Labor & Employment Law Daily Wrap Up, IMMIGRATION—6th Cir.: Willful H-1B notice-posting finding affirmed against Broadgate, Inc., (Jan 2, 2025)

By Jason Albright, J.D.

Broadgate argued that the notice-posting violation had not been alleged in the employee’s original complaint to DOL alleging nonpayment of required wages.

DOL’s Wage and Hour Division did not err in requiring Broadgate, Inc. to pay back wages of more than $31,000 and a “civil penalty” of about $68,000 following an investigation of an H-1B visa-holder’s wage claims that uncovered addition willful notice-posting violations, the Sixth Circuit affirmed. The appeals court rejected the employer’s argument that the District Director of the Wage and Hour Division’s Detroit District lacked authority to issue her determination letter in the case, and the agency was also entitled to investigate the notice violations after its investigation of the unpaid wages yielded evidence of them (Broadgate, Inc. v. Su, No. 22-1944 (6th Cir. Dec. 20, 2024)).

H-1B wage complaint. The Immigration Act’s H-1B visa program, according to the court, allows employers to hire temporary, non-immigrant employees to work in “specialty occupations.” In February 2018, one of Broadgate’s H-1B employees filed a complaint with the Department of Labor’s Wage and Hour Division (WHD), alleging that Broadgate had not paid him the full wages required thereunder.

WHD investigation. WHD opened an investigation, which substantiated the employee’s claim. In addition, the investigation uncovered evidence that Broadgate had not posted certain workplace notices required under the H-1B visa program.

Determination letter. In December 2018, the Director of WHD’s Detroit District issued a determination letter, finding that Broadgate had not paid the required wages and also had willfully failed to post required notices, among other violations.

Penalties. The letter barred Broadgate from participating in the H-1B program for two years, required Broadgate to pay back wages of more than $31,000, and assessed a “civil penalty” of about $68,000.

ALJ’s first decision. Broadgate sought review before an Administrative Law Judge (ALJ), challenging only the determination as to the willful notice violations. Its argument was that the District Director lacked authority to issue the determination letter. The ALJ agreed and vacated the determination regarding the workplace notices.

Administrative review and ALJ decision on remand. However, DOL’s Administrative Review Board reversed that decision, and on remand before the ALJ, Broadgate made a new argument that WHD had exceeded its authority by investigating the alleged notice violations, which had not been alleged in the employee’s original complaint. The ALJ rejected that argument and affirmed the Director’s imposition of fines and penalties.

Appeal. The Administrative Review Board affirmed the ALJ’s second decision, as did a federal district court, and this appeal followed.

Director’s authority. Turning first to the issue of the District Director’s authority to issue the December 2018 determination letter, the Sixth Circuit observed that Section 7 of the Administrative Procedure Act provides that “[e]xcept as otherwise provided by statute, the proponent of a rule or order has the burden of proof.” 5 U.S.C. § 556(d). Here, the determination letter was the order at issue, the government was the letter’s proponent, and so the government bore the burden of proof.

However, what the courts have called “the presumption of regularity” assigns a burden of production to Broadgate here, according to the appeals court. “Courts have applied that presumption in various contexts,” it observed, and as relevant here, the rule is that “[a]cts done by a public officer ‘which presuppose the existence of other acts to make them legally operative, are presumptive proofs of the latter.’” And under this rule, the District Director’s issuance of the determination letter was presumptive proof that the WHD Administrator had vested her with authority to issue it.

Nor did Broadgate even contend that it met this modest burden, which is “akin to making out a prima facie case.” Instead, it argued that “the imposition of any evidentiary burden upon it—as the opponent of an order—would violate § 556(d).” The appeals court was unpersuaded.

Notice-posting investigation. Finally, Broadgate separately argued that WHD lacked statutory authority to investigate the notice violations at issue, which were not originally alleged. Here, the appeals court observed that, although the agency’s initial determination of reasonable cause to investigate a failure to comply with H-1B regulations “limits the scope of the initial investigation,” the Division may, if it finds reasonable cause, investigate other violations within that scope.

Here, according to the Sixth Circuit, WHD commenced its investigation after an H-1B employee complained that Broadgate had not paid him the wages required by the Act. The Division found reasonable cause to investigate that complaint, and as a matter of course, that investigation required Broadgate to produce its “public-access file,” which typically includes documentation of the wages paid to an employer’s H-1B employees as well as evidence of its compliance with the Act’s notice requirements. Because the investigation of the unpaid wages yielded evidence—in the public-access file—of the notice violations, the agency was entitled to investigate them.

The judgment of the district court was thus affirmed.

The case is No. 22-1944.

Judge: Kethledge, R.

Attorneys: Michael E. Piston (Transnational Legal Services) for Broadgate, Inc. Christopher J. Doyle, Office of the U.S. Attorney, for Julie A. Su, Acting Secretary, U.S. Department of Labor.

Companies: Broadgate, Inc.

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