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Options When Receiving an H-1B Employer-Employee Relationship Denial

Below is an in-depth article regarding actions that can be taken when your company receives an employer-employee relationship denial. Reddy Neumann Brown PC’s Counsel for Litigation Jonathan Wasden and Attorney Steven Brown have prepared a short video discussing litigation strategies for these type of denials, which can be found here:


Since 2015, H-1B RFE rates have increased from 22.3% to 39.6%[1]. At the same time, the rate of denials during the same timespan has more than doubled, increasing from 16.8% to 37.3%.[2] The spike in denials has not been equally distributed amongst all H-1B filers. Rather, the agency has disproportionately targeted companies whose employees work at third party work sites.

While the statutes and regulations have not changed, USCIS has sought to change the standard and seeks to eliminate third party worksites from the H-1B program. Evidence of this is the February 22, 2018 USCIS memo which sought to increase the evidentiary burden for employers that place H-1B workers at third party end-clients. As a result of this memo, the denial rates for consulting and staffing companies in information technology and healthcare have skyrocketed. 

USCIS’s most common way to deny petitions from targeted employers is to state there is no employer-employee relationship or that there is no proof of specific work assignments.

These denials are based on the February 22, 2018 memo and focus on a lack of contractual documents or letters. When receiving these denials companies have really three options: 1) do nothing about the denial and refile, 2) file an MTR or appeal, or 3) sue USCIS on the denial. This article will address the three options and the advantages/disadvantages of each.

Option 1: Do nothing and/or refile.

Obviously, one option when receiving a denial is to not take any action, or refile the case. If it is a transfer, extension, or amendment case, and the I-94 is still valid you can likely refile the case right away and hope for a different result. If the I-94 is expired, and you qualify for a nunc pro tunc filing, you can refile with the expired I-94. You can read more about nunc pro tunc filings here: If you don’t qualify for a nunc pro tunc argument, your employer, or a new employer, can file a consular processing petition. Typically, in any of these situations, it is recommended that you look at the denial and try to correct any deficiencies in the refiled petition.

For cap-subject or lottery cases, an immediate refile is not available.  You will have to wait until April of the following year to refile, hope the case gets selected, and hope the case is able to get approved. Unfortunately, the option of doing nothing or waiting until April is not usually one that is good for cap-subject cases because there can be problems with status or the project that must be considered.

Option 2: File an I-290B for an Appeal or MTR.

Anytime you receive a denial, USCIS will inform you of your right to file a motion to reconsider, motion to reopen, or an appeal. This is done by filing an I-290B and paying the filing fee of $675. A motion to reconsider seeks to have USCIS reverse the decision based on an incorrect application of law or policy. A motion to reopen is a request that USCIS reverse the decision based on new facts. An appeal will function as a motion to reconsider or reopen at USCIS prior to going to the Administrative Appeals Office to Review. All I-290Bs must be filed within 30 days of the date of denial.

Many people think that an I-290B is the best way to get a denial reversed and it is the method the Agency wants to you take. Unfortunately, the fact of the matter is most of these cases are not successful. Historically, as little as 3% of I-290Bs filed end up in a positive adjudication for the petitioning party, and the highest amount of positive adjudications has still been fewer than 10%. Additionally, filing an I-290B does not grant any status or work authorization, and the adjudication can take as long as eight months or more to adjudicate.

The low success rate on I-290B filings is mainly due to the role USCIS and the AAO play in adjudicating I-290Bs. Prior to entering the private sector, Reddy & Neumann. P.C.’s Counsel for Litigation Jonathan Wasden worked with the AAO. It is his opinion that the AAO’s job is to play “backstop” for USCIS and find ways to uphold their decisions. Wasden has even gone on to say when going to the AAO “even if you win, you lose.” What is meant by this is the fact that the AAO will always look to uphold the denial. In some cases when there is clear USCIS error, the AAO has made a decision remanding the petition back to USCIS stating that they do not need to address the error and that USCIS should issue another RFE on a different issue not even in the denial. A recent example of this is a case that was denied because USCIS clearly did not read a crucial piece of evidence and denied the case for Beneficiary Qualifications. On appeal, the AAO essentially punted and remanded the case back to USCIS saying that beneficiary qualifications did not have to be addressed by the AAO until USCIS asks about specialty occupation, despite the fact that specialty occupation was not originally questioned in the RFE. This is just one of many examples of the AAO doing whatever they can do to avoid overturning USCIS’ decisions.

While you can certainly file an I-290B and hope for the best, there is another option that can have much better results.

Option 3: File A Lawsuit Against USCIS Challenging the Denial.

The final option is to file a federal court lawsuit against USCIS challenging the denial. It is important to note that in order to file a lawsuit challenging a denial, you do not have to appeal the denial to the agency (called “exhausting your administrative remedies”). This means you can go straight to court and challenge the denial.

In the past, these lawsuits have had a much more favorable outcome than an MTR or an appeal. As noted earlier, MTRs and Appeals still go through USCIS and USCIS or the AAO tend to uphold the denials. Conversely, filing a lawsuit gets the case in front of an independent judge that will understand the low legal burden for H-1B cases of preponderance of the evidence (greater than 50%). Thanks to past case law and recent Supreme Court decisions, litigation will give petitioners a good opportunity to have the judge focus on applying statute and regulation and not USCIS’ recent policy memorandums. Employer-employee relationship denial lawsuits will typically focus on USCIS’ application of the employer-employee relationship regulation and their overzealous and over burdensome application of the USCIS non-speculative work assignment rule that came out of the February 22, 2018 memo.

Again, these lawsuits typically achieve more favorable results than filing an MTR or an appeal. For example, we have seen approvals of 2018 cap cases that were denied, sued on, reopened by USCIS, and later approved. Litigation is particularly a good option for cap-subject cases where there is not an option to immediately refile and an I-290B that is going to take an extremely long period of time to adjudicate. A more detailed article about challenging employer-employee relationship denials can be found on the Reddy Neumann Brown PC Litigation page here:

If you want more information regarding federal court litigation options for your employer-employee relationship denial, please contact and a member of our team will provide you with more information. You can also set up a consultation with any of the members of our firm’s litigation team at Our litigation team consists of attorneys Steven Brown and Reddy Neumann Brown PC’s Counsel for Litigation Jonathan Wasden.

[1] (2019). H-1B Quarterly RFE and Denial Rate. [online] Available at: [Accessed 18 Sep. 2019].

[2] Id.

By: Steven Brown


Steven Brown is an attorney in the firm’s H-1B Department and represents our business clients throughout the entire H-1B, H-4, and H-4 EAD process. Additionally, Steven works with clients with Department of Labor Compliance included assistance with wage and hours investigations. Steven prides himself in being able to provide his clients with creative solutions to complex immigration problems.