Citizenship discrimination lawsuit against Meta revived

In a notable decision that may have a major impact on hiring practices throughout the tech industry and other fields, a split 9th U.S. Circuit Court of Appeals panel revived a citizenship discrimination case on Thursday against Meta Platforms Inc., holding that employers could not pass over U.S. citizens in favor of visa holders.

Dissenting from his colleagues, U.S. Circuit Judge Lawrence J.C. VanDyke said federal law did not protect from discrimination based on citizenship. While the majority's decision was "appealing," the Civil Rights Act of 1866 did not specify that discrimination was prohibited because of someone's citizenship status, said VanDyke. 

Meta, represented by Gibson Dunn & Crutcher LLP, did not respond to an inquiry for comment on the reversal. Rajaram v. Meta Platforms Inc., 22-16870 (9th Circ., filed Dec. 6, 2022). 

Commenting on the ruling, Bay Area immigration attorney Shah Peerally said many companies will face issues when hiring H-1B holders if the plaintiff wins on remand. "They will have to do a labor test or survey before hiring. The entire Silicon Valley can be affected if more people bring such an action," said Peerally. 

However, the attorney questioned the plaintiff's argument that H-1B hires were typically paid less than citizens, noting that data from the Foreign Labor Certification Data Center often reflected that H-1B holders were paid more than other hires. 

Pointing out that companies were already required to do labor tests before hiring foreign workers, UC Davis School of Law professor and immigration and employment expert Leticia Saucedo said more employers may take that part of the statute more seriously if the district court sides with the plaintiff. 

Saucedo said she agreed with VanDyke's interpretation of the law. The Civil Rights Act of 1866 protects against racial and alien discrimination, and it was not clear that the statute's intent was to protect citizens, she continued. "It turns the Civil Rights Act of 1866 on its head," said Saucedo. 

Software engineer Purushothaman Rajaram sued Meta in the Northern District of California in 2022, claiming that Facebook's parent company preferred to hire visa-dependent workers for certain U.S. positions as it can pay these employees less than citizens performing the same work. Dismissing the lawsuit for lack of standing, U.S. Magistrate Judge Laurel Beeler in San Francisco said reverse discrimination claims weren't covered by the relevant statutes. 

Appealing the lower court's decision, Kotchen & Low LLP partner Daniel L. Low argued in court filings that 42 U.S. Code Section 1981 explicitly protected everyone from the types of discrimination outlined in the statute, with nothing in the text suggesting that its protections should be limited to non-citizens. Beeler wrongly relied on out-of-circuit decisions to conclude that the law protects primarily against racial discrimination, and that "race" is interpreted to extend to alien status, but not citizen status, said Low. 

Authoring the majority opinion, Circuit Judge Eric D. Miller, a Trump appointee, said Section 1981 prohibited employers from discriminating against citizens. "An employer that discriminates against United States citizens gives one class of people -- noncitizens, or perhaps some subset of noncitizens -- a greater right to make contracts than 'white citizens.' If some noncitizens have a greater right to make contracts than 'white citizens,' then it is not true that '[a]ll persons' have the same right to make contracts as 'white citizens.' That is precisely what the literal text of the statute prohibits," wrote Miller. Circuit Judge Marsha S. Berzon concurred. 

William A. Stock, the managing partner at Klasko Immigration Law Partners LLP, commented that Meta had been accused of similar discriminatory practices before and that employers' hiring practices would continue to be scrutinized. In 2021, the U.S. Department of Justice and the U.S. Department of Labor announced separate settlements with Facebook over allegations that the company refused to recruit or consider U.S. workers, including citizens, nationals, asylees, refugees, and lawful permanent residents, for positions reserved for temporary visa holders. Facebook paid $4.75 million in civil penalties and up to $9.5 million to those allegedly discriminated against by the company. Furthermore, the tech giant was required to conduct additional recruitment for U.S. workers and would face ongoing audits to ensure compliance.

"I think we will see an increase in these types of accusations in part because of the presidential race. One of the parties is raising concerns about whether immigrants are taking jobs from Americans, and there are an increasing number of allegations that U.S. citizens should be protected by these laws that really weren't written to cover citizenship status discrimination. It's interesting that this case has made it this far," said Stock.

Singh Ahluwalia LLC managing partner Deepak Ahluwalia, who has been practicing immigration law for more than 9 years, said he welcomed the ruling but said there would be lawsuits from citizens and foreign applicants until the H-1B visa system is overhauled and restructured.

"While this is the right decision, it does not change the fact that the system in place encourages companies like Meta to discriminate on both sides. The restrictive immigration policies are completely against temporary workers here in the U.S. As a result, companies like Meta can hire these foreign workers at a cheaper rate, under the guise of H-1B visa, knowing they can pay them less. But what also happens is that this worker is 'bound' to the employer and knows that he or she would have to return back to their home country if they are fired and unable to find another job," said Ahluwalia, based in Fresno.

The 5th U.S. Circuit Court of Appeals is the only other court that has addressed this interpretation of Section 1981, coming to the opposite conclusion of the 9th Circuit. The appellate court held that this statute only targeted discrimination based on race and alien status. Chaiffetz v. Robertson Research Holding Ltd., 798 F.2d 731 (5th Circ., 1986).