Meta’s H-1B Hiring Spurs Ninth Circuit Look at Citizenship Bias

Facebook parent Meta Platforms Inc.‘s alleged preference for workers on H-1B visas will come before a federal appeals court panel as the judges consider the extent of a Civil War-era civil rights law.

The US Court of Appeals for the Ninth Circuit will hear oral argument Wednesday in a legal challenge that focuses on whether US citizens are a protected class under Section 1981 of the 1866 Civil Rights Act. A federal district court dismissed the case on the ground that the act doesn’t allow for such “reverse discrimination” claims.

Lawyers for appellant Purushothaman Rajaram told the Ninth Circuit that the statutory text of Section 1981 “encompasses a broad protected class and applies to reverse discrimination.”

Meta responded in its brief that courts have consistently interpreted Section 1981 as applying narrowly to race or alien status, not US citizenship.

“For decades, plaintiffs have argued that Section 1981 bars many different kinds of discrimination, but courts have consistently rejected that argument,” the company’s attorneys wrote. “And Mr. Rajaram offers no good reason why discrimination based on U.S. citizenship is an exception to the rule that Section 1981 should be narrowly construed—or why this Court should open a circuit split by holding as much.”

Underyling that legal dispute is a battle over Meta’s hiring practices and whether the technology giant illegally prefers to hire temporary foreign workers. Meta was one of the top H-1B employers in fiscal year 2022, with more than 1,500 approved petitions for new workers, according to an analysis from the Economic Policy Institute.

Rajaram, a naturalized citizen who unsuccessfully applied for multiple jobs at Facebook, says the company’s hiring policies are tilted in favor of workers on H-1B specialty occupation visas.

“If Mr. Rajaram prevails in this lawsuit, I would expect it to discourage employers from prioritizing hiring of H-1B workers over equally or more qualified U.S. citizens, as a number of companies currently do,” said Rajaram’s attorney, Daniel Low of Kotchen & Low LLP.

Meta didn’t respond to requests for comment on the case. The company also told the Ninth Circuit that Rajaram’s case lacked any factual allegations showing he would have been hired absent discrimination.

Previous Scrutiny

Meta’s H-1B hiring practices previously came under scrutiny from the departments of Justice and Labor as part of a new focus from the Trump administration on discrimination against US workers.

The DOJ accused Facebook of reserving positions for temporary visa holders and routinely refusing to recruit or hire US workers for those jobs, while the DOL separately found recruitment violations as part of an audit of Meta’s labor certification applications.

The company agreed to pay more than $14 million in civil penalties to settle those claims, while admitting no wrongdoing.

Those settlements focused narrowly on positions that were earmarked for visa workers whom the company sponsored for employment-based green cards, Low said.

Rajaram’s lawsuit, he said, “is not so narrowly confined, and addresses citizenship discrimination in hiring more broadly.”

Negative Incentives

The H-1B program allows companies to employ foreign workers with at least a bachelor’s degree for up two three-year terms. H-1B visa holders pursuing permanent residency can extend their status indefinitely.

The majority of approved petitions for the 85,000 new H-1B visas issued each year—two-thirds in FY 2022—are for jobs in tech-related fields occupations.

In addition to Meta, top users of the program last fiscal year include Amazon.com Inc., Infosys Ltd., Tata Consultancy Services, Cognizant Technology Solutions, and Alphabet Inc.'s Google, according to EPI.

Business groups say the annual cap on H-1B visas, which has remained flat for two decades, means there simply aren’t enough slots to bring in the talent with needed skills in tech and engineering fields. And research shows that most companies hiring H-1B workers offer salaries higher than the prevailing wage for that role.

Jeremy Neufeld, a senior immigration fellow at the Institute for Progress, said the H-1B program’s structure makes competition with US workers more likely. That’s because employers have little incentive to pay more to an H-1B worker than the prevailing wage for an occupation in their geographic area, he said.

“As long as you meet that minimum eligibility requirement, then your application is just as likely to get a visa as any other application,” Neufeld said. “Paying a worker more doesn’t actually increase your chances of getting a visa.”

As a result, he said, companies have an incentive to file as many petitions for H-1B visas as possible for minimally qualified workers rather than prioritize the most highly qualified candidates.

But David Bier, associate director of immigration studies at the Cato Institute, said H-1B workers must compete against everyone else.

“The claim being made here that because H-1B visa holders are being hired that means there’s some discrimination against US citizens is just not true,” he said.

The case is Rajaram v. Meta Platforms, Inc., 9th Cir., No. 22-16870, oral argument scheduled 10/4/23.