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I-9 E-Verify Immigration Compliance

OCAHO Finds No Constructive Knowledge by Bruce Buchanan, Siskind Susser

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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 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.

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  1. Ny Web Developer 's Avatar
    Just in 2012, ICE-HSI has fined or agreed to forfeitures at the following companies or business executives in these amounts (only listing those of $100,000 or more): Atrium Companies - $2 million; Advanced Containment Systems Inc. (ACSI) - $2 million; HerbCo - $1 million; Sun Drywall and Stucco, Inc. - $225,000; two executives of LTCI Ltd. - $223,000; and J & J Industrial Supply - $150,000.
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