Chapter 3 - Successor-in-Interest in Permanent Labor Certification Cases

A. Successor Requests to Use a Predecessor’s Approved Permanent Labor Certification

When a company is bought, merged, changes corporate structure, or significantly changes owners, the new or reorganized company may demonstrate to USCIS that it can be considered a successor in interest (successor) of the original company to assume the predecessor’s prior immigrant benefits requests.

If such a successor company acquires all or some of a business from a predecessor company, it may file a petition that requests to use the approved permanent labor certifications that the predecessor filed with the U.S. Department of Labor (DOL). Such successor may also file a new or amended petition if the predecessor has already filed a petition.

The employer must file such petitions within the validity period of the permanent labor certification and must submit the following evidence:

• Documentation to establish the qualifying transfer of the ownership of the predecessor to the successor;

• Documentation from an authorized official of the successor that evidences the transfer of ownership of the predecessor; the organizational structure of the predecessor prior to the transfer; the current organizational structure of the successor; and the job title, job location, rate of pay, job description, and job requirements for the permanent job opportunity for the beneficiary;

• Documentation to demonstrate that the beneficiary possesses the requisite minimum education, licensure, and work experience requirements specified on the permanent labor certification;

• The original approved permanent labor certification; and

• Documentation to establish the ability to pay the proffered wage by the predecessor and the successor.

B. Situations Not Requiring a New or Amended Petition

Not every change to the petitioner’s name or, in certain cases, the location where the beneficiary is to be employed requires a new or amended petition. Specifically, the petitioner does not need to file a new or amended Immigrant Petition for Alien Workers (Form I-140) due to:

• A legal change in the name of the petitioner, including a petitioner’s “doing business as” (DBA) name, if the ownership and legal business structure of the petitioner remains the same; or

• A new job location, if the new business location and job are within the same metropolitan statistical area of intended employment stated on the permanent labor certification.

When the beneficiary files an Application to Register Permanent Residence or Adjust Status (Form I-485) with USCIS or applies for an immigrant visa with the U.S. Department of State, the beneficiary may need to document that the petitioner is the same petitioner that filed the petition or that the job opportunity is still located in the area of intended employment specified on the permanent labor certification.^[1]

C. Change in Employer Due to Transfer of Ownership to a Successor

Successor-in-interest entities that wish to rely on the approval of a petition and the permanent labor certification filed by a predecessor entity must file an amended petition that demonstrates that a qualifying successor-in-interest relationship exists in accordance with the three successor-in-interest factors.^[2]

The petitioner must submit the following evidence with each amended petition:

• Documentation, such as a copy of the Form I-797 approval or receipt notice, that provides the previously filed petition’s receipt number and the petitioner’s name and address;

• Documentation to establish the ability to pay the proffered wage by the predecessor and the successor;

• Documentation to establish the qualifying transfer of ownership of the predecessor to the successor; and

• Documentation from an authorized official of the successor evidencing the transfer of ownership of the predecessor, the organizational structure of the predecessor before the transfer; the current organizational structure of the successor; and the job title, job location, rate of pay, job description, and job requirements for the permanent job opportunity for the beneficiary.

D. Consolidated Processing of Multiple Successor-In-Interest Petitions

Each successor-in-interest petition must be evaluated according to the three factors and is adjudicated on its own merits with regard to eligibility for the visa preference classification requested in the petition.^[3] However, multiple filings based on the same transfer and assumption of the ownership of the predecessor by the successor may have duplicative evidence provided in each case to establish the transfer and assumption of the ownership of the predecessor by the successor.

In the interest of efficiency and consistency, USCIS may elect to accept consolidated evidence (for example, one copy of the U.S. Securities and Exchange Commission Form 10-K for 20 petitions instead of 20 copies of the SEC Form 10-K). Additionally, USCIS may coordinate the adjudication of multiple pending successor petitions so that the petitions are adjudicated at a single USCIS office or at the same time or both, to the extent that other pressing work priorities permit.

Petitioners can initiate a request for the consolidated processing of multiple successor-in-interest cases affected by the same transfer of ownership through the USCIS Contact Center or, if applicable, the appropriate Premium Processing mailbox.^[4] USCIS reviews the submitted request and any related documentation when determining whether USCIS may accept the consolidated evidence.

The decision to grant a request for consolidated case processing rests solely with USCIS.

E. Successor-In-Interest Determinations

Interpretation of Matter of Dial Auto Repair Shop, Inc.

The legacy Immigration and Naturalization Service (legacy INS) Commissioner in Matter of Dial Auto Repair Shop, Inc. (PDF), examined a petitioner (the successor) who had taken over some functions of the employer who filed the permanent labor certification (the predecessor).^[5] The Commissioner found that the petitioner failed to adequately describe how it had acquired its predecessor, Elvira Auto Body’s, business. As a result, Dial Auto Repair Shop failed to meet its burden and was not eligible to claim continued validity of the original permanent labor certification.

The Commissioner stated that if Dial Auto Repair Shop’s “claim of having assumed all of Elvira Auto’s rights, duties, obligations, etc., is found to be untrue, then grounds would exist for invalidation of the labor certification . . . . Conversely, if the claim is found to be true, and it is determined that an actual successorship exists, the petition could be approved if eligibility is otherwise shown . . . .” ^[6] Notably, the Commissioner did not state that a valid successor relationship could only be established through the assumption of all the predecessor entity’s rights, duties, and obligations.

The definition of a successor is “someone who succeeds to the office, rights, responsibilities, or place of another; one who replaces or follows a predecessor.”^[7] Similarly, the term “successor” with reference to corporations is defined as “a corporation that, through amalgamation, consolidation, or other assumption of interests, is vested with the rights and duties of an earlier corporation.”^[8]

These definitions are consistent with the determinations made in Matter of Dial Auto Repair Shop, Inc., which highlight three factors that should be considered when determining if a previously approved or pending permanent labor certification remains valid for successor-in-interest petition adjudications.

F. Factors for Successorship Determinations

The three successor-in-interest factors are:

• The job opportunity offered by the successor must be the same as the job opportunity originally offered on the permanent labor certification;

• The successor bears the burden of proof to establish all elements of eligibility as of the priority date, including the provision of required evidence from the predecessor entity, such as evidence of the predecessor’s ability to pay the proffered wage; and

• For a valid successor-in-interest relationship to exist between the successor and the predecessor that filed the permanent labor certification, the petition must fully describe and document the transfer and assumption of the ownership of the predecessor by the successor.

If a business can establish these three factors, an officer may find a valid successor-in-interest relationship even in situations where a successor does not wholly assume a predecessor entity’s rights, duties, and obligations.

1. Same Job Opportunity

The job opportunity offered by the successor must be the same as the job opportunity originally offered on the permanent labor certification.

The job offered in the successor-in-interest petition by the successor must remain unchanged with respect to the rate of pay, metropolitan statistical area, job description, and job requirements specified on the permanent labor certification. USCIS denies successor-in-interest claims where the position with the successor is changed such that the rate of pay, job description, or requirements specified on the permanent labor certification no longer relate to the labor market test.^[9]

In other words, officers should deny any successor claim where the changes to the rate of pay, job description, or job requirements, as stated on permanent labor certification, if made at the time that the permanent labor certification was filed with DOL, could have affected the number or type of available U.S. workers who applied for the job opportunity. However, an increase in the rate of pay due to the passage of time does not affect the successor-in-interest claim.

The job opportunity must also remain valid and available from the time of the filing of the permanent labor certification with DOL until the issuance of an immigrant visa abroad or the beneficiary's adjustment of status to lawful permanent resident while in the United States.^[10] Otherwise, a new test of the labor market and new permanent labor certification application by the successor employer is required.

The original job opportunity ceases to exist if, at any time before the transfer of ownership, the predecessor ceases business operations entirely or even partially so that the beneficiary's services are no longer required or the business operation in which the job opportunity was originally offered has a substantial lapse in business operations after the transfer of ownership.

Example

A predecessor was involved in the operation of a restaurant, and the job opportunity specified on the permanent labor certification is for a specialty cook. The successor acquires the business and closes the restaurant for extensive renovations. The restaurant reopens 6 months later. In this case, the original job opportunity is no longer valid, as there was a substantial lapse in business operations after the transfer of ownership.

The successor would have to conduct a new test of the labor market for the job opportunity through the filing of a permanent labor certification application with DOL. Conversely, if, in the example described above, the restaurant did not close during the renovations to the property but continued business operations in a manner that would require the beneficiary's services as a specialty cook, then the job offer would remain valid during the business transition and no new permanent labor certification would be required.

2. Successor’s Burden of Proof

The successor bears the burden of proof to establish all elements of eligibility as of the priority date, including the provision of required evidence from the predecessor entity, such as evidence of the predecessor’s ability to pay the proffered wage.

In order to establish its eligibility as a successor-in-interest petitioner and the beneficiary's eligibility for the visa classification, the successor must demonstrate that the beneficiary met all the criteria for the visa classification. This includes the predecessor's ability to pay the proffered wage from the date of the filing of the permanent labor certification with DOL until the date of the transfer of the ownership of the predecessor to the successor.

The successor must meet the definition of "employer" and demonstrate the ability to pay the proffered wage as of the date of the transfer of ownership of the predecessor to the successor, continuing until the time of immigrant visa issuance or the beneficiary's adjustment of status in the United States.^[11] In cases of sales of discrete operational divisions or units of the predecessor,^[12] the predecessor's ability to pay the proffered wage should be analyzed by considering the financial data relating to the predecessor entity, not just the business unit.

The evidence in the petition must also show that the beneficiary possessed the minimum education and work experience requirements specified on the permanent labor certification, as of the filing date of the permanent labor certification with DOL.

Example

A petitioner files and obtains a DOL-approved permanent labor certification for an architect. The petitioner then becomes insolvent in the following year and is unable to meet its existing financial obligations. The firm is ultimately acquired by another architectural firm, which files a successor petition on the beneficiary's behalf.

In this case the second factor is not met because the predecessor entity did not possess the ability to pay the beneficiary's wage from the time of filing of the permanent labor certification until the acquisition of the predecessor by the successor.

The successor would have to conduct a new test of the labor market for the job opportunity through the filing of a permanent labor certification application with DOL. Conversely, if the predecessor had remained solvent until the time that it was acquired by the successor, then the second factor may be met if all other areas of eligibility are established.

3. Transfer and Assumption of Ownership

For a valid successor-in-interest relationship to exist between the successor and the predecessor that filed the permanent labor certification, the petition must fully describe and document the transfer and assumption of the ownership of the predecessor by the successor.

For successor-in-interest purposes, the transfer of ownership may occur at any time after the filing or approval of the original permanent labor certification with DOL.^[13]

Evidence of business transactions resulting in the transfer of ownership may include, but is not limited to:

• Legal agreements evidencing the merger, acquisition, or other reorganization of the predecessor;

• Mortgage closing statements;

• An SEC Form 10-K, Form 10-Q, Form 8-K or other relevant filing;

• Audited financial statements of the predecessor and successor for the year in which the transfer occurred;

• Documentation of the transfer or other assumption of real property, business licenses and other assets and interests from the predecessor to the successor;

• Copies of the financial or other legal instruments used to execute the transfer of ownership; and

• Newspaper articles or other media reports announcing the merger, acquisition, or other reorganization effecting the change between the predecessor and the successor.

The evidence provided must show that the successor not only acquired the predecessor's assets but also that the successor acquired the essential rights and obligations of the predecessor necessary to carry on the business in the same manner as the predecessor. The successor must continue to operate the same type of business as the predecessor, and the way the business is controlled and carried on by the successor must remain substantially the same as it was before the ownership transfer.

However, a valid successor-in-interest relationship may still be established in certain instances where liabilities unrelated to the original job opportunity are not assumed by the successor (for example, where the successor does not assume the liability of pending or potential sexual harassment litigation or other tort obligations unrelated to the job opportunity in the permanent labor certification).

Contractual agreements or other arrangements in which two or more business entities agree to conduct business together or agree to provide services to each other without the transfer of the ownership of the predecessor to the successor do not create a valid successor-in-interest relationship.

Example

Company A filed a permanent labor certification application with DOL for a computer systems analyst, which is ultimately approved. Company A subsequently signs a contract with Company B for the provision of computer systems analyst services to Company A by Company B, effectively outsourcing the computer systems analyst duties that were to be performed by the beneficiary to Company B.

A valid successor-in-interest relationship between Company A and Company B does not exist in this instance. The contractual agreement between the companies did not result in the transfer of the ownership of Company A to Company B in a manner so that its business interests are carried on and controlled in the same manner by Company B.

Conversely, in the example above, Company A sells its computer software development unit to Company B and the computer systems analyst position specified within the approved permanent labor certification is located within that business unit. A valid successor-in-interest relationship may exist between Company A and Company B if the sale of the business unit results in the transfer of the ownership of relevant assets and other interests of the business unit of Company A to Company B in a manner so that its business interests are carried on and controlled in the same manner by Company B.

Transfers in Whole or Part

The transfer of the ownership of the predecessor to the successor may occur through a merger, acquisition, or reorganization. These business transactions may involve business entities with differing organizational structures, such as:

• General partnerships;

• Limited partnerships;

• Limited liability partnerships (LLPs);

• Limited liability companies (LLCs); or

• Corporations (including subchapter C and S corporations).

The structure of business transactions resulting in the transfer of ownership of the predecessor to the successor varies from case to case. Frequently, the acquiring entity (successor) purchases a discrete operational division or unit, resulting in the sale of only a part of the predecessor (often structured to only transfer ownership of the assets or other interests comprising the division or unit to the successor without transferring ownership of the predecessor entity itself).

For successor-in-interest petition purposes, the operational division or unit of the business entity that is being transferred to the successor must be a clearly defined unit within the predecessor entity, and that unit must be transferred as a whole to the successor, with the exception of certain unrelated liabilities such as those previously outlined.

The job offered to the beneficiary in the successor petition must have been, and must continue to be, located within the operational division or unit that is transferred from the predecessor to the successor. The three successor-in-interest factors must also be met.

Example

The manufacturing division of a chemical wholesale corporation, which uses plant facilities and equipment, management, accounting, and operational structures that are readily divisible from the general structure of the predecessor entity might qualify if the manufacturing division (including all relevant divisible assets) is transferred to another business entity that continues to engage in chemical manufacturing.

Example

Another example might involve the sale of a branch office of a bank to another entity engaged in the provision of banking services as a member organization in the banking industry.

Conversely, the sale of a patented chemical formula by Company A to Company B, which allows Company B to manufacture a product using the chemical formula, does not create a successor-in-interest relationship between the two companies, even if Company A ceases to manufacture the product and starts to purchase the product from Company B.

This transaction did not result in the transfer of a clearly defined business unit. Rather, Company A merely sold the manufacturing rights for a given product to Company B without the transfer of the other related assets located within its business unit.

Requests for Evidence

USCIS may issue a Request for Evidence (RFE) to the petitioner if the petitioner has failed to demonstrate a qualified successor-in-interest relationship. The RFE explains why the permanent labor certification that was originally provided in support of the petition is not valid for the proffered position, based on one or more of the reasons outlined above, and other reasons, if any. If the petitioner does not provide a new original permanent labor certification that was valid at the time of filing of the petition or sufficient evidence to overcome the concerns outlined in the RFE, then USCIS denies the petition.

G. Portability on Successor-In-Interest Filing Requirements

The American Competitiveness in the 21st Century Act (AC21)^[14] allows for certain petitions to remain valid even if the beneficiary is no longer seeking to adjust status based on employment with the petitioner that originally filed the petition on that beneficiary’s behalf.

In cases where a beneficiary is eligible for portability based on AC21, a successor entity need not file a new petition on the beneficiary's behalf, provided that all the AC21 requirements have been met.^[15] For instance, the beneficiary would have to show for purposes of adjustment that the successor job opportunity is the "same or similar" as the job opportunity on the permanent labor certification, according to applicable guidance on AC21.^[16]

H. Relevance to Permanent Labor Certification Application

Successor-in-interest determinations are principally relevant to the continuing validity of a permanent labor certification. Successor-in-interest petitions are not required to reaffirm the validity of the initial petition requesting visa preference categories that do not require a permanent labor certification, such as the employment-based 1st preference persons of extraordinary ability and certain employment-based 2nd preference national interest waiver cases.

A new or successor employer seeking to classify the beneficiary as an employment-based 1st preference multi-national executive or manager or employment-based 1st preference outstanding professor or researcher must file a new petition and establish the beneficiary’s eligibility under the requested category’s specific eligibility requirements.

Footnotes

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[^ 1] In situations where the beneficiary eligible for portability based on the American Competitiveness in the 21st Century Act (AC21), the area of intended employment is not relevant at the adjustment stage. See Volume 7, Adjustment of Status, Part E, Employment-Based Adjustment, Chapter 5, Job Portability after Adjustment Filing and Other AC21 Provisions [7 USCIS-PM E.5] and the Form I-485 Supplement J webpage.

[^ 2] See Section F, Factors for Successorship Determinations [6 USCIS-PM E.3(F)].

[^ 3] See Section F, Factors for Successorship Determinations [6 USCIS-PM E.3(F)].

[^ 4] See the Direct Filing Addresses for Form I-140, Immigrant Petition for Alien Worker webpage.

[^ 5] See Matter of Dial Auto Repair Shop, Inc. (PDF), 19 I&N Dec. 481 (Comm. 1986).

[^ 6] See Matter of Dial Auto Repair Shop, Inc. (PDF), 19 I&N Dec. 481, 482 (Comm. 1986).

[^ 7] See Black's Law Dictionary (11th ed. 2019).

[^ 8] See Black’s Law Dictionary (11th ed. 2019).

[^ 9] An exception to this general rule is if a beneficiary is eligible for portability based on AC21. See Pub. L. 106-313 (PDF) (October 17, 2000). See INA 204(j). For more information, see Volume 7, Adjustment of Status, Part E, Employment-Based Adjustment, Chapter 5, Job Portability after Adjustment Filing and Other AC21 Provisions [7 USCIS-PM E.5]

[^ 10] In situations where the beneficiary eligible for portability based on AC21, the area of intended employment is not relevant at the adjustment stage. See Volume 7, Adjustment of Status, Part E, Employment-Based Adjustment, Chapter 5, Job Portability after Adjustment Filing and Other AC21 Provisions [7 USCIS-PM E.5] and the Form I-485 Supplement J webpage.

[^ 11] See Matter of Dial Auto Repair Shop, Inc. (PDF), 19 I&N Dec. 481, 482 (Comm. 1986).

[^ 12] For more information on transfers in whole or in part, see Subsection 3, Transfer and Assumption of Ownership [6 USCIS-PM E.3(F)(3)].

[^ 13] Where the succession occurred during the pendency of the labor certification application before DOL, including during the pre-filing recruitment phase, prior to filing the permanent labor certification application with DOL, DOL would have the jurisdiction to review the successor claim. See DOL FAQs Round 10 (PDF). In this instance, USCIS will consider tax returns or other documentation pertaining to ability to pay that relate to the predecessor(s).

[^ 14] See Pub. L. 106-313 (PDF) (October 17, 2000). See INA 204(j).

[^ 15] See INA 204(j).

[^ 16] See Volume 7, Adjustment of Status, Part E, Employment-Based Adjustment, Chapter 5, Job Portability after Adjustment Filing and Other AC21 Provisions [7 USCIS-PM E.5] and the Form I-485 Supplement J webpage.