DOES A RELEASE AND SETTLEMENT PREVENT AN H-1B WORKER FROM BACK WAGES ?

When an H-1B employee separates employment from an H-1B employer, the H-1B employer often seeks a Settlement and Release.  The employer’s goal is to put the matter to rest.  It does not want the H1-B employer to file a private lawsuit seeking back wages or to file a Complaint with the Department of Labor. 

H-1B employers also often are seeking to collect on liquidated damage provisions, which allow the employer to recoup the costs associated with the separation of the employment relationship.  Costs such as reputational loss, replacement costs, and travel costs are usually recoverable under the H-1B rules

H-1B employer and employees often seek a “global settlement,” which settles all outstanding claims between the parties. 

A 2015 Department of Labor decision, Gupta v. Headstrong, 2014-LCA-00008, confirms the appropriateness and enforceability of these settlement agreements.  In Gupta, the Administrative Law Judge held that the Settlement and Release extinguish all of the h-1B employee’s claims to back wages.  Notably in Gupta, the two parties were the employer and the employee.  The DOL was not a party to that lawsuit.

It remains an open question whether an H-1B employer can legally prevent an employee from filing a Complaint with DOL following a proper Settlement and Release.  The DOL does not want to see any hindrance on an employee’s ability to file a Complaint to their agency. 

In Gupta the Department attempted to have the ALJ validate their reading of the law buy filing an amicus brief.   The ALJ did not address this issue in the Decision. The Department would not, of course, have bothered to raise the issue in the amicus brief if it were a settled issue of law. 

Nevertheless, an H-1B employee who fairly settles a back wage claim and who subsequently or concurrently files a complaint with the DOL solely on a back wage claim (and who continues to assert to the Department that the back wage claim remains unsettled following a settlement on those same claims) may be committing fraud before a government agency.