By Bruce Buchanan, Sebelist Buchanan Law


Cawoods Produce, Inc. was successful in reducing by more than 50% the proposed penalty of $36,465 by Immigration and Custom Enforcement (ICE) before the Office of Chief Administrative Hearing Officer (OCAHO).

Cawoods was served with a Notice of Inspection (NOI) requesting the employer’s I-9, employee roster, and federal quarterly tax statements. After producing these documents, ICE issued a Notice of Suspect Documents, two Notices of Discrepancies, and a Notice of Technical and Procedural Failures. Thereafter, ICE issued a three-court complaint against Cawoods – Count I – failed to properly correct technical failures for two employees; Count II – failed to prepare and/or present I-9 forms for nine employees; and Count III – failed to properly complete 28 Form I-9’s.

ICE set the baseline penalty at $935 for the 39 violations based on 52 employees or 75%. Interestingly, it did not mitigate or aggravate the penalties based upon the five factors, finding them all to be neutral. Cawoods asserted it was a small business and should receive a 5% mitigating factor as well as one for good faith compliance. ICE treated good faith as neutral because it cooperated in the investigation. These assertions should have been discounted as it is well-established case law that good faith compliance after the service of the NOI is meaningless. Overall, ICE sought $36,465 as the penalty.

OCAHO found the two employees’ I-9 forms with technical errors were never listed in the Notice of Technical Failures nor was Cawoods given the opportunity to correct the technical errors. Therefore, Count I was dismissed.

Concerning Count II, OCAHO found that one employee was not listed on the quarterly tax report; thus, there was no showing that he was employed during the relevant period. However, the other eight employees were employed and Cawood’s failure to prepare I-9 forms on them was a serious violation.

As for Count III, OCAHO found ICE established liability for most, but not all, of the alleged violations. ICE failed to show nine of the 28 employees listed were employees during the relevant time period through tax records or any other records. OCAHO agreed the other 17 employee’s I-9 forms were improperly completed in Sections 1, 2, or 3.

Concerning the five factors, OCAHO found Cawoods to have committed serious violations, which called for a 5% aggravating factor while it was due a 5% mitigating factor of being a small business.
Based on the totality of the circumstances, OCAHO found $600 per the eight violations in Count II and one violation in Count III ($5400); $575 for the nine serious violations in Court II ($5175), and $500 per violation for the improper completion of eight I-9 forms ($400). Overall, it assessed a penalty of $14, 575.

As you can see, litigation in this case was a worthwhile endeavor as it reduced the penalties by about 75%. ICE’s failure to provide sufficient proof on many of the allegations proved to be their downfall.