Business
California, other states sue Trump administration over $100,000 fee for H-1B visas
California and a coalition of other states are suing the Trump administration over a policy charging employers $100,000 for each new H-1B visa they request for foreign employees to work in the U.S. — calling it a threat not only to major industry but also to public education and healthcare services.
“As the world’s fourth largest economy, California knows that when skilled talent from around the world joins our workforce, it drives our state forward,” said California Atty. Gen. Rob Bonta, who announced the litigation Friday.
President Trump imposed the fee through a Sept. 19 proclamation, in which he said the H-1B visa program — designed to provide U.S. employers with skilled workers in science, technology, engineering, math and other advanced fields — has been “deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor.”
Trump said the program also created a “national security threat by discouraging Americans from pursuing careers in science and technology, risking American leadership in these fields.”
Bonta said such claims are baseless, and that the imposition of such fees is unlawful because it runs counter to the intent of Congress in creating the program and exceeds the president’s authority. He said Congress has included significant safeguards to prevent abuses, and that the new fee structure undermines the program’s purpose.
“President Trump’s illegal $100,000 H-1B visa fee creates unnecessary — and illegal — financial burdens on California public employers and other providers of vital services, exacerbating labor shortages in key sectors,” Bonta said in a statement. “The Trump Administration thinks it can raise costs on a whim, but the law says otherwise.”
Taylor Rogers, a White House spokeswoman, said Friday that the fee was “a necessary, initial, incremental step towards necessary reforms” that were lawful and in line with the president’s promise to “put American workers first.”
Attorneys for the administration previously defended the fee in response to a separate lawsuit brought by the U.S. Chamber of Commerce and the Assn. of American Universities, arguing earlier this month that the president has “extraordinarily broad discretion to suspend the entry of aliens whenever he finds their admission ‘detrimental to the interests of the United States,’” or to adopt “reasonable rules, regulations, and orders” related to their entry.
“The Supreme Court has repeatedly confirmed that this authority is ‘sweeping,’ subject only to the requirement that the President identify a class of aliens and articulate a facially legitimate reason for their exclusion,” the administration’s attorneys wrote.
They alleged that the H-1B program has been “ruthlessly and shamelessly exploited by bad actors,” and wrote that the plaintiffs were asking the court “to disregard the President’s inherent authority to restrict the entry of aliens into the country and override his judgment,” which they said it cannot legally do.
Trump’s announcement of the new fee alarmed many existing visa holders and badly rattled industries that are heavily reliant on such visas, including tech companies trying to compete for the world’s best talent in the global race to ramp up their AI capabilities. Thousands of companies in California have applied for H-1B visas this year, and tens of thousands have been granted to them.
Trump’s adoption of the fees is seen as part of his much broader effort to restrict immigration into the U.S. in nearly all its forms. However, he is far from alone in criticizing the H-1B program as a problematic pipeline.
Critics of the program have for years documented examples of employers using it to replace American workers with cheaper foreign workers, as Trump has suggested, and questioned whether the country truly has a shortage of certain types of workers — including tech workers.
There have also been allegations of employers, who control the visas, abusing workers and using the threat of deportation to deter complaints — among the reasons some on the political left have also been critical of the program.
“Not only is this program disastrous for American workers, it can be very harmful to guest workers as well, who are often locked into lower-paying jobs and can have their visas taken away from them by their corporate bosses if they complain about dangerous, unfair or illegal working conditions,” Sen. Bernie Sanders (I-Vt.) wrote in a Fox News opinion column in January.
In the Chamber of Commerce case, attorneys for the administration wrote that companies in the U.S. “have at times laid off thousands of American workers while simultaneously hiring thousands of H-1B workers,” sometimes even forcing the American workers “to train their H-1B replacements” before they leave.
They have done so, the attorneys wrote, even as unemployment among recent U.S. college graduates in STEM fields has increased.
“Employing H-1B workers in entry-level positions at discounted rates undercuts American worker wages and opportunities, and is antithetical to the purpose of the H-1B program, which is ‘to fill jobs for which highly skilled and educated American workers are unavailable,’” the administration’s attorneys wrote.
By contrast, the states’ lawsuit stresses the shortfalls in the American workforce in key industries, and defends the program by citing its existing limits. The legal action notes that employers must certify to the government that their hiring of visa workers will not negatively affect American wages or working conditions. Congress also has set a cap on the number of visa holders that any individual employer may hire.
Bonta’s office said educators account for the third-largest occupation group in the program, with nearly 30,000 educators with H-1B visas helping thousands of institutions fill a national teacher shortage that saw nearly three-quarters of U.S. school districts report difficulty filling positions in the 2024-2025 school year.
Schools, universities and colleges — largely public or nonprofit — cannot afford to pay $100,000 per visa, Bonta’s office said.
In addition, some 17,000 healthcare workers with H-1B visas — half of them physicians and surgeons — are helping to backfill a massive shortfall in trained medical staff in the U.S., including by working as doctors and nurses in low-income and rural neighborhoods, Bonta’s office said.
“In California, access to specialists and primary care providers in rural areas is already extremely limited and is projected to worsen as physicians retire and these communities struggle to attract new doctors,” it said. “As a result of the fee, these institutions will be forced to operate with inadequate staffing or divert funding away from other important programs to cover expenses.”
Bonta’s office said that prior to the imposition of the new fee, employers could expect to pay between $960 and $7,595 in “regulatory and statutory fees” per H-1B visa, based on the actual cost to the government of processing the request and document, as intended by Congress.
The Trump administration, Bonta’s office said, issued the new fee without going through legally required processes for collecting outside input first, and “without considering the full range of impacts — especially on the provision of the critical services by government and nonprofit entities.”
The arguments echo findings by a judge in a separate case years ago, after Trump tried to restrict many such visas in his first term. A judge in that case — brought by the U.S. Chamber of Commerce, the National Assn. of Manufacturers and others — found that Congress, not the president, had the authority to change the terms of the visas, and that the Trump administration had not evaluated the potential impacts of such a change before implementing it, as required by law.
The case became moot after President Biden decided not to renew the restrictions in 2021, a move which tech companies considered a win.
Joining in the lawsuit — California’s 49th against the Trump administration in the last year alone — are Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, North Carolina, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington and Wisconsin.
Sweetgreen’s salad business isn’t as fresh as it used to be.
Not long ago, the Los-Angeles-based company’s fresh bowls of fancy salads were all the rage, and its shares soared on hopes that salad-slinging robots could make it more profitable.
Last year was tough, though, as enthusiasm for the brand waned and cash-strapped diners abandoned fast-casual options for cheaper fast food and homemade meals.
Sweetgreen’s same-store sales slid 9.5% last quarter, even as it increased portion sizes and tried new menu items — including French fries, which flopped. It laid off 10% of its support center workforce in Los Angeles, and one of its founders stepped down.
Over the last 12 months, Sweetgreen shares have tumbled more than 75%. The stock closed Thursday at $8.
“Sweetgreen is more of a premium health product, and it’s going to cost more than a Big Mac,” said retail expert Dominick Miserandino, who runs the company Retail Tech Media Nexus.
“The average consumer, when they’re hit with survival-type questions about basic necessities, wellness is not going to be No. 1 for them,” he said.
Younger consumers are showing less interest in Sweetgreen salads at the same time as tariffs and other factors are driving inflation. The company fell short of Wall Street’s expectations last quarter with a net loss of $36.1 million on revenue of $172.4 million.
“Performance was impacted by softer sales,” Sweetgreen co-founder and Chief Executive Jonathon Neman said in November. “This was coupled with lighter spending among younger guests.”
As it braces for the future, Sweetgreen decided to sell the food automation company it bought only a few years ago. Sweetgreen closed the sale of its automated kitchen technology, dubbed Infinite Kitchen, to the takeout and food delivery company Wonder Group last month.
Spyce, the business unit behind Infinite Kitchen, was sold for close to $200 milion in cash and shares of Wonder’s Series C preferred stock. Sweetgreen bought Spyce in 2021 for about $70 million. Sweetgreen will continue to use the technology in some restaurants. The tech uses automatic conveyor belts to assemble salads and other meals.
“The sale marks a strategic milestone for Sweetgreen, enabling the company to reinvest in key priorities and focus on growth and operational efficiency,” the company said in a news release.
Sweetgreen did not respond to a request for comment.
Sweetgreen was founded in 2007 in Washington by Georgetown students looking to make healthy food as convenient as fast food. It moved its headquarters to Los Angeles in 2016.
The chain has grown to more than 280 stores in the U.S.
California — with 56 Sweetgreens — is the state with the most locations.
The company made its initial public offering in 2021, and a day later was valued at nearly $6 billion. Sweetgreen is now worth around $900 million.
Fast-casual eateries — considered a step above fast food but more affordable than a full-service restaurant — once boomed in popularity. But value-seeking consumers are now turning to other options, said Evert Gruyaert, head of U.S. restaurants and food service at Deloitte.
“There is extremely strong competition and pressure coming from quick-service brands, and casual dining now has very compelling value offers too,” he said. “Fast casual is really squeezed in the middle.”
Fast-casual chains such as Cava and Newport Beach-based Chipotle popularized the customizable lunch bowl, usually including a protein, grain, and veggies.
The idea took off after Chipotle founder Steve Ells noticed that customers were opening up their burritos and asking for a fork. The Mexican chain launched bowls in 2003, paving the way for the Mediterranean bowl destination Cava to open in 2006.
Sweetgreen’s menu includes a range of salads as well as warm bowls featuring rice, salmon and chicken. A caramelized garlic steak bowl sells for $17.95, and a garden cobb salad is $15.75.
With tax, tip and a drink, customers could easily spend more than $20 on lunch.
The trend of lunching on big bowls of healthy ingredients has lost some momentum in recent years.
On social media, some diners are complaining about “slop bowls,” saying that lunch shouldn’t be just a collection of ingredients thrown in a bowl.
Chipotle shares have slid about 30% over the last year and Cava shares have fallen close to 40% over the same time frame. Ells, who left Chipotle in 2020, returned to sandwiches and handheld foods in his new venture Counter Service.
On an earnings call in November, Sweetgreen’s Neman said the chain’s new handheld product will begin market testing early this year.
Whether in a bowl or on bread, much of Sweetgreen’s appeal comes from the perception that it’s a healthy choice. But even in Southern California, where wellness is often top of mind, its offerings are failing to attract as many customers as they once did.
“If you’re financially pushed to the limit, you need fast food to get you through the day at the cheapest possible price,” Miserandino said.
Millennials and Gen. Z, who according to Neman make up about a third of Sweetgreen’s customer base, are facing a difficult job market and cutting back on spending more than their older peers.
Sweetgreen is trying to find a way back into the sweet spot of salad consumers. It debuted a new nutrient-dense menu, created in collaboration with the wellness company Function.
The menu, which follows a recent surge in demand for protein and other macronutrients, includes options with extra iron, omega-3 fatty acids and antioxidants.
“Amid a challenging macro backdrop, our priorities remain clear,” Neman said in November. “I am extremely confident that our leadership team and focused strategy will lead Sweetgreen back to sustained, profitable growth.”
After nearly 14 years at the helm, Lucasfilm President Kathleen Kennedy will step down this week, marking a major — though expected — changing of the guard at the Walt Disney Co.-owned “Star Wars” studio.
In her place, current Lucasfilm Chief Creative Officer Dave Filoni has been named president and will retain his creative title and Lucasfilm Business President and General Manager Lynwen Brennan has been named co-president, Disney said Thursday. The pair will co-lead the San Francisco-based studio and will report to Disney Entertainment Co-Chairman Alan Bergman.
“When George Lucas asked me to take over Lucasfilm upon his retirement, I couldn’t have imagined what lay ahead,” said Kennedy, 72, in a statement Thursday. “It has been a true privilege to spend more than a decade working alongside the extraordinary talent at Lucasfilm. Their creativity and dedication have been an inspiration, and I’m deeply proud of what we’ve accomplished together. I’m excited to continue developing films and television with both longtime collaborators and fresh voices who represent the future of storytelling.”
The move comes amid widespread speculation about Kennedy’s future. Handpicked in 2012 by “Star Wars” and “Indiana Jones” creator George Lucas to helm the company he founded, Kennedy oversaw the expansion of the “Star Wars” franchise into a new trilogy, two spin-off movies, as well as several TV shows, including “The Mandalorian” and “Andor.” Under her leadership, the studio also grew its presence in Disney’s theme parks with “Star Wars”-themed lands in both Anaheim’s Disneyland Resort and Walt Disney World in Florida.
But the expansion, and her tenure, were not without setbacks.
2018’s “Solo: A Star Wars Story” grossed a disappointing $392.9 million at the box office, after a fraught production in which the studio replaced the directors during shooting. Several “Star Wars” projects have been announced over the years with big names attached, only to be delayed or dropped, including a planned trilogy with “Game of Thrones” showrunners David Benioff and D.B. Weiss.
Kennedy told The Times in 2019 that perceptions of director churn at Lucasfilm were overblown.
“Nobody in our business develops something with one person, that’s it, and everything goes perfectly,” she said at the time. “That’s a fairly common part of the process. We fall under incredible scrutiny because it’s ‘Star Wars.’ Because of the quality I’m striving for, I’m reaching out to top talent, and vice versa.”
Kennedy also had to weather scrutiny from die-hard fans about the new direction of the franchise. Nevertheless, the newest “Star Wars” trilogy grossed a collective $4.3 billion in worldwide box office revenue, with spinoff “Rogue One: A Star Wars Story” hauling in more than $1 billion globally and leading to the popular series “Andor.”
She will continue as producer of Lucasfilm’s next two theatrical films — May’s “Star Wars: The Mandalorian and Grogu” and “Star Wars: Starfighter,” which is being helmed by “Deadpool & Wolverine” director Shawn Levy and set for release in 2027.
“The Mandalorian and Grogu” will mark the first “Star Wars” theatrical film since 2019’s “Star Wars: Episode IX — The Rise of Skywalker.” During production for that movie, Kennedy asked Disney Chief Executive Bob Iger if the company could take a pause on “Star Wars” films to give them more time develop new storylines. At that point, the company had released at least one “Star Wars” movie a year since 2015, while Lucas himself had previously waited at least three years between films. (Since 2019, the studio did release “Indiana Jones and the Dial of Destiny,” as well as several “Star Wars”-adjacent series and and streaming films, including some Lego movies and an ILM documentary.)
“When we acquired Lucasfilm more than a decade ago, we knew we were bringing into the Disney family not only one of the most beloved and enduring storytelling universes ever created, but also a team of extraordinary talent led by a visionary filmmaker — someone who had been handpicked by George Lucas himself, no less,” Iger said in a statement Thursday. “We’re deeply grateful for Kathleen Kennedy’s leadership, her vision, and her stewardship of such an iconic studio and brand.”
Both Filoni and Brennan step into their new roles as Lucasfilm veterans.
Filoni, who frequently wears a cowboy hat in public and is thus widely recognizable to fans, was chosen by Lucas in 2005 to build the studio’s animation business. He created Lucasfilm’s first series, “Star Wars: The Clone Wars” as well as “Star Wars Rebels,” was the executive producer on shows including “The Mandalorian” and “Ahsoka” and is producer and writer of the “The Mandalorian and Grogu” film.
Brennan joined Lucasfilm visual effects studio Industrial Light & Magic in 1999 and currently leads business strategy, franchise and production operations, as well as ILM’s expansion worldwide.
Paramount suffered a blow in a Delaware courtroom Thursday as a judge refused to expedite its lawsuit against Warner Bros. Discovery seeking information about internal deliberations and a financial analysis.
Reuters reported that Vice Chancellor Morgan T. Zurn of the Delaware Chancery Court said during a hearing that Paramount had failed to show it would suffer “cognizable irreparable harm” without the financial details it sought.
Now the pressure is on Paramount to win over Warner shareholders before next week’s tender offer deadline. Investors have until Wednesday to sell their stock to Paramount for $30 a share. Paramount could extend that deadline.
Paramount sued on Monday, claiming investors needed information that Warner has yet to provide about how board members valued various assets in determining that its sale to Netflix was more lucrative.
Paramount wanted the judge to fast-track the proceedings to help boost its outreach to Warner shareholders.
The David Ellison-led company has insisted its $108-billion deal, including absorption of Warner debt, represents a higher value for Warner shareholders than Netflix’s Dec. 4 cash-and-stock deal. Warner board members closed the auction that night, awarding Netflix the prize.
Netflix, which has seen its stock slide about 17% since early December, is reportedly weighing whether to bolster its bid by offering all cash for Warner Bros. movie and television studio, HBO and HBO Max. Netflix declined to comment.
Paramount wants to buy all of Warner Bros. Discovery, including CNN and the other basic cable channels.
In a statement Thursday, Warner Bros. Discovery said Paramount Skydance’s legal challenge “was yet another unserious attempt to distract and the Judge saw right through it.”
“We are pleased a Delaware Court agreed with our belief and rejected the notion that this lawsuit needed special treatment and may have other serious flaws,” Warner Bros. Discovery said. “Despite its multiple opportunities, Paramount Skydance continues to propose a transaction that our board unanimously concluded is not superior to the merger agreement with Netflix.”
Paramount downplayed its latest setback, saying Zurn’s ruling “does not pertain to the merits of Paramount’s claim.”
Paramount, in its statement, said that Warner shareholders deserved information about how Warner board’s evaluated the value for Warner’s cable channels to better compare the two proposals.
Netflix doesn’t want the cable channels allowing Warner to move forward with plans to spin off those channels this summer. Warner shareholders would get stock in that new company, called Discovery Global.
“WBD shareholders should ask why their Board is working so hard to hide this information,” Paramount said, adding it “continues to urge WBD to make these disclosures so that WBD shareholders can make an informed decision.”
Times staff writer Samantha Masunaga contributed to this report.
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