NLRB Settlement – Know When to Enroll in E-Verify

What does the National Labor Relations Board (NLRB) have anything do with enrolling in E-Verify? If your organization consists of a unionized workforce, take note! In a recent settlement with the NLRB signed on March 22, 2012, Pacific Steel Casting Company (“Pacific Steel”) had to notify the Department of Homeland Security of its withdrawal from its voluntary enrollment in the Federal E-Verify program.

THE BACKGROUND

In late February 2011, Pacific Steel, based in Berkeley, California, received a visit from ICE Officers requesting to inspect I-9 Forms for approximately 550 employees. It was during this same time that Pacific Steel voluntarily enrolled in the Federal E-Verify Program without notifying its unionized employees or the Union Chapter, Local 164B, of its enrollment. By May 2011, Local 164B discovered Pacific Steel’s enrollment in the E-Verify Program. Pacific Steel claimed the enrollment was mandated as a result of being a federal contractor, but this soon turned out to be untrue.

THE SETTLEMENT

By June 2011, Local 164B filed a complaint with the NLRB on grounds that included a refusal to bargain or bad faith bargaining and repudiation/modification of contracts (by unilateral action). Part of the settlement contract signed in March 2012 with the NLRB involved Pacific Steel’s withdrawal from the E-Verify Program as a direct result of failing to bargain with its Union. Workers that had previously been terminated by Pacific Steel due to results generated from E-Verify had to be reinstated, with back pay and lost benefits.

LESSONS LEARNED

The NLRB Settlement was a precedent settlement. When considering voluntary enrollment in the E-Verify Program, organizations with a unionized workforce must review their collective bargaining agreements to ensure that enrollment does not violate contract provisions or other bargaining responsibilities. Furthermore, knowing when to enroll in E-Verify, how to communicate E-Verify participation to its employees and under what circumstances current employees’ cases could be initiated in E-Verify are very important. Failure to comply could lead to significant administrative penalties and settlements, as in this case.