Several of the largest business advocacy groups in the U.S. have filed a joint lawsuit to stop the federal government from moving forward with new restrictive measures that are handicapping companies’ ability to meet workforce needs through “lawful immigration.”

The U.S. Chamber of Commerce, the National Association of Manufacturers, the National Retail Federation, Technology Network and others filed the complaint in response to a proclamation issued by the White House, “purportedly” in response to the COVID-19 pandemic and to free up jobs for Americans, the complaint states. 

The action could result in as many as 500,000 people – many among the” best and brightest” – being banned from coming to the U.S. this year, the complaint states.   

Top professionals not welcome

Named as defendants are the departments of Homeland Security and State, and their respective heads, Acting Secretary Chad Wolf and Secretary of State Michael Pompeo in their official capacity.

“Our lawsuit seeks to overturn these sweeping and unlawful immigration restrictions that are an unequivocal ‘not welcome’ sign to the engineers, executives, IT experts, doctors, nurses and other critical workers who help drive the American economy,” U.S. Chamber CEO Thomas  Donohue said in a statement after the lawsuit was filed. “Left in place, these restrictions will push investment abroad, inhibit economic growth and reduce job creation.”

It’s also unrealistic to expect companies to immediately alter their domestic operations to find half a million replacements for these valuable workers, states the complaint that was filed in federal court in San Francisco July 21.

Overstepping executive boundaries 

In issuing the proclamation, the Trump administration unlawfully exceeded the “statutory and constitutional authority of the Executive,” the lawsuit states. 

These restrictions “are far outside the bounds of the law and would deal a severe blow to our industry,” Linda Kelly, senior vice president and general counsel for the National Association of Manufacturers (NAM) said in a statement after the lawsuit was filed. 

“We cannot let this stand. These overreaching, unlawful restrictions don’t just limit visas, they will restrain our economic recovery at a time when the very future of our country hangs in the balance,” Kelly said.   

Industry should be focused on recovery and not on visa restrictions that “will hand other countries a competitive advantage because they will drive talented individuals away from the United States,” she said. 

Most restrictive immigration policies in “nearly a century” 

Chamber CEO Donohue echoed those concerns in an piece he wrote for the New York Times explaining why it was necessary to file a lawsuit.

Donohue stated that American innovation is threatened by the worker visa policy and other recent restrictive policies. Among those is the administration’s efforts to cancel the Deferred Action for Childhood Arrivals program, or DACA, right after the program was upheld by the Supreme Court on June 18. 

He also cited the White House’s recent failed effort to ban international students from attending American colleges and universities that hold classes virtually in the fall.

“Taken together, these are the most restrictionist immigration policies in nearly a century. This is a fundamental mistake at a time when our nation’s economy is already suffering,” Donohue said.

Skilled workers, researchers, scholars among those banned

Among the visas suspended are H-1B visas for skilled workers that are relied on by the technology industry; H-4 visas for spouses; H-2B visas for seasonal workers; J-1 visas for researchers, scholars and au pairs; and L-1 visas for executives who transfer to the U.S. after working for the same employer abroad.

“This proclamation is meant to protect American jobs but instead it threatens the millions of rank-and-file workers whose jobs rely on experts coming up with the latest technology to keep retail moving forward,” Stephanie Martz, National Retail Foundation chief administrative officer and general counsel, said in a statement.

Groups that filed lawsuit represent millions of businesses, consumers

Among the organizations that filed the complaint:

U.S. Chamber of Commerce is the world’s largest business federation representing more than 3 million companies and professional organizations of every size, in every industry sector, and from every region of the U.S.  

National Association of Manufacturers is the largest manufacturing association in the U.S., representing small and large manufacturers in every industrial sector and in all 50 states. 

National Retail Federation is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants, and internet retailers from the U.S. and more than 45 countries. 

Technology Network is the national, bipartisan network of technology CEOs and senior executives that advocate for the growth of the innovation economy at the federal and all 50 states. TechNet’s represents over three million employees and their customers in the fields of information technology, e-commerce, the sharing and gig economies, advanced energy, cybersecurity, venture capital, and finance. Intrax, Inc. is a cultural exchange company that operates multiple Department of State-designated exchange programs that bring participants to the U.S. on J-1 visas for individuals approved to participate in work-and study-based exchange visitor programs.

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The CEO of the largest business advocacy group in America, the United States Chamber of Commerce, outlined a plan to spur half a million new startups and hundreds of new initial public offerings in 2020 at his annual State of Business Address in Washington, D.C. last week.

“If we want to create more wealth and opportunity for all Americans, the answer is more business, not less,” longtime CEO Tom Donohue said. “We need a wakeup call in this country that disincentivizing growth and disparaging corporations is no way to generate collective prosperity.”

Donohue called on “bipartisan” leaders across business and government at all levels to “reinvigorate the American innovation machine” by promoting measures like new technology and industry to address climate change, immigration reform and the “side gig” economy.

These are just a few of hundreds of challenges the Chamber is taking on this year to push the nation forward in reaching a goal to surpass 500,000 business creations and 250 new initial public offerings (IPOs) annually, he said.

Startup revival for “collective prosperity”

Business growth is not just about corporate profits, he said. It’s about trillions of new dollars for employee wages and local, state and federal taxes for schools, social programs, government operations and highways and infrastructure, he said.

New business growth reduces “income inequality,” Donohue said. But instead of growing in America, startups are declining, according to U.S. Census data, Donohue said.

“We should all be troubled that we have 20 percent fewer startups than we did three decades ago, when we were a smaller country,” he said. “We should all be worried that there are half as many public companies today as in 1996.”

Arizona haven for startups

Meanwhile, Arizona is in a better position than many states in startup creation.

The state’s two largest universities spin out a steady stream of startups in bioscience, technology, water conservation and other industries annually.

Last year, University of Arizona startups alone pumped $585 million into the economy, according to a report released last month by the university’s McGuire Center for Entrepreneurship.

Arizona and metro Phoenix consistently rank among the top places to start a business by various publications and organizations. A released last month by content and comparison platform Comparisun named Arizona the fifth-best state in which to launch a startup.

Challenges ahead

During his speech last week, Donohue highlighted a number of challenges it will embark on addressing this year, including threats to the gig economy, harmful isolationist trade policy and climate change.

Threats to the “side gig” economy

One battle this year will be to stand up against recent attacks at the state level that are eroding opportunities in the gig economy and other business sectors, Donohue said.

Of concern is one law just passed in California that alters the definition of private contractors and freelancers. Employers will now be required to provide benefits to a new class of worker.

“Under such proposals, Lyft and Uber drivers would be deemed employees and not independent contractors,” Donohue said. “The result? The business model that has revolutionized entire sectors of the economy will screech to a halt. The same is true for the innovation we are seeing in everything from home repair tasks to grocery delivery.

“At stake is the flexibility and independence that have made “side gigs” or second jobs an important part of how millions of Americans support themselves and their families,” he said.

Such regulations impact not only drivers for ride-hailing services but other industries as well.

The U.S. Chamber released a�� detailing how new state regulations of the gig economy will suppress business opportunities and limit consumer choice and services.

States’ adopting costly data privacy rules

Another initiative will be to fight encroaching states’ regulations over data privacy.

As federal lawmakers have failed to adopt a national policy for data privacy, states are stepping in. That’s proving costly for businesses, Donohue said.

He cited California’s new Consumer Privacy Act and said the initial price tag of compliance is $55 billion in the state, with small businesses facing up-front costs of $50,000 each.

“Washington’s inability to make progress on data privacy is resulting in a patchwork of state rules and regulations that will stifle the free flow of goods and services across state borders,”�� he said. “Can you imagine effectively running a company when you have 50 different sets of standards to comply with? This would create conflict for businesses, confusion for consumers, and increase costs for everyone.”

Other goals and challenges for 2020 include:

Global competitiveness and free trade

Donahue said America must show proactive leadership around the world to foster U.S. businesses.

“Engaging with the world is our best strategy for strong national security and lasting prosperity,” Donohue said. “Embracing free trade doesn’t mean ignoring unfair practices aimed at us. It means leading the way in setting the rules and enforcing them, based on the simple propositions that more trade is better than less trade, more customers are better than fewer customers, and expanding markets globally will benefit everyone.”

He lauded the U.S. House passage of the United States-Mexico-Canada Agreement (USMCA) and raised the need for trade agreements with the United Kingdom, the European Union, Japan, Brazil and markets in Africa. He stressed the importance of U.S. engagement in the booming Asia-Pacific.

Immigration reform

Donahue said action is needed to update cumbersome immigration practices to make it more efficient for businesses to hire qualified foreign workers of all skill levels.��

Climate change innovation

Donahue said he wants to see research and development of new technology and industry to tackle climate issues. Currently, there are 35 bipartisan bills in Congress designed to help address climate change through innovation and investment.

Passage of a comprehensive infrastructure package

As the nation’s highways, bridges, water and sewer systems and other infrastructure continue to deteriorate, Congress must step up, Donahue said.

Abusive class action lawyers

States are increasingly fertile ground for business opponents to advance questionable agendas, Donohue said, including the class action trial bar’s sweeping new focus on municipality litigation targeting businesses under the public nuisance law.

Bipartisan politicians

Real change will require bipartisan politicians, Donohue said.

“The business community must not, and will not, stand on the sidelines of these debates,” Donohue said. “While the Chamber never engages in presidential politics, we will praise or criticize proposals by presidential candidates from both parties. We will lead the opposition to the policies that undermine the job creators, that penalize the innovators and that target the wealth creators and investors that allow Americans to provide for their families and plan for their futures.”

To read more about Donohue’s address, go to:

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