Business, Globalization and the American Dream

Dornbaum & Peregoy immigration lawyer Kathleen Peregoy on the evolution of American business, and navigating the changing landscape of global mobility

Published in 2014 New Jersey Super Lawyers — April 2014

Q: Tell me about your career.

A: My career started with a business degree, and I always had an interest in finance, tax, trade, international business and economics. These interests culminated into a real interest in how business shapes the law, and how law shapes business. I have practiced law since the early 80’s through major economic shifts and the rise and fall of significant industries that have changed U.S. business into a global marketplace and economy. To conduct business in this environment, a lawyer must have consummate knowledge, broad and deep experience and specialized understanding of this complex web of U.S. and foreign regulation. I represent clients in major industries that include telecom, IT, engineering, oil and gas, financial services, medical devices, pharmaceuticals, biotechnology and alternative energy. Navigating these new global business realities means that planning for and resolving immigration issues are daily, significant considerations in effectively doing business for U.S. and foreign companies.

The practice of immigration law right now is largely a boutique practice like ours, comprised of small, expert teams with a high level of technological savvy. We have a well-trained, skilled staff, and it is imperative to keep up to date on the latest developments in law and regulation.

One of the most fascinating things about the practice is the ability to view business and the economy through a completely different lens. One is able to understand which industries are hiring and why. Industries rise and fall and hiring ebbs and flows in response to local as well as global events. For example, the nationalization of the oil industry in certain South American countries resulted in America’s engineering and construction companies hiring waves of skilled South and Central American engineers needing work and ready to enter the U.S., just at the time when oil was discovered under the shale in the Gulf of Mexico. Immigration lawyers had to assist employers in timing H-1 petition filings (used to bring professionals into the U.S.) due to blackout periods (our “caps”); strategize filing of L petitions and blanket L-1s (used to transfer multinational employees between offices) to make sure these engineers were work authorized to enter, in stages, to service this U.S. industry as it accelerated in importance.

Other events in the U.S. and global economy affect other significant industries, for example medical devices. Several years ago there was a huge expansion in medical device technology, particularly in diagnostic testing and imaging for hospitals and medical centers as well as a departure from conducting certain treatments only in hospital. This spurred the introduction of ventilators, self-injection devices, self-administered dialysis, and even infusion for use at home. As a result there was a need for engineers to design these next generation devices, such as automated laboratory equipment for sale to research centers, hospitals and universities. When the Madoff scandal was revealed and many endowments and investments lost their value, money that hospitals, universities and laboratories had to invest in and purchase this equipment disappeared. This resulted in large layoffs of engineers at these institutions and shifts in the technology and equipment they developed. This created the need to advise client companies on how to minimize the impact of terminations and address the compliance issues involved with payment of return transportation costs, and notification requirements to the U.S. government and counseling these professionals on their options if they wished to remain in the U.S.

 

Q: What are you seeing in immigration now?

A: U.S. immigration policy can make things more complicated for many companies seeking to benefit from the skill set foreign nationals possess. Navigating the paperwork, processing delays and multi-government agency requirements from the Department of Homeland Security, Department of Labor and Department of State can be challenging. For many, it is impossible.

In fact, despite the many proven benefits immigrants bring to the American economy our immigration laws often create the very obstacles that keep them away.

In 2007, 2008, 2013 and 2014 (periods of strong economic growth), visas for temporary, highly skilled workers were in such short supply that the U.S. Citizenship and Immigration Services office exhausted the year’s supply of H-1B work visas in less than a week; and even during the recession years, the annual cap has been insufficient to meet demand.

The caps have kept many high-tech workers far away from American shores, including immigrants who could have founded the high-tech companies that will spur job and economic growth in the future.

The situation is even less promising for highly skilled workers who want to stay here permanently to pursue the American dream. These workers must apply for employment-based green cards, which are so limited in number that some applicants face wait times of nine years or more, during which time it is difficult to change jobs, relocate, or even accept a promotion within the same company.

To compete, we must modernize our own immigration system so that it welcomes, rather than discourages, the Fortune 500 entrepreneurs of the 21st century global economy.

We must give existing American companies access and ability to hire and keep the highly skilled workers from around the world that they need to compete and we must stem the loss of highly skilled foreign students trained in our universities, allowing them to stay and contribute to our economy.

Without these kinds of smart changes to our immigration laws, America risks losing its place as the natural home for the world’s business powerhouses — the Fortune 500 companies of the future.

 

Q: What other things influenced the evolution of immigration law?

A: Today business must consider carefully global mobility, and incorporate planning to effectuate and secure the clearances necessary for employers to transfer individuals into the U.S and also, to outsource talent to other countries where operations also require skilled personnel.

These forces have changed the practice of immigration law such that we must routinely counsel employers in “best practices” and “compliance” programs. This is critical given increased enforcement by the Department of Homeland Security Fraud Detention and National Security Units (FDNS); Immigration Customs and Enforcement (ICE); Department of Labor, Wage and Hour Division; and the Department of Justice, Office of Special Counsel (OSC) among others.

These changes demand that immigration practitioners now have a “seat at the table” with other business leaders in addressing compliance. Immigration counsel, particularly employment and regulatory lawyers, must possess a strong background in business as well as an understanding of complex immigration laws.

Despite this more recent strong business focus, however, immigration is still a “personal” practice. For example, foreign students in overburdened education systems, like in India or China, want U.S. educations badly, and some universities and outside agencies have whole teams devoted to that effort. U.S. research enterprises want talented U.S. educated foreign scientists in their ranks. It is now part of any high level U.S. job career path that if one is recognized as a high performer, it is part of one’s professional development to take overseas assignments, transferring into or outside of the U.S.

On the enforcement side, there is a major emphasis on enrollment in E-verify. After 9/11, with the emphasis on anti-terrorism and protection of U.S. workers, the government wants to know who is here and in what capacity. The government is systematically driving employers to the E-verify system. With E-verify, employers must verify the work authorization of each employee which information is cross-walked to other databases, like Social Security, the Division of Motor Vehicles, allowing the government to identify those who are not work-authorized. The complexity of the identification procedures has also resulted in an increase in resources devoted to address discrimination. For example, the Office of Special Counsel has expanded the area in charge of anti-discrimination claims. There are major fines being assessed against employers for these transgressions and proper I-9/ E-verify and Wage and Hour counseling of staff involved in the hiring arena is a major growth area for our practice.

 

Q: With such constant movement of people and goods across borders, you must see a lot of innovation. What’s that like?

A: To be a good lawyer, one is taught in law school how to approach a set of data, craft a persuasive argument and reach the desired result. It is no different with immigration. If you were presented with an immigration issue for a foreign national working on defense technologies and components for fighter jets built by defense contractors or R&D scientists leading innovations for a pharmaceutical company, one would act as a trained lawyer does, and gather the essential facts. One would then self-educate, in a collaborative process that involves in-depth discussions with the client, and not only with the person who is going to be performing the work, but also with that individual(s) manager. It’s interesting to “drill down” and speak with people intimate with the work. What might be so clear to a scientific mind might not be as clear to others. As immigration lawyers, we present to the government officers who decide immigration issues as we would to a jury. That involves breaking the matter down to a story, an illustrated picture, something that makes sense to the “reasonable man”. Of course the first few times we’re presented with something new and innovative, especially if it’s highly technical, it can be daunting, but it is amazing to see how excited people become when they start to explain what they do. A veil comes off; they let you into their world. It helps to be endlessly curious, not only about business and innovation, but to be fascinated by the human condition.

The American economy stands apart because, more than any other place on earth, talented people from around the globe want to come here to start their businesses. America has long been seen as the land of opportunity, and our economic success is built on decade after decade of the world’s best and brightest coming to our shores to work, innovate, and succeed.

The sectors that will drive job creation and economic growth over the next generation tend to be the sectors where immigrant and children-of-immigrant founders are especially well represented. The Bureau of Labor Statistics projects that from 2008 through 2018 the ranks of biomedical engineers and computer network analysts will experience the fastest job growth. The three highest grossing medical equipment and device makers, a frequent place of employment for biomedical engineers, were all founded by children of immigrants — Medtronic, Boston Scientific, and Baxter International.

Immigrant-founded Fortune 500 companies drive a wide range of industry sectors across the American economy. Fortune 500 companies founded by immigrants are not confined to a small subset of industries or fields. Instead, they range across aerospace, defense, Internet, consumer products, specialty retail, railroads, insurance, electronics, hospitality, natural resources, finance, and many other sectors.

Seven of the ten most valuable brands in the world come from American companies founded by immigrants or children of immigrants. Many of America’s greatest brands, including Apple, Google, AT&T, Budweiser, Colgate, eBay, General Electric, IBM, and McDonald’s owe their origin to a founder who was an immigrant or the child of an immigrant.

America is a nation of immigrants, and the American economy is an economy of immigrants. Many of our most “American” companies; Procter & Gamble, AT&T, Kraft, Colgate-Palmolive, U.S. Steel, Philip Morris, TIAA-CREF, DuPont, Goldman Sachs, Pfizer, International Paper, Kohl’s, Capital One, Honeywell and Nordstrom, to name just a few, were founded by immigrants.

Immigrants and their children are responsible for a host of iconic American brands, ranging from Barbie, which was launched by the daughter of Polish immigrants, to Ford, built by a man whose father hailed from Cork, Ireland.

A similar story exists for the cutting-edge American firms Google, Intel, eBay, Yahoo!, Sun, and Qualcomm. These latest generations of powerhouses were all founded by immigrants.

Other growing fields, like semiconductors and medical devices, are full of immigrant founded companies as well.

Today, these “New American” companies founded by immigrants or their children employ more than 10 million people worldwide and generate more than $4.2 trillion in revenue annually, a figure that exceeds the 2010 gross domestic product of all but two other countries in the world.

Countries that compete with the U.S. for foreign talent have adopted strong policies to draw the ambitious and highly skilled into their economies. Attracting the entrepreneurs who will start tomorrow’s Fortune 500 companies will require serious effort by the U.S. government. Above all, it will require reforming the current immigration laws that erect senseless and arbitrary barriers in the face of the job-creators we should most want to recruit.

The disproportionately large impact that immigrants have had in founding our most successful companies is hardly surprising considering who comes here and why. America’s economy attracts those who are driven to succeed. The most motivated workers around the world want to come here because our economic system and meritocratic society reward hard work and ingenuity.

In certain industries, the contribution of immigrants and their children to the American job market is particularly striking.

The 10 “New American” aerospace and defense firms in the Fortune 500 employ more than a million people. The 13 “New American” specialty retailers a group that includes Office Depot, Bed Bath & Beyond, and the parent company of T.J.Maxx employ another roughly 950,000 workers, the vast majority of them in stores on American soil. Not counted in that category are companies like Nordstrom and Kohl’s, which are usually characterized by business analysts as “general merchandisers.” Those two companies, employing about 130,000 together, were founded by Johan Nordstrom of Sweden and Max Kohl of Germany, two famed immigrant entrepreneurs.

The evidence shows that immigrant entrepreneurs’ rate of success is only on the rise. But it is far from assured that this trend will continue. As the economy globalizes, talented and ambitious individuals have ever greater choices about where to start a new company, invent a new product, or discover a new medicine. For America to attract these individuals and continue to lead the global economy, we will need to make America more appealing than our competitor nations and this will have to start with enacting smarter immigration laws.

 

Q: What’s your favorite part of your work?

A: Being able to work with so many of these talented individuals and companies who benefit from their skill set is a privilege.

Being so near cutting-edge ideas is fantastic, but it is the fact that we impact peoples’ lives is clearly one of the most rewarding parts of the practice of immigration law. Each foreign national’s success is so uniquely an American success story. Talented people come to the U.S., work hard and become successful, just like our American pioneers did. I see people who came to the U.S. without money or contacts in their home country, with only their intelligence and persistence, and confidence that they could succeed. Because of their incredible skill set, unparalleled drive and determination, they achieved our American Dream in one generation. These pioneers are the “best and the brightest” and in all respects but birth, truly “American” and their children, born here, complete the circle and continue to excel.

That collaboration, the exchange of ideas; the pulse of innovation; all of that keeps me wired in.

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