Mergers and acquisitions may interrupt the validity of a pending or approved PERM labor certification, unless the newly formed U.S. Company acquired the interests of the original company that filed the labor certification application.
During a merger or acquisition, a PERM labor certification application may continue and be considered valid, provided that the new company is the successor in interest of the original company that filed the PERM application. If the new or merged company took all the assets (accounts receivable, intellectual property rights, contract rights, etc.) and liabilities (debts, contract obligations, accounts payable, etc.) in the merger or buyout, the new merged company is the successor in interest of the original company and the new merged company may continue the PERM process for the foreign national employee.
If a merger happens before a PERM case is filed or approved then a petitioner will need to show that the new or merged company is a successor in interest of the original company in the event of an audit. Advertisements must be run based on the employer at the moment of recruitment and ETA Form 9089 must be submitted based on the employer at the moment of filing. So, if a merger or acquisition takes place before a PERM cases is submitted there can be a discrepancy between the employer’s name on advertisements and the employer’s name on the PERM form.
Example: Company A starts recruitment for a PERM positions. In all of the advertisements the employer is listed as “Company A.” After the recruitment period ends, but BEFORE the ETA Form 9089 is filed, Company A is acquired by Company B. At the time of ETA Form 9089 filing, the company lists the employer as Company B (since Company A no longer exists as an employer). Company B must be prepared to document that it is the successor in interest of Company A in the event of an audit (which is likely in this situation).
If the merger or acquisition takes place after a PERM petition is submitted (the employer’s name on advertisements and ETA Form 9089 match) the new employer should still be prepared to document that it is the successor in interest if an audit occurs. Examples of documents used to establish a successor in interest relationship are: A contract of sale for the acquisition of the predecessor; mortgage closing statements; a Security Exchange Commission (SEC) Form 10-K for the successor entity; audited financial statements of the predecessor and successor for the year in which the transfer occurred; documentation of the transfer of real property and business licenses from the predecessor to the successor; copies of the financial instruments used to execute the transfer of ownership; and newspaper articles or other media reports announcing the merger and acquisition of the predecessor.
Whether a merger happens before, during, or after approval of a PERM petition, an employer must be prepared to document the successor in interest requirements to the USCIS when submitting an I-140. Even if the employer has previously satisfied the Department of Labor (DOL) requirement that a successor in interest relationship exists, similar evidence will still need to be given to the USCIS in support of a filed I-140.
Example: Company C filed a PERM Labor Certification application for Mr. Kim. Shortly after Mr. Kim’s PERM with Company C is certified, but before Company C was able to file the I-140 petition with the USCIS, Company C concluded a deal and merged into Company D. In their merger agreement, Company D took all assets and liabilities (including immigration liability of Company C) and Company C dissolved after the merger. In such a circumstance, if Company D is willing to continue to sponsor Mr. Kim’s green card process, Company D may file the I-140 petition for Mr. Kim by using the approved PERM under Company C’s name.
Previous USCIS policy was to only accept approved labor certifications based on a successor in interest if the merger or acquisition occurred after PERM approval. Fortunately this is no longer the case and a labor certification based on a successor in interest relationship created at any time during the PERM process will be accepted. As long as an employer can adequately document that the successor company truly acquired all of the previous company’s assets and liabilities the USCIS will accept a labor certification based on a merger or acquisition.
PERM labor certification is an extremely complicated and time-sensitive procedure. We recommend that you consult with an experienced and responsible immigration attorney. We have successfully represented many PERM cases. If you would like to contact us, please telephone us at (713) 771-8433 or visit us at one of our six locations. You can also contact us conveniently online by emailing us at firstname.lastname@example.org. Our attorneys will use their experience, expertise, and teamwork to ensure the highest quality of service.
(Updated 10/1/2012 by AD)
For more information on PERM Labor Certification, please refer to the following links:
PERM General Issues