On August 12, 2015, Judge Ellen Segal Huvelle of the U.S. District Court for the District of Columbia dealt a blow to employers by vacating the U.S. Department of Homeland Security’s (DHS) 2008 interim rule expanding the optional practical training (OPT) program for science, technology, engineering, and mathematics (STEM) students in Washington Alliance of Technology Workers v. U.S. Department of Homeland Security, Civil Action No. 14-529 (D.D.C. Aug. 12, 2015).

In 2008, DHS promulgated an interim rule expanding the OPT program period to 29 months for students with STEM degrees (and working for employers enrolled in E-Verify). In 2014, the Washington Alliance of Technology Workers, Local 37083 of the Communication Workers of America, the AFL-CIO (WashTech) filed a lawsuit against the DHS claiming that the 2008 interim rule was not valid. Specifically, WashTech alleged that DHS’s 2008 interim rule went beyond the authority of DHS to admit foreign students; the regulations were arbitrary and capricious; the OPT program was a conduit for low-wage labor (as there is no requirement to pay a prevailing wage, or Medicare and Social Security taxes) and created unfair job competition; the increased competition negatively impacted U.S. workers; and the OPT rules were basically a workaround the H-1B quotas. WashTech further alleged that DHS’s regulations failed to comply with the requirements of the Administrative Procedure Act.

As part of the relief requested, WashTech asked the court to (i) declare that DHS exceeded its legal authority by creating the OPT program; (ii) permanently enjoin it from issuing employment authorization to F-1 visa holders not pursuing a full course of study; (iii) invalidate the 17-month STEM extension and any action by DHS in connection with an extension of the program (including the 2011 and 2012 extensions); and (iv) order all non-students currently working under their approved OPT to cease immediately.

Agreeing that DHS had failed to satisfy procedural requirements by not subjecting the 2008 interim rule to a public notice and comment process and that the emergency exception to the notice and comment requirement was not applicable, Judge Huvelle vacated the 2008 interim rule. However, realizing the disruption that immediate implementation of the court order would cause on employers, Judge Huvelle stayed the court’s decision until February 12, 2016.

By way of background, the OPT program allows students here on an F-1 visa (who have either graduated or been pursuing a degree for 9 months) to work in their chosen field of study for one year. The 2008 interim rule extended the employment authorization period by 17 months (for a total of 29 months) for STEM students who worked for employers enrolled in E-Verify; the rule eliminated the requirement that DHS grant H-1B “cap gap” protection  via a notice in the Federal Register and made cap gap protections automatic; and permitted F-1 students to apply for OPT during the 60-day period after graduation.

So what does Judge Huvelle’s ruling mean to employers? Basically, unless DHS implements a new rule by the  February 12, 2016 deadline that addresses the court’s concerns, the vacatur of the 2008 interim rule would result in a massive headache for employers already scrambling to find employees for some of these highly specialized occupations. If DHS fails to time pass a new rule, essentially three things will happen come February 12, 2016: (i) OPT/STEM authorizations will no longer be valid after February 12, 2016 (this would affect current OPT/STEM holders and individuals who would be eligible for OPT/STEM); (ii) H-1B/F-1 cap gap will no longer be automatic and will require a notice in the Federal Register; and (iii) F-1 students will only be permitted to apply for OPT while in school.

More importantly, the court’s order undermines government’s ability to implement changes to the OPT program down the road and creates a roadblock for the planned expansion of the OPT program announced under the President’s Immigration Accountability Executive Actions on November 20, 2014.