Plugged In: An EV Newsletter Vol. 1 No. 6

This is the sixth edition of Plugged-In, our monthly EV newsletter.  In the last six months, we have covered multiple topics such as the United States’ decoupling agenda from China (and how that may not work in the short-term), Toyota’s hesitance to commit to an all-in EV strategy, the SEC’s and EPA’s regulations relating to carbon emissions, and even the role of immigration laws in drawing much needed talent to a rapidly growing EV industry. In this edition, we go further into suggesting immigration reforms to TN visas granted to our North American neighbors, discuss the Ford legal team’s strategy to escape a class-action lawsuit, and cover interesting topics relative to electricity needs in light of inadequate charging infrastructure. We hope you enjoy the newsletter.

 

We also have an administrative announcement.  We will be taking a brief hiatus during the summer so we will not be publishing for the next few months. Our EV Group is working through some interesting research projects in the meanwhile and we hope to release the findings from those in our next edition.  Until then, stay Plugged-In!

 

Rasika A. Kulkarni | Editor and Associate Attorney

 

Electrification of U.S. Immigration: A Vehicle for Charging Forward –
8 Proposed Policy Changes to Modernize the TN Visa

 

From the Flintstones to the Jetsons, transportation has always been, and will continue to be, a priority for humankind. We are a dinosaur’s leap ahead of the bird and dinosaur-operated machines of the Flintstones, but not quite light speed ahead of the aerocars of the Jetsons. The technology of today and of the foreseeable future is the Electric Vehicle (EV). While EVs have not been captured by an animated sitcom, they sit high on the Federal Government’s list of strategy priorities for the United States (U.S.).

 

Local municipalities, states, and the Federal Government are investing in ways to eliminate climate related emissions from transportation. Local governments are also focused on building sustainable cities with a major focus on sustainable transportation. In fact, in December of 2015, the U.S. Department of Transportation (USDOT) launched a Smart City Challenge resulting in a $50 million grant and designation as America’s Smart City to the winner. There is also a growing number of EV Alternative Fuel Corridors charging across the U.S. in order to build a national electric vehicle charging network to make electric vehicles more accessible and affordable.

 

How Immigration Can Support the Electric Vehicle Strategic Priority?

 

In order to build the mobility ecosystems, it requires the talent of professional and skilled workers. Whether it is an Engineer responsible for the design and development of battery systems, or an Architect focused on eco-friendly urban planning, or a Technician working in a manufacturing plant, it is the human capital responsible for building the infrastructure.

 

As preparations are underway for the ongoing expansion of EV production, there remains a critical skills gap in the automotive and mobility industry.¹ As with any new technology, it is constantly evolving and improving. The workforce will need the knowledge to keep up with new technology development, as well as, related improvements, maintenance, and repairs. Another factor to consider is the pivot from mechanical engineering to electrical engineering and software development for EVs. The current mechanically-focused workforce is not equipped with the skills for such a pivot. Employers may focus on skills re-training of their workforce but this is a long-term solution, and one which may not keep up with the quickly evolving technologies and growing demand for electric vehicles. It also does not address the labor shortage crisis in the U.S.² There is another option for employers to keep abreast with EV manufacturing, and that is to also rely upon foreign workers to fill the skill gaps.

 

TN NAFTA Professionals: A Solution to Filling the Skills Gap

 

U.S. immigration laws provide an option to fill the skills gap for employers in the U.S. Since there is a limited talent pool to draw from for support within the U.S., employers may need to rely upon our North American neighbors to the north and south to provide immediate relief for employers struggling to find professional and skilled workers.

 

The North American Free Trade Agreement (NAFTA) created special economic and trade relationships for the United States, Mexico and Canada. It gave birth to the Trade NAFTA (TN) visa category which came into effect in 1994. On July 1, 2020, the United States-Mexico-Canada Agreement (USMCA) entered into force and replaced NAFTA, which governed continental trade for more than two and a half decades. Despite the USMCA make-over, the immigration related sections for TN professionals remained basically unaffected. See our blog post, here.

 

In spite of the missed opportunity to modernize and improve the TN visa category, it continues to be a positive and beneficial solution for employers. The National Foundation for American Policy (NFAP) issued a Policy Brief in April 2018 addressing the background and history of NAFTA, along with the positive contributions and economic impact of USMCA (formerly NAFTA) on immigration.³  According to the report, the “benefits of cross-border mobility, accessibility to essential workers, and its related investment in the United States and creation of U.S. jobs are critical,” which is supported by inclusion of the immigration chapter in the USMCA.

 

Specifically, the TN visa category allows qualified Canadian and Mexican citizens to seek temporary work authorization in the U.S. to perform certain professional work activities through sponsorship by an employer in almost all cases. The eligibility criteria includes the following:

 

• Applicant is a citizen of Canada or Mexico.
• Profession is on USMCA list (Appendices 1 and 2 of Annex 16-A of USMCA, Chapter 16).
• Job in the U.S. requires a USMCA Professional.
• Applicant has an offer to work in a pre-arranged job for an employer.
• Applicant satisfies the requirements including education and/or work experience of the profession.

There are limited professions or occupations that qualify for TN sponsorship. The most commonly used TN categories for the automotive industry from OEMs to automotive suppliers include Engineers and Scientific Technicians/Technologists. Other TN categories used less frequently in the automotive industry, may include Computer Systems Analysts, Industrial Designers, and Management Consultants.

 

A significant advantage of the TN visa category is that there is no annual quota. As a result, an employer may sponsor a TN worker at any time. It can also be renewed indefinitely so long as a job offer exists. In addition, the process and timeline for securing TN work authorization is generally quicker than other visa categories with a higher probability of success.

 

For example, TN-1 Canadian Professional Workers may apply for TN status at the U.S. Port-of-Entry (POE). TN-2 Mexican Professional Workers normally apply for a TN visa at the U.S. Embassy or Consulate abroad with some exceptions. If a Mexican TN worker has a valid TN visa, and they need to change employers, they may present their TN application for adjudication at a land crossing POE.  This option is not uniformly applied at the POEs; and in addition, the electronic version of the form I-94 online unfortunately includes no designation as to the sponsoring employer in such circumstances at present.  With the possibility of a TN visa for Mexican nationals now being valid for up to 48 months, this longer validity period saves time, energy and cost for a quick adjudication. Also a nonimmigrant petition is not required to be filed with the United States Citizenship and Immigration Services (USCIS), which translates into cost savings and quicker results.  Please note that the maximum period of admission in TN status for any Canadian or Mexican national is three years.

 

8 Policy Changes to Improve TN Visa

 

U.S. immigration laws offers employers an opportunity to find talented workers to fill the skills gap in the U.S. However, like everything else, there is room for improvement.  Unfortunately, the TN category often does not have clear guidance regarding the scope of the professional category.  USCIS, the Department of State (DOS) and Customs and Border Protection (CBP) have issued a variety of clarifications on TN professions over the years, which are not necessarily consistent.  In addition, even though there is no minimum wage required under U.S. immigration law for TN professionals, adjudicators should assess if the wage offered meets federal and state law requirements as well as if the wage appears to be sufficient for the duties and occupation.  It is also important to note that lawsuits have been filed recently against certain employers in the automotive industry for allegedly failing to comply with representations in TN visa applications as to the scope of the proposed work.  Compliance oversight is always of critical importance in any visa application representations.

 

The TN category should be modernized by implementing policy changes to further support employers, who need qualified TN professionals during this critical time in history, especially since EV is a key priority for the Federal Government. A detailed paper presented by The George W. Bush Institute lays the groundwork and makes the case for enhancing the USMCA.⁴

 

Below are 8 suggested improvements to help the U.S. economy grow in this critical EV expansion period:

 

1. Expand the TN Professionals List. This suggestion is the most obvious and much needed change to improve and expand upon the qualifying occupations for sponsorship. The current TN USMCA Professionals List is antiquated and does not account for modernization since the agreement went into effect. NAFTA was signed by all three countries in 1992, came into effect in 1994, and is now over 30 years old. It was established before the internet took off in 1995, and before smart phones became affordable and accessible in the 2000s. Expanding the TN Professionals list will allow for additional critical occupations to be included, which may have evolved over time, such as the Computer Systems Analyst category, which is currently the only computer-related occupation on the list. IT related jobs have progressed by leaps and bounds since then.

2. Allow TN Nonimmigrants to have Dual Intent to Simplify Permanent Residence Sponsorship. The regulations only permits citizens of Mexico or Canada to be eligible for TN status.  Thus, the pool of beneficiaries is limited.  The H-1B and L categories recognize dual intent, which allows international travel to be uninterrupted while pursuing adjustment of status to permanent residence in the U.S.  Dual intent benefits should be extended to our USMCA partners, who of course being along the border are often travelling within North America as part of their duties.

3. Extend Work Authorization Incident to Status to TN Dependents.  L and E dependents (spouses) are now able to qualify to work in the U.S. incident to their status.  Just as dual intent should be expanded as noted above to the TN category, so should spousal work authorization.

4. Open up TN to Managers. The TN visa category is designed for specialty occupation/professional workers. It limits opportunities for managers and executives, and professionals who supervise other professional or skilled workers more than 50% of their time. Similar to visa categories such as the H-1B Specialty Occupation Workers, H-1B1 Chile and Singapore Free Trade Agreement Specialty Occupation Workers, and E-3 Australian Specialty Occupation Workers, the TN Canadian/Mexican Professional Worker category is designed for professionals. U.S. immigration laws define a professional as “persons holding a bachelor’s degree or its equivalent in the specific field in which they are to be engaged.”⁵ However, the other visa categories allow for sponsorship of managers. To be in line with the other visa categories, policies should be issued to clarify that the TN category may include managers of occupations that are currently in the TN Professionals List, i.e. Engineering Manager. A policy clarification to clearly support the use of the TN category for managers of qualifying professionals will allow employers to bring in key leadership into the U.S., to help lead the charge on EV.

5. Permit TN Work Experience Equivalencies. The regulations allow a candidate to qualify for H-1B, H-1B1 and E-3 sponsorship based on a U.S. bachelor’s degree equivalency through an evaluation of work experience gained within the field. For a work experience evaluation, the general rule is for every 3 years of work experience gained within the field, it is equivalent to 1 year of formal education. As such, 12 years of work experience gained in the field can be equated to 4 years for degree equivalency in support of an H-1B, H-1B1, and E-3 sponsorship, in addition to the straight formal education. However, the same rule does not apply in the context of TN sponsorship. Only a formal education is considered for U.S. degree equivalency purposes. By adopting a policy that falls in line with the other visa categories, it would allow skilled workers with no formal education but more than 12 years of work experience to qualify for TN sponsorship. Given the growing field of skilled, technical workers in the EV space, this change would provide critical support for the automotive industry.

6. Relax the “Cedula” or “Titulo” Requirement for Mexican Citizens. A TN Canadian or Mexican worker being sponsored for an engineering position in the TN Engineer category requires the U.S. equivalent of a Bachelor’s degree. However, Mexican citizens are also required to have a cedula professional (a professional credential) or a “titulo” (a university diploma) as this serves as evidence of completion of a degree program for certain professions. The consular posts will not accept a “carta de pasante,” which serves as proof of completion of coursework, but not full completion of degree requirements for “licenciatura” (a bachelor’s degree).  The additional requirement for cedula professional can take an additional 6 months or more after completion of all coursework. If this rule were refined to allow Mexican candidates with the “carta de pasante” to apply for TN sponsorship, it would streamline the process and give employers an opportunity to consider this pool of talent.

7. TN Scientific Technician/Technologist Category.  Immigration officials are often quick to consider a job offer to a candidate in the TN Scientific Technician/Technologist category as overqualified if the candidate holds a “titulo” or “licenciatura” and deny their application. A candidate with the equivalency of a 4 year U.S. degree still satisfies the requirements and as such, they should not be penalized for having the degree.

8. Education Requirement for Skilled Workers. Immigration officials are also quick to dismiss the TN Scientific Technician/Technologists if they did not complete at least 2 years of post-secondary education. This education may be in the form of technical, vocational school or an Associates program. However, in Mexico, their secondary or high school programs offer technical training programs. A policy change to allow for trained skilled workers to secure TN work sponsorship based on their technical education or training should be adopted.

 

Positive Automotive Impact

 

As the Federal Government continues to prioritize and spend money on EV, and as employers in the U.S. continue to struggle in filling the skills gap, implementing policy changes to facilitate the TN visa process may become crucial to their overarching strategic priorities. The antiquated policies and laws from over 30 years ago must also keep up with new technologies and advancements of today. Employers contemplating expanding manufacturing capabilities, research and development, technical services, etc. will need the Federal Government’s support to implement positive TN policy changes to charge forward into the future. 

 

Suzanne K. Sukkar | Member

 

Federal Preemption to Ford’s Rescue

 

Even more than in an individual action, as a defense tactic, a motion to dismiss is a critical point of inflection for resolving putative class actions.  Inflection Points and Class Action Litigation  As the class action plaintiffs’ bar begins to challenge conduct surrounding EVs, manufacturers and sellers should be aware of all the potential defenses and affirmative defenses giving rise to motions to dismiss class actions.  One such affirmative defense is preemption, both expressed and implied. 

 

Ford successfully used one type of implied preemption to defeat a putative class action in In re Ford Motor Co. F-150 and Ranger Truck Fuel Economy Marketing and Sales Practices Litigation, 65 F.4^th 851 (6^th Cir. 2023) (the “Ford Case”).  This defense may be available to EV manufacturers and sellers facing putative class actions.