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The definition of constructive knowledge has been an ongoing topic for immigration compliance lawyers for a number of years. Recently, OCAHO, in United States v. Associated Painters, Inc., 10 OCAHO No. 1151 (May 30, 2012), provided some guidance as to what does not meet the definition of constructive knowledge.
Associated Painters, Inc. (API) faced two separate inspections by ICE and its predecessor INS in 2009 and 2000, respectively. In the 2000 inspection, INS found 34 employees could not be verified with proper work authorization. As a result, all of the 34 employees left employment with API by November 24, 2000. The company's president, Rodney Friese, completed an "Attestation of Compliance - Re-verification of Employees" stating the employees no longer worked for API and affirmed "should any of the individuals listed in this Notice seek future employment, I am required to properly complete a Form I-9 with documents other than those indicated on the Notice."
However, API did rehire three of the 34 employees in October 2004, March 2008, and September 2008. These three employees used the same Social Security numbers from their previous employment. This was contrary to the November 24, 2000 attestation.
On July 1, 2009, ICE conducted an inspection of API and discovered the rehiring of three employees with the previously used Social Security numbers. ICE served a Notice of Intent to Fine and API requested a hearing on the matter.
In response, ICE stated the only issue in need of resolution is whether API hired the three individuals "knowing them to be unauthorized to work." ICE asserted API had actual and constructive knowledge of the unauthorized status of the three individuals based on Rodney Friese's actual notice in 2000 and his acknowledgment - "should any of the individuals listed in this Notice seek future employment, I am required to properly complete a Form I-9 with documentsother than those indicated on the Notice."
API provided a statement from Friese asserting that, "because of the company's decentralized recordkeeping, the lapse of time, and the number of employment applications considered, these hiring errors took place without the oversight and knowledge of the owners and officers of API. . . and the hires actually took place from four to eight years after the Attestation of Compliance wassigned in 2000, that the three individuals were hired in two different locations by three different managers, and that the individuals simply slipped through the cracks unknowingly."
As immigration compliance attorneys are well-aware, the doctrine of constructive knowledge isas clear as mud in OCAHO case law. ICE cited Collins Food International, Inc. v. INS, 948 F.2d 549 (9th Cir. 1991), Mester Manufacturing Co. v. INS, 879 F.2d 561 (9th Cir. 1989) and New El Rey Sausage Co. v. INS, 925 F.2d 1153 (9th Cir. 1991), to support its position that API had constructive knowledge.
The Court in Collins gave clear warning that the constructive knowledge doctrine must be "sparingly applied" in order to preserve congressional intent. Collins emphasized IRCA was "delicately balanced" to prevent the employment of unauthorized aliens while still avoiding discrimination. 948 F.2d at 554-55. Furthermore, too expansive a view of constructive knowledge would risk encouraging employers to avoid liability through discriminatory practices. Id. See also Aramark Facility Services v. Service Employees' International Union, 530 F.3d 817, 825 (9th Cir. 2008) (constructive knowledge must be narrowly construed and sparingly applied in order to preserve the original congressional intent).
OCAHO disagreed with ICE's assertion that the decisions in Mester and New El Rey supported a finding of constructive knowledge in the case at bar. According to OCAHO:
Those cases involved employers who continued to employ suspect employees without interruption and without taking any corrective action at all after the employers had received specific notice from INS about the questionable status of the employees. Unlike the employers in those cases, (API) did not continue to employ the individuals on the list without interruption or corrective action after it received notice of the discrepancies in their documents in 2000; either it took prompt action to terminate them or they left after being requested to submit additional documents, but none continued to be employed by API after November 2000. The four to eight year period intervening between 2000 and the rehire of those three individuals readily distinguishes the facts in this case from those in Mester and New El Rey.
OCAHO further stated:
What happened during the four to eight years intervening between 2000 and the hiring of the suspect employees is nowhere elaborated. For all that the record reflects, Friese promptly forgot about the Attestation of Compliance and did nothing at all to implement it. On the other hand, for all that the record discloses he took prompt steps to implement the Attestation by issuing directives to all the supervisors and hiring managers and by providing specific training for I-9 preparers every six months. We simply do not know. . . .
Context matters. The totality of the circumstances matters. Inferences are drawn from facts, not from legal syllogisms and not from the air. . . . This record is otherwise devoid of evidence as to any surrounding facts and circumstances from which it may be inferred that Araiza, Ponce, and Ramirez were hired because Friese or others at API failed to exercise reasonable care, abandoned their I-9 responsibilities elected to look the other way, acted recklessly, or otherwise engaged in culpable conduct. Not only do we not know what Friese did in 2000 to notify the hiring managers, we do not know what the qualifications of those managers were, what training was provided to them, or what their turnover rate was. We know virtually nothing about the circumstances under which the hires took place in 2004 and 2008.
Based upon the record, OCAHO decided there was insufficient evidence to find API acted with "reckless and wanton disregard for the legal consequences of permitting another individual to introduce an unauthorized alien into its workforce."
This is a significant decision because it provides a threshold for what does not meet the doctrine of constructive knowledge. Furthermore, it certainly shows continuing support that OCAHO will not merely rubber stamp ICE's Notices of Intent to Fine. Thus, it may be well worth it for companies facing ICE fines to litigate the cases.
The Department of Justice has reached a settlement agreement with United Natural Foods Inc. (UNFI), resolving allegations that the company discriminated under the anti-discrimination provision of the Immigration and Nationality Act (INA), when it impermissibly reverified the work authority of lawful permanent residents and required some non-citizen workers to provide specific I-9 documentation.
A lawful permanent resident alleged UNFI improperly terminated him after he failed to produce anunexpired lawful permanent resident card in connection with an erroneous reverification of his employment eligibility. The charging party had presented proper work authorization documentation at the time of hire, and UNFI had no reason to suspect that his documentation was not genuine. The employee had permanent work-authorization, but lost three weeks' worth of wages as a result of UNFI's practice.
The DOJ's investigation revealed UNFI reverified the documentation of similarly-situated lawful permanent residents when their documentation expired but did not reverify expired documentation of U.S. citizens. The anti-discrimination provision prohibits treating employees differently in the employment eligibility verification and reverification processes based on citizenship or national origin.
In response to the department's investigation, UNFI conducted an internal audit and undertookimmediate corrective action to address and rectify its employment eligibility verification policies and practices. As part of its corrective action, UNFI rehired the charging party and gave him full back pay. Under the settlement agreement, the company agreed to pay $3,190 in civil penalties, to conform all of its actions to ensure compliance with the INA's anti-discrimination provision and to train its human resources personnel about the company's responsibility to avoid discrimination in the employment eligibility verification process.
South Carolina employees have been warned by the State's Department of Labor that they must utilize E-Verify to check employees' work-authorization status or face immediate penalties under South Carolina's "Illegal Immigration and Reform Act." Jim Knight of South Carolina's Department of Labor, Licensing and Regulation, the state agency overseeing immigration compliance, stated: "There is no free bite at the apple after July 1." The statute has a 6-month grace period beforethe penalties are enforced.
This signals the end of a grace period designed to enable employers to sign up for E-Verify. The requirement that South Carolina-based employers verify workers' employment eligibility through E-Verify began with the state's 2008 immigration law and first went into effect in July 2010.
Governor Nikki Haley signed Amendments to the "South Carolina Illegal Immigration and Reform Act" on June 27, 2011, which set the effective date as January 1, 2012. Between January 1, 2012 and June 30, 2012, employers who were found to be out of compliance received warnings for a firstviolation.
Under the new enforcement scheme, however, a first violation carries a one-year probation requiring businesses to submit quarterly reports to the state's Department of Labor and a place on the agency's website for six months. A second violation within three years requires the business to be shut down between 10 days and 30 days through the temporary suspension of their operatinglicenses. Plus, the employer will be permanently featured online. In addition, an agency determination that an employer knowingly hired an illegal immigrant and failed to use E-Verify raises the penalty from an automatic, temporary suspension and $1,000 fine to a potential permanent shutdown through the revocation of all business licenses.
If you operate a business in South Carolina, you must comply with the E-Verify law. If your company is new to E-Verify, you should consult with an immigration compliance attorney.
On July 5, 2012, as expected, Governor Tom Corbett signed into law the Public Works Employment Verification Act, which will take effect January 1, 2013. The law which requires public works contractors and subcontractors, on construction projects where the estimated cost is at least $25,000, to use E-Verify to determine whether their employees are authorized to work in the United States.
The law broadly defines public work as "Construction, reconstruction, demolition, alteration and/or repair work other than maintenance work, done under contract and paid for in whole or in part out of the funds of a public body where the estimated cost of the total project is in excess of $25,000)."
State public works contractors and subcontractors will also be required to sign a verification form acknowledging their enrollment in E-Verify and their responsibilities under the law. Willfulviolators who misrepresent themselves on the verification form may be subject to a civil fine of $250 and $1,000 per violation.
Failure to E-Verify employees will lead to the following penalties:
First Offense: warning to violator and posting on Pennsylvania's website;
Second Offense: 30 day debarment from state public works contracts;
Third Offense: 180 days or up to one year debarment from state public works contracts; and
Willful violators may be debarred for up to three years.
The Department of General Services shall enforce this law. It shall investigate "any credible complaint of a violation of this law. Additionally, the Department shall conduct random audits of public works contractors and subcontractors.
The law includes an anti-retaliation/discrimination provision whereby it is unlawful to retaliate or discriminate against any employee who participates in an investigation or hearing or reports a complaint.
Since the law is not effective for almost 6 months, public works contractors and subcontractors have time to prepare to rnter the world of E-Verify. I would advise these contractors to retain an attorney experienced in immigration compliance.
On June 30, 2012, the Pennsylvania Legislature passed legislation which will require public works contractors and subcontractors, on construction projects where the estimated cost is at least $25,000, to use E-Verify to determine whether their employees are authorized to work in the United States. Violators of the new law are subject to penalties, including fines of $250 to $1000, warnings, and debarment from working on public projects from 30 days to three years. The legislation is awaiting signature from Governor Corbett, who is expected to sign it. If signed, it will take effect January 1, 2013.
If signed, Pennsyvania would become the only Northeastern state to require E-Verify and the first to be implemented through legislation. Previously, Rhode Island had E-Verify through an Executive Order that required contractors, sub-contractors and vendors doing business with Rhode Island to use E-Verify for all new hires. But, Governor Chafee rescinded that Order in January 2011.
Check back after Governor Corbett signs the legislation for a more in-depth discussion of the new law.