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I-9 E-Verify Immigration Compliance


  1. I-9 form with August 31, 2012 Expiration Date is Still Valid by Bruce Buchanan, Siskind Susser

    On August 13, 2012, the USCIS  announced employers should continue using the current I-9 form version even though the I-9 form's expiration date is August 31, 2012. Employers should use the
    current version of Form I-9, but the USCIS instructions for the Form I-9 state that the agency also accepts the prior version of the Form I-9, which bears a  revision date of February 2, 2009.
  2. American Appeal Escapes Lawsuit Related to ICE Audit by Bruce Buchanan, Siskind Susser

    On July 31, 2012, the U.S. District Court for the Central District of California dismissed, without prejudice, a shareholder derivative suit against American Apparel and its individual directors which alleged the directors breached their fiduciary duty by failing to institute controls to ensure American Apparel's compliance with immigration laws and misrepresented its compliance with those laws in filings with the Securities and Exchange Commission (SEC).
    As you may recall, in 2009, after a 17-month investigation by Immigrations and Customs Enforcement (ICE), about 1,800 employees or a quarter of American Apparel's workforce were terminated due to their failure to have proper work authorization. The terminations caused the company's workforce to become undersized, which caused a tremendous loss in production. Due to this, American Apparel's stock price significantly dropped. Thus, the shareholders sued.
    The District Court dismissed the complaint on the grounds that it failed to plead the requisite knowledge and bad faith on the part of the individual directors necessary to maintain a shareholder derivative suit under Delaware law.  The Court, in dismissing the complaint, stated the plaintiffs were unable to establish the very difficult standards necessary to maintain a derivative action. Under Delaware law, where American Apparel is incorporated, conduct amounting to gross negligence is insufficient to support a claim of bad faith.
  3. Construction Company’s Fine Reduced by OCAHO by Bruce Buchanan, Siskind Susser

    In United States v. Stanford Sign & Awning, Inc., 10 OCAHO No. 1152 (2012), the Office of the  Chief Administrative Hearing Officer (OCAHO) reduced a small construction company's fine from $12,523.50 to $9600 for 18 violations.  
    ICE established Stanford failed to ensure that 17 employees properly completed section 1, and/or failed itself to properly complete sections 2 or 3 of the I-9 form plus committed one additional violation. ICE found the percentage of violations was 37%; thus, the base fine was $605.00 per violation. ICE aggravated the proposed penalties by a total of 15% - 5% based on lack of good faith, 5% for the seriousness of the violations, and 5% for the involvement of unauthorized aliens. Thus, ICE sought approximately $696 per violation for each of the 18 violations for a total of $12,523.50. 
    In support of its assertion that Stanford did not act in good faith, ICE said Stanford failed to follow directions on making corrections to technical errors found on 25 of its I-9 forms. However, it is well established that paperwork violations standing alone are insufficient to support a finding of lack of good faith; thus, a poor rate of compliance is not in itself necessarily evidence of bad faith.
    With respect to seriousness, ICE asserted two points - "the percentage of violations is extremely high", and the failure to present an I-9 form is always a serious violation. OCAHO stated only one of the violations involved a failure to prepare an I-9. Any aggravation of a penalty for the seriousness of other violations must be based on the seriousness of the specific violation reflected on the particular individual's I-9.
    As to the involvement of unauthorized aliens, ICE said there were three employees without proper
    documentation in December 2010 and after a Letter of Suspect Documents was issued, two of them were terminated. ICE enhanced the fine by 5% based only upon the hiring of two unauthorized aliens.  OCAHO found, "Absent any allegation or evidence that Stanford had knowledge that the
    two individuals ICE identified were unauthorized for employment, the company's state of mind could hardly have been affected one way or another by the presence of these individuals in the workforce."
    OCAHO held: "The seriousness factor is, moreover, best evaluated on a continuum because not all
    violations are necessarily equally serious. OCAHO case law has acknowledged that while failure to enter either a List A or a List C document showing employment authorization in section 2 is serious, it is not as serious a violation as is an employer's failure to complete an I-9 at all or to sign the attestation in section 2."
    OCAHO disagreed with ICE's argument that an overall enhancement based on seriousness is warranted because the percentage of violations, 37%, is "extremely high."  OCAHO stated, "The template for the initial assessment provides an escalating scale of base penalties as the percentage of violations itself increases. Because the percentage of violations was the sole criterion used to determine the baseline fine, it ought not to be used again as an aggravating factor."
    Thus, OCAHO found enhancement based on the seriousness of the violation was appropriate for six violations - failing to prepare one I-9, for backdating two I-9 forms, and for Stanford's failure to sign the attestation in section 2 on three employees' I-9s. OCAHO determined these violations should be calculated at $600 each while the remaining 12 violations should be calculated at $500 each.
    Although Stanford successfully reduced the proposed fine by 25%, the cost in attorney's fees surely was well beyond the savings in the fine. Thus, many times employers need to keep the overall cost in mind when deciding whether to litigate a case before OCAHO.
  4. OCAHO Finds No Constructive Knowledge by Bruce Buchanan, Siskind Susser

    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 documents
    other 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 was
    signed 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 is
    as 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.
  5. DOJ Settles Claims of Discrimination against United Natural Foods by Bruce Buchanan, Siskind Susser

    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 an
    unexpired 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 undertook
    immediate 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.
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