pages. Responses, if any, shall be filed within ten days of service of the petition, and shall not exceed five double-spaced pages. Upon the granting of a petition the Board may order briefs.

1 In this decision, AF is an abbreviation for Appeal File.

2 We note the Employer’s argument that the Employer’s former parent company retains an option to reacquire up to 40% of the Employer’s equity, in which case the Alien would become a minority owner. This factor, however, does not change the fact that at the time of the recruitment and application for labor certification, the Alien owned one-half of the Employer.

3 We note that this analysis is relative and there is no set threshold to determine how many employees an employer can have and still be considered small. In its request for review, the Employer contended that section 656.17(l)(5), which refers to documenting any familial relationship in a company with fewer than 10 employees, implies that 10 is a relative threshold for determining the validity of the job opening. Although we will refrain from ruling on whether or not 10 is a reasonable threshold to consider an Employer small, we agree with the Employer that it is not “overly small” to the extent that its size creates doubt as to the existence of a bona fide job opportunity. In this particular case, we find that the Employer’s size is a neutral factor in the analysis.