Southern Illinois University School of Medicine v. U.S. Department of Labor

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF ILLINOIS

SPRINGFIELD DIVISION

SOUTHERN ILLINOIS )

UNIVERSITY SCHOOL OF )

MEDICINE, )

)

Plaintiff, )

) Case No. 18-cv-01092

v. )

)

UNITED STATES DEPARTMENT )

OF LABOR, et al., )

)

Defendants. )

OPINION AND ORDER

SUE E. MYERSCOUGH, U.S. District Judge:

Before the Court is Plaintiff Southern Illinois School of

Medicine’s (SIUSM) Motion for Summary Judgment (d/e 28) and

Defendant United States Department of Labor’s (the “Department”)

Cross-Motion for Summary Judgment (d/e 30). The Court finds

that the Department acted neither arbitrarily nor capriciously in

finding that SIUSM did not pay Dr. Sajida Ahad the required wage

under the Immigration and Nationality Act, 8 U.S.C. §§ 1101 &

1182, et seq. (INA), and its implementing regulations, 20 C.F.R. §

655, Subparts H & I. Therefore, the Department’s action is

affirmed, and its Cross-Motion for Summary Judgment (d/e 30) is

GRANTED. Plaintiff’s Motion for Summary Judgment (d/e 28) is,

accordingly, DENIED.

I. STATUTORY AND REGULATORY FRAMEWORK

The Immigration and Nationality Act, 8 U.S.C. §§ 1101 &

1182, et seq. (INA), and its implementing regulations, 20 C.F.R. §

655, Subparts H & I provide the employment and wage standards

for H-1B non-immigrant workers. Non-immigrant H-1B workers are

temporary workers who lawfully enter the United States to perform

“specialty occupations,” including medical professionals who are

required to attain “a bachelor’s or higher degree in the specific

specialty,” 8 U.S.C. § 1101(a)(15)(H)(i)(b1), and occupy roles

requiring “a body of specialized knowledge.” Id. at § 1184(i)(3). The

INA delegates the enforcement of its wage standard provisions to

the Department of Labor. Id. at § 1182(n).

An employer of an H-1B non-immigrant must certify to the

Secretary of Labor in a Labor Conditions Application (LCA) that the

employer will pay the H-1B worker a required wage during the

employee’s H-1B employment. 8 U.S.C. § 1182(n)(1)(A)(i). Under

the INA, the required wage is the greater of “the actual wage level

paid by the employer to all other individuals with similar experience

and qualifications for the specific employment in question, or the

prevailing wage level for the occupational classification in the area

of employment.” Id. The parties do not contest that the only issue

in the present case is whether SIUSM paid Dr. Ahad the “actual”

wage because the wages SIUSM did pay to Dr. Ahad exceeded the

prevailing wage. Pl.’s Mot. for Summ. J. (d/e 28) p. 23, n.4; Def.’s

Cross-Mot. for Summ. J. (d/e 30) p. 63.

The “actual” wage under the INA is determined using factors

set out in 20 C.F.R. 655.731(a)(1). That regulation provides:

The actual wage is the wage rate paid by the employer to

all other individuals with similar experience and

qualifications for the specific employment in question. In

determining such wage level, the following factors may be

considered: Experience, qualifications, education, job

responsibility and function, specialized knowledge, and

other legitimate business factors. “Legitimate business

factors,” for purposes of this section, means those that it

is reasonable to conclude are necessary because they

conform to recognized principles or can be demonstrated

by accepted rules and standards. Where there are other

employees with substantially similar experience and

qualifications in the specific employment in question—

i.e., they have substantially the same duties and

responsibilities as the H–1B nonimmigrant—the actual

wage shall be the amount paid to these other employees.

Where no such other employees exist at the place of

employment, the actual wage shall be the wage paid to

the H–1B nonimmigrant by the employer.

Id.

An “aggrieved party,” i.e., an H-1B non-immigrant who

believes she was not paid the required wage, may file a complaint

with the Administrator of the Wage and Hour Division of the

Department of Labor, which issues a determination of the

allegations. 8 U.S.C. § 1182(n)(2); 20 C.F.R. §§ 655.800, 655.805,

655.815. The parties may challenge the Administrator’s

determination before an Administrative Law Judge (ALJ). Id.; 20

C.F.R. § 655.820. Parties may appeal the ALJ’s decision to the

Administrative Review Board (ARB), to which the Secretary of the

Department of Labor has delegated authority to issue the

Department’s final decisions. 20 C.F.R. 655.845; 77 Fed. Reg.

69378, § 5(c)(26).

II. LEGAL STANDARD

This cause seeking review of a final agency action under the

Administrative Procedures Act, 5 U.S.C. § 704 (“APA”), is before the

Court on cross-motions for summary judgment pursuant to Federal

Rule of Civil Procedure 56. In agency review cases under the APA,

the Court “sits as an appellate tribunal” so “the usual summary

judgment standard does not apply.” UPMC Mercy v. Sebelius, 793

F.Supp.2d 62, 67 (D.D.C. 2011). This is because “it is the role of

the agency to resolve factual issues to arrive at a decision that is

supported by the administrative record, and the function of the

district court is to determine whether or not as a matter of law the

evidence in the administrative record permitted the agency to make

the decision it did.” Id. (cleaned up). “Cross-motions for summary

judgment provide an appropriate procedural vehicle for deciding the

legal significance of the evidence set forth in the administrative

record and for evaluating the administrative decision.” Abraham

Lincoln Mem’l Hosp. v. Sebelius, No. 10-3122, 2011 WL 2293233,

at *4 (C.D. Ill. June 8, 2011) (internal quotations and citations

omitted). Therefore, the following facts are taken from the

administrative record and the agency’s findings.

III. BACKGROUND AND PROCEDURAL HISTORY

Dr. Sajida Ahad was employed as a physician by SIUSM

beginning in 2008. R-1818. Because Dr. Ahad was born in

Pakistan, she was initially employed pursuant to an I-129 Petition

for a Non-immigrant Worker in O-1 status which was filed on her

behalf by SIUSM. R-1818. Dr. Ahad remained employed under the

O-1 visa until June 2011, when SIUSM filed a Labor Conditions

Application (LCA) with the Secretary of Labor pursuant to the INA.

In the LCA, SIUSM stated that Dr. Ahad would be employed as an

Assistant Professor of Surgery/Bariatric Surgeon, would be

responsible for teaching both general and bariatric surgery, and

would be paid an annual salary of $250,000. R-1818. Dr. Ahad

received approval for an H-1B visa which remained valid from July

2011 through July 2014. Id.

While employed at SIUSM, Dr. Ahad performed teaching,

research, and service duties. Her teaching duties involved

“instruction of medical students in the disciplines of general

surgery and bariatric surgery as well as general medical care,” and

her research duties were not constrained to any specific area. R-

1818. Her service duties involved clinical practice work and

accounted for the majority of her time. Id. While she was focused

on cultivating a bariatric program, Dr. Ahad’s service duties also

included performing various procedures involving “anything in the

belly. R-1819. She also took trauma call while in O-1 visa status

from 2008 through 2010, when she was asked to step away from

the trauma call because she was no longer needed. Id. Lastly, Dr.

Ahad was offered a choice to extend her service duties to fill in for

another physician’s breast surgery practice. Id. Dr. Ahad declined

that offer, citing her already heavy workload and an uncertain

future in that practice given the post would be temporary until

SIUSM could find a replacement breast surgeon. Id.

Compensation from SIUSM to its Assistant Professors within

the General Surgery Division, such as Dr. Ahad, consisted of two

parts: an academic base and a clinical component. R-1821. The

clinical component varied and was based on the specific

productivity of the clinical work performed by individual physicians,

while the academic base was paid monthly. Id. Over the course of

Dr. Ahad’s employment with SIUSM while in H-1B status, she

received $338,789.60 in academic base pay and $253,676.64 in

clinical compensation.

Dr. Ahad filed a complaint to the Wage and Hour Division of

the Department of Labor in 2014, alleging SIUSM did not pay her

the required wage under the INA during her H-1B status. R-4–13.

The Administrator of the Wage and Hour Division issued a

determination on August 4, 2015 that SIUSM did not underpay Dr.

Ahad or violate the INA. R-1. On August 14, 2015, Dr. Ahad

appealed the Administrator’s determination to an ALJ and

requested an administrative hearing. R-14–16. After the hearing

on January 5, 2016, the ALJ issued a decision on April 13, 2016

reversing the Administrator and finding that SIUSM did violate the

INA by underpaying Dr. Ahad as compared to other SIUSM

physicians. R-1815–1834. The ALJ ordered SIUSM to pay Dr.

Ahad back pay of $223,884.27, including $80,001.52 in academic

base pay and $143,822.75 in clinical compensation. On May 12,

2016, both SIUSM and Dr. Ahad appealed the ALJ’s decision. R-

1835 & R-1845. The ARB affirmed the ALJ’s decision on January

29, 2018, issuing the final agency decision that SIUSM violated the

INA by not paying Dr. Ahad the required wage. R-2319. SIUSM

now appeals the final agency decision by the Department of Labor

announced through the ARB, arguing that the agency’s decision

was contrary to the INA and in violation of the APA.

IV. ANALYSIS

Under the APA, agency actions, findings, and conclusions may

be set aside where such actions, findings, or conclusions are

“arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law,” or not supported by substantial evidence

from the administrative record. 5 U.S.C. § 706(2); Roadway Exp.,

Inc. v. U.S. Dep’t of Labor, 612 F.3d 660, 664 (7th Cir. 2010). An

agency’s actions are “arbitrary and capricious if the agency has

relied on factors which Congress has not intended it to consider,

entirely failed to consider an important aspect of the problem,

offered an explanation for its decision that runs counter to the

evidence before the agency, or is so implausible that it could not be

ascribed to a difference in view or the product of agency expertise.

Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins.

Co., 463 U.S. 29, 43 (1983). An agency’s actions are not arbitrary

or capricious “as long as the agency’s path may be reasonably

discerned.” Mt. Sinai Hosp. Medical Center v. Shalala, 196 F.3d

703, 708 (7th Cir. 1999) (internal quotations and citations omitted).

“The arbitrary and capricious standard is highly deferential,

and even if [the Court] disagree[s] with an agency's action, [the

Court] must uphold the action if the agency considered all of the

relevant factors and [the Court] can discern a rational basis for the

agency's choice.” Israel v. U.S. Dep't of Agric., 282 F.3d 521, 526

(7th Cir. 2002). Therefore, the Court gives substantial deference to

the agency’s factual findings and final decision. Gimbel v.

Commodity Futures Trading Comm’n, 872 F.2d 196, 199 (7th Cir.

1989); Mt. Sinai Hosp. Med. Ctr., 196 F.3d at 708.; Davis v. Vilsack,

2013 WL 6865425, at *2 (C.D. Ill. Dec. 31, 2013) (“Because this is a

deferential standard, an inference may not be set aside simply

because the opposite conclusion is more reasonable.”).

The legal issue in this case—which the Department considered

at the administrative level through the ALJ and ARB—is whether

SIUSM paid Dr. Ahad the required wage under the INA. Plaintiff

SIUSM argues that the ALJ and ARB decisions holding that SIUSM

failed to pay Dr. Ahad the required wage were arbitrary and

capricious because SIUSM’s productivity-based compensation

system is a piece-rate system akin to an hourly wage and

permissible under the INA. SIUSM also argues that the decisions

below were unsupported by substantial evidence in the record and

used improper comparator physicians when determining the actual

wage owed to Dr. Ahad. The Department, in response, argues that

the comparator physicians were proper; that SIUSM forfeited its

piece-rate argument by not raising it below; that, even if the

productivity-based system was permissible, SIUSM deprived Dr.

Ahad of opportunities to be productive; and that the Department’s

decision is consistent with the congressional intent behind the INA.

First, the Court finds that SIUSM forfeited its piece-rate

compensation argument by not raising it below. Parties forfeit

arguments not raised during the administrative process. Dep’t of

Transp. v. Pub. Citizen, 541 U.S. 752, 763–65 (2004); United States

v. L.A. Truck Lines, Inc., 344 U.S. 33, 37 (1952) (“[O]rderly

procedure and good administration require that objections to the

proceedings of an administrative agency be made while it had

opportunity for correction in order to raise issues reviewable by the

courts.”). To avoid forfeiting an argument, parties must “actually

argue[]” the issue in the administrative proceeding. Nyandwi v.

Garland, 15 F.4th 836, 841 (7th Cir. 2021) (citing Duarte-Salagosa

v. Holder, 775 F.3d 841, 846 (7th Cir. 2014)). An argument is

“actually argued” if the agency had been put “on notice” that the

party attempted to challenge the agency’s decision based on that

argument. Id. (citing Hamdan v. Mukasey, 528 F.3d 986, 991 (7th

Cir. 2008)); see also Kleissler v. U.S. Forest Serv., 183 F.3d 196,

202 (3rd Cir. 1999) (“[W]e hold that the claims raised at the

administrative appeal and in the federal complaint must be so

similar that the district court can ascertain that the agency was on

notice of, and had an opportunity to consider and decide, the same

claims now raised in federal court.”).

SIUSM’s arguments below did not put the Department “on

notice” of SIUSM’s uniform piece-rate argument. SIUSM argued

below only that Dr. Ahad’s lower wages resulted from authorized

deductions in accordance with SIUSM’s productivity-based

compensation system. Throughout its briefs before the ALJ and the

ARB, SIUSM focused its arguments on the assertion that Dr. Ahad

was paid less because deductions in wages were authorized

pursuant to 20 C.F.R §§ 655.731(c)(2) and (c)(9)(ii). R-1808–12,

1853–57, 2027–32. SIUSM argued before the ALJ that “Dr. Ahad

received periodic deductions after her second year of employment

based upon her []productivity” and that “[t]his type of deduction is

reasonable and customary in her occupation.” R-1811–12. SIUSM

then argued before the ARB that “20 C.F.R. § 655.731(c)(9)(ii)

permits deductions that are ‘reasonable and customary in the

occupation and/or area of employment.’” R-1854. In each

instance, SIUSM relied on the “authorized deductions” sections of

the INA’s implementing regulations—specifically, 20 C.F.R §§

655.731(c)(2) and (c)(9)(ii)—for the proposition that Dr. Ahad

received less pay because those wages were legally deducted from

her pay as a result of her reduced productivity. R-1810, 1854,

1857. The ALJ rejected those arguments, holding that the alleged

deductions were not for the principal benefit of Dr. Ahad as

required by the INA. R-1828–29.

In its briefing before this Court, however, SIUSM takes a

different tack and does not mention either § 655.731(c)(2) or

655.731 (c)(9)(ii). See generally Pl.’s Mot. (d/e 28); Pl.’s Consol.

Reply (d/e 33). Instead, SIUSM now relies on 20 C.F.R. §

655.731(b)(1)(V)(A)’s mention of allowable H-1B compensation

under piece-rate systems, such as hourly wages. See Pl.’s Mot. (d/e

28) at p. 28, and Pl.’s Consol. Reply (d/e 33) at p. 46. SIUSM

argues that its productivity-based system is uniformly applied and

should be considered an allowable piece-rate compensation system

under § 655.731(b)(1)(V)(A). But nowhere in SIUSM’s briefing below

before the ALJ or ARB did SIUSM mention piece-rate systems or §

655.731(b)(1)(V)(A). Accordingly, the Court cannot find that the ALJ

and the ARB were on notice of or given an opportunity to consider

and decide whether SIUSM’s productivity-based compensation

system could be considered an allowable piece-rate system under

the INA or 20 C.F.R. § 655.731(b)(1)(V)(A).

SIUSM also contends that its current piece-rate argument was

preserved because SIUSM used in its briefs below words and

phrases akin to “productivity” and because the ALJ and ARB

discussed of the productivity-based system in their decisions

regarding SIUSM’s authorized-deduction argument. See Pl.’s

Consol. Reply (d/e 33) at p. 45. But mere words and phrases used

while advancing one argument cannot preserve a separate

argument which happens to use the same words and phrases.

Vermont Yankee Nuclear Power Corp. v. Nat. Res. Def. Council,

Inc., 435 U.S. 519, 553–54 (1978) (“administrative proceedings

should not be a game or a forum to engage in unjustified

obstructionism by making cryptic and obscure reference to matters

that “ought to be” considered and then, after failing to do more to

bring the matter to the agency's attention, seeking to have that

agency determination vacated”); cf. Pub. Citizen, 541 U.S. at 764–

65 (holding that particular objections must be raised before an

agency in order to preserve an argument for suit). Therefore, the

Court concludes that SIUSM has forfeited its piece-rate argument

under 20 C.F.R. § 655.731(b)(1)(V)(A) by not raising it below.

SIUSM’s next objection to the administrative decisions below

is the use of certain other doctors employed by SIUSM as

comparators to Dr. Ahad and the wages she was paid. The INA

states that the required wage to be paid to H-1B non-immigrant

specialty workers be the greater of either the prevailing wage, which

is not an issue in this case, or “the actual wage level paid by the

employer to all other individuals with similar experience and

qualifications for the specific employment in question.” 8 U.S.C. §

1182(n)(1)(A)(i)(I). SIUSM argues that none of the comparators used

by the ALJ and ARB in determining the actual wage owed to Dr.

Ahad occupied sufficiently similar roles to Dr. Ahad’s specific

employment in question, rendering the ALJ and ARB decisions

arbitrary and capricious. SIUSM’s contentions against similarity

center on the uniqueness of Dr. Ahad’s title as an Assistant

Professor of Surgery/Bariatric Surgeon, her performance of

bariatric surgeries, her absence from the trauma team during her

H-1B employment, and this Court’s prior decision to decertify Dr.

Ahad’s other collective action in Ahad v. Bd. of Trs. of S. Illinois

Univ., 2019 WL 1433753, at *1 (C.D. Ill. Mar. 29, 2019) (hereinafter

Ahad).

As a threshold matter, the ALJ’s and ARB’s decision to use

certain physicians as comparators below was not precluded or

contrary to the law because of the Court’s prior decision in Ahad.

In Ahad, the Court evaluated whether, under the Fair Labor

Standards Act (FLSA), Dr. Ahad’s collective action should be

decertified because she and the other opt-in plaintiffs were not

similarly situated. See Ahad, 2019 WL 1433753, at *3. The Court

noted that “[t]he FLSA does not detail the process a court should

employ to determine whether potential class members are ‘similarly

situated.’” Id. (internal citations omitted). Instead, the Court relied

on other cases considering the certification process under the FLSA

to determine that the other opt-in plaintiffs in Ahad were not

similarly situated to Dr. Ahad because of “the actual duties

performed by each of the plaintiffs on a day-to-day basis.” Id. at *4.

As a result, the Court determined that decertification was required

under the FLSA. Id. at *3–*4.

In contrast, the INA and its implementing regulations in this

case do detail the factors agencies should consider to determine

whether other employees of the H-1B non-immigrant’s employer are

similarly situated. See 20 C.F.R. § 655.731(a)(1). Moreover, the

regulations caution that the similarly situated distinction “cannot

be established through differing job titles or minor variations in

day-to-day work assignments where other individuals with similar

experience and qualifications perform substantially the same duties

and responsibilities as the H-1B non-immigrant.” 57 Fed. Reg.

1316-01. Therefore, the analysis for determining whether

physicians are similarly situated for comparison under the INA and

its implementing regulations is different than under the FLSA such

that the Court’s prior decision in Ahad is neither directly on point

nor controlling.

Turning to the analysis under the INA employed by the ALJ

and ARB, the Court finds that the agency’s use of comparator Drs.

A, B, E, I, and K was not arbitrary and capricious. Title 20 C.F.R. §

655.731(a)(1) states that, in determining the ‘actual wage’ to be paid

under the INA, “the following factors may be considered:

Experience, qualifications, education, job responsibility and

function, specialized knowledge, and other legitimate business

factors.” Additionally, the Department’s Supplementary Guide to its

Rules and Regulations go on to clarify that, when considering the

job responsibilities and functions of the H-1B non-immigrant

worker and her comparators, “the job title alone is not dispositive of

this issue. While like job titles presume like jobs with similar job

duties, responsibilities and functions, this presumption may be

rebutted with information regarding actual duties, responsibilities

and functions. Further, different job titles alone are meaningless if

the job duties, responsibilities and functions are substantially the

same.” 57 Fed. Reg. 1316-01.

In determining that Drs. A, B, E, I, and K were similarly

situated, the ALJ considered each of the § 655.731(a)(1) factors.

The ALJ considered in detail the similarity between each physician’s

education, experience, and qualifications—R-1822–24—and each

physician’s job responsibilities and duties while at SIUSM—R-1824.

The ALJ recounted testimony that each physician performed

surgeries in areas outside of their respective subspecialty and each

had additional teaching and research duties. R-1824–25. The ALJ

relied on exhibits presented by both SIUSM and Dr. Ahad and the

testimony presented at the administrative hearing before finding

that “the specific employment in question is an Assistant Professor

with an appointment to the Division of General Surgery.” R-1824–

25. While SIUSM’s argues that Dr. Ahad’s title of Assistant

Professor of Surgery/Bariatric Surgery renders the ALJ’s specific

employment determination contrary to the law—Pl.’s Mot. (d/e 28)

p. 32 (emphasis in Motion)—the record evidence considered by the

ALJ shows that comparator physicians occupied roles in which

their “job duties, responsibilities and functions [were] substantially

the same” despite the minor difference in titles. 57 Fed. Reg. 1316-

01. Specifically, the ALJ noted that none of the comparator

physicians were confined to practicing within only their

subspecialty while employed in the Division of General Surgery. R-

1825. Therefore, the ALJ’s use of Drs. A, B, E, I, and K as

comparator physicians was not contrary to the law and is affirmed.

See Israel, 282 F.3d at 526 (In review under the APA, the Court

“must uphold the action if the agency considered all of the relevant

factors and [the Court] can discern a rational basis for the agency's

choice.”).

Finally, SIUSM asserts that the ALJ did not consider the

comparator physicians’ roles in taking trauma call. However, the

ALJ first considered Dr. Ahad’s own testimony that she had taken

trauma call until she was instructed to stop. R-1826 (citing Dep. of

Dr. Ahad, R-670). The ALJ then considered the testimony of four

other doctors’ regarding Dr. Ahad’s role on the trauma team before

finding that “SIUSM did not produce persuasive evidence to

counter” Dr. Ahad’s own testimony. R-1826. SIUSM’s arguments

urging the Court to find differently amount to requests to reweigh

the evidence presented to the agency, which would be outside the

realm of this Court’s review under the APA. See UPMC Mercy, 793

F.Supp.2d at 67 (“it is the role of the agency to resolve factual

issues to arrive at a decision that is supported by the administrative

record, [while] the function of the district court is to determine

whether or not as a matter of law the evidence in the administrative

record permitted the agency to make the decision it did.”). The

Court instead finds that the ALJ did rely on substantial evidence in

the record in concluding that Dr. Ahad took trauma call and that

her ability to earn higher pay during her H-1B employment was

impacted by the instruction she received to stop taking trauma call.

V. CONCLUSION

The Department of Labor, through the ALJ and ARB, relied on

substantial record evidence to reach a conclusion that was neither

contrary to the law nor arbitrary and capricious. See 5 U.S.C. §

704. Therefore, Plaintiff Southern Illinois University School of

Medicine’s Motion for Summary Judgment (d/e 28) is DENIED, and

Defendant Department of Labor’s Consolidated Cross-Motion for

Summary Judgment (d/e 30) is GRANTED. The ALJ’s and ARB’s

orders are AFFIRMED, and SIUSM is ORDERED to pay Dr. Ahad

$223,884.27 in back wages. The Clerk is directed to enter

judgment for the Defendant and against the Plaintiff. This case is

closed.

IT IS SO ORDERED.

ENTERED: November 23, 2021

FOR THE COURT

/s/ Sue E. Myerscough

SUE E. MYERSCOUGH

UNITED STATES DISTRICT JUDGE