On April 28, 2026, the Department of Justice filed a lawsuit against Cloudera, alleging that the company discriminated against U.S. workers by favoring foreign workers through its hiring practices. Following the lawsuit, Cloudera was placed on a 180-day PERM suspension. Similarly, on September 8, 2026, the U.S. Department of Labor announced that IT company Cognizant had its permanent labor certifications (PERM) suspended.
The Department of Labor is investigating whether Cloudera participated in a fraud scheme through the H-1B Program that discriminated against U.S. workers by intentionally favoring temporary visa holders. Allegedly, Cloudera created a hiring process in which U.S. workers were directed to submit applications to a nonfunctional email address, preventing the company from receiving their applications. These allegations highlight increased government scrutiny intoPERM recruitment processes and whether they provide U.S. workers with a genuine opportunity to apply. Moving forward, HR and business leaders should ensure hiring practices comply with immigration laws and do not discriminate, or appear to discriminate, based on citizenship status.
What Is PERM and Why Does It Matter?
The H-1B Program is for employers who desire to hire foreign national employees as employees in speciality positions or as models who possess exceptional skill and recognition. The program exists to allow employers to hire foreign nationals to fill skill gaps in their workforce. PERM requires the employer to conduct prescribed recruitment and establish that there are no able, willing, qualified, and available U.S. workers for the permanent position, among other requirements.
Who is Most Affected
The Trump Administration’s “crack down on the abuse of the H-1B Program” primarily affects foreign national employees and employers hiring foreign national employees. Specifically, the industries most affected are “for professional, scientific, and technical services,” as they account for most H-1B applications.
What This Matters for HR and Business Leaders
These cases demonstrate that government agencies are cracking down on how organizations conduct PERM recruitment. Businesses that discriminate against U.S. workers can face serious consequences such as civil fines and limitations on their ability to sponsor workers for permanent residence and prohibitions on filing new H-1B petitions.
What Employers Should Do Now
- Audit PERM recruitment procedures;
- Confirm PERM applicants can actually access and use every listed application method;
- Compare PERM recruitment with ordinary recruiting practices;
- Maintain complete applicant/recruitment records;
- Document lawful, job-related reasons for rejecting U.S. applicants;
- Train HR and recruiting teams on citizenship-status discrimination;
- Have immigration counsel review practices that differ between PERM and normal recruiting.
We Are Here to Help
If you would like help with reviewing PERM recruitment practices, assessing immigration-related hiring policies, responding to DOL or DOJ inquiries, and developing compliant foreign-national hiring procedures, please call us at (212) 495-9245 or email us at info@klugfirm.com.