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Page 8 February 9, 2015 • Law Times www.lawtimesnews.com Cross-border moves Companies struggling with employee transfers By Julius Melnitzer For Law Times t the recent North American Competi- tiveness and Inno- vation Conference held in Toronto, Ontario pressed U.S. Commerce Secretary Penny Pritzker and Ca- nadian Minister of International Trade Ed Fast to address cross- border labour mobility as their No. 1 priority. "The most important issue facing companies with cross- border business is the challenge of moving existing company workers across the shared border," says Kevin Weber of Dickinson Wright LLP's Toronto office. "The changing landscape of labour mobility and immigra- tion that extends beyond post- 9/11 measures to include the outdated NAFTA immigration regime, the closure of Canada and U.S. immigration offices along the border, and emerging political and security threats has unleashed a new thickening of the border," says Weber. These issues are making a large dent in Canada's international competitiveness. "Nothing destroys an invest- ment decision more than when a CEO gets stopped at the border and turned around," says Weber. "Europe is way ahead of us and Asia is moving rapidly in the same direction." Unfortunately, the situation is part of what's now a well-es- tablished pattern. "The clear trend is that govern- ment obstacles to the cross-border movement of employees by way of rules, regulations, or otherwise has increased," says Jean-Philippe Brunet of Norton Rose Fulbright Canada LLP's Montreal office. In early January, a glimmer of hope emerged when the U.S. Department of Homeland Se- curity announced — albeit in all of one paragraph — that it was considering what it called a known-employer pilot pro- gram to begin by late 2015. The project would test a plan to make adjudication more ef- ficient and less costly by reduc- ing paperwork and delay both for border authorities and U.S. employers seeking to employ foreign workers. Meanwhile, NAFTA pro- visions relating to the cross- border movement of employ- ees have become increasingly irrelevant in an evolving economy. A 2012 study by the Canadian Employee Re- location Council identified the most important issues to com- panies with a stake in the cross- border movement of employees as inconsistency in the applica- tion of the rules, an outdated NAFTA list of what constitutes professionals, and a lack of pre- dictability at ports of entry. Employers on both sides of the border complain that border officials who don't necessar- ily understand the realities of business are nonetheless able to make decisions that can result in severe damage to a company's business operations. In fact, the inconsistencies in the United States have become so absurd that forum shopping in the sense of picking an appropriate port of entry isn't uncommon. "There are ports of entry where the U.S. Customs and Border Pro- tection staff have more experience and training related to the cross- border applications," says Shan- non Donnelly of Baker & McK- enzie LLP's Washington office. "In most cases, we prefer our clients to travel through ports where the . . . supervisors and officers are well versed and trained in the application of the law and recommend such posts to our clients." Even to a lawyer with the experience of Eileen Martin of Hiscock & Barclay LLP's Buf- falo office, it's the uncertainty that's the most galling. Martin spent a year as a visa officer with the Canadian consulate general in Buffalo after beginning her career as an employee of the former U.S. Immigration and Naturalization Service. "You can't count on someone getting in just because they got in before, even if they did so 25 times," she says. "Things are getting more dif- ficult and more complex all the time." Still, things are a little better on the Canadian side. For example, Canada was the first to liberal- ize work permits for spouses, in- cluding for common-law and gay couples. When the United States followed suit, it limited the rights to opposite-sex spouses and cer- tain categories of work permits. "A few years ago, one of my clients had a Canadian whom the company was transferring to Bos- ton," says Brunet. "He had been with his girl- friend for over 30 years and the couple had two daughters in their twenties. The only advice I could give him was to get married in Vegas, which they did two days before the Boston job started." To be sure, Canada does have special rules regarding transfers within a company. But these rules apply only to executives, managers, and employees with specialized knowledge. "Managers doesn't mean middle managers like foremen, and specialized knowledge has become a real sticking point," says Weber. The specialized-knowledge exception is especially relevant in situations where, for example, a company on one side of the border has agreed to maintain equipment or provide train- ing as part of a transaction. "It works best for propri- etary equipment now," says Weber. "Otherwise, authorities are making it much more difficult to assert that an employee has specialized knowledge that isn't available in the importing country." In some cases, border of- ficials will even search laptops and phones to determine the true nature of a person's skills. "They're going a lot further than ever in trying to find out if the traveller should be granted a work permit," says Joel Guberman of Guberman Garson Segal LLP in Toronto. "Because employees must sometimes maintain confidenti- ality about the particulars of the visit, the inquiries can be trying." In some cases, employers are going to dangerous lengths to avoid difficulties. "Some big companies just f lat out tell their people to lie, to say they're just going to a meeting or a vacation, if they think it will be difficult to get a work permit," says Guberman. "That's a terrible approach be- cause making a material misrep- resentation is like a death war- rant in the sense that the U.S. will bar the person crossing for life." Ten years ago, many compa- nies and their law departments did the applications themselves and tried to figure things out by going online or contacting the government. That's no longer the case. "Clients are relying more and more on in-house mobility experts, consultants or external legal counsel," says Brunet. Indeed, the labyrinth that the challenge of moving employees 'The clear trend is that government obstacles to the cross-border movement of employees by way of rules, regulations or otherwise has increased,' says Jean-Philippe Brunet. 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