Validity of H1B after 1 year ouside US

Hi All,
I am a canadian and I have H1B authorization valid till end of Sept, 2010. I got it in Sept. of 2007. I worked in US till May 2009 and came back to Canada. So I am out of US for more then a year. My US employer did not petition to revoke my H1B and I still have the I94 which is still valid. I did not return the I94 to the airline because I was not planning to stay this long. Now the employer is telling me that my H1B is abandoned and invalid. If I want to go back and work for them again, they have to apply for a new H1B in 2011 quota. My question is can they apply for renewal of the H1B. Your feedback is greatly appreciated. TIA

Several years ago, the CIS decided that leaving for a year did not necessarily mean that one could not resume using it, without having to reapply for H1 under any quota.

You can resume this H1, and can renew it like anyone else that has an H1 expiring in Sept 2010, and you can even recoup the time you spent outside US during against your 6-yr clock.

When your firm talks tp their lawyer they will realize the advantageous position you are in.