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Entertainment Companies Grapple With Immigration Issues for Foreign Workers

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When Republican presidential candidates gathered onstage for a debate last month, one media conglomerate found itself in an unenviable position: as their target.

That was The Walt Disney Co., over an incident in 2014 in which it laid off about 250 IT workers at Walt Disney World and enlisted a contracting firm to replace them, including among the new hires foreign workers with H-1B guest-worker visas.

Donald Trump and Florida Sen. Marco Rubio said the incident reflected troubles with the H-1B program, which allows U.S. companies to temporarily employ foreign workers in “specialty occupations.” Rubio said the program was being “abused” to replace American workers.

What didn’t get mentioned were the concerns the visa was designed to address. For instance, some estimates say that nearly 600,000 technology jobs are unfilled in the U.S., due to a shortage of domestic workers with such skills. While Silicon Valley is the most visible user of H-1B visas, Hollywood depends on them as well, particularly for technical functions in studio operations and in specialized fields like visual effects and animation.

Vivek Wadhwa, director of research at the Center for Entrepreneurship and Research Commercialization at Duke University, says the H-1B program is meant to enable companies to draw on highly skilled foreign talent that they can’t otherwise recruit. Without the visas, “we are basically starving the American economy,” he says. “This is when we need them the most. Blaming foreigners for our problems ignores that they help make our economy more efficient so that we can hire more [American workers, too].”

After a Senate hearing in which some lawmakers pilloried the H-1B program, Compete America — a group whose members include Amazon, Facebook, Microsoft and the video-game trade group Entertainment Software Assn. — said in a statement that problems in the system need to be addressed, but that those issues are “by far” the exceptions to the rule.

“It is a false choice to suggest we can’t protect our U.S. workforce and still have a functional, user-friendly H-1B system with a proven track record of keeping jobs and economic benefits in America,” the group said.

The Disney incident, Wadhwa says, was an example of the visa being used for something other than its intended purpose, and “gives the nativists an excuse to blame foreigners for their woes.”

Leo Perrero, one of the IT workers laid off from Disney World, is pursuing a class-action lawsuit against the company along with another Disney tech worker, Dena Moore. “I just felt extremely betrayed,” Perrero tells Variety. Also named as defendants are HCL and Cognizant, the firms that brought in the foreign workers who took the jobs. The litigation alleges the companies colluded to replace American workers with H-1B visa workers.

Perrero says Disney workers received notice in late 2014 that their jobs would end, and that “if we didn’t cooperate and didn’t do the things to train replacement workers, we wouldn’t get bonuses or severance.”

He says workers were also told that about 100 “more exciting” jobs would be created. None panned out. “I never got offered anything,” he says, despite what he describes as a “stellar performance review.”

Perrero testified before a Senate committee hearing in February and appeared at a Trump rally that month. His attorney, Sara Blackwell, says a problem for many laid-off workers is that a condition of their severance agreements includes being prohibited from seeking legal action. “It is a horrible secret,” she says. Via an organization called Protect US Workers, she has focused on the issue of the H-1B visas and laid off workers, including at a recent rally in Chicago.

Disney has stated that the lawsuits misrepresent the facts, and that the reorganization took the Parks and Resorts IT department “from a team that focused primarily on maintaining our existing systems to one that is more focused on developing new capabilities. A focus on innovation is critical given the constant evolution of technology.”

The company says it was able to hire back more than 100 of the 250 employees affected, noting: “In addition, since the reorganization, we have hired more than 140 other U.S. IT workers into technical roles within the Parks technology team, and we are currently recruiting candidates to fill more than 100 IT positions. The Parks U.S. IT team will ultimately be larger than it was prior to the reorganization.”

Of greater importance to Hollywood on the immigration front is the O-1 visa, granted to those with “extraordinary ability” in the sciences, the arts or the movie or TV business. When there were still glimmers of hope for comprehensive immigration reform last year — before an election cycle in which corporate America has been a target — the MPAA lobbied on the issue, according to a disclosure report.

Chad Blocker, partner at law firm Fragomen Worldwide’s Los Angeles office, said that “it is not infrequent” where the criteria for obtaining an O-1 visa do not apply to all professions. His firm is a leading specialist in immigration matters.

“It can be difficult for a petitioner to meet the regulatory criteria, even if they have someone who is really extraordinary in their field,” he said.

Immigration officials issued a policy memorandum earlier this year, but it has raised new questions of whether it will make the process more flexible.

Steve Hulett, business representative for the Animation Guild, says he is often called upon by immigration lawyers to write recommendations for clients to obtain an O-1. “It is always this double-edged sword,” Hulett says of guest-worker visas, noting the concern that talent is being brought in at the expense of U.S. employees, vs. the idea that restricting the entry of guest workers will ultimately cost more jobs if it forces a company to pick up operations and move elsewhere.

“You have to intelligently manage this stuff so you don’t have a huge dislocation,” he says. “Frankly, I don’t know what the best solution is.  I’m not sure there IS a ‘best solution’.”

Photo: Donald Trump has highlighted the H-1B visa issue on the campaign trail and in debates.

For more for from Variety’s Politics and Hollywood issue, click here.