E-Verify Lands Potato Company in Hot Water

Last week, the Justice Department filed a lawsuit against two Washington-based potato companies for allegedly discriminating against non-citizens during the Form I-9 employment verification process. This latest enforcement action comes on the heels of the recently published “New Form I-9,” and serves as a clear reminder to employers across the U.S. that I-9 compliance is not just about filling in a form and filing it away. Rather, it’s an often delicate hiring exercise where competing interests are at play.

big-data-i9everifyOn the one hand, employers must be vigilant in ensuring that the Form I-9 is completed properly and on-time in order to ensure that they are hiring a legal workforce. On the other hand, they must also take care to avoid discriminating against any work-authorized individual based on the person’s citizenship, immigration status, or national origin.

We often refer to this as the “I-9 squeeze” with the HR or hiring manager caught in the middle between auditors at the Immigration and Customs Enforcement (“ICE”) and attorneys with the DOJ’s special unit known as the Office of Special Counsel for Immigration-Related Unfair Employment Practices (or OSC for short). But as it turns out, employers have yet another factor to consider, one that is gradually increasing in magnitude: the rise of the free and “mostly” voluntary E-Verify program.

How does E-Verify factor into I-9 discrimination and what does this have to do with our two potato companies? Read on to find out!

The DOJ Complaint

Before I begin, I must emphasize that the “facts” below are those alleged to be true by the OSC in their complaint. The companies may dispute those facts or present evidence which mitigates or refutes the allegations of discrimination altogether. It’s also highly possible the companies might even challenge how the OSC came to their conclusions – given the often-contentious debate over how one defines discriminatory intent during the hiring process.

Here’s what we know thus far. The respondents are two potato companies, based in Washington State. One of the companies operates the other under a joint venture arrangement and is responsible for administration and daily HR operations – including I-9 verification policies and practices. In this respect, the companies may be classified as “joint employers” and hence the reason they are both named in the complaint.

While not much is known about the companies’ specific I-9 verification process, the complaint indicates that from at least November 2013 until at least October 2016, the companies requested specific (and limited) I-9 documentation from non-U.S. citizen employees, but allowed U.S. citizens the flexibility to present a variety of documents. As we’ve described in the past, the Immigration Reform and Control Act of 1986 prohibits employers from engaging in such discriminatory conduct which can often lead to employment delays, withheld training, wrongful terminations, retaliation, and other violations.

Now typically, these prohibited practices come to light when an aggrieved employee files a complaint with the OSC after being treated unfairly during the hiring or onboarding process. But based on what I’ve read thus far, it appears that this complaint actually originated from something far more hidden and routine: the company’s use of the E-Verify system.

Big Data Can Reveal Big Trouble

While it’s not very well known, the United States Citizenship and Immigration Services (“USCIS”) has a “Memorandum of Agreement” with the OSC by which it can refer E-Verify case information to the agency for “all matters that may involve an individual act or a pattern or practice of employment discrimination on the basis of national origin or citizenship status; document abuse; or retaliation.” The memo also provides that USCIS can refer cases to OSC that involve the misuse, abuse, or fraudulent use of the E-Verify system (a rather broad mandate indeed).

And sure enough, it appears that E-Verify played a fairly big role in the alleged case against the two potato companies. According to the complaint, the USCIS made contact with the organizations in August 2013 to notify them about some unusual stats with their E-Verify cases. Specifically, USCIS noted that between November 1, 2013 and and October 16, 2016, the companies hired approximately 2002 US citizens, 794 lawful permanent residents (“LPRs”), and 281 aliens authorized to work.

But what stood out was the following: at least 99.5% of the LPRs and 98.6% of the aliens authorized to work produced a List A document to establish their work authorization. Meanwhile, only 2.15% of US citizen employees produced a List A document. The inference was clear – the USCIS was concerned that the companies were requiring certain protected classes of workers to present specific documents.

Pattern or Practice Violation?

In their complaint, the OSC alleges that the potato companies engaged in a “pattern or practice” of I-9 document abuse – a serious charge which is reserved for instances which involve multiple violations over a period of time. In this regard, the OSC alleged that the companies (in their response to the E-Verify inquiries) admitted to having an entirely different I-9 review process for non-citizen employees based on their mistaken belief that only US citizens can present List B and C documents. The OSC also claims that multiple non-citizen employees actually possessed valid List B/List C documents, but the companies refused to accept them (preferring only List A according to their policy).

The OSC is seeking an order against the companies to cease and desist their allegedly unlawful I-9 practices and pay the maximum civil penalties for each work-authorized individual who is found to have been subjected to the discriminatory practices alleged in the complaint. As is typically the case, the agency is also seeking relief in the form of back pay, rehire, and reinstatement relating to any aggrieved employee.

The Upshot

As mentioned earlier, this case is at the very early stages of litigation, and the companies may (and probably will) have their own view and positioning relating to the allegations in the complaint. Perhaps the E-Verify “big data” simply reflects that LPRs will usually present, at their own discretion, a green card during the I-9 process. Or maybe the companies will refute the “intent” to discriminate in their hiring practices, and chalk this up to a misunderstanding that was communicated to E-Verify. After all, a phone call from the USCIS Monitoring and Compliance branch can often feel like a hot potato (pun fully intended), so perhaps there is more to the story that has yet to be revealed.

Regardless of the outcome, this case is a perfect example of the complexities and confusion relating to the Form I-9 and E-Verify processes. And as we look ahead towards a President Trump administration – with promises of mandatory E-Verify and increasing worksite enforcement – I suspect there may be many more cases such as these where both employees (and employers to a degree) fall victim to the increasingly complicated and often conflicted goals of employment eligibility verification.

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John Fay is an immigration attorney and technologist with a deep applied knowledge of I-9 compliance and E-Verify rules and procedures. During his career, John has advised human resource managers and executives on a wide variety of corporate immigration compliance issues, including the implementation of electronic I-9 systems. In his current role, John serves as Vice President and General Counsel at the LawLogix division of Hyland Software, Inc., where he is responsible for overseeing product design and functionality while ensuring compliance with ever-changing government rules.