It has long been a concern for L-1A clients of whether their visas will be extended after the first year on the visa when establishing a New Office branch in the U.S. We have advised our clients and all of our prospective New Office L-1A clients that they must meet strict standards within one year, or risk not having their L-1A status extended. While it may not be reasonable, it is pragmatic. To do otherwise would potentially waste considerable client resources invested in establishing a new office that may not be viable if the key employee (sometimes the owner) is forced to leave the US. Time and again we have seen the California Service Center hold these cases to a stricter standard than what is required of the law. In many instances, the decisions from CSC would simply ignore evidence presented to them that our clients fulfilled the role of an executive or manager of the company. In those cases, an appeal of the case through a motion to reopen proved to be the only way to get the case overturned.
Recently, the AAO rebuked the California Service Center’s (CSC) stubborn refusal to properly apply the law for new office Executives and Managers who seek an extension of status beyond the initial one year. This case goes even further than recent decisions that simply “reversed” the CSC and remanded the matter. In this case, the AAO Approved the Extension request, and in so doing articulated affirmatively what the legal standards are for New Office L-1A Managers who seek an extension beyond the one year.
The case, Matter of Z [the case is as yet unnamed by the AAO], FILE: WAC 13 103 50466, involved a newly formed US corporation (Petitioner) that is the wholly owned subsidiary of a Japanese parent that provides packaging solutions in the food, beverage and pharmaceutical industries. Petitioner was created to test the “American” (North and South) market for import, distribution and sale of products, as well as to evaluate feasibility of establishing a manufacturing facility in the US.
When the AAO decided Matter of Z, the decision clearly set out the standard of review for the position of Manager or Executive who qualifies for that position. In particular, the AAO decision stated that, “Beyond the required description of the job duties, USCIS reviews the totality of the record when examining the claimed managerial or executive capacity of a beneficiary, including the petitioner’s organizational structure, the presence of other employees to relieve the beneficiary from performing operational duties, the nature of the petitioner’s business, and any other factors that will contribute to a complete understanding of a beneficiary’s actual duties and role in a business. In the case of an employee who is claimed to manage or direct an essential function, these other factors may include the beneficiary’s position within the organizational hierarchy, the depth of the petitioner’s organizational structure, the scope of the beneficiary’s authority and its impact on the petitioner’s operations, the indirect supervision of employees within the scope of the function managed, and the value of the budgets, products, or services that the beneficiary manages.”
The AAO clearly adopted the concept of a manager or executive L-1A qualifying by managing the “function” of setting up and directing the US operation rather than limiting their review to only the individuals managed in the US operation. Finally, they stated that, “… the petitioner need only establish that the beneficiary devoted more than half of his time to managerial duties.” Considering the importance of the L-1A qualifying manager or executive position to these companies setting up legitimate branches in the U.S., the AAO understands that looking at the totality of the record to determine that they qualify. CSC has been quick to dismiss these arguments in the past because the AAO has not required it to firmly consider the totality of the record. While AAO decisions are binding on the Immigration Service Centers, it may take time for the weight of this decision to be carried out. In the meantime, attorneys and clients have a decision that strongly supports their ability to start up small branches and maintain that status through the first year of the branch office being in the U.S. Let us hope this decision makes it easier for these businesses to flourish and grow in the U.S.