By Bruce Buchanan, Siskind Susser

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Durable, Inc., a manufacturer of aluminum products in Wheeling, Illinois, was cited by Immigration and Customs Enforcement (ICE) for 300 Form I-9 violations after a Notice of Inspection (NOI). ICE set the proposed fine for the 300 violations at $329,895.

The Investigation
ICE found Durable failed to ensure Section 1 of the I-9 form was properly completed for 178 employees, and failed to properly complete Section 2 of the I-9 form for 122 employees. ICE set the baseline penalty at $950 per violation based on a 46 percent I-9 error rate and Durable being a “repeat offender”. Therefore, the fine amount per violation was significantly greater than what would be expected for a first time offender with the same 46 percent I-9 error rate. Other aggravating factors adding to the penalty amount were Durable’s lack of good faith, its history of violations and the seriousness of the violations (15% increase); and allegations involving unauthorized workers (5% increase). Based upon all of the factors, the penalty set was $1,092.50 per violation.

ICE also issued Notices of Suspect Documents which listed 613 employees who did not appear to be authorized to work. Of the 613 employees, only five contested the determination and established their authorization to work. Durable conceded 286 employees were unauthorized to work. Thereafter, Durable terminated 603 employees for lack of proper work authorization.

The Litigation
The major issue litigated at the Office of Chief Administrative Hearing Officer (OCAHO) – before the Administrative Law Judge (ALJ) and the Chief Administrative Hearing Officer (CAHO), was whether Durable should be found to be a “repeat offender” of IRCA. It was clearly established that in 1989, Durable entered into a Settlement Agreement with the former Immigration and Naturalization Service (INS) whereby it agreed to pay $30,000 in fines for “knowingly” employing 17 undocumented workers. Durable argued this settlement occurred almost 25 years ago under different ownership; thus, given these factors, it should not be found as having a history of prior I-9 violations.

ICE asserted Durable was the same corporate entity regardless of any change in owners. Furthermore, ICE argued that the purpose of a fine is to have a deterrent effect on employers and apparently the $30,000 fine did not have the intended effect. Durable, on the other hand, stated that it provided Human Resource (HR) employees with informal I-9 training after the 1989 settlement, but OCAHO found Durable failed to provide any documentation on that training or what it entailed.

Another issue before OCAHO was whether Durable’s execution of Section 3 excused its failure to execute Section 2. Durable argued it “complied with the spirit of Form I-9” and the 116 instances where this error occurred do not support a violation. OCAHO disagreed, pointing out that signing Section 3 in lieu of Section 2 was insufficient, especially given that Section 3 “does not require either the date of hire or any issuing authority for any documents examined.” OCAHO found that omitting the date of hire from the I-9 form “renders it impossible to determine whether the employee truly completed the attestation as to their citizenship or immigration status upon the date of hire” and whether it was timely completed. OCAHO concluded that this failure, to properly complete and sign Section 2 of the I-9 form within three business days of hire, was a substantive violation.

Durable also argued that those 116 instances of signing Section 3 were valid reverifications because, although the original I-9 forms could not be located, HR believed I-9 forms were originally completed for those employees. Thus, HR was merely reverifying the employees’ work authorization. OCAHO rejected Durable’s argument and held that HR’s beliefs had “no reasonable basis in fact or law and employers are not entitled to simply make up their own rules.”

The Takeaway
Overall, OCAHO declined to reduce ICE’s proposed fine and was not impressed with Durable’s unique defenses. This case is a great example why any employer, large or small, would be wise to have an I-9 Compliance Policy in place, have periodic I-9 audits, provide training to HR personnel on best practices, and consult periodically with an immigration compliance attorney.

Copies of both decisions and citations are available below:
United States v. Durable, Inc., 11 OCAHO no. 1231 - click here for decision.
United States v. Durable, Inc., 11 OCAHO no. 1229 - click here for decision.