Practicing employment-related immigration law seems much like serving as consigliere to the biblical David and advising him on Goliath’s points of vulnerability (“[smite] the Philistine in his forehead“). As the bar knows well, in immigration matters the brobdingnagian federal government tends to go after the most lilliputian of American businesses. 

The early case law interpreting the duty of employers to complete Form I-9 (Employment Eligibility Verification) illustrates this proclivity.  The immigration enforcers quickly learned that it is far easier to secure an I-9 victory against a small furniture maker or sausage factory, than a national steakhouse chain. Recent history reinforces this trend, as confirmed in the successful prosecutions of predominantly small employers by Immigration and Customs Enforcement (ICE). 

Emboldened by its parade of victories against mostly tiny employers ($7 million in fines against 2,740 firms in 2010), ICE is now poised to target some of America’s largest companies.  As reported on January 20 by the Wall St. Journal’s Miriam Jordan (“Crackdown on Illegal Workers Grows”) in an interview of ICE Chief, John Morton, the agency has opened an “Employment Compliance Inspection Center.” According to Mr. Morton, the new ECIC would “address a need to conduct audits even of the largest employers with a very large number of employees.”  Just as the WSJ scoop reported, ICE’s new ECIC debuted late this week in Crystal City, VA.   It will start with an initial crew of “15 auditors who will support ICE’s worksite enforcement strategy by helping agency field offices around the country expedite Form I-9 audits of businesses selected for inspection by ICE.”

While announcing the new ECIC last week, ICE also continued to trumpet its IMAGE program, an acronym for the ICE Mutual Agreement between Government and Employers.  The name, IMAGE, is a spot-on coinage because the program has proved to be little more than a public relations tactic garbed as a supposedly valuable ”self-policing partnership“ with the business community to improve immigration law compliance.  IMAGE should instead stand for ICE Makes you Agree to Get Enrolled, since most ”voluntary” participants in the program are businesses that faced serious sanctions unless they agreed to enroll in IMAGE and fulfill its requirements in order to settle an ICE enforcement action.

Large corporations not under ICE investigation, however, have generally declined to join IMAGE because its major prerequisite for admission (allowing ICE to conduct an I-9 audit) is a non-starter. 

Why might a large, law-abiding and civic-minded company decline to be audited?  Because voluntary submission to an ICE audit would likely be a violation of fiduciary duty to the company’s stockholders and could well lead to a securities class action.  A savvy plaintiffs’ class action securities lawyer could easily make a winning case against a publicly-traded company that willingly enrolled in IMAGE by asserting the following readily proven facts in a complaint:

  • Approximately 8 million workers are Illegally employed in the U.S.;
  • Pervasive acts of document fraud, identity theft and false attestations of the legal right to work are the means by which law-abiding employers unknowingly hire unauthorized workers;
  • Fastidious compliance with all I-9 requirements will not prevent a company from unwittingly employing unauthorized workers because the I-9 only requires the employer to verify that the documents of identity and work permission presented by the new hire appear genuine and appear to relate to the individual;
  • Enrollment in E-Verify – an online verification system maintained by the federal government, a system still vulnerable to fraud and misuse, according to the General Accounting Office — will not result in the discovery and termination of unauthorized workers currently employed (except for such workers assigned to work under a narrow class of federal contracts) because E-Verify may not be used to determine whether everyone on the current payroll is authorized to work;
  • Given the foregoing situational realities, Defendant Company, if it had operated as a prudently managed corporation, should have known that a voluntary IMAGE-inspired I-9 audit by ICE would likely result in an order from the agency, effective immediately, without grace period, to terminate a material percentage of current workers whom ICE identifies as unauthorized for employment;
  • The abrupt termination of a significant percentage of current workers at Defendant Company has resulted in a major disruption of this IMAGE-enrolled business;
  • Defendant Company’s voluntary enrollment in IMAGE is the foreseeable and proximate cause of the loss of such current workers and has adversely affected Defendant Company’s revenues, expenses, profits, corporate brand and worker morale, thereby leading to a foreseeably precipitous decline in the price of the Defendant Company’s shares listed on public stock exchanges;
  • WHEREFORE, by virtue of its voluntary enrollment in IMAGE, Defendant Company has breached its fiduciary duty to Plaintiff Shareholders, and accordingly this Court should order Defendant Company to pay Plaintiffs a Gazillion Dollars in damages plus attorneys fees (at 40+% of the damage award).

If IMAGE remains a no-go for large companies, what prevents ECIC’s Crystal City auditors from (1) identifying unauthorized workers at a large company served with an ICE Notice of I-9 Inspection and (2) prompting the agency to order the same type of disruptive firing that IMAGE participation would trigger? Apparently nothing (save for due process of law and the prowess of their immigration lawyers). 

ECIC thus may well succeed where IMAGE has failed, as a Washington Post editorial predicts:

If the current policy [of targeting larger companies] turns up the heat on corporations, so much the better; they may in turn increase pressure on Congress to reform America’s broken immigration system. As it stands, that system ignores the fact that millions of undocumented workers play an integral role in the economy and that the nation needs a realistic mechanism for admitting sufficient numbers of low-skilled employees to fill jobs that Americans don’t want, even with the nation suffering from high unemployment.

Ironically, the cutting of ECIC’s red ribbon came within days of Pres. Obama’s announcement in his WSJ op-ed (“Toward a 21-st Century Regulatory System”) of a new executive diktat designed to “bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.” 

Surely, the I-9 process — a compliance program plagued by “overlapping rules,” long-term legislative “tinkering” and the “influence” of union and management lobbyists — could stand a fresh look.  Just as the Obama Administration determined that it should not proceed with its Social Security No-Match amendment to the I-9 regulations, the Administration and a bipartisan Congress should take other felicitous steps: 

  1. The Administration should update and reissue the INS 1998 proposed regulation and then at long last promulgate a final rule that would offer definitive guidance to employers by formally interpreting the 1996 statute — the “Sonny Bono Amendment” found at INA § 274A(b)(6)(A), (B), and (C) — that forgives employers acting in good faith who are found to have committed “technical or procedural” I-9 paperwork violations if the mistakes are corrected within 10 days of notice by ICE.
  2. Congress should scrap E-Verify or let it expire on schedule in 2012 and replace it (as well as the I-9 obligation) with a system that relieves employers of the governmental function of serving as the immigration police by developing a tamper-proof photo ID card that workers could swipe at the time of hire and thereby prove to employers their entitlement to work.
  3. Congress and the Administration should establish an “Employment-Based Immigration Truth and Reconciliation Commission” as part of a comprehensive immigration reform which would regularize the status of unauthorized workers and allow for orderly, humane and adequate future flows of workers on lawful visas.

Until these or other workable proposals are enacted, the salutary potential of our immigration laws to unleash the powerful forces of innovation and job creation will remain but an unrealized and wistful opportunity. Meantime, ECIC will presumably ensnare some large employers whose workforces will be decimated or whose immigration lawyers successfully fend off, in true Davidian style, the increasingly gargantuan ICE.