On Sunday, nearly 100 companies filed an amicus brief in the US 9th Circuit Court of Appeals in opposition to President Donald Trump’s recent executive order temporarily banning entry to the United States for citizens of seven Muslim-majority countries and suspending the admission of refugees. The companies’ lawyers are arguing that the order “inflicts significant harm on American business.”
A federal judge in Seattle had temporarily blocked the order on Friday, and the Trump Administration is currently appealing that ruling in the San Francisco-based 9th Circuit. Regardless of its ruling, the case is likely to end up in the Supreme Court, possibly before the end of the week.
The list of companies party to the brief is dominated by the tech sector, including big names like Airbnb, Apple, eBay, Netflix, Facebook, Google, Intel, Microsoft, Twitter, Uber, and Y Combinator. A number of workforce-focused tech companies also signed on, such as Glassdoor, LinkedIn, Salesforce, and Workday, as did some non-technology companies, including Chobani and Levi Strauss. In the brief, the companies lay out both legal and economic arguments against the order, with the latter centered on the impact of more restrictive immigration policies on American companies’ ability to compete for the world’s best talent:
The Order effects a sudden shift in the rules governing entry into the United States, and is inflicting substantial harm on U.S. companies. It hinders the ability of American companies to attract great talent; increases costs imposed on business; makes it more difficult for American firms to compete in the international marketplace; and gives global enterprises a new, significant incentive to build operations—and hire new employees—outside the United States.
The Order violates the immigration laws and the Constitution. In 1965, Congress prohibited discrimination on the basis of national origin precisely so that the Nation could not shut its doors to immigrants based on where they come from. Moreover, any discretion under the immigration laws must be exercised reasonably, and subject to meaningful constraints.
The brief has been in the works for a week, since a group of tech companies first met to discuss it. Tech companies are also working on a brief to the court of public opinion: Bloomberg reported last week that Facebook, Microsoft, and other tech sector heavyweights were circulating an open letter to the president “expressing concern about his recent order on immigration and offering help fixing it and other policies.”
In a sense, this brief is the opening salvo in what is sure to be a lengthy and consequential legal battle between companies (especially, but not exclusively, technology companies) that depend on a global talent market and the Trump administration over immigration. The arguments leveled in Sunday’s brief are ostensibly against this particular executive order but also hint at how these companies intend to challenge the Trump administration on this issue going forward.
During his presidential campaign, President Trump had promised to crack down not only on illegal immigration and refugee resettlement but also what he characterized as the excessive use of H1-B skilled worker visas by Silicon Valley. As Matt Yglesias explains at Vox, a draft of a potential executive order titled “Protecting American Jobs and Workers by Strengthening the Integrity of Foreign Worker Visa Programs” shows that the administration is looking at ways to curtail the use of several avenues for hiring skilled foreign labor, including the H1-B:
- One provision would shorten the span of time a foreigner is allowed to work in the United States under the Optional Practical Training rule. OPT allows a foreigner who had a student visa to work for a limited amount of time in the United States after graduation. The Obama administration expanded the OPT window from 12 months to 17 months.
- Two provisions deal with H-1B visas that allow companies to hire foreign-born guest workers with technical skills. Obama acted to give the spouses of H-1B holders permission to work, thus de facto expanding the foreign-born skilled workforce through the back door. Trump will reverse that. The order would direct agencies to “consider ways” to alter the way the program works to “ensure that beneficiaries of the program are the best and the brightest.” This likely means trying to ensure that H-1Bs largely go to America’s best-known and highest paying tech companies, rather than, as is frequently the case today, serving to help companies that mostly do back-office outsourcing work.
- Another provision would call for a Department of Homeland Security crackdown on L-1 visas, featuring “site visits.” L-1s are designed to allow companies to transfer foreign-born managers to oversee US-based operations, but in a practical sense serve a similar role to H-1Bs in generally allowing for skilled temporary workers.
Business leaders may or may not have personal or ideological reasons for supporting more open immigration policies, but at the end of the day, the prospect of having their access to foreign talent cut off is a bottom line issue for Silicon Valley CEOs. That’s one reason why they have been vocal on this issue while other corporate giants have sometimes opted for a more muted response. Another reason, Tom Gara argues at BuzzFeed, is that liberal politics is now part of Silicon Valley’s brand:
The gap between Silicon Valley and pretty much everyone else in corporate America has often been a rhetorical one: the reason most see Uber as a tech company, but not Ford, is mostly about how these companies talk about themselves, and how we listen to them. But in the case of this weekend’s madness, it has been illuminating. When it comes to taking a stand, people simply expect more from internet companies than they do from everyone else — in large part because of the we’re-the-good-guys posture of the tech industry.
When a serious line is crossed in Washington, there’s an assumption that Mark Zuckerberg should say something about it; nobody is holding their breath for the CEO of Bank of America.
Gara depicts this as a reason to be skeptical of the earnestness of the tech sector’s political stance, but his criticism draws attention to an important point. Mark Zuckerberg and other tech sector leaders have been outspoken advocates of more open immigration policies for years, partly out of personal conviction and partly out of economic self-interest; these stances have created an incentive for tech companies to adopt the “right” public policy positions to appeal to their millennial consumer base, who oppose Trump and his immigration policies by overwhelming majorities, and who are more capable than ever of punishing companies whose leaders fail to meet that demand: Witness the #deleteUber campaign on social media, during which people tried to punish Uber for perceived links to Trump, and which may have precipitated Uber CEO Travis Kalanick’s departure from Trump’s economic advisory council. This is why it is so important for corporate leaders to keep in mind that if your company takes a public stance in this climate, you will likely be expected to match words with actions.
Not all tech sector leaders are recoiling from Trump, by the way. Tesla CEO Elon Musk, himself an immigrant who has vocally disagreed with Trump on immigration and other issues, has opted to remain on the Trump’s economic advisory council, defending his decision as a way to keep a critical voice in Trump’s ear. At Friday’s council meeting, Musk said he raised objections to the travel ban and brought up the matter of climate change. Yet Musk is taking a risk in refusing to distance himself from Trump in the form of media criticism and the related possible damage to Tesla’s brand.
Not all companies have the same incentives as technology companies to take strong political positions, either, according to the New Yorker‘s Vauhini Vara. Federal government contractors, for instance, would risk falling out of favor with the administration if they spoke out.
Stepping back, TLNT‘s Raghav Singh argues that a system that favors skilled immigration is in America’s national interest:
The U.S. needs an immigration policy that gives preference to high skilled workers. Despite all the claims that immigrants add value, the effects of immigration are not uniformly beneficial. Available evidence shows that low-skilled immigrant workers tend to depress wages for low-skilled native workers. Not by much — about half-percent to five percent — but the effect is certainly one that has negative consequences for those affected.
Contrast that with the results seen in Canada and Australia. In both countries, skilled immigrants are earning average salaries that are about the same as native-born workers. Crucially, the labor force participation rate for skilled immigrants is much higher — 89 percent in Canada and 96 percent in Australia, compared to 66 percent and 67 percent for native-born workers respectively.
Speaking of Canada, one option for Silicon Valley, if its mounting political battle with Trump doesn’t go well, is to move north. Canada is making moves to court global talent at the same time the US government (among other western governments) is looking to close its borders. Tech talent accustomed to the climate and lifestyle of the San Francisco Bay Area might be just as happy in Vancouver, and some companies are already looking to move their employees there, as TechCrunch’s Connie Lozos reported last week:
[A]t least one small group of cofounders has banded together to make it easier for U.S. companies to create subsidiaries in Canada and to move their U.S.-based employees to a new, Vancouver-based office, and all within what they describe as weeks, not months. They haven’t created a nonprofit. They’ve instead formed a new company called True North that’s right now offering a $6,000 package that includes airfare for one person to Vancouver, two nights of accommodations, and a day with “world-class immigration professionals who will walk you through the process and answer any questions you have.”
The package is somewhat rich. For example, an employee could fly from the Bay Area to Vancouver, land accommodations, and talk with immigration attorneys for far less than what True North is charging. But the broader idea is interesting, and that’s for employees to keep their current jobs with their current employers but to have the option to work via a wholly owned Canadian subsidiary that can provide them with protected status in the event that the U.S. changes its employment regulations.
The outcomes of the current legal cases against President Trump’s executive order remain to be seen, and further orders and court cases are likely, each with an uncertain impact. In the meantime, the global battle for talent has become a major theme in arguably the most important US policy conversation of the day.