By Matthew S. Groban and Robert S. Groban, Jr.
The OCAHO has recently issued two Form I-9 enforcement decisions involving hospitality and construction industry employers that should be of interest to all our clients.
In United States v. Symmetric Solutions, Inc. d/b/a Minerva Indian Cuisine, 10 OCAHO no. 1209 (OCAHO February 6, 2014), an OCAHO Administrative Law Judge ("ALJ") upheld a $77,000 fine imposed by Immigration Customs Enforcement ("ICE") against a restaurant in Alpharetta, Georgia ("Restaurant"), for Form I-9 violations. ICE claimed that the Restaurant failed to prepare/present Forms I-9 for more than 80 employees, failed to ensure that several employees completed their Forms I-9 correctly, and hired 17 workers knowing that they were not authorized to work. The Restaurant claimed that it was not liable for the violations because, among other things, it did not own the Restaurant at the time of the violations. The ALJ rejected this defense, and upheld the fine, because the evidence established that the original owners retained a 40 percent interest in the business following the sale and continued to play an active role managing the business after the transaction.
In United States v. M&D Masonry, Inc., 10 OCAHO no. 1211 (OCAHO March 11, 2014), the ALJ upheld a fine of $228,300 imposed by ICE upon M&D Masonry ("M&D"), a Georgia masonry company, for Form I-9 violations. The government was alerted to possible misconduct by M&D from a newspaper article entitled "Illegal hiring for airport construction," which appeared in The Atlanta Journal-Constitution. After an investigation, ICE charged M&D with failing to secure correctly completed Forms I-9 from more than 270 employees and with failing to obtain any Form I-9 from more than 85 employees. The OCAHO ALJ rejected M&D’s claims that, among other things, these were at most technical violations and failed to take the company’s limited financial resources into account. In this regard, the ALJ upheld the fine of $228,300 after pointedly noting that ICE was "unduly generous" in considering the company’s financial situation when establishing the fine, due to the serious and persistent number of violations at issue.
These cases serve as an important reminder to employers of the potentially serious nature of Form I-9 violations and the continuing need to address them as part of any organization’s overall risk management policies. These cases also underscore the importance of "due diligence" in this area as part of any merger, acquisition, or other transaction. Most purchase and sale agreements do not have specific set asides for these penalties or provisions to handle the business disruption that can result from ICE directives to terminate undocumented workers. Thus, it is critical to assess these issues prior to closing to avoid the litigation that invariably follows if they are not suitably addressed.