SPORTS AND ENTERTAINMENT IMMIGRATION: Trump, Models, Money, and Visas; What Could Go Wrong?

NYSBA Entertainment, Arts and Sports Law Journal

Fall 2016 | Vol. 27 | No. 3


Previously, we discussed the merits of the H-1B classification for fashion models without belaboring the issue very much. However, then came along Donald and Melania Trump. The former, with his affinity for models and all things beautiful and “gorge,” and the latter, having been a model who worked within the U.S., but may or may not have obtained an H-1B3 visa to do so.

Taking up a case study, let us dive into the dealings of a businessman and H-1B classification to see why the H-1B is not ideal for models or the entities that represent them, despite having a special carve-out for fashion models (H-1B3). This article will close with some thoughts for the practitioner curious about which visa options may be best for the model seeking to enter the U.S. temporarily to work.

Background

Trump Model Management, LLC (Trump Model Management, TMM or the Entity) is a corporate entity that currently operates as Trump Models,¹ and describes itself as:

…the brainstorm and vision of owner, Donald Trump. As one of the leading agencies in New York, Trump Models has been at the forefront of cultivating a wide range of innovative and vibrant talent which personify the trends of the fashion industry.Trump Models has achieved status recognition with the top magazines,designers, photographers and clients from around the world.²

Since at least 2011, as indicated by the Memorandum and Order of the Court for the Southern District of New York, TMM has been representing models from around the world.³ A review of the TMM website lists a number of female models⁴ who it represents, with nationalities from the U.S., Canada, France, and Kazakhstan, to New Zealand and Argentina.⁵

In 2011, Trump Model Management “submitted to the U.S. Department of Homeland Security a [petition] requesting an H-1B visa” for Alexia Palmer, seeking to retain her services in the U.S.⁶ Part of the request included a labor condition application or an “LCA,”⁷ which is a request by a prospective employer for U.S. Department of Labor (DOL) certification that the prospective employer will pay the prospective hire at or above the “prevailing wage”⁸ rate for the position sought.⁹ In this case, the prevailing wage was deemed to be $45,490, and the application indicated that TMM would pay Ms. Palmer $75,000 per year.¹⁰

The petition was approved and Ms. Palmer entered the U.S. under H-1B3 status. She asserted that for three years she “worked on 21 different projects arranged by Trump”¹¹ and that “[a]fter the deduction of all agency fees, expenses, and allowance[s],” that she “was paid $3,880.75 for her work from 2011 to 2013.”¹² This would mean that Ms. Palmer was not paid at the prevailing wage rate and could cause TMM to have a problem with both the United States Citizenship and Immigration Services (USCIS) and the DOL.

In 2014, Ms. Palmer filed the “class action complaint […] seeking relief under the Fair Labor Standards Act (FLSA), the INA,¹³ the Racketeer Influenced and Corrupt Organizations Act (RICO), and state law.”¹⁴

The District Court Rejects the Claims for Relief

The FLSA Claim

The court evaluated Ms. Palmer’s claim that TMM violated the FLSA by failing to pay her the minimum wage, as it requires. Ms. Palmer’s claim failed because, “[t]he FLSA provides that every employer must pay each employee a minimum of $7.25 an hour,”¹⁵ yet here, Ms.Palmer “allege[d] only that [TMM] paid her $3,880.75 for work she performed over a period of three years[, …] does not specify the number of hours worked[, …] and does not dispute [TMM’s] claim that she was paid above the minimum wage.”¹⁶ The court went on to confirm that

[b]ecause Plaintiff does not “allege facts about her salary and working hours, such that a simple arithmetical calculation [could] be used to determine the amount owed per pay period,” [internal citations omitted], her conclusory minimum wage allegations are insufficient to raise “more than a mere possibility of a right to relief,” [internal citation omitted], [and t]herefore, Plaintiff’s FLSA claim cannot stand.¹⁷

The RICO Claim (and the INA)

The court evaluated Ms. Palmer’s allegation that TMM “devised and carried out a fraudulent scheme to deprive her and other foreign models of a promised salary of $75,000 per year [… by] submitt[ing] to the federal government sham H-1B visa applications stating that Defendants would pay the models $75,000 ‘when Defendants had no intention of doing so.’”¹⁸

The court never reached Ms. Palmer’s allegations because, as it detailed not-so-subtly, she failed to follow proper channels for redress. Ms. Palmer was obligated to begin by filing her complaint(s) with the Wage and Hour Division of the DOJ.¹⁹ If she was not pleased with the outcome, she would then need to seek review by an administrative law judge. If she was not pleased with the decision of the administrative law judge,²⁰ she could then seek review of the matter by the Secretary of Labor. And finally, if she did not care for the opinion of the Secretary of Labor,²¹ she could then appeal to the applicable federal district court.²² As such, the Court wrote that Ms. Palmer, having “failed to exhaust the administrative procedures set forth in Section 1182(n) [of the INA], […] is barred from asserting an INA claim in this court.”²³

Additionally, the court disregarded the RICO claim, writing that Ms. Palmer,rather than follow the administrative complaint process,sought satisfaction from the court on the grounds that the alleged violation of the INA by Trump Model Management amounted to a violation of the RICO statute.²⁴ “The RICO statute, however, is not the proper avenue for relief.”²⁵

State Law Claims

Finally, Ms. Palmer asserted claims at common law for breach of contract, unjust enrichment, fraud, and conversion.²⁶ One sentence from the court settled this: “Having dismissed Plaintiff’s federal law claims, the Court declines to exercise supplemental jurisdiction over these state law claims pursuant to 28 U.S.C. 1367(c). [internal citations omitted].”²⁷

The Wage and Hour Division Denies Ms. Palmer’s Request for Hearing

With the District Court issuing its Memorandum and Order on March 23, 2016,²⁸ Ms. Palmer wasted little time and filed an LCA complaint with the Wage and Hour Division (WHD) of the DOL on March 24, 2016.²⁹

One week later, on April 1, 2016, the “WHD found a lack of reasonable cause to investigate because the alleged violations had not occurred within 12 months of the complaint, and the complaint did not present adequate grounds for equitable tolling.”³⁰ Of course, she appealed to the Office of Administrative Law Judges (OALJ), which provided an Order to Show Cause, as to why the matter should not be dismissed.³¹ Ms. Palmer failed to demonstrate a valid basis for equitable tolling.

Conclusion of Ms. Palmer’s Actions

Ultimately, Ms. Palmer’s complaints were rejected due to a failure to follow the statutory guidelines for redress and dismissed for lack of jurisdiction.

What, then, do we make of the fundamental issue alleged by Ms. Palmer: that her proposed employer certified that it would pay her at or above the prevailing wage rate for a fashion model and might not have done so?

As there was no definitive answer or guidance provided by either the court or the WHD, we are in a position where there is more attention being paid to the H-1B classification for fashion models and the requisite labor condition application filed by their employers, even though those labor condition applications are not readily applicable to the relationship between the petitioner who files an H-1B petition seeking to employ a fashion model, and the fashion model him- or herself. Neither are the terms “employ,” “employer” or “employee” appropriate for the relationship between the parties to the H-1B submission. Such misnomers are only part of the basis for why the H-1B3 is not an ideal visa for either a model to desire or a manager to pursue.

Why the H-1B3 Is Not Ideal for a Model Coming to the U.S.

As the Palmer v. Trump decisions leave us without anything more than a “Hello”-and-“Goodbye,” we turn now to the reasons why this visa is simply not so great for a model seeking to come to the U.S.

Lottery System

One of the main reasons we can list as a basis for not liking the H-1B classification is it is subject to certain caps or a maximum number of visas that can be granted and regimented periods for submission.³² With each passing year, the number of petitions increased. The divide between the number of petitions and the number of visas available has increased significantly since 2014, when there were roughly three times as many petitions filed as there were available visas,³³ to 2015 and 2016, when there were roughly four times as many petitions filed for the same number of visas.³⁴ Since the competition is so fierce, USCIS implemented a lottery system that selects petitions at random for processing. Therefore, the likelihood of a model, or anyone else for that matter, getting selected is incredibly slim. Not getting selected would have multiple effects, because the model would not be able to enter the U.S. with this type of work authorization, and could potentially (1) throw off schedules for shoots and shows,(2) result in lost earnings, and (3) damage his or her reputation.

Compensation Issues

As we see with Ms. Palmer’s claims and the other models who have come out after, as well as other individuals across industries, the H-1B has an opportunity for abuse by unscrupulous individuals and their entities. Of course, this can happen in any industry and with any visa, though it is difficult to ignore here, considering the industry’s reputation.

Why the H-1B3 is Not Ideal for a Manager or Management Company Seeking to Represent a Model Coming to the U.S.

Lottery System

The lottery system is a bane to and stings both sides of the H-1B equation: Just as a model seeking the status might not be selected for the lottery and would not be able to enter the U.S., potentially losing earnings and damaging his or her reputation, it would also hinder the efforts of the manager or management company to demonstrate reliability and fill any openings in upcoming shoots or shows. It would also mean that the employer who pays an attorney has nothing to show for it.

The Open Question Regarding Compensation

Due to the door left open by Ms. Palmer’s filings, this could entice other models to take a closer look at their compensation structures and potentially inspire them to file complaints against their managers. It could also intrigue the WHD to have a closer look at LCAs filed for the employment of the models, and potentially audit those employers. The hard part here is that the LCA does not properly represent the pay structure of a model; it only requires a standard type of compensation set as a salary or hourly rate.

Let us also not lose sight of the fact that the reviewing bodies here were very careful to point out where the claims failed (i.e.,the FLSA requiring the federal minimum wage rate and the RICO statute being inappropriate to the allegations), and where there was either a lack of jurisdiction or an overripe filing that was outside of the statute of limitations.

Alternatives to the H-1B for a Model

The O Visa

The O visa presents a great alternative, though the standard for approval is significantly higher: Whereas a model under H-1B status must possess distinguished merit and ability, a model under O-1 status must possess extraordinary ability. However, if a successful argument can be made that the model is someone who possesses extraordinary ability, then the O comes with an array of benefits for both parties, such as:(1) no LCA requirement; (2) a model may benefit from O status, in no more than three-year cycles,for as long as necessary;³⁵ (3) the freedom to file a petition at any time of year and elect either regular or premium processing; and (4) the ability to demonstrate the accurate pay relationship, so that there is no confusion or misunderstanding between parties.

The P-3 Visa

Though lesser known, and narrower in scope than most others, the P-3 visa may be suitable for a model who is coming to the U.S. to engage in a “culturally unique program.”³⁶ The standard for approval is closer to that of an H-1B visa, making it a great alternative to both the H-1B and O-1 visas. Similar to the O visa, the P-3 does not require an LCA, may be filed at any time of year with either regular or premium processing, and allows for an accurate demonstration of the compensation structure. However, it is only available in one-year increments.

Conclusion

The case of Palmer v. Trump has demonstrated publicly the flaws of using H-1B classification for “employing” a model and, as such, we should look to other options. Those flaws are not minor, but leave the door open for both parties to be exposed, though more so for the employer. Therefore, two alternative visa classifications that may prove beneficial to both the employer and the model are the O-1 and the P-3, both of which are better than the H-1B, but also have their own drawbacks. It is important to choose wisely, because depending upon the visa petition filed, clients could find themselves involved with an administrative complaint.

Endnotes

  1. A search for “Trump Model Management” in Google’s search engine brings up the Trump Models website with the following as its search engine description: “Founded in 1999, Trump Model Management is one of New York City’s top modeling agencies. With a name that symbolizes success, the agency has risen to the top of the fashion market, producing models that appear on the pages of magazines such as Vogue, on designer runways, in advertising campaigns and blockbuster movies.”
  2. Trump Models, About the Agency, available  at http://www.trumpmodels.com/contact/.
  3. Palmer v. Trump Model Management, No. 14-cv-8307, 2016 U.S. Dist. LEXIS 51061 (S.D.N.Y. Mar. 23, 2016).
  4. Only female models…
  5. Trump Models, Women, available at http://www.trumpmodels.com/women/. Several of the women listed were selected randomly and their nationalities were reviewed through other media outlets, such as models.com, because the Trump Model website does not list their nationalities.
  6. Palmer, supra at 3.
  7. More information regarding LCAs is available at https://www.doleta.gov/.
  8. Palmer, supra, at 3, (quoting 20 CFR § 655.731(a)(2)(ii). The “prevailing wage” is defined generally as the “arithmetic mean of the wages of workers similarly employed.”).
  9. See https://www.doleta.gov/; https://uscis.gov/.
  10. Palmer, supra.
  11. Id. at p 3, quoting the Complaint.
  12. Id. at p 3. Note that the duration of time is January 2011 to December 2013.
  13. Immigration Nationality Act.
  14. Palmer v. Trump Model Management, United States Department of Labor, 2016 LCA 00022 (August 18, 2016).
  15. Palmer, supra at paragraph II, p 4 (quoting 29 USC § 206(a)).
  16. Id. (quoting Plaintiff’s Complaint at paragraph 49 and Defendant’s Memorandum at pages 5 and 6).
  17. Id.
  18. Palmer, supra, at III, p 3 (quoting the Plaintiff’s Complaint at paragraphs 57-59, 62-64).
  19. Palmer, supra, at III, p 7 (citing 8 USC § 1182(n)(2); 20 CFR §§ 655.805-655.806, 655.815).
  20. Palmer, supra, at III, p 7 (citing 20 CFR §§ 655.815, 655.820, 655.840).
  21. Id. at sections 655.840, 655.845.
  22. Id. at sections 655.850.
  23. Palmer, supra, at III, p 8.
  24. Id.
  25. Id.
  26. Id. at IV, p 9.
  27. Id. at pp 9-10.
  28. Id. at p 1.
  29. Palmer v. Trump Model Management, United States Department of Labor, 2016 LCA 00022 (August 18, 2016).
  30. Id.
  31. Id.
  32. Filings for first-time beneficiaries of H-1B status may be submitted beginning April 1, only.
  33. “USCIS received about 172,500 H-1B petitions during the filing period which began April 1, including petitions filed for the advanced degree exemption.” See https://www.uscis.gov/news/uscis-reaches-fy-2015-h-1b-cap-0.
  34. “USCIS received nearly 233,000 H-1B petitions during the filing period, which began April 1, including petitions filed for the advanced degree exemption.” See https://www.uscis.gov/news/alerts/uscis-completes-h-1b-cap-random-selection-process-fy-2016. “USCIS received over 236,000 H-1B petitions during the filing period, which began April 1, including petitions filed for the advanced degree exemption.” See https://www.uscis.gov/news/alerts/uscis-completes-h-1b-cap-random-selection-process-fy-2017.
  35. The H-1B classification has a six-year maximum amount of time allowed in the U.S. before the beneficiary must remain outside the U.S. for one year. Though subject to some exceptions, such as time spent outside the U.S. while under H-1B status may be recaptured, this requirement simply does not exist with the O visa.
  36. USCIS, P-3 Artist or Entertainer Coming to Be Part of a Culturally Unique Program, available at https://www.uscis.gov/working-united-states/temporary-workers/p-3-artist-or-entertainer-part-culturally-unique-program/p-3-artist-or-entertainer-coming-be-part-culturally-unique-program.

Article originally written in Entertainment, Arts and Sports Law Journal and is republished here with permission from NYSBA.

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