dismissed L-1A Case: Motorcycle Sales

identifyingdatadeletedto
preventclearly unw~ted
invasionofpersonalpnvacy
PUBLICCOpy
U.S.Department of Homeland Security
20 Massachusetts Ave., N.W., Rm. A3000
Washington, DC 20529
U.S.Citizenship
and Immigration
Services
File: SRC 03 184 52443 Office: TEXAS SERVICE CENTER Date: NOV 06 2007
IN RE: Petitioner:
Beneficiary:
Petition: Petition for a Nonimmigrant Worker Pursuant to Section 101(a)(l5)(L) of the Immigration
and Nationality Act, 8 U.S.C. § 1101(a)(15)(L)
IN BEHALF OF PETITIONER:
INSTRUCTIONS:
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to
the office that originally decided your case. Any further inquiry must be made to that office.
Robert P. Wiemann, .ef
~ Administrative Appeals Office
www.uscis.gov
SRC 03 184 52443
Page 2
DISCUSSION: The Director, Texas Service Center, denied the petition for a nonimmigrant visa. The matter
is now before the Administrative Appeals Office (AAO) on appeal. The AAO will dismiss the appeal.
The petitioner filed this nonimmigrant visa petition seeking to extend the employment of its general manager
as an L-lA nonimmigrant intracompany transferee pursuant to section 10I(a)(15)(L) of the Immigration and
Nationality Act (the Act), 8 U.S.C. § IIOI(a)(l5)(L). The petitioner is a limited liability company organized
under the laws of the State of Florida and is allegedly involved in the sale and distribution of three-wheeled
motorcycles. The beneficiary was initially granted a one-year period of stay to open a new office in the
United States, and the petitioner now seeks to extend the beneficiary's stay .1
The director denied the petition concluding that the petitioner did not establish (1) that the beneficiary will be
employed in the United States in a primarily managerial or executive capacity ; or (2) that the petitioner is a
qualifying organization because it did not establish that it is "doing business as an employer" as required by 8
C.F.R. § 2I4 .2(1)(l)(ii)(G)(2).
The petitioner subsequently filed an appeal. The director declined to treat the appeal as a motion and
forwarded the appeal to the AAO for review. On appeal, counsel to the petitioner asserts that the director
erred and that the beneficiary's duties are primarily those of an executive or manager. Counsel further argues
that the petitioner did business as an employer. Counsel submits a brief and additional evidence.
To establish eligibility for the L-I nonimmigrant visa classification, ·the petitioner must meet the criteria
outlined in section IOI(a)(I5)(L) of the Act. Specifically, a qualifying organization must have employed the
beneficiary in a qualifying managerial or executive capacity, or in a specialized knowledge capacity , for one
continuous year within three years preceding the beneficiary's application for admission into the United
States. 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, executive, or
specialized knowledge capacity.
The regulation at 8 C .F.R. § 214.2(1)(3) states that an individual petition filed on Form 1-129 shall be
accompanied by:
(i) Evidence that the petitioner and the organization which employed or will employ the
alien are qualifying organizations as defined in paragraph (1)(1)(ii)(G) of this section .
(ii) Evidence that the alien will be employed in an executive, inanagerial, or specialized
knowledge capacity, including a detailed description of the services to be performed.
(iii) Evidence that the alien has at least one continuous year of full time employment
I According to Florida state corporate records , the petitioner's corporate status in Florida was "administratively
dissolved" on September 15, 2006 . Therefore, since the corporation may not carry on any business except
that necessary to wind up and liquidate its affairs , the company can no longer be considered a legal entity in
the United States. See Fla. Stat . 607.1405 (2006). Accordingly, if this appeal were not being dismissed for
the reasons set forth herein, this would call into question the petitioner's continued eligibility for the benefit
sought.
SRC 03 184 52443
Page 3
abroad with a qualifying organization within the three years preceding the filing of
the petition.
(iv) Evidence that the alien's prior year of employment abroad was in a position that was
managerial, executive or involved specialized knowledge and that the alien's prior
education, training, and employment qualifies him/her to perform the intended
services in the United States; however, the work in the United States need not be the
same work which the alien performed abroad.
The regulation at 8 C.F.R. § 214.2(1)(14)(ii)also provides that a visa petition, which involved the opening of a
new office, may be extended by filing a new Form 1-129, accompanied by the following:
(A) Evidence that the United States and foreign entities are still qualifying
organizations as defmed in paragraph (1)(1)(ii)(G) of this section;
(B) Evidence that the United States entity has been doing business as defined in
paragraph (l)(l)(ii)(H) of this section for the previous year;
(C) A statement of the duties performed by the beneficiary for the previous year
and the duties the beneficiary will perform under the extended petition;
(D) A statement describing the staffing of the new operation, including the
number of employees and types of positions held accompanied by evidence
of wages paid to employees when the beneficiary will be employed in a
managerial or executive capacity; and
(E) Evidence of the financial status of the United States operation.
The first issue in the present matter is whether the beneficiary will be employed by the United States entity in
a primarily managerial or executive capacity.
Section 101(a)(44)(A) of the Act, 8 U.S.C. § 1l01(a)(44)(A), defines the term "managerial capacity" as an
assignment within an organization in which the employee primarily:
(i) manages the organization, or a department, subdivision, function, or component of
the organization;
(ii) supervises and controls the work of other supervisory, professional, or managerial
employees, or manages an essential function within the organization, or a department
or subdivision of the organization;
(iii) if another employee or other employees are directly supervised, has the authority to
hire and fire or recommend ' those as well as other personnel actions (such as
promotion and leave authorization), or if no other employee is directly supervised,
functions at a senior level within the organizational hierarchy or with respect to the
SRC 03 184 52443
Page 4
function managed; and
(iv) exercises discretion over the day to day operations of the activity or function for
which the employee has authority . A first line supervisor is not considered to be
acting in a managerial capacity merely by virtue of the supervisor's supervisory
duties unless the employees supervised are professional.
Section 101(a)(44)(B) of the Act, 8 U.S.C. § llOl(a)(44)(B), defines the term "executive capacity" as an
assignment within an organization in which the employee primarily:
(i) directs the management of the organization or a major component or function of the
organization;
(ii) establishes the goals and policies of the organization, component , or function;
(iii) exercises wide latitude in discretionary decision making; and
(iv) receives only general supervision or direction from higher level executives, the board
of directors, or stockholders of the organization.
The petitioner does not clarify in the initial petition whether the beneficiary will be primarily engaged in
managerial duties under section 101(a)(44)(A) of the Act, or primarily executive duties under section
101(a)(44)(B) of the Act. A petitioner may not claim that a beneficiary will be employed as a hybrid
"executive/manager" and rely on partial sections of the two statutory definitions. If the petitioner is indeed
representing the beneficiary as both an executive and a manager, it must establish that the beneficiary meets
each of the four criteria set forth in the statutory definition for executive and the statutory definition for
manager.
The petitioner described the beneficiary's job duties in the Form 1-129as follows:
Manage [the petitioner] in developing its import, marketing, sales and distribution business;
establish markets and sales network throughout the U.S. for "Boom Trikes[."J
Counsel to the petitioner also submitted a letter dated June 19 ,2003 which explains that the beneficiary will
be remunerated by the foreign employer and that the petitioner "has employed a marketing representative."
While the petitioner's 2002 Form 1120, U.S. Corporation Income Tax Return, indicates that the petitioner had
no employees in 2002 , the petitioner submitted a letter dated April 30, 2003, which claims that it has hired
__ as a "marketing representative." This claim is repeated in a document titled "History Glance
Enterprises July 2002 - May 2003" which states that the petitioner began employing a part-time "marketing
assistant" named~ May 2003 as well as three independent sales representatives . The petitioner
also claimed to employ one person in its Form 1-129.
On October 27, 2004, the director requested additional evidence. The director requested, inter alia , the
petitioner's federal and state wage reports, Forms 1099 for the independent contractors, and descriptions of all
subordinate employees.
SRC 03 184 52443
Page 5
In response, the petitioner submitted a federal wage report, Form 941 , for the second quarter of 2003
indicating that the petitioner employed one person during that timeframe and only during the third month of
that quarter, i.e., June 2003 . This is also the month in which the petition was filed. The Form 941 further
indicates that the petitioner paid $1 ,162.00 in wages in that quarter. The petitioner did not submit a
corresponding Florida wage report even though this was specifically requested by the director.
The petitioner also submitted a letter from its accountant dated December 15, 2003 which repeats the
petitioner's claim that it hired a part-time "sales /marketing employee" in May 2003 with "an annual salary of
$7,000.00." However , the petitioner also submitted an organizational chart and job description which identify
the marketing employee as '__e employee identified as the marketing representative
in the initial petition, does not appear on the~onal chart. According to _sjob description ,
_became ill in 2003 and his wife, ~, ceased working for the petitioner in the third quarter
of 2003 to care for him. However, the job description for _ claims that she is "now back on
payroll." It must be noted that the petitioner does not address ~that_was hired in May
2003 but his wife,_ was apparently the individual employed by the petitioner, albeit for less than a
one-month time period.
Regardless, the job description for _ claims that she will perform marketing tasks. While the
petitioner identifies other persons on the organizational chart and in the list of job descriptions, the record
does not indicate that these other individuals were employed by the petitioner at any time prior to the filing of
the petition in June 2003 .
On March 30, 2004, the director denied the petition. The director concluded that the petitioner did not
establish that the beneficiary will be employed in the United States in a primarily managerial or executive
capacity.
On appeal, counsel asserts that the beneficiary will be employed as an executive or manager. In support,
counsel submits additional evidence primarily concerning the petitioner's purported business activities after
the filing of the petition. Counsel also submitted copies of _ 2003 Form W-2 which indicates that
the only compensation paid to this employee was the $1,162.00 claimed in the Form 941 for her one month of
employment in June 2003 . The petitioner's averment that she was "back on payroll" in late 2003 appears to
have been false. Moreover, the 2002 Forms W-2 and the petitioner's 2002 Form W-3 indicate that the
petitioner never employed
Upon review, the petitioner's assertions are not persuasive.
As a threshold matter, it must be noted that the petitioner submitted substantial documentation on appeal and
in response to the director's Request for Evidence that concerns the petitioner's business activities after the
filing of the instant petition on June 20, 2003. To the extent this evidence concerns post-petition business
activity, this evidence will not be considered by the MO. The petitioner must establish eligibility at the time
of filing the nonimmigrant visa petition. A visa petition may not be approved at a future date after the
petitioner or beneficiary becomes eligible under a new set of facts. Matter ofMichelin Tire Corp. , 17 I&N
Dec. 248 (Reg. Comm, 1978).
SRC 03 18452443
Page 6
Title 8 C.F.R. § 2l4.2(l)(3)(v)(C) allows the "new office" operation one year within the date of approval of
the petition to support an executive or managerial position. There is no provision in Citizenship and
Immigration Services (CIS) regulations that allows for an extension of this one-year period . If the business
does not have sufficient staffing after one year to relieve the beneficiary from primarily performing
operational and administrative tasks, the petitioner is ineligible by regulation for an extension. In the instant
matter, the United States operation has not reached the point that it can employ the beneficiary in a
predominantly managerial or executiveposition.
When examining the executive or managerial capacity of the beneficiary, the AAO will look first to the
petitioner's description of the job duties. See 8 C.F.R. § 2l4.2(l)(3)(ii). The petitioner's description of the job
duties must clearly describe the duties to be performed by the beneficiary and indicate whether such duties are
either in an executive or managerial capacity . Id. The petitioner must specifically state whether the
beneficiary is primarily employed in a managerial or executive capacity. As explained above , a petitioner
cannot claim that some of the duties of the position entail executive responsibilities, while other duties are
managerial. A beneficiary may not claim to be employed as a hybrid "executive/manager" and rely on partial
sections of the two statutory definitions.
The petitioner's description of the beneficiary's job duties has failed to establish that the beneficiary will act
in a "managerial" capacity. In support of its petition, the petitioner has provided a vague and nonspecific
description of the beneficiary's duties that fails to demonstrate what the beneficiary will do on a day-to-day
basis. The fact that the petitioner has given the beneficiary a managerial title and has prepared a vague job
description which includes lofty duties does not establish that the beneficiary will actually perform
managerial duties. Specifics are clearly an important indication of whether a beneficiary's duties are primarily
executive or managerial in nature; otherwise meeting the definitions would simply be a matter of reiterating
the regulations. Fedin Bros . Co., Ltd. v. Sava, 724 F. Supp. 1103 (E.D.N.Y. 1989), aff'd, 905 F.2d 41 (2d.
Cir. 1990). Going on record without supporting documentary ev idence is not sufficient for purposes of
meeting the burden of proof in these proceedings. Matter of Treasure Craft of California, 14 I&N Dec. 190
(Reg. Comm. 1972).
Likewise, it appears that the beneficiary will be primarily performing non-qualifying administrative or
operational tasks which will not rise to the level of being managerial or executive in nature. For example , the
petitioner states that the beneficiary will develop the petitioner's "import , marketing, sales and distribution
business" and "establish markets and sales network." However, marketing, sales, importation, and product
distribution duties constitute administrative or operational tasks when the tasks inherent to these duties are
performed by the beneficiary. The record as a whole , which includes evidence that the beneficiary directly
corresponds with potential customers via email, indicates that the beneficiary will be performing these non­
qualifying tasks.
Moreover, as the organizational chart, wage reports, and job descriptions for the subordinate employees fail to
identify any employees or contractors who will relieve the beneficiary of the need to perform the non­
qualifying tasks inherent to both the sales, marketing, and distribution duties as well as to the management of
the business in general, it must be concluded that he will perform these tasks. While the petitioner has
claimed that it employs a part-time marketing assistant, the record confirms that this employee worked for the
petitioner for less than one month. The petitioner also failed to provide any evidence confirming its
employment of independent contractors or other employees even though specifically requested by the
SRC 03 184 52443
Page?
director. Failure to submit requested evidence that precludes a material line of inquiry shall be grounds for
denying the petition . 8 C.F.R. § 103.2(b)(l4) . As the petitioner has not established how much time the
beneficiary will devote to performing non-qualifying tasks, it cannot be confirmed that he will be "primarily"
employed as a manager or executive. An employee who "primarily" performs the tasks necessary to produce
a product or to provide services is not considered to be "primarily" employed in a managerial or executive
capacity. See sections lOl(a)(44)(A) and (B) of the Act (requiring that one "primarily " perform the
enumerated managerial or executive duties); see also Matter of Church Scientology International , 19 I&N
Dec. 593, 604 (Comm. 1988).
The petitioner has also failed to establish that the beneficiary will supervise and control the work of other
supervisory, managerial, or professional employees , or will manage an essential function of the organization.
As explained in the organizational chart, wage reports, and job descriptions , the beneficiary appears to
supervise no employees . The only person employed by the petitioner appears to have been Ruth Birgy, and
the record indicates that she only worked for the petitioner for a few weeks in June 2003 . As of June 20,
2003, and for the reasons discussed infra, it does not appear that the beneficiary would have had any
subordinate employees . Therefore, the petitioner has not established that the beneficiary will be employed
primarily in a managerial capacity.'
Similarly, the petitioner has failed to establish that the beneficiary will act in an "executive" capacity. 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 level of employees for the beneficiary to
2 While the petitioner has not argued that the beneficiary will manage an essential function of the
organization, the record nevertheless would not support this position even if taken. The term "function
manager" applies generally when a beneficiary does not supervise or control the work of a subordinate staff
but instead is primarily responsible for managing an "essential function" within the organization. See section
101(a)(44)(A)(ii) of the Act. The term "essential function" is not defined by statute or regulation. If a
petitioner claims that the beneficiary is managing an essential function , the petitioner must furnish a written
job offer that clearly describes the duties to be performed in managing the essential function, i.e., identify the
function with specificity, articulate the essent ial nature of the function, and establish the proportion of the
beneficiary's daily duties attributed to managing the essential function. See 8 C.F.R. § 214.2(1)(3)(ii). In
addition, the petitioner's description of the beneficiary's daily duties must demonstrate that the beneficiary
manages the function rather than performs the duties related to the function . In this matter, the petitioner has
not provided evidence that the beneficiary will manage an essential function. The petitioner's -vague job
description fails to document what proportion of the beneficiary's duties will be managerial functions, if any,
and what proportion will be non-managerial. Also, as explained above, the record establishes that the
beneficiary will be primarily engaged in performing non-qualifying operational or administrative tasks.
Absent a clear and credible breakdown of the time spent by the beneficiary performing his duties, the AAO
cannot determine what proportion of his duties will be managerial, nor can it deduce whether the beneficiary
will be primarily performing the duties of a function manager. See IKEA US, Inc. v. US. Dept. ofJustice, 48
F. Supp. 2d 22,24 (D.D.C. 1999).
SRC 03 184 52443
Page 8
direct, and the beneficiary must primarily focus on the broad goals and policies of the organization rather than
the day-to-day operations 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. The 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 of the organization." Id. For the same reasons indicated above, the petitioner has failed to
establish that the beneficiary will be acting primarily in an executive capacity. The job description provided
for the beneficiary is so vague that the AAO cannot deduce what the beneficiary does on a day-to-day basis.
Moreover, as explained above, it appears that the beneficiary will primarily perform non-qualifying
administrative or operational tasks. Therefore , the petitioner has not established that the beneficiary will be
employed primarily in an executive capacity. 3
It is appropriate for CIS to consider the size of the petitioning company in conjunction with other relevant
factors, such as a company's small personnel size , the absence of employees who would perform the non­
managerial or non-executive operations of the company, or a "shell company" that does not conduct business
in a regular and continuous manner. See, e.g., Systronics Corp. v. INS, 153 F. Supp. 2d 7, 15 (D.D.C. 2001) .
The size of a company may be especially relevant when CIS notes discrepancies in the record and fails to
believe that the facts asserted are true. Id. In this matter, the record is rife with inconsistencies regarding its
employment of subordinate workers. As outlined above, the petitioner originally asserted in its petition,
which was filed on June 20, 2003, that it hired_ as a part-time "marketing assistant" in May 2003.
However, both the petitioner's response to the director's Request for Evidence, and the evidence submitted on
appeal, confirm that ~was never employed by the petitioner in 2003. It is unclear why the petitioner
would claim on June 20, 2003 that it has been employing someone for almost two months when, in fact, it had
never employed this person . In fact, the record confirms that the petitioner actually paid _wife,
_ for a short period of time in June 2003. Again, it is unclear why _relationship with
the petitioner was not disclosed in the original petition filed on June 20, 2003 when, according to the wage
reports submitted in response to the Request for Evidence, she rendered services to the petitioner only during
that month and that she was paid $1,162.00. Moreover, it is unclear why the petitioner claims in the job
descriptions provided in response to the Request for Evidence that • came "back on payroll" after
3 It is noted that counsel to the petitioner cited the unpublished opinion in Matter ofIrish Dairy Board, A28­
845-42 (AAO Nov . 16, 1989), in support of her contention that the beneficiary is primarily employed as an
executive or manager. In that decision, the AAO recognized that the sole employee of the petitioner could be
employed primarily as a manager or executive provided he or she is primarily performing executive or
managerial duties. However, counsel's reliance on this decision is misplaced . First, counsel has furnished no
evidence to establish that the facts of the instant petition are analogous to those in the unpublished decision.
Moreover, while 8 C.F .R. § 103.3(c) provides that AAO precedent decisions are binding on all CIS
employees in the administration of the Act, unpublished decisions are not similarly binding. Second, as
explained above , the petitioner has not established that the beneficiary will be primarily employed in an
executive or managerial capacity. This is paramount to the analysis, as a beneficiary may not be classified as
a manager or an executive if he or she is not primarily performing managerial or executive duties regardless
of the number of people employed by the petitioner . Therefore, as the petitioner has not established this
essential element, the decision in Matter ofIrish Dairy Board would be irrelevant even if it were binding or
analogous.
SRC 03 184 52443
Page 9
the third quarter of 2003 when, according to the Forms W-2 and W-3 for 2003 , she was not paid any more
compensation than what was reported in June 2003. Overall, the petitioner's representations regarding its
employment of a subordinate staff are rife with unresolved inconsistencies. It is incumbent upon the
petitioner to resolve any inconsistencies in the record by independent objective evidence. Any attempt to
explain or reconcile such inconsistencies will not suffice unless the petitioner submits ' competent objective
evidence pointing to where the truth lies. Matter ofHo, 19 I&N Dec. 582, 591-92 (BIA 1988). Doubt cast on
any aspect of the petitioner's proof may, of course, lead to a reevaluation of the reliability and sufficiency of
the remaining evidence offered in support of the visa petition . [d. at 591 .
Accordingly, in this matter, the petitioner has failed to establish that the beneficiary will be primarily
performing managerial or executive duties, and the petition may not be approved for that reason.
The second issue in the present matter is whether the petitioner has established that it is "doing business . . . as
an employer in the United States" and, thus, still has a qualifying relationship with the foreign entity .
The regulation at 8 C.F .R. § 214.2(1)(14)(ii)(A) states that a petition to extend a "new office" petition filed on
Form 1-129 shall be accompanied by:
Evidence that the United States and the foreign entity are still qualifying organizations as
defmed in paragraph (1)(1)(ii)(G) of this section[.]
Title 8 C.F .R. ·§ 214.2(i)(1)(ii)(G) defmes a "qualifying organization" as a firm, corporation, or other legal
entity which "meets exactly one of the qualifying relationships specified in the defmitions of a parent , branch,
affiliate or subsidiary specified in paragraph (1)(1)(ii) of this section" and "is or will be doing business ... as an
employer in the United States." A "subsidiary" is defined in pertinent part as a legal entity, which includes
limited liability companies, "of which a parent owns, directly or indirectly, more than half of the entity and
controls the entity."
In this matter, the petitioner, a limited liability company, asserts in the Form 1-129 that it is 90% owned by the
foreign employer and that the foreign employer is 100% owned by the beneficiary. It also asserts that the
beneficiary has been, and will be, compensated by the foreign employer and that the petitioner employs one
person . As outlined above, however, the record contains numerous inconsistencies regarding its staffing, and it
cannot be confirmed that the petitioner has ever truly employed anyone.
On March 30, 2004 , the director denied the petition . The director concluded that the petitioner did not
establish that the "U .S. entity is 'doing business as an employer'" as required for qualifying organizations by 8
C.F.R. § 214.2(1)(1)(ii)(G)(2). On appeal, counsel asserts that the petitioner has been doing business as an
employer.
Upon review, the petitioner's assertions are not persuasive .
As properly noted by the director, the definition of "qualifying organization" includes a requirement that the
petitioner establish that it "is or will be doing business .. . as an employer in the United States." Therefore , not
only does the defmition of "qualifying organization" require the petitioner to establish that it is or will be "doing
business" as defined in 8 C.F.R. § 214.2(1)(1)(ii)(H), it must also establish that it is or will be doing business as an
SRC 03 184 52443
Page 10
employer. In this matter, the record does not establish that the petitioner is, or will be, employing anyone. As
further discussed herein, the beneficiary is not, and will not likely become, an "employee" of the petitioner,"
Moreover, the record does not establish that the workers listed in the organizational chart, inclUdin,,
1
have been, or will ever become, employees of the petitioner. The fact that the petitioner has identifi
in a Form 941 as an "employee" does not, alone, establish that she was employed by the petitioner. Not only is
the record rife with unresolved inconsistencies regarding whom was employed by the petitioner in 2003, the mere
inclusion of a person on a wage report and the payment of money to that person does not alone establish that that
person is an "employee" for purposes of the Act and the regulations.
It is noted that "employer," "employee," and "employed" are not specifically defined for purposes of the Act even
though these terms are used repeatedly in the context of addressing the L-1 classification. Section 101(a)( l5)(L),
8 U.S.C. § 1101(a)(15)(L), requires beneficiaries to have been "employed" abroad and to render services to the
same "employer" in the United States. Further, section 101(a)(44), 8 U.S.C. § 1101(a)(44), defines both
managerial and executive capacity as an assignment within an organization in which an "employee" performs
certain enumerated qualifying duties. Finally, the specific definition of "managerial capacity" in section
10l(a)(44)(A), 8 U.S.C. § 1101(a)(44)(A), refers repeatedly to the supervision and control of other "employees."
Neither the legacy Immigration and Naturalization Service nor Citizenship and Immigration Services (CIS) has
defined the terms "employee," "employer," or "employed" by regulation for purposes of the L-1 classification.
See, e.g., 8 C.F.R. § 204.5 and SC.F.R. § 214.2(1). Therefore, for purposes of the L-1 classification, these
terms are undefined.
The Supreme Court of the United States has determined that where a federal statute fails to clearly defme the
term "employee," courts should conclude "that Congress intended to describe the conventional master-servant
relationship as understood by common-law agency doctrine." Nationwide Mutual Ins. Co. v. Darden, 503
U.S. 318, 322-323 (1992) (hereinafter "Darden") (quoting Community for Creative Non- Violence v. Reid, 490
U.S. 730 (1989». That definition is as follows:
In determining whether a hired party is an employee under the general common law of
agency, we consider the hiring party's right to control the manner and means by which the
product is accomplished. Among the other factors relevant to this inquiry are the skill
required; the source of the instrumentalities and tools; the location of the work; the duration
of the relationship between the parties; whether the hiring party has the right to assign
additional projects to the hired party; the extent of the hired party's discretion over when and
how long to work; the method of payment; the hired party's role in hiring and paying
assistants; whether the work is part of the regular business of the hiring party; whether the
hiring party is in business; the provision of employee benefits; and the tax treatment of the
4 A beneficiary's ongoing receipt of remuneration from a foreign source, and not from the petitioner, is an
important factor in determining whether a beneficiary may qualify as an L-lA intracompany transferee as it
must be established that the beneficiary will be controlled by, and will render services to, the United States
entity. See Matter of Penner, 18 I&N Dec. 49 (Comm. 1982); but see Matter ofPozzoli, 14 I&N Dec. 569
(BIA 1974). While the 1974 decision in Matter ofPozzoli held that the origin of a beneficiary's remuneration
is not relevant in determining a beneficiary's eligibility as an L-1A intracompany transferee, the current
validity of this decision is questionable in light of the 1982 decision in Matter of Penner which clearly
determined that the origin of a beneficiary's compensation, while not determinative, is at least relevant.
SRC 03 184 52443
Page 11
hired party.
Darden, 503 U.S . at 323-324; see also Restatem ent (Second) of Agency § 220(2) (1958); Clackamas
Gastroenterology Associates, P.e. v. Wells, 538 U.S. 440 (2003) (hereinafter "Clackamas"). As the common­
law test contains "no shorthand formula or magic phrase that can be applied to find the answer, .. . all of the
incidents of the relationship must be assessed and weighed with no one factor being decisive ." Darden , 503
U.S. at 324 (quoting NLRB v. United Ins. Co. ofAmerica, 390 U.S. 254, 258 (1968).5
Therefore, in this matter, the petitioner was obligated to establish that it is doing business, or will be doing
business, in the United States as an "employer" in accordance with the common-law agency definition
outlined above. The "tax treatment" of the worker, e.g. , the listing of an employee in a Form 941, is but one
factor in examining whether a master-servant relationship ever existed. The petitioner was also obligated to
establish that it had control over the employee and to address those other indicia of employment in order to
carry its burden of proof. In this matter , because the evidence submitted by the petitioner regarding its
conduct of business as an "employer" was insufficient to establish that it is or will employ workers as defined
above, the director properly determined that the petitioner failed to establish that it is a qualifying
organization as defined in 8 C.F.R. §2l4.2(1)(1)(ii)(G)(2).
While the legacy Immigration and Naturalization Service (lNS) has in the past considered the issue of
employment in the context of L-l A intracompany transferee petitions, these decisions, which both predate the
Supreme Court's Darden decision by over a decade, can be distinguished from the present matter. The
decisions in Matter of Aphrodite Investments Limited, 17 I&N Dec . 530 (Comm. 1980) (hereinafter
Aphrodite) and Matter ofAllan Gee, Inc., 17 I&N Dec. 296 (Reg. Comm. 1979) (hereinafter Allan Gee), both
primarily addressed the ability of corporate entities to file petitions on behalf of beneficiaries who have
substantial ownership stakes in those entities. The soundness of this particular conclusion is not being
5 While the Darden court considered only the definition of "employee" under the Employee Retirement
Income Security Act of 1974 ("ERISA"), 29 U.S .C. § 1002(6), and did not address the definition of
"employer," courts have generally refused to extend the common law agency definition to ERISA's use of
employer because "the definition of 'employer' in ERISA, unlike the definition of 'employee,' clearly indicates
legislative intent to extend the definition beyond the traditional common law definition." See, e.g., Bowers v.
Andrew Weir Shipping, Ltd., 810 F. Supp. 522 (S.D .N.Y. 1992), aff'd, 27 F.3d 800 (2 nd Cir. 1994), cert.
denied, 513 U .S. 1000 (1994). However , in the case of the above-cited sections of the Immigration and
Nationality Act, there is no indication that Congress intended for the undefined terms "employer" or
"employed" to have a broader application than that of the corresponding undefined term "employee."
Therefore, in the absence of an intent by Congress to impose broader definitions , the "conventional master­
servant relationship as understood by common-law agency doctrine," and the Darden statutory construction
test, apply to the terms "employee," "employer," and "employed" as used in 8 C.F.R. § 214 .2(1), 8 U.S.C. §
1101(a)(15)(L), 8 U.S.C. § l1Ol(a)(44) ; and 8 U.S.C. § 1153(b)(1)(C). That being said, there are instances in
the Act where Congress may have intended a more defmed application of the term "employer" than what is
encompassed in the conventional master-servant relationship . See, e.g., section 2l4(c)(2)(F) of the Act, 8
U.S.c. § 1184(c)(2)(F) (referring to "unaffiliated employers" supervising and controlling L-lB intracompany
transferees having specialized knowledge); section 274A of the Act, 8 U.S.c. § 1324a (referring to the
employment of unauthorized aliens).
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questioned and is not at issue in the present matter. However, these decisions fail to directly address how, or
whether, petitioners must establish that beneficiaries are bona fide "employees" of the petitioners . . The
decisions also fail to address how, or whether, petitioners must establish that they are bona fide "employers"
of employees .
In the 1980 Aphrodite decision, the INS Commissioner addressed whether a petitioner may seek to classify a
beneficiary as an intracompany transferee even though the beneficiary was a part owner of the foreign entity
and, apparently, not an "employee" of either the foreign entity or the petitioner. The district director and
regional commissioner determined that the beneficiary could not be classified as an intracompany transferee
because "he is 'an entrepreneur, a speculative investor, and not an employee of an international company .'" 17
I&N Dec. at 530. Relying on Matter of M--, 8 I&N Dec. 24 (BIA 1958), the Commissioner disagreed,
declined to require that to intracompany transferees be "employees," and specifically noted that the word
"employee" is not used in section 101(a)(15)(L), 8 U.S.C. § 1101(a)(15)(L). 17 I&N Dec. at 531. The
Commissioner further reasoned that adopting the word "employee" would exclude "some of the very people
that the statute intends to benefit: executives" and noted that the Webster's New Collegiate Dictionary did not
defme "employee" to include "executives."
However, the Aphrodite decision, while otherwise sound, predates both the 1990 codification of the
defmitions of "managerial capacity" and "executive capacity" in 8 U.S .C. § 1101(a)(44), Pub. L. No. 101-649 ,
§ 123, 104 Stat. 4978, § 123 (1990), and the Supreme Court's decision in Darden. As the definitions of both
"managerial capacity" and "executive capacity" now clearly use the word "employee" in describing
intracompany transferee managers and executives , the commissioner's decision in Aphrodite declining to
impose an employment requirement upon intracompany transferees, while correct at the time, ceased being a
valid approach to determining an alien's eligibility for L-l classification in 1990. 6 Furthermore, given that
Congress did not defme the term "employee" in codifying the definitions of "managerial capacity" and
"executive capacity," the Supreme Court instructs that one should conclude "that Congress intended to
describe the conventional master-servant relationship as understood by common-law agency doctrine."
Darden, 503 U.S. at 322-323. Therefore, while the Aphrodite decision remains instructive as to whether a
petitioner may seek L-l classification for a beneficiary having a substantial ownership interest in the
organization, the determina tion that an intracompany transferee employed in an executive capacity need not
be an "employee" has been superceded by statute. Finally, the AAO notes that the Commissioner's reliance
on the dictionary definition of the term "employee" is neither binding nor persuasive when compared to the
common law treatment of the complex subject.
Moreover, in the 1979 Allan Gee decision, the acting regional commissioner of INS determined that the
petitioning corporation could seek L-l classification for the beneficiary even though the beneficiary was the
sole stockholder of the petitioner. 17 I&N Dec . at 298. Relying on the basic legal tenet that corporations are
6 INS adopted regulations substantially similar to the defmitions of "managerial capacity" and "executive
capacity" ultimately codified in 1990 at 8 U .S.C. § 1101(a)(44). See 8 C.F .R. §§ 214.2(1)(l)(ii)(B)-(C) ; 52
F.R. 5738-01 (Feb . 26, 1987) . These regulations , which also require that L-l managers and execut ives be
employees , were generally upheld as consistent with the Act even prior to the 1990 codification of these
defmitions. See National Hand Tool Corp. v . Pasquarell, 889 F.2d 1472 (5 th Cir. 1989). Therefore, an
employment requirement was arguably imposed upon managers and executives seeking L-l classification as
early as 1987.
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separate and distinct from their stockholders, INS correctly concluded that the Act does not prohibit a
petitioning corporation from employing, and petitioning for, a beneficiary who happens to own all of a
petitioner's stock. 17 I&N Dec . at 297-298. Importantly, however, the decision does not address how, or
whether, petitioners must establish that such beneficiaries are bona fide "employees" of the petitioners . It is
unclear why the acting regional commission did not take this crucial next step in the analysis . . While it is
correct that a petitioner may employ and seek L-l classification for a beneficiary who happens to have a
significant ownership interest in a petitioner, this does not automatically mean that such beneficiaries are bona
fide employees. The Allan Gee decision simply fails to address the issue being addressed in the instant
matter.
Regardless, as with the Aphrodite decision, the Allan Gee decision was decided approximately 13 years
before the Supreme Court's decision in Darden. As explained above, the Darden decision indicates that
where Congress fails to define the term "employee," courts should conclude "that Congress intended to
describe the conventional master-servant relationship as understood by common-law agency doctrine."
Darden, 503 U.S . at 322-323. As indicated above, the Act fails to define the tenus "employee," "employer,"
and "employed" for L-l classification purposes. Therefore, while a petitioner, which is solely or primarily
owned by a beneficiary, may file a petition for that beneficiary as an L-1A intracompany transferee, the
question of whether such a beneficiary will truly be an "employee" as now required by the Act is a separate
and independent matter which will be scrutinized on a case-by-case basis utilizing the analysis set forth by the
Supreme Court in Darden, 503 U.S. at 323-324, and Clackamas, 538 U .S. at 449-450.
In other words , while a petitioner may file a petition for a beneficiary who is its sole or primary owner, this
does not necessarily mean that the beneficiary will be a bona fide "employee." See Clackamas, 538 U.S. 440.
In fact, courts employing this analysis in considering whether an owner of an "employer" is also an
"employee" have concluded, in certain contexts, that the owner is not an "employee." See, e.g., Ziegler v.
Anesthesia Associates of Lancaster, Ltd ., 74 Fed. Appx. 197, 2003 WL 22048003 (3rd Cir. 2003)
(unpublished); Solon v. Kaplan, 398 F.3d 629 (7th Cir.)005). Using similar analysis, CIS could reasonably
conclude that beneficiaries who own and control a petitioning corporation or partnership, as in the cases of
Allan Gee Inc . and Aphrodite Investments Limited, might not, given the facts of individual cases, be
"employees" of those petitioners.
Therefore, in considering whether or not one is an "employee" or an "employer ," CIS will focus on the
common-law touchstone of control. Clackamas, 538 U.S. at 450. Factors indicating that a worker is an
"employee" of an "employer" are clearly delineated in both the Darden and Clackamas decisions . 503 U.S . at
323-324; see also Restatement (Second) ofAgency § 220(2) (1958). Such indicia of control include when,
where, and how a worker performs the job; the continuity of the worker's relationship with the employer; the
tax treatment of the worker ; the provision of employee benefits; and whether the work performed by the
worker is part of the employer's regular business . See Clackamas, 538 U.S. at 448-449; cf New Compliance
Manual, Equal Employment Opportunity Commission, § 2-III(A)(1), (EEOC 2006) (adopting a materially
identical test and indicating that said test was based on the Darden decision).
It is important to note that the factors listed in Darden and Clackamas are not exhaustive and must be
evaluated on a case-by-case basis. Other aspects of the relationship between the parties may affect the
determination of whether an employer-employee relationship exists. Furthermore , not all or even a majority
of the listed criteria need be met; however, the fact finder must weigh and compare a combination of the
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factors in analyzing the facts of each individual case. The determination must be based on all of the
circumstances in the relationship between the parties , regardless of whether the parties refer to it as an
employee or as an independent contractor relationship. See Clackamas , 538 U.S. at 448-449; New
Compliance Manual at § 2-III(A)(1 ).
Within the context ofL-1 nonimmigrant petitions, when a worker is also a partner, officer, member of a board
of directors, or a major shareholder, the worker may only be defined as an "employee" if he or she is subject
to the organization's "control." See Clackamas, 538 U.S. at 449-450; see also New Compliance Manual at §
2-III(A)(l)(d). Factors to be addressed in determining whether a worker, who is also an owner of the
organization, is an employee include:
• Whether the organization can hire or fire the individual or set the rules and regulations of the
individual's work.
• Whether and, if so, to what extent the organization supervises the individual's work.
• Whether the individual reports to someone higher in the organization.
• Whether and, if so, to what extent the individual is able to influence the organization.
• Whether the parties intended that the individual be an employee, as expressed in written
agreements or contracts .
• Whether the individual shares in the profits, losses, and liabilities of the organization.
Clackamas, 538 U.S . at 449-450 (citing New Compliance Manual).
Again, it is important to note that this list need not be exhaustive and such questions cannot be decided in
every case by a "shorthand formula or magic phrase ." Id. at 450 (citing Darden, 503 U.S. at 324). Moreover,
in applying the above test, the mere fact that a "person has a particular title - such as partner, director, or vice
president - should not necessarily be used to determine whether he or she is an employee or a proprietor."
Clackamas, 538 U.S. at 450 ; cf. Matter of Church Scientology International , 19 I&N Dec . 593, 604 (Comm.
1988) (stating that a job title alone is not determinative of whether one is employed in an executive or
managerial capacity). Likewise, the "mere existence of a document styled 'employment agreement'" shall not
lead inexorably to the conclusion that the worker is an employee . Clackamas , 538 U .S. at 450. "Rather, as
was true in applying common-law rules to the independent-contractor-versus-employee issue confronted in"
Darden, the answer to whether a shareholder-director is an employee depends on 'all of the incidents of the
relationship ... with no one factor being decisive. III Id. at 451 (quoting Darden , 503 U.S. at 324).
In this matter, the pet itioner has not established that it "is or will be doing business . .. as an employer in the
United States." First, as explained above , the record is so rife with inconsistencies regarding the petitioner's
alleged staffing that it calls into question whether the petitioner had ever employed anyone in any capacity . For
this reason alone, the petitioner has not established that it is, or will be, doing business as an employer. Second,
applying the Darden and Clackamas factors enumerated above, the petitioner has not established that it has , or
will have, a "conventional master-servant relationship" with one or more workers as understood by common-
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law agency doctrine. While the petitioner claims that _as employed in June 2003, the petitioner
has not only failed to establish that this person was employed at the time the petition was filed, the petitioner
has not established this person was a bona fide "employee ." ~as paid a total of $1,162.00 for less
than one month's worth of services. The petitioner failed to describe what , exactly, _ did in June
2003, andit does not appear that this was a "continuing relationship ." It also does not appear that
provided these services on the "employer's premises" or that the petitioner set her hours or provided tools and
equipment. The record indicates that_lived in Crossville , Tennessee , while the petitioner's place of
business was in Ft. Myers, Florida. Therefore , the petitioner has not demonstrated that there were enough
factors of "control" present to establish that _was an "employee." Also, when those competing
factors which indicate that the beneficiary was actually an independent contractor or service provider are
weighed against any indicia of "control," such as the reporting of_ wages on a Form 941, it is clear
that the beneficiary was more likely than not a short-term independent contractor.
Furthermore, applying the Darden and Clackamas factors enumerated above, the petitioner has not established
that it has , or will have, a "conventional master-servant relationship" with the beneficiary as understood by
common-law agency doctrine. While the petition contains some serious inconsistencies regarding the
petitioner's ownership and control (see irifra), it has been alleged that the foreign entity is owned and
controlled primarily by the beneficiary. The foreign entity, in turn , allegedly owns and controls the petitioner.
Therefore, accepting the petitioner's characterizations as true, the beneficiary is the principal owner and
operator of both the petitioner and the foreign entity .
While this does not limit the petitioner's ability to file a petition on behalf of the beneficiary as an
intracompany transferee , the petitioner has nevertheless failed to establish that the beneficiary will be an
"employee" of the petitioner or that the pet itioner "is or will be doing business . .. as an employer in the United
States." First, as explained above, the beneficiary receives his remuneration from abroad and not from the
petitioner. Therefore , the petitioner does not withhold taxes or provide any salary or benefits to the beneficiary.
Second, the petitioner does not appear to "control" the beneficiary's work performance. The petitioner has not
submitted any employment contracts or other documents, which could establish that the beneficiary is controlled
by someone other than himself. To the contrary , it appears that the beneficiary, as the owner and operator of the
business, has plenary authority to direct his own work performance. It does not appear that his "employment" can
be terminated; he does not appear to be supervised by anyone; he does not report to a higher authority; and he has
sole influence over the organization . Finally, the petitioning organization appears to be a corporation in name
only; there are few indicia that the corporation exists as a functional entity with an established organization and
personnel structure outside of the beneficiary's position.
Applying the relevant factors , it appears that none of the elements of control vital to establishing that the
beneficiary has a "conventional master-servant relationship" with the petitioner are present. Therefore , the
petitioner has not established that the beneficiary is an "employee" and has not established that it is or will be
doing business as an employer in the United States. As indicated above, a petitioner that fails to establish that it is
or will be doing business as an employer in the United States and in at least one other country will not meet the
definition of a "qualifying organization" under the regulations . 8 C.F.R. § 214.2(1)(I)(ii)(G)(2).
Beyond the decision of the director, the petitioner also failed to establish that it is a qualifying organization
because the record contains unresolved inconsistencies regarding its ownership and control. The regulation and
case law confirm that ownership and control are the factors that must be examined in determining whether a
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qualifying relationship exists between United States and foreign entities for purposes of this visa
classification . Matter of Church Scientology International, 19 I&N Dec. 593; see also Matter of Siemens
Medical Systems , Inc., 19 I&N Dec. 362 (BIA 1986); Matter ofHughes, 18 I&N Dec. 289 (Comm . 1982) . In
the context of this visa petition, ownership refers to the direct or indirect legal right of possession of the assets
of an entity with full power and authority to control; control means the direct or indirect legal right and
authority to direct the establishment, management, and operations of an entity. Matter ofChurch Scientology
International , 19 I&N Dec. at 595.
In this matter, the petitioner asserts in the Form 1-129 that it is 90% owned by the foreign employer . The
petitioner also asserts in the Form 1-129 that the foreign employer is 100% owned by the beneficiary.
However, the petitioner avers in its 2002 Form 1120 that it is 100% owned by the foreign employer.
Moreover, the foreign employer's tax advisor indicates in a letter dated November 14, 2003 that the foreign
employer is 80% owned by the beneficiary. The petitioner does not offer any explanation for these serious
inconsistencies in the record . Once again, it is incumbent upon the petitioner to resolve any inconsistencies
in the record by independent objective evidence. Any attempt to explain or reconcile such inconsistencies will
not suffice unless the petitioner submits competent objective evidence pointing to where the truth lies. Matter
ofHo, 19 I&N Dec. at 591-92.
Accordingly, the petitioner has not established that it and the foreign entity are still qualifying organizations.
For this reason, the petition may not be approved .
Beyond the decision of the director , the petitioner has also failed to establish that the beneficiary has at least
one continuous year of full-time employment abroad with a qualifying organization as required by 8 C.F .R.
§ 214.2(1)(3)(iii). As explained above, the petitioner has failed to establish that the beneficiary is has a
"conventional master-servant relationship" with the petitioner. For the same reasons, the petitioner has failed
to establish that the beneficiary had a "conventional master-servant relationship" with the foreign entity . As
indicated above, the beneficiary allegedly owns and controls the foreign entity. The petitioner has not
submitted any employment contracts or other documents, which could establish that the beneficiary was
controlled abroad by someone other than himself. To the contrary, it appears that the beneficiary, as the owner
and operator of the business, had plenary authority to direct his own work performance. It does not appear that
his "employment" could have been terminated; he did not appear to have been supervised by anyone; he did not
report to a higher authority; and he had sole influence over the organization . Therefore , the petitioner has not
established that the beneficiary was a bona fide "employee" abroad, and for this additional reason the petition
may not be approved.
An application or petition that fails to comply with the technical requirements of the law may be denied by
the AAO even if the Service Center does not identify all of the grounds for denial in the initial decision. See
Spencer Enterprises, Inc. v. United States, 229 F . Supp. 2d 1025, 1043 (E.D . Cal. 2001), aff'd, 345 F .3d 683
(9th Cir. 2003); see a/so Dor v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989) (noting that the AAO reviews
appeals on a de novo basis) .
The petition will be denied for the above stated reasons, with each considered as an independent and
alternative basis for denial. When the AAO denies a petition on multiple alternative grounds, a plaintiff can
succeed on a challenge only if it is shown that the AAO abused its discretion with respect to all of the AAO's
enumerated grounds. See Spencer Enterprises, Inc ., 229 F. Supp. 2d at 1043.
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In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the
petitioner. Section 291 of the Act. Here, that burden has not been met. Accordingly, the appeal will be
dismissed.
ORDER: The appeal is dismissed.