dismissed L-1A Case: Retail
Decision Summary
The appeal was dismissed because the petitioner failed to provide sufficient evidence that its new office would support the beneficiary in a managerial or executive capacity within one year. The Director and the AAO found the submitted business plan, including its organizational chart and financial projections, to be unsubstantiated and containing unexplained inconsistencies, thus failing to demonstrate the U.S. operation's viability.
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MATTER OF A-R-T-US LLC APPEAL OF VERMONT SERVICE CENTER DECISION Non-Precedent Decision of the Administrative Appeals Office DATE: NOV. 22,2016 PETITION: FORM I-129, PETITION FOR A NONIMMIGRANT WORKER The Petitioner, a retailer of health, wellness, and lifestyle products, seeks to temporarily employ the Beneficiary as chief executive officer of its new office under the L-1A nonimmigrant classification for intracompany transferees. See Immigration and Nationality Act (the Act) section 10l(a)(l5)(L), 8 U.S.C. § 1101(a)(l5)(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, Vermont Service Center, denied the petition. The Director concluded that the Petitioner did not submit sufficient evidence to support the claim that it would have the ability to employ the Beneficiary in the United States in an executive capacity within one year of approval of the petition. The matter is now before us on appeal. In its appeal, the Petitioner submits additional evidence and asserts that the Director did not properly assess the supporting documents, which the Petitioner claims substantiate that the Beneficiary "will be able to perform essential functions" and "direct and oversee all management ofthe company." Upon de novo review, we will dismiss the appeal. I. LEGAL FRAMEWORK To establish eligibility for the L-1 nonimmigrant visa classification, a qualifying organization must have employed the Beneficiary in a 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. Section 101(a)(15)(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, executive, or specialized knowledge capacity. /d. The regulation at 8 C.F.R. § 214.2(1)(3) states that an individual petition filed on Form I-129, Petition for a Nonimmigrant Worker, shall be accompanied by: Matter of A-R-T-US LLC (i) Evidence that the petitioner and the organization which employed or will employ the alien are qualifying organizations as defined in paragraph (l)(l)(ii)(G) ofthis section. (ii) Evidence that the alien will be employed in an executive, managerial, 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 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. In addition, the regulation at 8 C.F.R. § 214.2(1)(3)(v) states that if the petition indicates that the beneficiary is coming to the United States as a manager or executive to open or to be employed in a new office, the petitioner shall submit evidence that: (A) Sufficient physical premises to house the new office have been secured; (8) The beneficiary has been employed for one continuous year in the three year period preceding the filing of the petition in an executive or managerial capacity and that the proposed employment involved executive or managerial authority over the new operation; and (C) The intended United States operation, within one year of the approval of the petition, will support an executive or managerial position as defined in paragraphs (l)(l)(ii)(B) or (C) of this section, supported by information regarding: (1) The proposed nature of the office describing the scope of the entity, its organizational structure, and its financial goals; (2) The size of the United States investment and the financial ability ofthe foreign entity to remunerate the beneficiary and to commence doing business in the United States; and (3) The organizational structure ofthe foreign entity. 2 Matter of A-R-T-US LLC II. U.S. EMPLOYMENT IN A MANAGERIAL OR EXECUTIVE CAPACITY The primary issue to be addressed in this decision is whether the Petitioner· submitted sufficient probative evidence to establish that it would support the Beneficiary in a managerial or executive capacity within one year of the approval of the petition. The Petitioner originally claimed that the Beneficiary will be employed in an executive capacity. On appeal, the Petitioner altered its claim to ir~dude managerial capacity. Therefore, our analysis will assess whether the Beneficiary will be employed in a managerial or executive capacity. Section 101(a)(44)(A) of the Act, 8 U.S.C. § 1101(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 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. § 1101(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 3 Matter of A-R-T-US LLC (iv) receives only general supervision or direction from higher-level executives, the board of directors, or stockholders of the organization. If staffing levels are used as a factor in determining whether an individual is acting in a managerial or executive capacity, U.S. Citizenship and Immigration Services (USCIS) must take into account the reasonable needs of the organization, in light of the overall purpose and stage of development of the organization. See section 101(a)(44)(C) of the Act. The Petitioner filed the Form 1-129 on March 28, 2016. In support of the petition, the Petitioner provided a cover letter that the Beneficiary signed in his capacity as the Petitioner's CEO. The Beneficiary stated that he would be employed in an executive capacity, which would involve planning, developing, and establishing policies, reviewing activity and financial reports, assessing performances of "executive and managerial personnel," developing goals and objectives, overseeing operational costs, looking into new markets and gauge the needs of potential customers, and carrying out "any other functions required to foster and promote business operations." The Petitioner also submitted a business plan, which includes a proposed organizational chart, financial projections, and personnel forecasts. The organizational chart depicts the Beneficiary at the top of the hierarchy, supported by an assistant/data entry employee, technicians, and a sales manager at the second tier of the hierarchy, and sales positions at the bottom tier. Based on the total funds allocated to each position, as provided on page 25 of the business plan, the Petitioner's $250,000 in first-year payroll expenses would include six sales people, each earning $20,000 annually. Apportioned monthly over the course of 12 months, the sales payroll expense would be approximately $1667 per sales person. However, the Petitioner's monthly personnel forecast on page 31 of the business plan shows that the monthly expense for six sales people would vary, starting with $1409 during the first month of operation increasing monthly over the course of 12 months. The Petitioner did not explain why the monthly payroll expense for sales people is expected to vary, given that the personnel forecast projects six sales people during each of the 12 months of the first operating year. The business plan also includes revenue projections indicating that the Petitioner would generate revenues totaling $600,000 and would make a total of 3,000 sales presentations during its first year of operation. However, the Petitioner did not provide a basis for these predictions. The Petitioner also did not clarify the significance of the number "4" in the row representing "Presentations/Sales" for each of the first five years of operation. If the Petitioner projected that 3,000 sales presentations would be made, it is unclear why only four of those presentations would result in sales or how the information in the "Presentations/Sales" row is distinguished from the row titled "Product Sales (Average)," which shows a consistent increase from 750 units during the first year of operation to 1 ,800 units in its fifth year. The Petitioner also provided IRS Form W-2s it issued to nine people in 2015, showing wages ranging from $52.82 to $4,400. The Petitioner did not provide additional information disclosing 4 Matter of A-R-T-US LLC what positions these individuals held, what duties they performed, or their respective dates of employment. The Director issued a request for evidence (RFE), informing the Petitioner that the record lacked sufficient evidence to establish that the Petitioner would have the ability to support the Beneficiary in a managerial or executive capacity within one year of the petition's approval. The Director stated that the Petitioner did not demonstrate that it would employ a staff capable of relieving the Beneficiary from having to perform primarily nonmanagerial or nonexecutive job duties. In response, the Petitioner stated that the Beneficiary operates in an executive capacity and is subject to limited direction from his business partner. In a separate letter, the Petitioner stated that the Beneficiary will direct the management of the organization, exercise decision-making authority, and "perform essential functions ... while leading the growth and development of the [Petitioner]." The Petitioner also provided the following list of the Beneficiary's proposed job duties: • Overseeing the development of the U.S. office; • Controlling the company's budget and capital allocation expenses; • Approving the hiring and firing of company employees; • As the US team begins to scale up, it will be the primary responsibility of the CEO to build the best team possible, and to create an environment and culture where the company can be successful. On the recruiting side this includes building a pipeline of prospective candidates, interviewing candidates, and then successfully closing them. On the team building side, this would include ... 1:1 feedback to [the] company's employees. • Directing the company's operations and strategy by hiring the right people and creating a marketing plan which will include targeting new markets and customer base; • Setting and communicating company goals and objectives to employees ... ; • Developing sales training programs for sales team with the assistance of the Sales Manager; • Attend important customer meetings, investor management (both updating existing investors and meeting new ones), and speaking opportunities at industry networking events. As customer traction picks up, [the Beneficiary] will spend more time with potential strategic customers. • Manage and supervise the work of subordinate management once they are recruited; • Overseeing sales of company's products to new and existing clients as performed by salespeople; • Negotiating new contracts with distributors and customers; • Overseeing customer satisfaction; • Reviewing reports from the sales manager/customer service manager/marketing manager/ office manager; and • Supervising Sales Team meetings to review orders for new and existing customers. 5 Matter of A-R-T-US LLC • Assure product quality and organizational stability through development and implementation of standards and controls, systems and procedures, and regular evaluation. • Promote programs and services that are produced in .a cost-effective manner, employing economy while maintaining an acceptable level of quality. • Oversee the fiscal activities of the organization including budgeting, reporting and audit. The Petitioner did not specify what tasks would be involved in overseeing its company development, product sales, customer satisfaction, and fiscal activities; nor did the Petitioner specify any standards, controls, or procedures to establish how the Beneficiary would ensure quality control. The Petitioner also did not establish that attending customer meetings or negotiating contracts with distributors and clients are tasks that fall within the definition of managerial or executive capacity. In addition, the Petitioner provided an organizational chart depicting a significantly different staffing structure than the one provided in the original chart, which was included in the Petitioner's business plan. Specifically, while both charts similarly show the Beneficiary at the top of the hierarchy, the second chart submitted with the RFE response, which was dated one month after filing, lists six new positions - a marketing manager, an office manager, a marketing/public relations specialist, a customer service manager, an accounting manager, and a customer service agent - none of which were previously included in the Petitioner's originally submitted organizational chart. The new chart also shows four fewer sales people as compared to the original chart. The Petitioner did not clarify or reconcile the significant differences between the two charts or discuss how the changed organizational hierarchy would affect the Petitioner's projected payroll expenses, its revenues, or its sales, which may foreseeably decrease given the diminished number of sales people as reflected in the new chart. The Petitioner also did not address the originally submitted Form W-2s or explain their relevance in terms of the organizational hierarchies that were depicted in the two charts discussed above, particularly given that the Petitioner claimed only one employee when filing the instant petition. The Director ultimately denied the petition, concluding that the Petitioner's submissions were not sufficient to establish that the Petitioner would support the Beneficiary in an executive capacity, as the Petitioner originally claimed. On appeal, the Petitioner alters the original claim, which focused on the Beneficiary's prospective employment in an executive capacity, to include portions of the definition of managerial capacity. Namely, the Petitioner now contends that the Beneficiary's job duties will be "related to the management of the sales and marketing function" and further states that the Beneficiary's responsibilities will include supervising and controlling the work of professional subordinates and hiring and firing his subordinates. See section 101(a)(44)(A)(ii) ofthe Act. 6 Matter of A-R-T-US LLC When exammmg the managerial capacity of the Beneficiary, we look first to the Petitioner's description of the job duties. See 8 C.F.R. § 214.2(1)(3)(ii). The Petitioner's description of the job duties must clearly describe the duties performed by the Beneficiary and indicate whether such duties are in a managerial capacity. !d. I The definition of managerial capacity has two parts. First, the Petitioner must show that the Beneficiary performs and 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 is and will be primarily engaged in managerial duties, as opposed to ordinary operational activities alongside the Petitioner's other employees. See Family Inc. v. USCIS, 469 F.3d 1313, 1316 (9th Cir. 2006); Champion World, 940 F.2d 1533. In addition, it is important to note that when a new business is established and commences operations, the regulations recognize that a designated manager responsible for or assisting with the set-up of operations will be engaged in a variety of activities not normally performed by employees at the managerial level and that often the full range of managerial responsibility cannot be performed. In order to qualify for L-1 nonimmigrant classification during the first year of operations, the regulations require the petitioner to disclose the business plans and the size of the United States investment, and thereby establish that the proposed enterprise will support a managerial position within one year of the approval ofthe petition. See 8 C.F.R. § 214.2(l)(3)(v)(C). This evidence should demonstrate a realistic expectation that the enterprise will succeed and rapidly expand as it moves away from the developmental stage to full operations, where there would be an actual need for a manager who will primarily perform qualifying duties. In the instant matter, we considered both the job duties and the financial and personnel projections as put forth in the Petitioner's business plan and its subsequently submitted supporting documents. After having conducted our review of the petition and the evidence of record, including materials submitted in support of the appeal, we conclude that the Petitioner has not established that the Beneficiary will be employed in the United States in a managerial or an executive capacity within one year of approval of the petition. As discussed above, the Petitioner's various descriptions ofthe Beneficiary's proposed job duties are deficient in their overall lack of specific job duties and their failure to establish that the Beneficiary would eventually allocate his time primarily to the performance of tasks of a managerial or executive nature. 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, 1108 (E.D.N.Y. 1989), aff'd, 905 F .2d 41 (2d. Cir. 1990). While we acknowledge that the Beneficiary is not expected to perform primarily in a managerial or executive capacity during the Petitioner's first year of operation, it is nevertheless critical to discuss the Beneficiary's actual role and specify the job duties he would perform during that first year as this information helps us to understand how the Beneficiary would ensure that the Petitioner progresses beyond the new office stage of operation. Here, while the Petitioner provides various general statements, which address the role that the Matter of A-R-T-US LLC Beneficiary would eventually assume once the Petitioner moves to its next operational phase, it is unclear how, i.e., what specific tasks the Beneficiary would carry out, to ensure that the Petitioner will progress to that next phase of operation. We also considered the Petitioner's projected organizational hierarchy, which is similarly instrumental in explaining how the Petitioner's staff would work together to relieve the Beneficiary from having to allocate his time primarily to operational and/or administrative tasks after its first year of operation. As discussed above, the inconsistent information that the Petitioner provided with regard to its organizational hierarchy and staffing composition significantly hinders our ability to assess the Petitioner's capability in supporting the Beneficiary in a managerial or executive capacity by relieving him from having to primarily carry out nonmanagerial or nonexecutive job duties. We note that the original organizational chart indicates that the Beneficiary would directly oversee an assistant/data entry employee, a sales manager, and technicians, whereas the chart the Petitioner submitted in response to the RFE indicates that the Beneficiary's direct subordinates would now include several new positions, such as a marketing manager and an office manager. Further, the sales manager, which was depicted in both organizational charts, would now occupy a position in the third tier of the organizational hierarchy, thus indicating that the Beneficiary would not directly oversee the sales manager as originally claimed. The Petitioner has not resolved these inconsistencies with independent, objective evidence pointing to where the truth lies. See, Matter of Ho, 19 I&N Dec. 582, 591-92 (BIA 1988). As noted previously, the Petitioner also has not addressed how a diminished sales staff, as depicted in the second organizational chart, would allow the Petitioner to meet the gross income projections that were put forth in the business plan, whose personnel projections were entirely inconsistent with that chart; nor did the Petitioner provide any information as to the payroll expenses associated with the second organizational chart, as the projections in the Petitioner's business plan were based on an entirely different staffing composition. If USCIS finds reason to believe that an assertion stated in the petition is not true, USC IS may reject that assertion. See, e.g., Section 204(b) of the Act, 8 U.S.C. § 1154(b); An~tekhai v. INS, 876 F.2d 1218, 1220 (5th Cir. 1989); Lu-Ann Bakery Shop, Inc. v. Nelson, 705 F. Supp. 7, 10 (D.D.C. 1988); Systronics Corp. v. INS, 153 F. Supp. 2d 7, 15 (D.D.C. 2001). Lastly, the Petitioner did not explain why it changed its original claim, which focused on the Beneficiary's role in an executive capacity, to include managerial capacity, incorporating elements of a personnel manager and function manager into its new claim. While the Petitioner is not precluded from establishing that the Beneficiary meets all four elements of both managerial and executive capacity, we note that the Petitioner cannot meet the statutory requirements by picking and choosing portions of each without meeting all four elements of either definition. Here, the Petitioner has not established that the Beneficiary will meet either the definition of managerial capacity or the definition of executive capacity within one year of approval of the petition. 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, 8 U.S.C. § 1101(a)(44)(B). Under the statute, a beneficiary must have the ability to "direct the 8 Matter of A-R-T-US LLC management" and "establish the goals and policies" of that organization. Inherent to the definition, the organization must have a subordinate level of managerial employees for a beneficiary to direct and a 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. 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 of the organization." !d. In the present matter, the Petitioner provided inconsistent information regarding its organizational structure, thereby precluding a meaningful understanding of who the Beneficiary's projected subordinates would be and whether the Petitioner would have the staffing capacity to elevate the Beneficiary to an executive level. While no beneficiary is required to allocate 100% of his time to executive-level tasks, each petitioner must establish that the non-qualifying tasks its beneficiary would perform at the end of the new office period are only incidental to the proposed position. 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 also, sections 101(a)(44)(A) and (B) of the Act (requiring that one "primarily" perform the enumerated managerial or executive duties); Matter of Church Scientology International, 19 I&N Dec. 593, 604 (Comm'r 1988). Despite the Petitioner's claim that the Beneficiary would direct the management of the organization and enjoy a high level of discretionary authority over the Petitioner's business activities, these factors alone are not sufficient to establish that the Petitioner would ultimately have the ability to relieve the Beneficiary from having to primarily perform nonexecutive tasks. The evidence of record is similarly insufficient to establish that the Beneficiary would be employed in a managerial capacity in the role of a personnel or a function manager. First, the Petitioner conflates the distinct objectives of a personnel manager, whose primary focus is primarily to supervise and control the work of other supervisory, professional, or managerial employees, with those of a function manager, which is a term that applies generally when a beneficiary does not primarily 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) ofthe Act. In light of the inconsistent organizational charts the Petitioner submitted, we are unable to determine whether the Beneficiary would assume the role of a personnel or a function manager. Merely claiming that the Beneficiary would oversee the work of professional employees is not sufficient to establish that the Beneficiary would be a personnel manager, particularly when the Petitioner offered inconsistent organizational charts to show specifically whom the Beneficiary would manage. See section 10l(a)(44)(A)(iv) of the Act. A petitioner's unsupported statements are of very limited weight and normally will be insufficient to carry its burden of proof. See Matter of Sojjici, 22 I&N Dec. 158, 165 (Comm'r 1998) (citing Matter of Treasure Craft of Cal., 14 I&N Dec. 190 (Reg'l Comm'r 1972)); see also Matter ofChawathe, 25 I&N Dec. 369, 376 (AAO 2010). The Petitioner 9 r----------------- Matter of A-R-T-US LLC must support its assertions with relevant, probative, and credible evidence. See Matter ofChawathe, 25 I&N Dec. at 376. While the Petitioner provided nine Form W-2s for 2015, it did not explain their relevance or indicate whether it currently employs or plans to employ any of the individuals to whom the W -2s were issued. Further, given the two distinct staffing structures that the Petitioner depicted as a result of having submitted two inconsistent organizational charts, the credibility of the offered evidence is suspect. Doubt cast on any aspect of the Petitioner's proof may lead to a reevaluation of the reliability and sufficiency of the remaining evidence offered in support of the visa petition. Matter of Ho, 19 I&N Dec. at 591. · The Petitioner's function manager claim is equally questionable in light of the inconsistencies discussed above and the lack of sufficient information as to the specific function the Beneficiary would manage. As indicated above, the term "function manager" applies generally when a beneficiary does not primarily 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 will manage an essential function, a 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 essential nature of the function, and establish the proportion of a 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 a beneficiary's daily duties must demonstrate that the beneficiary will manage the function rather than performs the duties related to the function. In this matter, the Petitioner claims that the Beneficiary's job duties will be "related to the management of the sales and marketing function." However, the job description the Petitioner offered in its RFE response does not support this claim, which the Petitioner first made on appeal. Rather, the job description indicates that the Beneficiary would focus not only on the Petitioner's sales and marketing, but that he would also be involved in various aspects of human resources, such as hiring and firing employees and helping to create sales training programs, as well as operational and administrative functions, such as contract negotiation, budget allocation and financial concerns, and customer satisfaction. The management of an organization's essential function necessarily limits a beneficiary's involvement to managing tasks that are specifically associated with that function; this concept is inconsistent with the role of the Beneficiary in the present matter, who, based on the Petitioner's earlier claims, would be involved in all aspects of the Petitioner's operation and as such would not have the limited role of managing a specific component or function within the petitioning organization. Moreover, the Petitioner must establish that the Beneficiary would manage the function and not perform the underlying duties related to that function. Given that the Petitioner did not provide consistent evidence demonstrating that it would have a staffing hierarchy capable of relieving the Beneficiary from having to primarily perform key operational tasks of the organization after its first year of operation, the Petitioner has not established that the Beneficiary would assume the role of a function manager. 10 Matter of A-R-T-US LLC In sum, the totality of the evidence, which includes the Petitioner's business plan, its projected staffing, and the Beneficiary's proposed job duties, precludes the finding that the Beneficiary would be employed in a managerial or executive capacity within one year off this petition's approval and on the basis of this conclusion the instant petition cannot be approved. III. CONCLUSION The petition will be denied and the appeal dismissed for the above reason. In visa petition proceedings, the burden of proving eligibility for the benefit sought remains with the petitioner. Section 291 of the Act, 8 U.S.C. § 1361; Matter of Otiende, 26 I&N 127, 128 (BIA 2013). 'Here, that burden has not been met. ORDER: The appeal is dismissed. Cite as Matter of A-R-T-US LLC, ID# 63513 (AAO Nov. 22, 2016) 11
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