What is Knowledge of Unauthorized to Work for I-9 Purposes?

A recent OCAHO decision, United States v. Jalisco’s Bar and Grill, analyzed what “knowledge” of an employee’s unauthorized work status means.  In so doing, OCAHO found Jalisco’s Bar did not knowingly employ one unauthorized worker, Marcos, even though it knowingly hired his brother, David, despite his unauthorized status.

In this case, prior to the serving of the Notice of Inspection (NOI), ICE special agents engaged in surveillance of the employer.  After serving the NOI, an ICE agent interviewed, David (at that time a former employee), who was in the United States on a visitor’s visa.  David admitted that before he was hired by Jalisco’s, he told its owner that he was ineligible to work. Clearly, as OCAHO held, this is evidence of actual knowledge of an employee’s unauthorized status.

Joe’s brother, Marcos, also had worked at Jalisco’s without eligibility to work. However, neither David nor Marcos told Jalisco’s that Marcos was unauthorized to work. ICE charged Jalisco’s with employing David and Marcos with knowledge of their undocumented status.  OCAHO disagreed with this conclusion concerning Marcos. OCAHO held:

While I credit ICE’s conclusion that both brothers were unauthorized for employment in the United States, there is no evidence to support an inference that Gutierrez knew or should have known that Marcos Guillen was not authorized. Jalisco’s failure to prepare an I-9 for Marcos Guillen is suggestive, but insufficient in itself to support a finding of constructive knowledge.

The second count within the Notice of Intent to Fine (NIF) also raises an interesting issue.  Jalisco’s presented 22 Form I-9s that were clearly untimely completed and backdated.  This was obvious because Jalisco’s used the August 7, 2009 Form I-9 when the employees were hired before August 7, 2009.

Jalisco’s conceded the 22 Form I-9s were untimely completed but stated these I-9 forms were filled out after the original I-9 forms were damaged when a water heater tank ruptured.  Jalisco’s stated it could not determine what to do so it prepared new I-9 forms and backdated them.  However, Jalisco’s did not prepare any document explaining the situation and did not produce the initial damaged I-9 forms.

Jalisco’s argued (without the use of legal counsel) that it was “entrapped.”  OCAHO pointed out this was a defense in criminal proceedings, not civil cases.

OCAHO considered the defense of “impossibility” which has been successfully utilized where an employer, through no fault of its own, is unable to produce the original I-9 forms.  However, OCAHO found Jalisco’s failed to establish that the original I-9 forms were timely prepared nor provided any documentary evidence concerning the damaged I-9 forms.  Thus, OCAHO disregarded Jalisco’s defense on the I-9 forms.

Jalisco’s had better luck with the amount of penalties that it had to pay.  ICE sought $431.25 for the knowing hire violation and $1075.25 per violation for the failure to timely prepare the I-9 forms.  OCAHO was mystified as to why the first violation was penalized at such a low level when the range for such a violation is between $375 and $3200.  It decided to fine the company $1900 for this violation although it did not discuss how it arrived at this number.

On the other violations, OCAHO found “the paperwork violations appear disproportionate both to the gravity of those violations and to the size of the business.”  Thus, OCAHO assessed these violations at $450 each except for the knowing hire of the unauthorized employee without completing an I-9 form, which was assessed at $750. Overall, OCAHO reduced ICE’s proposed penalties from $26,668.50 to $13,000.

This decision is helpful to immigration compliance attorneys and employers on what is and is not constructive knowledge, which is very difficult to define. Additionally, the decision demonstrates the need for contemporaneous documentation when I-9 forms are damaged, and the importance of not backdating I-9 forms even if one is trying to recreate them.