dismissed L-1A Case: Clothing Retail

U.S. Citizenship 
and Immigration 
Services 
MATTER OF M-C-USA, INC. 
Non-Precedent Decision.of the 
Administrative Appeals Office 
DATE: MAY 22,2018 
APPEAL OF CALIFORNIA SERVICE CENTER DECISION 
PETITION: FORM I-129, PETITION FOR·A NONIMMIGRANT WORKER 
The Petitioner, a clothing retailer and wholesaler, seeks to continue the Beneficiary's temporary 
employment as its managing director under the L-lA nonimmigrant classification for intracompany 
transferees.' See Immigration and Nationality Act (the Act) section IOI(a)(I5)(L), 8 U.S.C. 
§ IIOI(a)(I5)(L). The L-lA classification allows a corporation or other legal entity (including its 
affiliate or subsidiary) to transfer a qualifying foreign employee to the United States to work 
temporarily in a managerial or executive capacity. 
The Director of the California Service Center denied the petition, concluding that the record did not 
establish, as required, that: (I) the Beneficiary would be employed in a managerial or executive 
capacity under the extended petition; and (2) that the Beneficiary's foreign employer continues to do 
business as a qualifying organization abroad. 
On appeal, the Petitioner asserts that it established by a preponderance of the evidence that the 
foreign entity continues to do business and that the Beneficiary will perform primarily executive 
duties under the extended petition.2 · 
Upon de novo review, we will withdraw the Director's finding that the Petitioner did not establish 
that the foreign entity continues to do business as a qualifying organization in China.3 However, as 
the Petitioner has not overcome the remaining ground for denial, we will dismiss the appeal. 
1 The Petitioner previously filed a "new office" petition on the Beneficiary's behalf which was approved for the period 
October 13, 2015, until September I, 2016. A "new office" is an organization that has been doing business in the United 
States through a parent, branch, affiliate, or subsidiary for less than one year. 8 C.F.R. § 214.2(1)(1)(ii)(F). The 
regulation at 8 C.F.R. § 214.2(1)(3)(v)(C) allows a "new office" operation one year within the date of approval of the 
petition to support an executive or managerial position. 
The record of proceeding also contains a motion to reopen with supporting evidence, which was originally submitted 
concurrently with this appeal, returned to the Petitioner; accepted as properly filed on May 3, 2017, and ultimately 
dismissed by the Director as untimely filed. Our de novo review of the record included a review of the evidence 
submitted in support of the Petitioner's motion. 
3 The record now contains additional evidence of the foreign entity's ongoing business activities sufficient to show that 
the company is still doing business as defined in the regulations. See 8 C.F.R. § 214.2(l)(i)(ii)(H). 
Matter of M-C- USA, Inc. 
I. LEGAL FRAMEWORK 
To establish eligibility for the L-1 A nonimmigrant visa classification, a qualifying organization must 
have employed the beneficiary "in a capacity that is managerial, executive, or involves specialized 
knowledge," for one continuous year within three years preceding the beneficiary's application for 
admission into the United States. Section IOI(a)(lS)(L) of the Act. In addition, the beneficiary 
must seek to enter the United States temporarily to continue rendering his or her services to the same 
employer or a subsidiary or affiliate thereof in a managerial or executive capacity. !d. 
A petitioner seeking to extend an L-IA petition that involved a new office must submit a statement 
of the beneficiary's duties during the previous year and under the extended petition; a statement 
describing the staffing of the new operation and evidence of the numbers and types of positions held; 
evidence of its financial status; evidence that it has been doing business for the previous year; and 
evidence that it maintains a qualifying relationship with the beneficiary's foreign employer. 
8 C.F.R. § 214.2(1)(14)(ii). This evidence must demonstrate that the beneficiary will be employed in 
a managerial or executive capacity, as defined at sections 10l(a)(44)(A) and (B) of the Act, under 
the extended petition. 
II. U.S. EMPLOYMENT IN AN EXECUTIVE CAPACITY 
The sole issue to be addressed is whether the Petitioner established that the Beneficiary will be 
employed in an executive capacity. The Petitioner did not claim that the Beneficiary would be 
employed in a managerial capacity; therefore, our analysis will address only the Petitioner's claim 
that the Beneficiary's proposed position would be in an executive capacity. 
The term "executive capacity" is defined as an assignment within an organization in which the 
employee primarily directs the management of the organization or a major component or function of 
the organization; establishes the goals and policies of the organization, component, or function; 
exercises wide latitude in discretionary decision-making; and receives only general supervision or 
direction from higher-level executives, the board of directors, or stockholders of the organization. 
Section IOI(a)(44)(B) of the Act. 
When examining the executive capacity of a given beneficiary, we will look to the petitioner's 
description of the job duties. See 8 C.F.R. § 214.2(1)(3)(ii). Beyond the required description of the 
job duties, U.S. Citizenship and Immigration Services (USCIS) examines the company's 
organizational structure, the duties of a beneficiary's subordinate employees, the presence of other 
employees to relieve a beneficiary from performing operational duties, the nature of the business, 
and any other factors that will contribute to understanding a beneficiary's actual duties and role in a 
business. 
Accordingly, we will discuss evidence regarding the Beneficiary's job duties along with evidence of 
the nature of the Petitioner's business, its staffing levels, and its organizational structure. 
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Matter of M-C-USA, Inc. 
A. Duties 
Based on the definition of executive capacity, the Petitioner must first show that the Beneficiary will 
perform certain high-level responsibilities. Champion World, Inc. v. INS, 940 F.2d 1533 (9th Cir. 
1991) (unpublished table decision). Second, the Petitioner must prove that the Beneficiary will be 
primarily engaged in executive duties, as opposed to ordinary operational activities along side the 
Petitioner's other employees. See Family inc. v. USCJS, 469 F.3d 1313, 13.16 (9th Cir. 2006); 
Champion World, 940 F.2d at 1533. 
The Petitioner provided the following statement of the Beneficiary's duties as managing director at 
the time of filing: 
. 30% Directing design and production from . . . the foreign affiliate Chinese 
company 
20% Overseeing national sales with the sales director and negotiating major 
wholesale contracts 
15% Directing marketing activities including representation at the major trade 
shows 
l 0% Budget and finance activities; arranging Bank lines of credit and other forms 
of finance; preparing budgets; analyzing sales forecasts and projection s 
10% Preparing major sales presentations in coordination with the National Sales 
Director and General Manager 
15% Overseeing the production of the custom private label account 
with the General Manager and identifying and overseeing development of new 
private label accounts. 
The Petitioner further stated that the Beneficiary establishes goals, policies , business plans , and 
procedures; communicates daily with senior staff and sets wholesale and retail pricing ; enters into 
and negotiates contracts and business agreem~nts; oversees the design work done in China in 
accordance with U.S. fashion trends; and, in his role as the foreign affiliate's CEO, directs the 
production and d
esign of products produced in China for distribution in the United States. 
In response to the Director 's request for evidence, the Petitioner submitted the following list of 
duties the Beneficiary will perform under the extended petition:4 
5% Continue to direct the retail operation and make decision s on hiring additional 
staffing according to business demand. 
10% Continue to work with [the general manager and sales director] to build the 
[Petitioner's] brand on a national 
basis . Regular travel to the major trade 
shows and exhibits for ladies' gowns. 
5% Direct the importation of product from the foreign at~iliate. 
4 The Petitioner added the percentages that appear here in a statement submitted on motion. 
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Matter of M-C-USA, Inc. 
I 0% Work closely with [the general manager] to service the exacting demands for 
high end fashion gowns ... review opportunities to develop different market 
segments which are price sensitive. 
5% Make decisions on whether to expand to a second retail location ... 
5% Implement a new business plan ... 
l 0% Focus his efforts in building the national presence for [the Petitioner's] brand 
l 0% Make decisions regarding major accounts and will analyze the profitability of 
the different market sectors ... 
5% Hire additional management staff either on an incentive basis or salary 
depending on the growth of the business. 
20% Overall responsibility for design, finance 'lnd major operational decisions. 
Finally, the record contains a statement from the Beneficiary, who explains that he founded the 
foreign affiliate "for the purpose of manufacturing ladies' gowns which I design." He emphasizes 
that as the principal designer and founder of both the Petitioner and foreign entity he has "ultimate 
decision making authority over financial and operational decisions." The Beneficiary indicates that 
he has delegated managerial duties to the general manager and focuses on making executive 
decisions related to the development of the business, which leaves him with "no time for work in day 
to day operations." 
We agree with the Director's determination that the Petitioner has not provided sufficient insight into 
the specific tasks the Beneficiary will perform as part of his day-to-day routine. The descriptions 
convey the Beneficiary's discretionary decision-making authority and oversight over the operations 
as a whole, but are too broad to give a sense of the types of duties he primarily performs on a daily 
basis. Further, many of the duties indicate that the Beneficiary either works closely with or 
delegates certain non-executive tasks to a subordinate general manager and sales director. As 
discussed further below, the record does not adequately document the Petitioner's engagement of 
these two individuals at the time of filing, which undermines the Petitioner's claim that the 
Beneficiary actually delegates these non-qualifying tasks to subordinates. 
The Petitioner emphasizes that all of the Beneficiary's stated duties will be at an executive level, and 
objects to the Director's finding that duties such as traveling to major trade shows and directing 
import activities are not qualifying tasks. However, duties that are so broad that they do not convey 
information about the Beneficiary's day-to-day tasks are insufficient to meet the Petitioner's burden 
of proof, even if the broadly stated activities indicate that the Beneficiary has the appropriate level of 
authority over the company's operations. The Petitioner did not describe the specific tasks the 
Beneficiary performs to "service the exacting demands for high end fashion gowns," to "focus his 
efforts" in building a national presence, or to "build the brand." The Petitioner indicates that the 
Beneficiary will direct importing, budget and finance activities, but the company does not employ 
staff who would assist with the any of these activities so it is unclear that his associated duties would 
be executive in nature. 
Reciting the Beneficiary's vague job responsibilities or broadly-cast business objectives is not 
sufficient; the regulations require a detailed description of the Beneficiary's daily job duties. The 
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Matter of M-C-USA , Inc. 
Petitioner has not provided any detail or explanation of the Beneficiary's activities in the course of 
his daily routine. The actual duties themselves will reveal the true nature ofthe employment. Fedin 
Bros. Co., Ltd. v. Sava, 724 F. Supp. 11.03, 1108 (E.D.N.Y. 1989), aff'd, 905 F.2d 41 (2d. Cir. 1990). 
Further, although the Petitioner indicated that the Beneficiary will "direct design " activitie s, his own 
statement indicates that he is the person who designs the company ' s gowns, a respon sibi lity that is 
not conveyed in either of the position descriptions provided. The Petitioner does not employ any 
design staff.· The foreign entity's organizational chart depicts a design department with three 
employee s that include two workers identified as "flower pattern," and one identified as "paper 
pattern," with no further descriptions of their roles. If the Benefic iary is in fact the primary designer, 
then it is unclear why the Petitioner did not state this and identify how much time he spends on this 
non-executive function. 
The fact that the Beneficiary will direct a business as its senior employee does not necessarily 
establish eligibility for classification as an intracompany transferee in an executive capacity within 
the meaning of section 10I(a)(44)(A) of the Act. Even though the Beneficiary may exercise 
discretion over the Petitioner' s day-to-day operations, and possess the requisit e level of authority 
with respect to discretionary decision-making, a broad overview of his responsib ilities is insufficient 
to establish that his actual duties would be primarily executive in nature as of the date of til in g. 
B. Staffing and Organizational Structure 
If staffing levels.are used as a factor in determining whether an individual is acting in a managerial 
or executive capacity, USCIS takes into account the reasonable needs of the organization, in light of 
the overall purpose and stage of development ofthe organization. See section 10l(a)(44)(C) ofthe 
Act. 
The Petitioner, which operates a retail store that also serves as a wholesale showroom, stated that it 
had five employees at the time of filing on August 31, 2016. The Petitioner's organi zatio nal chart 
depicted the Beneficiary as the managing director and identified his direct subordinates as a national 
sales director and a general manager The organizati onal chart also 
included a store manager who reports to the general manager, and two sales representative s who 
work in the store. 
The Petitioner submitted a payroll register for the period December 14, 2015, through August 7, 
2016. This evidence corroborated the employment of the Beneficiar y, the three store emp loyees, 
and another individual, who did not appear on the organizational chart. 5 The payroll 
register also identified as a 1099 employee (paid on contract or commission), and showed 
that he had received only one payment in the amount of$1,223.36 in January 2016. 
5 
In respon se to the RFE, in March 2017, the Petitioner identified as a "wholesale manager" responsible for 
supervising wholesale accounts, coordinating trade shows, and. "sales marketing ." However, an employee payroll 
summary submitted at that time showed that her employment was terminated on August 26, 2016, prior to the filing of 
this petition . 
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Matter of M-C-USA, Inc. 
The Petitioner did not provide evidence of payments to In a letter in support of the 
petition, the Petitioner stated that she, along with the Beneficiary, "manages and oversees accounts," 
and noted that she served as a management consultant to the Petitioner during the initial phase of 
start-up operations. The Petitioner explained that owns her own business, which also 
imports gowns from the foreign entity for a private label called The Petitioner 
specifically stated that it expected to accept a salaried position with the Petitioner during 
"the next three year period," and noted· that she would "directly focus on the management of the 
account which is anticipated to be the major source of revenue for the wholesale 
b!Jsiness." 
In the RFE, the Director noted the lack of evidence that the Petitioner actually employed the claimed 
managerial employees at the time of filing, and requested additional 
information regarding the company's organizational structure, staffing levels, wages and salaries 
paid, and duties performed by subordinate employees. 
In response, the Petitioner explained that as national sales director, works directly with 
senior executives of national chains and department stores. The Petitioner stated that, consistent 
with his position as a senior sales executive, his compensation arrangement is entirely incentive­
based. In support of this claim, the Petitioner submitted an undated "Sales Rep Agreement" with 
authorizing him as a "non-exclusive independent representative" authorized to sell and 
promote the company's products in the West Coast in exchange for a commission of 3% to I 0% 
dependent on the sales amount. 
The Petitioner also submitted an un-signed, un-dated statement attributed to which 
indicates that his duties include attending several trade shows per year with the Petitioner's team,6 
and traveling to 13 western states to visit boutiques that may be interested in the Petitioner's line of 
products. The Petitioner submitted e-mail receipts for two flights booked by (to 
and . , but did not provide evidence of any further payments to him after January 2016. The 
Petition
er has not established that he was provid!ng services for the company at the time of filing or 
that he has been managing its national sales accounts. 
With respect to employment, the Petitioner explained that she "helped the ?eneficiary 
start the business ... and initially received compensation in the form of goods in kind," but "is now 
compensated with a base salary of $5000 per month plus incentive compensation." The Petitioner 
stated that manages sales and general operations, and reports to the Beneficiary for major 
financial matters and business strategy. 
The Petitioner submitted a "Director Agreement" dated September 5, 2015, which 
indicates that it 
appointed as "executive operation officer and management representative." The 
6 
The statemen t identifies this team as (the store manager), and . As 
noted, left the company before the petition was filed . according to the emp loyee summary 
submitted in response to the RFE, terminat ed her employment on September I 0, 2016 , ten days after the petition was 
filed. 
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Maller of M-C-VSA, Inc. 
agreement indicates that the Petitioner would compensate her with merchandise for her boutique 
during the first year, and pay her a salary of $5000 per month beginning in August 2016. The 
Petitioner also submitted an unsigned, undated statement attributed to This statement 
indicates that her duties include researching new designs for each season, managing the buying and 
manufacturing of new designs in consultation with the Beneficiary, conducting monthly sales 
meetings. and providing training to new employees, overseeing emplo yee scheduling and payroll, 
setting sales goals, managing all social media, and working at all trade shows. According to this 
statement, was on payroll 
"from the end of August 2016." 
As evidence of the claimed "goods in kind" compensation paid to the Petitioner 
submitted copies of three invoices showing approximately $58,000 of merchandise sold to 
between November 2015 and August 2016. The Petitioner did not submit supporting bank 
statements, its general ledger, or other evidence.in support of its claim that did not pay 
and was not expected to pay for this merchandise in exchange for her services. 
Regarding its payments to the Petitioner submitted copies of two paystubs 
showing her receipt of ·1 099 payments of $2500 per pay period. Neither document identifies the 
Petitioner's name or a date. 7 The "Employee Summary " submitted in response to the RFE identifies 
as a full-time employee hired on December 1, 2015, but the Petitioner did not explain 
why she was not included on the employee payroll list submitted at the time of filing. The latter 
employee summary shows that the Petitioner paid $22,500 in 20 16; however the 
Petitioner did not provide a copy of ~n IRS Form 1099 issued to her. 
Overall, we find this evidence insufficient to establish that the Petitioner employed as its 
general manager when the petition was filed on August 31, 2016. If was on the 
company's payroll at the end of August, then it is unclear why the Petitioner stated in a letter dated 
August 29, 2016, that it anticipated hiring her "in the next three years" after the extension is 
approved. As noted, the Petitioner did not adequately document that she received merchandise as 
compensation for her services prior to August 2016 and the payroll evidence the Petitioner provided 
is insufficient to establish when the Petitioner began paying her a salary, wage or other fees. 
Further, even if we found that the Petitioner had started compensating for her services as 
of the date of filing, the record does not contain consistent information about the nature of her duties 
in support ofthe Petitioner 's claim that it employs her in a managerial role. At the time of tiling, the 
Petitioner implied that she would assist the Beneficiary with overseeing account s and would spend 
most of her time on the private label. The . statement attributed to indicates 
that she performs many additional duties, including design research, social media account 
management, overseeing employee scheduling and payroll, conducting sales meetings, trade show 
activities, among others. In addition, the Petitioner acknowledges that owns her own, 
similar business and has not explained how she would undertake a full-time managerial role with an 
unrelated company. 
7 
Also, we note that the payroll register submitted at the time of filing indicates that the Petitioner was using 
for payroll processing , not as of mid-August 2016 . 
7 
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Matter of M-C-USA, Inc. 
The statutory definition of the term "executive capacity" focuses on a person 's elevated position 
within a complex organizational hierarchy, including major components or functions of the 
organization, and that person's authority to direct the organization. Section 101(a)(44)(B) of the 
Act. Under the statute, a beneficiary must have the ability to "direct the management" and "establish · 
the goals and policies" of that organization . Inherent to the definition, the organization must have a 
subordinate levet' of managerial employees for a beneficiary to direct and they must primarily focus 
on the broad goals and policies of the organization rather than the day-to-day operation s of the 
enterprise. An individual will not be deemed an executive under the statute simply because they 
have an executive title or because they "direct" the enterprise as the owner or sole managerial 
employee. A beneficiary must also exercise "wide latitude in discretionary decision making" and 
receive only "general supervision or direction from higher level executives, the board of directors, or 
stockholders ofthe organization." !d. 
For the reasons discussed, the Petitioner has not established that the Beneficiary delegates non­
executive duties to a subordinate managerial staff. Although the Petitioner indicates that it has 
sufficient lower-level staff to allow the Beneficiary to primarily focus on the broad policies and 
goals of the organization , and to remove him froll). significant involvement in the day-to-day 
operations of the company , the record does not support· that claim. 
As noted, the Petitioner has not sufficiently documented its employment of its sales director and 
general manager. In response to the RFE, the Petitioner stated that its other staff include a store 
manager, a wholesale manager, and two salespersons. The Petitioner's payroll records 
indicate that 
the store manager left the company just after the petition was filed and the wholesale manager was 
terminated prior to the filing of the petition, so it is unclear why it included them among its staff. It 
appears that the Pe~itioner did hire two additional staff in 2016 , but the 
Petitioner did not mention them in any of its statements or indicate what positions they hold. 
Although they are identified on the payroll records as full-time employees , earned only 
$1 ,325 in 2016 after being hired in early September, and earned $1,848 for 
approximately 9 weeks of work. 
We have also considered the Petitioner 's claim that the Beneficiary continue s to direct the work of 
employees located ,at the Chinese affiliate, specifically those responsible for the design, production, 
and logistics activities related to the U.S market. The Petitioner submitted an organizational chart 
for the foreign entity, but has not provided position descriptions for the foreign employees or 
explained the nature of the duties they perform in support of the U.S. compan y. The organi zational 
chart does not depict a logistics or export department or production staff . While the Beneficiar y may 
continue to have general oversight of the foreign entity and the organization as a whole as the sole 
owner of both companies, the Petitioner has not sufficiently established that the foreign staff assist 
the Petitioner with its day-to-day operations or remove the Beneficiary from involvement in non­
executive duties . 
The Petitioner cites to Matter ofZ-A -, Inc., Adopted Decision 2016-02 (AAO Apr. 14, 2016), and 
asserts that the Director erred by focusing on the size of the Beneficiary's subordinate staff and the 
small size of the U.S. company. As required by section I Ol(a)(44) (C) of the Act, if staffing levels 
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Matter of M-C-USA, Inc. 
' are used as a factor in determining whether an individual is acting in a managerial or executive 
capacity, USCIS must take into account the reasonable needs of the organization, in light of the 
overall purpose and stage of development of the organization. However, it is appropriate for USC IS 
to consider the size of the petitioning company in conjunction with other relevant factors, such as the 
absence of employees who would perform the non-managerial or non-executive operations of the 
company. Family Inc. v. USCJS, 469 F.3d 1313 (9th Cir. 2006); Systronics Corp. v. INS, !53 F. 
Supp. 2d 7, 15 (D.D.C. 2001). The size of a conipany may be especially relevant when USCIS notes 
discrepancies in the record. See Systronics, 153 F. Supp. 2d at 15. 
The Petitioner operates a retail and wholesale clothing business. The Petitioner has not adequately 
documented the employment of its claimed "senior managerial" staff for the reasons. The Petitioner 
has consistently documented its employment of retail sales representatives, but the record shows that 
its retail manager and wholesale manager both left the company around the time of filing. The 
Beneficiary is purportedly responsible for overseeing financial, administrative and logistics matters, 
but does not have subordinate staff to assist him with these functions, nor does it employ purchasing 
staff and it is unclear who sources inventory from the parent company and other suppliers. 8 In 
addition, the Beneficiary states that he designs the gowns sold by the company, a non-executive duty 
that was not included in the Petitioner's description of hisduties. In light of these facts, there are a 
number of non-executive functions which are not or cannot be delegated to subordinate staff. 
We have interpret the statute to prohibit discrimination against small or medium-size businesses. 
However, we have also consistently interpreted that Act to require petitioners to establish that the 
beneficiary's position "primarily" consists of executive duties, and that it has sufficient personnel to 
relieve a beneficiary from performing operational and administrative tasks. The reasonable needs of 
a petitioner will not supersede the requirement that a beneficiary be "primarily" employed in a 
managerial or executive capacity as required by the statute. Brazil Quality Stones v. Chertoff, 531 
F .3d 1063, I 070 n.l 0 (9th Cir. 2008). 
Based on the nature of the company and its documented staffing levels, the Petitioner has not shown 
that it requires the Beneficiary to primarily perform the higher level planning, policy-making and 
business development duties attributed to him. Rather, it appears that he would more likely than not 
be required to perform a variety of non-executive duties necessary for the day-to-day operations of 
the company. Accordingly, the Petitioner has not established that he will be employed in an 
executive capacity. 
Ill. CONCLUSION 
The appeal will be dismissed because the Petitioner did not establish that it will employ the 
Beneficiary in an executive capacity. 
8 The Petitioner identifies its Chinese affiliate as its major supplier, but the submitted customs documents show that the 
Petitioner has been importing inventory from Lebanon and Turkey. 
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Matter of M-C-USA. Inc. 
ORDER: The appeal is dismissed. 
Cite as Matter of M-C-USA, Inc., 10# 620851 (AAO May 22, 2018) 
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