Federal agencies increasingly are scrutinizing employers, particularly government contractors, in search of discrimination in favor of visa holders and against U.S. workers based on their citizenship or national origin. Agencies are also aggressively suspending employers’ access to immigration visa sponsorship programs based on these claims of discrimination.

Recent DOJ & DOL Coordinated Investigation, Lawsuit & Employer Suspension

In April 2026, the U.S. Department of Justice (DOJ) filed a lawsuit against Cloudera, Inc. alleging discrimination in the company’s use of the Permanent Labor Certification Program (PERM). DOJ claims that Cloudera favored foreign visa holders to the exclusion of U.S. workers based on their citizenship. DOJ alleges the Company permitted only temporary work visa holders to apply for certain high-paying technology jobs.

Just a few weeks later in May 2026, the U.S. Department of Labor (DOL) suspended Cloudera for 180 days from submitting all PERM applications, with possible extensions of the suspension, depending on the DOJ’s ongoing lawsuit and investigation.

This shift toward coordinated enforcement between these federal agencies on immigration compliance is a new approach. It significantly increases the risk of simultaneous investigations, lawsuits and, importantly, immediate suspension from visa sponsorship programs, even before DOJ or a court reaches a legal conclusion or resolution.

Federal Contractors Face Increased Risk

The coordinated Cloudera enforcement development is particularly concerning for federal contractors, where alleged immigration non-compliance can quickly escalate beyond typical penalties into potentially huge False Claims Act (FCA) exposure.

As an example of DOJ’s growing focus on pursuing immigration-related violations under the FCA, in September 2025, DOJ announced a $4 million settlement with a New Jersey shipbuilder for failing to meet immigration employment (I-9) verification requirements.

Based on the varied remedies available under the laws enforced by DOJ, DOL, and other agencies, federal contractors face broad risks including “treble” damages under the FCA, suspension from visa sponsorship programs, suspension or cancellation of current federal contracts, and future contract debarment.

What Should Employers Do?

Employers should act quickly to audit PERM and other visa sponsorship programs to ensure there is no potential discrimination against U.S. workers based on citizenship or national origin. While considering foreign visa holders for open positions is and remains lawful, the Administration and its enforcement agencies have clearly signaled they are prioritizing claims of workplace discrimination against U.S. citizens.

ANNOUNCEMENT

Silberman Law Launches Full-Service Workplace Immigration Practice

During the past year, our clients increasingly have sought our counsel on workplace immigration matters. The quickly changing and uncertain immigration enforcement landscape creates increased challenges for employers, emphasizing the need for expert legal advice and guidance.

In response, we are pleased to announce that Silberman Law has launched a full-service Workplace Immigration Practice, led by Principal Attorney Steven Williams.

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If you have questions about this Alert or want immigration law advice or guidance, please contact the Silberman law legal professional with whom you work, or simply reply to this Alert.