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16 OCAHO no. 1446c
UNITED STATES DEPARTMENT OF JUSTICE
EXECUTIVE OFFICE FOR IMMIGRATION REVIEW
OFFICE OF THE CHIEF ADMINISTRATIVE HEARING OFFICER
UNITED STATES OF AMERICA,
Complainant,
v.
KLJ LEASING, LLC,
Respondent.
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8 U.S.C. § 1324a Proceeding
OCAHO Case No. 2022A00022
Appearances: Faten Barakat-Nice, Esq., and James Harmony, Esq., for Complainant
Julie Pace, Esq. and Heidi Nunn-Gilman, Esq., for Respondent
ORDER ON LIABILITY FOR COUNTS VII THROUGH XII
I.
INTRODUCTION
This matter stems from Complainant DHS’s investigation into whether Respondent was
hiring persons who are not authorized to work in the United States. The Department’s initial
investigation, which occurred in 2013-2015, resolved through a settlement agreement and some
changes to Respondent’s hiring policies. Complainant conducted a second investigation in 2017.
It determined that Respondent continued to hire undocumented persons and that its practices to
identify applicants with suspect identification documents was lacking. After a lengthy second
investigation, it filed suit for violations of 8 U.S.C. § 1324a. Respondent denies these allegations.
Presently before the Court are the parties’ cross-motions for summary decision. To
facilitate the adjudication of this case, the Court will address Counts VII through XII of the
Amended Complaint in this order. These charges relate to Respondent allegedly:
•
Hiring 424 workers knowing that they were aliens who were not authorized to work in the
United States because Respondent did not fill out Part 2 of their Forms I-9 where
Respondent attests to their ability to lawfully work and provide documents to prove their
identity (Count VII);
•
Continuing to employ seven workers knowing that they were not authorized to work
because their work authorization documents had expired (Count VIII);
16 OCAHO no. 1446c
•
Rehiring 11 employees when Respondent previously received notice from DHS that they
were ineligible to work (Count IX);
•
Continuing to employ four persons after receiving a Notice of Suspect Documents from
DHS advising Respondent that those persons’ identities did not match the documents they
submitted (Count X); and
•
Failing to retain and promptly present to the government electronic records (or metadata)
showing how the Forms I-9 were created for 60 people and 89 people, respectively (Counts
XI and XII).
The Court will issue a subsequent order addressing summary decision as to Counts I
through VI.
II.
FINDING OF FACT 1
In keeping with OCAHO precedent, Federal Rule of Civil Procedure 56, Celotex v. Catrett,
477 U.S. 317 (1986), and its progeny, the Court construes the facts in the light most favorable to
the non-moving party. On the counts for which there are cross-motions for summary decision, the
court must “evaluate each motion separately, giving the nonmoving party in each instance the
benefit of all reasonable inferences.” ACLU v. City of Las Vegas, 333 F.3d 1092, 1097 (2003);
Fed. R. Civ. P. 56.
Respondent is an agricultural company incorporated in Arizona. Resp’t’s Mot. Part. Summ.
Dec., Ex. 1 at 1, Complainant’s Mot. Summ. Dec., Ex. G-3 at 3. It employs between 150 and
700 people, with the number fluctuating on a seasonal basis. Resp’t’s Resp. Mot. Summ. Dec.,
Ex. A at 2.
First Inspection
DHS previously audited Respondent; the audit lasted between August 20, 2013 and
December 12, 2015. See Complainant’s Mot. Summ. Dec. at 10050, Ex. G-77, id. at 110, Ex. G4, Resp’t’s Resp. Mot. Summ. Dec., Ex. M at 3.
On July 22, 2014, Complainant served Respondent with a Notice of Technical or
Procedural Failures (NTPF or Notice of I-9 Failures). Complainant’s Mot. Summ. Dec., Ex. G67; see also Resp’t’s Mot. Part. Summ. Dec. at 12.
Complainant informed Respondent that its employees must make the corrections to Section
1 of the Forms I-9 (the employee attestation section), rather than Respondent’s management
making the changes. Complainant’s Mot. Summ. Dec. at 9530, Ex. G-67.
The undisputed facts are drawn from Complainant’s statement of facts in its Motion for Summary Decision and
from Respondent’s introduction and summary of facts from its Motion for Partial Summary Decision, to the degree
that the two statements do not differ or contradict one another and are supported by the record, see 28 C.F.R. § 68.38;
Fed. R. Civ. P. 56(c)(1).
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Also on July 22, 2014, DHS served Respondent with a Notice of Suspect Documents (or
NSD). Complainant’s Mot. Summ. Dec. at 9449-91, Ex. G-64. 2
On November 13, 2014, DHS served Respondent with a second Notice of Suspect
Documents. Compl. Mot. Summ. Dec., Ex. G-65.
The parties settled on December 15, 2015. Complainant’s Mot. Summ. Dec., Ex. G-7 at
12, G-69.
Respondent’s Efforts After First Inspection
Following the first inspection, Respondent implemented new practices to assist with
employment authorization checks. The Respondent: 1) “[c]entraliz[ed] the I-9 completion process
in its offices with trained employees;” 2) “[i]mplement[ed] an electronic I-9 system (Tracker I-9
Complete) and train[ed] employees on the system;” 3) “[p]rovid[ed] I-9 and immigration
compliance training to employees completing the Form I-9 on behalf of the company;” and 4)
“[c]onduct[ed] internal I-9 reviews and correct[ed] errors identified during the internal audit
process.” Resp’t’s Mot. Part. Summ. Dec., Ex. 1 at ⁋ 7; id., Ex. 6 (memorandum from
Respondent’s attorney describing Respondent’s review and auditing process); id., Ex. 9 (internal
communication regarding I-9 training with respondent’s attorney).
Respondent also conducted an internal audit of their Forms I-9. Respt’t’s Mot. Summ.
Dec., Ex. 1 at ⁋ 10; id., Ex. 8; Complainant’s Mot. Summ. Dec., Ex. G-25. 3
In addition, Respondent created a flag in its payroll system to alert the company if a person
who previously worked at Respondent and who was associated with a suspect document, per
DHS’s November 2014 letter, attempted to seek reemployment. Resp’t’s Mot. Part. Summ. Dec.,
Ex. 1 ⁋ 14, id., Ex. 6 at 3.
Respondent asserts that its screen for former employees with suspect documents was
imperfect. Not all persons identified on the Notice of Suspect Documents were entered into
Respondent’s screening database. Also, Respondent human resources personnel did not always
turn on the alert notification for prospective employees who were identified as having suspect
documents. Resp’t’s Mot. Part. Summ. Dec., Ex. 1 ⁋ 16. Additionally, Respondent did not always
process prospective employees through the centralized hiring system it had created, opting instead
The first Notice of Suspect Documents listed Employees 1, 3, and 4 now listed in Count X of the Amended
Complaint. Complainant’s Mot. Summ. Dec., at 94545, 9477, 9486.
2
In the process of this internal audit, Respondent appears to have changed the reference number for some List A
documents to the USCIS receipt number (REC Number) rather than the Alien Registration Number (A Number) on
certain Forms I-9. Complainant’s Mot. Summ. Decision at 10065, Ex. G-77, id. at 7769-7771, Ex. G-26. List A
documents are “[d]ocuments establishing both employment authorization and identity.” 8 U.S.C. § 1324a(b)(1)(B).
Acceptable documents include a “United States passport; resident alien card, alien registration card, or other document
designated by the Attorney General, if the document” meets certain requirements. Id. at § 1324a(b)(1)(B)(i)-(ii); see
also 8 C.F.R. § 274a.2(b)(1)(v)(A) (specifying acceptable documents that are “acceptable to evidence both identity
and employment authorization.”).
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to delegate that authority to the agricultural field supervisors. Those persons did not have access
to the alert system. As a result, some flagged former employees were rehired. Respondent asserts
that many of the people who were erroneously hired were terminated shortly thereafter. Id., Ex.
1, ¶ 18-20.
Employees Rehired Between Inspections
Respondent hired the seven employees listed in Count VIII. It completed Forms I-9 for
those employees, noting a work authorization document with an expiration date in Section 2.
Suppl. Exs. Mot. Summ. Dec. at 2054-73, Ex. G-15. The listed employees’ work authorizations
then expired and there was a gap between each employee’s work authorization expiration and an
extension of work authorization by USCIS. Id. The listed employees continued to receive wages
and/or paychecks during the period in which they were not authorized to work. Id.
Second Inspection and Notice of Intent to Fine
DHS served Respondent with a second Notice of Inspection on May 1, 2017.
Complainant’s Mot. Summ. Dec. at 9174, Ex. G-45; Resp’t’s Mot. Part. Summ. Dec. 4, id. at Ex.
3. The parties agreed that Respondent would share the requested documents on May 12, 2017.
Complainant’s Mot. Summ. Dec. at 9141, Ex. G-36.
Complainant’s I-9 audit protocols included using software which tracks all changes made
to the electronically stored Forms I-9. These “audit trail” records are effectively metadata for the
Forms I-9s, creating a log of when they were created, who accessed them, when they did so, what
modifications were made, and by whom. See Complainant’s Mot. Summ. Dec. at 9133, Ex. G-32
(“Generally, an audit trail is a record showing who has accessed a computer system and the actions
performed within or on the computer system during a given period of time[.]”) (Exhibit is a copy
of 8 C.F.R. § 274a.2(e)); Resp’t’s Mot. Part. Summ. Dec., Ex. 12 (An audit trail “provides a
historical record of who accessed the document, date and time of entry, description of the entry or
field, the process made . . . and Section updated.”).
Complainant received paper and electronic Forms I-9 from Respondent on May 12, 2017,
some with audit trails, others without. Complainant’s Mot. Summ. Dec. at 170, Ex. G-4; id. at
10052-53, Ex. G-77 (noting that on May 12, 2017 “two boxes of Forms I-9 and other information
was provided” by Respondent).
Respondent asserts that some audit trails were not provided to DHS due to a technical issue.
Resp’t’s Resp. Mot. Summ. Dec., Ex. A at ⁋ 5.
On June 20, 2017, ICE Auditor Daniel Sullivan notified Respondent of the missing audit
trails. Complainant’s Mot. Summ. Dec. at 10058, Ex. G-77, id. at 9155, Ex. G-39. On June 26,
2017, Respondent provided 142 missing audit trails. 4 Resp’t’s Resp. Mot. Summ. Dec., Ex. C at
2.
4
The missing audit trails relate to counts XI and XII of Complainant’s Second Amended Complaint.
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Complainant compiled a spreadsheet regarding the electronic Forms I-9 received, notating
A Numbers, 5 REC numbers, 6 the Section 2 employer representative, the List A document REC
number expiration date, and the time computed by the Section 1 sign date. Complainant’s Mot.
Summ. Dec. at 9; see id., Exs. G-47-54.
Complainant noted in its internal review of Respondent’s records that many of the REC
numbers and A numbers used on the Forms I-9 were either sequential or numbers where one digit
was transposed. Complainant’s Mot. Summ. Dec., at G-3, G-4, G-14, 47-52, G-77. Complainant
found similar patterns with the expiration dates of the documents. Id. Complainant concluded
that the occurrences were too frequent to be coincidental. Complainant’s Mot. Summ. Dec., at 9.
Mr. Sullivan identified the following concerns with the data he received: (1) Forms I-9
completed by a “Preparer/Translator” were electronically signed in Section 1 by the preparer
instead of the employee; (2) the audit trails showed the preparer as the person who signed Section
1; (3) for Forms I-9 presented after June 26, 2017, the audit trails were changed to show that the
Section 1 signature was completed by the employee; (4) two new Forms I-9 were originally
presented with audit trails, but when Complainant mistakenly requested the audit trail, the second
one presented different from the first; (5) the audit trails presented after June 26, 2017 differed
from ones provided prior; and (6) the “authenticity of the [audit trails] was shown to be a failure.”
Complainant’s Mot. Summ. Dec. at 37.
DHS served a Second Notice of Suspect Documents on Respondent on April 10, 2019,
Complainant’s Mot. Summ. Dec., Ex. G-63, Resp’t’s Mot. Part. Summ. Dec. at 4.
On May 26, 2021, DHS served Respondent with a Notice of Intent to Fine (NIF).
Complainant’s Mot. Summ. Dec., Ex. G-2.
III.
SUMMARY DECISION STANDARD
Under OCAHO’s Rules of Practice and Procedure, 28 C.F.R. pt. 68 (2024), the
Administrative Law Judge (ALJ) “shall enter a summary decision for either party if the pleadings,
affidavits, material obtained . . . show that there is no genuine issue as to any material fact and that
An “A number” is an Alien registration number, or a unique seven, eight, or nine digit number DHS assigns to an
alien. U.S. Citizenship and Immigration Services, A-Number/Alien Registration Number/Alien Number (A-Number
or A#), https://www.uscis.gov/glossary-term/50684.
5
A “REC number” is a USCIS Receipt number, or a unique 13 character identifier that USCIS assigns to track
individual applications or petitions, including those for work authorization. U.S. Citizenship and Immigration
Services, Receipt Number, https://www.uscis.gov/glossary-term/66907. Complainant asserts that the REC numbers
have a particular meaning, that “the first three letters in the series … show the USCIS processing service center where
the receipt is issued … the next two digits signify the fiscal year the receipt was issued … the next three digits represent
the computer workday on which the receipt was processed, and the fee was taken for the application … the final five
digits are unique identifiers for the petition or application associated with the relief.” Complainant’s Mot. Summ.
Dec. at 9-10.
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a party is entitled to summary decision.” 28 C.F.R. § 68.38(c). 7 “An issue of material fact is
genuine only if it has a real basis in the record” and a “genuine issue of fact is material if, under
the governing law, it might affect the outcome of the suit.” Sepahpour v. Unisys, Inc., 3 OCAHO
no. 500, 1012, 1014 (1993) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586-87 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
“Once the moving party satisfies its initial burden of demonstrating both the absence of a
material factual issue and that the party is entitled to judgment as a matter of law, the nonmoving
party must come forward with contravening evidence to avoid summary resolution.” United States
v. Four Seasons Earthworks, Inc., 10 OCAHO no. 1150, 3 (2012) (citing Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986)). “[T]he party opposing the motion for summary decision ‘may not rest
upon the mere allegations or denials’ of its pleadings, but must ‘set forth specific facts showing
that there is a genuine issue of fact for the hearing.’” United States v. 3679 Com. Place, Inc., 12
OCAHO no. 1296, 4 (2017) (quoting 28 C.F.R. § 68.38(b)). Further, if the government satisfies
its burden of proof, “the burden of production shifts to the respondent to introduce evidence . . . to
controvert the government’s evidence. If the respondent fails to introduce any such evidence, the
unrebutted evidence introduced by the government may be sufficient to satisfy its burden[.]”
United States v. Durable, Inc., 11 OCAHO no. 1231, 5 (2014) (CAHO Order) (internal citation
omitted). All facts and reasonable inferences are viewed “in the light most favorable to the nonmoving party.” United States v. Primera Enters., Inc., 4 OCAHO no. 615, 259, 261 (1994)
(citations omitted). Finally, “[w]hen a party who would bear the burden of proof at trial is unable
to make a showing sufficient to establish an element essential to that party’s case, summary
[decision] against that party will ensue.’” Brown, et al. v. Pilgrim’s Pride Corp., 14 OCAHO no.
1379a, 12 (2022) (quoting Angulo v. Securitas Sec. Servs. USA, Inc., 11 OCAHO no. 1259, 8
(2015)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The Ninth Circuit, under whose jurisdiction this case arises, 8 has made clear that “when
parties submit cross-motions for summary judgment, ‘[e]ach motion must be considered on its
own merits.’” Fair Hous. Council of Riverside Cnty, Inc. v. Riverside Two, 249 F.3d 1132, 1136
(9th Cir. 2001) (quoting William W. Schwarzer, et al., The Analysis and Decision of Summary
Judgment Motions, 139 F.R.D. 441, 499 (Feb. 1992)); see also Li Zu v. Avalon Valley Rehab.
Ctr., 14 OCAHO no. 1376, 4 (accord). “[E]ach movant has the burden of presenting evidence to
support its motion that would allow the district court, if appropriate, to direct a verdict in its favor.”
High Tech Gays v. Def. Indus. Sec. Clearance Office, 895 F.2d 563, 574 (9th Cir. 1990) (quoting
Barhold v. Rodriguez, 863 F.2d 233, 236 (2d Cir. 1988)) (abrogated on other grounds). “The fact
that one party fails to satisfy [their summary decision] burden on his own . . . motion does not
automatically indicate that the opposing party has satisfied its burden and should be granted
summary judgment on the other motion.” 10A Charles Allen Wright & Arthur R. Miller, Federal
Practice and Procedure § 2720 (4th ed. 2024).
IV.
LEGAL STANDARDS FOR ESTABLISHING LIABILITY UNDER § 1324A
OCAHO Rules of Practice and Procedure, 28 C.F.R. pt. 68 (2024). The rules are also available through OCAHO’s
webpage on the United States Department of Justice’s website. See https://www.justice.gov/eoir/office-of-the-chiefadministrative-hearing-officer-regulations.
7
Since the allegations at issue in this case occurred in Arizona, the Court may look to the case law of the relevant
United States Court of Appeals, here the Ninth Circuit. See 28 C.F.R. § 68.57.
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“In cases arising under 8 U.S.C. § 1324a, the government has the burden of proving by a
preponderance of the evidence that the respondent is liable for committing a violation of the
employment eligibility verification requirements.” United States v. Metro. Enters., Inc., 12
OCAHO no. 1297, 7 (2017). The government also has the burden of proof with respect to the
penalty; it also “must prove the existence of any aggravating factor by the preponderance of the
evidence[.]” Id. (quoting United States v. Niche, Inc., 11 OCAHO no. 1250, 6 (2015)) (internal
citations omitted).
a. Failure to Prepare and Failure to Present Violations
“Employers must prepare and retain Forms I-9 for employees hired after November 6,
1986,” and employers must produce the Forms I-9 for government inspection upon three days’
notice. Metro. Enters., 12 OCAHO no. 1297 at 7 (citing, inter alia, 8 C.F.R. § 274a.2(b)(2)(ii)). 9
An employer must ensure that an employee completes section 1 of the I-9 on the date of hire and
the employer must complete section 2 of the Form I-9 within three days of hire. United States v.
A&J Kyoto Japanese Rest., Inc., 10 OCAHO no. 1186, 5 (2013); 8 C.F.R. §§ 274a.2(b)(1)(i)(A),
(ii)(B). “Employers must retain an employee’s I-9 for three years after the date of hire or one year
after the date of termination, whichever is later.” United States v. Imacuclean Cleaning Servs.,
LLC, 13 OCAHO no. 1327, 3 (2019) (citing 8 C.F.R. § 274a.2(b)(2)(i)(A)).
“Failures to satisfy the requirements of the employment verification system are known as
‘paperwork violations,’ which are either ‘substantive’ or ‘technical or procedural.’” Metro.
Enters., Inc., 12 OCAHO no. 1297 at 7 (citing Memorandum from Paul W. Virtue, INS Acting
Exec. Comm’r of Programs, Interim Guidelines: Section 274A(b)(6) of the Immigration &
Nationality Act Added by Section 411 of the Illegal Immigration Reform & Immigrant
Responsibility Act of 1996 (Mar. 6, 1997) (Virtue Memorandum)). As explained in United States
v. WSC Plumbing, Inc., 9 OCAHO no. 1071, 11 (2001), dissemination of the Virtue Memorandum
to the public may be viewed as an invitation for the public to rely on it as representing agency
policy. While this office is not bound by the Virtue Memorandum, the Government is bound by
it, and failure to follow its own guidance is grounds for dismissal of those claims. Id. at 12. With
respect to technical or procedural violations, the employer must be given a period of not less than
ten business days to correct the failure voluntarily. 8 U.S.C. § 1324a(b)(6)(A)–(B).
b. Knowing Hire Violations and Knowingly Continue to Employ Violations
Under 8 U.S.C. § 1324a(a)(1)-(2), it is unlawful for an employer to “hire . . . an alien
knowing the alien is . . . unauthorized” to work in the United States and “to continue to employ
the alien in the United States knowing the alien is (or has become) an unauthorized alien with
respect to employment.” See also United States v. Foothill Packing, Inc., 11 OCAHO no. 1240, 8
(2015). Therefore, the “government must show either that the company knew, or that it should
9
“Any person or entity required to retain Forms I-9 in accordance with this section shall be provided with at least
three business days notice prior to an inspection of Forms I-9 by officers of an authorized agency of the United States.
At the time of inspection, Forms I-9 must be made available in their original paper, electronic form, a paper copy of
the electronic form, or on microfilm or microfiche at the location where the request for production was made.” 8
C.F.R. § 274a.2(b)(2)(ii)).
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have known, that the employee[s] … [were] unauthorized to work in the United States at the date
of hire” or became unauthorized to work during their employment. Id. at 9.
“Regulations define ‘knowing’ as including both actual and constructive knowledge[.]”
Foothill Packing, Inc., 11 OCAHO no. 1240, at 8. Specifically, 8 C.F.R. § 274a.1(l)(1) explains
that “[t]he term knowing includes not only actual knowledge but also knowledge which may fairly
be inferred” by the surrounding facts and circumstances. “The basic principle underlying the
doctrine of constructive knowledge . . . in OCAHO case law is that the employer is not entitled to
cultivate deliberate ignorance or avoid acquiring knowledge.” United States v. Muniz Concrete &
Contracting, Inc., 12 OCAHO no. 1278, 7 (2016) (quoting Foothill Packing, Inc., 11 OCAHO no.
1240, at 9).
V.
ANALYSIS
a. Counts VII, IX: Knowingly Hiring Unauthorized Persons
The parties cross-move for summary decision with respect to whether KLJ knew or should
have known that the employees listed in Counts VII and IX were not authorized to work when it
hired them. Compl. Mot. Summ. Dec. 23–31; Resp’t Mot. Summ. Decision 20–26.
1. Standard of Law
Pursuant to 8 U.S.C. § 1324a(a)(1)(B), “[i]t is unlawful for a person or other entity . . . to
hire, or to recruit or refer for a fee, for employment in the United States an alien knowing the alien
is an unauthorized alien . . . with respect to such employment . . . .” “The government must show
either that the employer knew, or should have known, an employee was unauthorized to work in
the United States at the time of hire.” United States v. Bazan’s Enterprises, Inc., 15 OCAHO no.
1408, 3 (2021) (citing United States v. Carter, 7 OCAHO no. 931, 121, 140–41 (1997)).
As with knowingly continuing to employ, a knowing hire may be based on actual
knowledge or constructive knowledge. See United States v. Foothill Packing, Inc., 11 OCAHO
no. 1240, 8 (2015); see also United States v. Valdez, 1 OCAHO 91, 598, 608 (1991).
2. Count VII
Complainant argues that “[t]he evidence in Count VII shows a distinct pattern by KLJ in
its Section 2 verification of all [424] I-9’s that it knowingly hired the individuals in violation of
section 274A(a)(1)(A) of the INA.” Complainant’s Mot. Summ Decision 25. 10 Specifically, “[t]he
use of fraudulent numbers, the repetition or near repetition of the numbers by a small group of KLJ
[signers] and the timing of the use of those numbers all show a strong indication that there is
possible collusion . . . in that [KLJ’s Section 2 signers] are either creating or complicit in using
these fraudulent [documents].” Id. at 28. Complainant contends that all the employees in Count
VII were on the notice issued during the second inspection, but “[t]here is no indication that KLJ
Complainant’s Motion for Summary Decision was filed prior to the filing of the Second Amended Complaint and
originally refers to the numbers of individuals in the Counts in the First Amended Complaint.
10
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ever employed any proper review of the documents to show that it was in compliance with the
regulations and law.” Id. at 29.
In cross moving for summary decision, Respondent argues that Count VII is “based on a
theory of constructive knowledge – that the Company should have been aware that more than one
employee presented a permanent resident card with the same USCIS receipt number (‘REC
number’) as another employee, or a document number in sequence with another employee’s
document number.” Resp’t Mot. Summ. Decision 9.
Respondent argues that the only way for an employer to identify duplicate REC, A
numbers, or Social Security numbers would be for the employer to create a database, which it
contends is not required under the statute. Id. at 9–10. Respondent further argues that more
stringent employee screening tools would risk discriminating against its potential employees on
the basis of their national origin or citizenship status. Id. at 10. Respondent argues that the
documents it received appeared on their face to be authentic, and as such Complainant has not met
its burden of showing that Respondent has constructive or actual knowledge that it was employing
undocumented persons. Id. at 17, 21.
Complainant’s theory of liability in Count VII presents a question of first impression:
whether evidence of widespread duplicate or sequential REC numbers on ID documents are
sufficient to meet the government’s burden of showing constructive knowledge on the part of an
employer that an employee is not authorized to work at the time of hire. The Court finds that, in
this circumstance, the evidence is insufficient to show no question of material fact.
The courts have found that employers are chargeable with knowing that their employees
are unauthorized to work by direct knowledge, i.e. an employee tendering an expired document,
and through recklessness, for instance in the employer’s failure to review the document to
determine whether it appeared genuine. See United States v. Foothill Packing, Inc., 11 OCAHO
no. 1240, 11 (2015); United States v. Occupational Resources Management Co., 10 OCAHO no.
1166, 10-11 (2013), United States v. Sunshine Bldg. Maint., Inc., 7 OCAHO no. 997, 29–31
(1998); see also United States v. American Terrazzo Corp., 6 OCAHO 877, 576, at 586-87 (1996)
(finding constructive knowledge where the employee told her employer she was a foreign student,
and the employer completed Section 1 of the Form I-9, and her social security card on its face
stated that it was not valid for work in the US).
However, the courts have also made clear that employers are not required to have expertise
in detecting whether identification is fraudulent. In Collins Food International, Inc. v. INS, 948
F.2d 549, 552-555 (9th Cir. 1991), the Ninth Circuit reversed a lower court ruling finding that the
employer is chargeable with a violation of § 1324a when the employer failed to detect that the
employee’s social security card had been forged after comparing it with the INS sample in the
Handbook for Employers. Citing the House Judiciary Committee Report in its creation of § 1324a,
the court states:
[i]t is not expected that employers ascertain the legitimacy of
documents presented during the verification process […] [t]he
‘reasonable man’ standard is to be used in implementing this
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provision and the Committee wishes to emphasize that documents
that reasonably appear to be genuine should be accepted by
employers without requiring further investigation of those
documents.
Id. at 554.
In this matter, Complainant argues that Respondent either knew or should have known that
the employees in Count VII were unauthorized to work, as evidenced by the fact that many of the
REC numbers and A numbers were repeated or sequential/similar, and because a small number of
Respondent’s employees were entering these REC numbers in quick succession.
However, the proffered evidence does not meet the summary judgment standard.
Addressing first the proposition that Respondent should have known that the documents were
fraudulent, the evidence on this point is sparse. While a reasonable person might wonder about
these apparent discrepancies, and might reasonably conclude based on them that Respondent was
aware that it was employing undocumented persons, considering the evidence in the light most
favorable to the non-moving party, the evidence does not compel this conclusion. One might also
conclude from the bare record that the similarity of the REC numbers, or their repetition, might
have been a product of a clerical error, or of chance rather than evidence of an intention to
unlawfully hire or of wanton and reckless disregard for the law. Assuming arguendo that
Respondent correctly input data concerning its employees, Complainant offers no evidence
reflecting the statistical unlikelihood of persons with sequential identification numbers seeking
employment from the same employer around the same timeframe. 11
Moreover, there is a fundamental question as to the nature and abilities of the electronic
database that Respondent put in place following its first inspection. Respondent argues that no
federal law requires it to use an electronic I-9 data storage system, which is correct. However, the
evidence in this case is that Respondent voluntarily employed some form of an electronic database,
and it conducted at least one audit of its I-9s using the database. To the extent that Respondent,
through this electronic system, became aware of the use of fictitious identification numbers and it
did nothing, or to the extent this information was readily available to Respondent and yet it took
no action, Respondent would be arguably conscious of, or acting in reckless disregard to, its
employment of undocumented persons. However, neither party has proffered evidence discussing
how the system works, whether it is even capable of identifying duplicate or sequential REC or A
numbers, and whether Respondent ever queried the system to gather this information.
11
The courts have used statistical evidence in weighing whether the employer intended the action they undertook
(rather than it occurring by chance) in many contexts; the most directly relevant, in the undersigned’s opinion,
occurring in the context of Title VII litigation. See, e.g., Int’l Bhd. Of Teamsters v. United States, 431 U.S. 324, 339
(1977) (“[O]ur cases make it unmistakably clear that ‘[s]tatistical analyses have served and will continue to serve an
important role’ in cases in which the existence of discrimination is a disputed issue.”); Watson v. Ft. Worth Bank &
Trust, 487 U.S. 977, 994 (1988) (discussing the use of statistical evidence in employment discrimination cases); Segar
v. Smith, 738 F.2d 1249, 1267 (D.C. Cir. 1984) (using regression analysis to evaluate whether an employer
purposefully discriminated against its African American employees); Tabor v. Hilti, Inc., 703 F.3d 1206, 1223 (10th
Cir. 2013) (discussing statistical significance in the context of a Title VII employment discrimination case); Gay v.
Waiters’ and Dairy Lunchmen’s Union, Local No. 30, 694 F.2d 531, 550 (9th Cir. 1982) (summarizing that statistical
evidence is relevant and admissible at prima facie stage of disparate treatment employment discrimination cases);
Diaz v. American Telephone & Telegraph, 752 F.2d 1356, 1363 (9th Cir. 1985) (same).
10
16 OCAHO no. 1446c
Complainant has asserted that it used an excel spreadsheet, among other methods, to identify
duplicate or sequential numbers. The record is devoid of evidence as to how, apart from
conversations among the people Complainant asserted were responsible for the entry of a
significant amount of the data for its new personnel, it would similarly have become appraised of
the potentially fictious identification.
While “the knowledge element can be established through circumstantial evidence,”
United States v. Bhattacharya, 14 OCAHO no. 1380, 7 (2020) (citing United States v. CarpioLingan, 6 OCAHO no. 914, 11 (1997)), the evidence does not establish that Respondent was
willfully blind to an employee’s unauthorized status. The caselaw directs that “‘[c]onstructive
knowledge’ must be narrowly construed,” United States v. R&SL Inc., 13 OCAHO no. 1333b, 47
(2022), given IRCA’s delicate balance to prevent the employment of unauthorized workers while
avoiding discrimination, Collins Foods Int’l, Inc., 948 F.2d at 554-55.
In short—Complainant would have the Court conclude that “on its face” the sequential or
near sequential REC numbers, and their inclusion instead of other unique identifiers, creates an
unrebuttable presumption that Respondent knew it was hiring undocumented persons in violation
of the statute. However, without additional evidence from Complainant the record permits several
other inferences. This, in turn, prohibits a finding of liability at this stage. 12
Similarly, the Court denies summary decision to Complainant’s argument that a finding of
liability is warranted because Respondent intentionally entered false identification information for
its employees. This is a contested issue of fact. Complainant asserts that an interview of
Respondent’s HR staff revealed they did not request or check employee identification before
hiring, in contravention of § 1324a. Complainant’s Mot. Summ. Dec. at 10. Respondent offers
affidavit testimony from its CEO that the company has a practice of physically inspecting each
piece of identification provided to it, and strictly complying with its obligation to check
identification documents in compliance with § 1324a. Resp’t’s Mot. Summ. Dec. Ex. 1, ¶ 13, 2426. Neither party presents the testimony of the people who actually input the data. This issue is
contested, and it therefore can only be resolved through weighing the credibility of the conflicting
evidence.
Addressing Respondent’s cross motion for summary decision, the proffered evidence
similarly does not establish that there is no material question of fact as to whether Respondent
engaged in a reasonable review of the identification and work authorization documents.
Respondent contends that it was not obliged to create a system to track the ID numbers of its
employees, however the evidence at this stage of the proceedings indicates that Respondent did
enroll in such a system of its own volition following the first inspection. Respondent contends
that any errors with regard to its identifying flagged employees are likely the product of clerical
mistakes, however Respondent offers no evidence to support this claim. Therefore, the Court
The Court need not reach the merits of Complainant’s argument that the sequential REC numbers could not have
been produced by a document vendor because the Complainant’s evidence concerning the sequential REC numbers
as evidence of Complainant’s knowledge of hiring undocumented persons is not sufficient, or sufficiently uncontested,
to eliminate it as a triable question of fact. See Complainant’s Mot. Summ. Dec. at 11, 28-29, Ex. G-77 (discussing
Complainant’s review of NSDs in the Phoenix metropolitan area from 2014-2015). However, the Court notes that
Complainant’s arguments on document vendors appears to rely on expert testimony; accordingly, the parties would
be obliged to present evidence in keeping with Federal Rule of Civil Procedure 26(a)(2) concerning the basis of the
expert’s conclusions. 28 C.F.R. § 68.40; Fed. R. Evid. 701, 702; Fed. R. Civ. P. 26(a)(2).
12
11
16 OCAHO no. 1446c
likewise does not find that Respondent has shown no question of material fact that it or its agents
had no actual or constructive knowledge of the unauthorized status of these employees.
For both motions, the “circumstantial evidence . . . is too weak to sustain on a motion for
summary decision where all reasonable inference must be accorded the non-moving party[.]”
United States v. American Terrazzo Corp., 6 OCAHO no. 828, 59, 65 (1995). The Court is
cognizant that “with respect to the contentions as to both actual and constructive knowledge,
summary decision generally is inapposite when there are issues concerning the state of mind of a
party,” and “summary judgment is generally an inappropriate method of resolving an issue of this
type.” Id.
Accordingly, the Court finds that the evidence presented leaves a question of material fact
for a hearing. As such, both Complainant and Respondent’s Motions for Summary Decision as to
Count VII are DENIED.
a. Count IX
Count IX consists of 11 employees who were identified on the 2014 Notice of Suspect
Documents, left employment with Respondent after the third quarter of 2014, and were rehired
during the first quarter of 2015 or after. Second Amended Compl. 25; Complainant’s Mot. Summ
Dec. 30. 13 Complainant contends that “[t]here is no evidence that KLJ attempted to get corrected
identity documents that would allow their individuals to be authorized to work in the U.S.”
Complainant’s Mot. Summ. Dec. Complainant further contends that because “these individuals
were already identified on the [Notice of Suspect Documents] list, KLJ should have known that
these individuals were not authorized to work in the United States.” Id. As a result, Complainant
contends that the persons in Count IX were either knowingly rehired despite their unauthorized
status, or that Complainant was reckless in its decision to rehire them.
Respondent counters that it created a system to identify and weed out applicants on the
Notice of Suspect Documents list. It argues that in some instances, the persons on the NSD list
worked for a “few hours or days” before being processed through the payroll system, and then
were terminated after being identified. Resp’t Mot. Summ. Dec. at 24. In other instances,
Respondent “inadvertently did not flag” some individuals previously subject to a prior Notice of
Suspect Documents. Id. at 23–24. It argues that its creation of this personnel system absolves it
of liability, and cross moves for summary decision with regard to Count IX.
The parties do not dispute that Complainant established a system to identify and refuse
employment to undocumented persons after the first DHS investigation. The parties also do not
dispute that there are many differences between the information provided in the Notice of Suspect
Documents and in the employee files for the persons identified in Count IX. They include:
Count IX originally consisted of 72 individuals. In the First Amended Complaint, Count IX was reduced to 22
individuals. In the Second Amended Complaint, Count IX was further reduced to 11 individuals. The employee
reference numbers utilized are from the Second Amende Complaint.
13
12
16 OCAHO no. 1446c
•
For Employee 8, the first name identified in the Notice of Suspect Documents is the same
as the employee’s last name on the Form I-9, three digits of the Social Security Numbers
differ, and A Numbers are different.
•
For Employee 9, in the June 2014 Notice of Suspect Documents, the first name identified
for the employee is spelled differently and identified as one of the employee’s last names
(with a separate first name that does not appear in the Notice of Suspect Documents), the
last four digits of the Social Security Numbers differ between the Notice and the Form I9, and the A Numbers differ.
•
For Employee 11, the first name identified in the Notice of Suspect Documents corresponds
to one of the last names identified on the Form I-9 (with a separate first name that does not
appear in the Notice of Suspect Documents), 14 the Social Security Numbers have a one
number difference, and there is also a one number difference between the A Numbers.
Second Amended Compl. 25; Complainant’s Mot. Summ. Dec. at 9456, Ex. G-64; Supp.
Exs. 2097-2099.
The Court concludes that for the persons identified above the significant differences
between the information provided in the Notice of Suspect Documents and the employee records
prevent Respondent from being sufficiently aware of the employees’ status to sustain a charge of
knowing hiring of unauthorized persons. For each, there was no match on a unique identifier (i.e.
a SSN or A number) and Respondent employed too many people with too frequent of turnover to
permit an inference that the Respondent could positively identify these persons based on their
name alone.
Concerning the remaining persons identified in Count IX, the parties have a substantive
dispute about whether Respondent engaged in a reasonable inquiry into whether the documents
were fraudulent. 15 Complainant contends that Respondent “turned a blind eye” to its unauthorized
workers, and that in the context of DHS’s prior investigation and consent decree Respondent’s
failure to summarily refuse employment to the persons identified was a “knowing act.”
Respondent counters that these hires resulted from an administrative oversight in entering 1,675
persons into its screening database. Resp’t’s Resp. Mot. Summ. Dec. 24-25.
Missing from either party’s argument is a discussion of the frequency with which the
alleged administrative errors occurred (one perhaps keyed to an industry standard to determine
whether the error rate was statistically significant), a discussion about Respondent’s methods for
identifying errors and correcting them (i.e. through an audit or other secondary review), 16 and a
There are two individuals listed on the June 2014 Notice of Suspect Documents with the same last name and first
name. Complainant’s Mot. Summ. Dec. at 9456, 9473. It appears that Complainant is discussing the individual listed
earlier in the June 2014 Notice of Suspect Documents, based on the Social Security number and A number
descriptions.
14
15
In the Second Amended Complaint, Employees 4 and 10 appear to be the same individual, as they have the same
first and last names and the Social Security Numbers listed on the Forms I-9 provided are the same. Second Amended
Compl. 25; Supp. Exs. 2081; Supp. Exs. 3341. There can only be one charge for the same individual.
Respondent includes in its opposition to Complainant’s Motion for Summary Decision Exhibit 7, which appears to
be the sections of the Respondent’s electronic I-9 vendor’s website which discuss its product. Unfortunately, the
16
13
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statement from the persons either inputting the information, who supervised the data input, or who
reviewed the data input after the fact attesting to their good faith efforts. Without this information,
the Court is incapable of coming to a legal or factual conclusion about whether Respondent acted
reasonably to prevent the rehiring of persons who it was previously advised had suspect
documents.
The need for this information is particularly acute in the case presently before the Court,
where Respondent has admitted that it at times did not enter all of the information for flagged
persons into its database, it at times did not turn on the system to alert it to hiring persons who had
been flagged, and it at times did not feed new applicant data into its centralized system to alert it
to their potentially undocumented status.
Finally, addressing the seven persons in Count IX who Respondent contends were
employed for less than three business days, Respondent argues that liability should not apply to
them as 8 U.S.C. § 1324a and its regulations requires that an I-9 be completed within three days
of employment and these persons were terminated before that deadline. Complainant counters that
Respondent had previously admitted to violating § 1324a when it entered into a consent agreement,
and that it presumably should be held to a heightened standard of more diligently identifying and
screening out persons who are unauthorized to work.
Without addressing the heightened standard argument, in part because neither party
identifies a section of the 2014 settlement agreement addressing this claim, 17 the Court notes that
8 C.F.R. § 274a.2(b)(1)(ii) provides that an employer has within three business days of the
employee’s employ to review and complete the attestation section of the Form I-9, and that
pursuant to 8 C.F.R. § 274a.2(b)(1)(iii) an employer that hires an employee for less than three days
must still complete the employee verification information. See also United States v. Two for
Seven, LLC, d/b/a Black and Blue Rest., 10 OCAHO no. 1208, 4 (2014). Neither the statute nor
regulation speak to the proposition Respondent asks the Court to accept—that the three days is
effectively a safe harbor for employers to demand the relevant documents from an employee,
review them, determine that they are false, and terminate the employee without incurring liability
under § 1324a. Neither party cites any caselaw for this proposition, and the Court has found none
addressing it.
It is certainly conceivable that an employer operating in good faith, especially one with a
large labor force and high employee turnover, might require three days to process, vet, and reach
a decision about the tendered documents and their prospective employees’ work status. This
Court’s guideposts in Collins Food and SKZ speak both to the “reasonableness” of the inquiry into
sections addressing compliance and audit are brief, and the text is cut off at the end. Respondent’s Exhibit 8, titled
“Sample of I-9 Audit Memo from Internal Audit” appears to show an audit of a paper copy of several Forms I-9,
which does not shed light on Respondent’s audit of its electronically stored I-9 information.
17
The Court notes that Complainant’s Exhibit G-69 to its Motion for Summary Decision includes a copy of the 2014
settlement agreement. Complainant highlights paragraph four, in which the Respondent agrees “that the violations of
the stated Notice are a first offense and that future violations of § 274A of the Act … will be treated as having been
committed by an employer with a history of previous violations.” However, this appears to relate to the Department’s
penalty calculations for subsequent violations of the Act, rather than imposing a heightened due diligence obligation
on Respondent.
14
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the documents, as well as avoiding a “reckless disregard” of their obligations under § 1324a. This
caselaw, as well as the regulation’s directive of three days, militate towards a conclusion that all
else being equal an employer may perform a reasonable inquiry within that timeframe and reject
an applicant without creating liability. This conclusion draws additional support from the language
in Collins Food about the potential consequence of a higher than “reasonable person” standard for
the review of identification documents leading to discrimination on the basis of national origin.
Collins Food, 948 F.2d at 554 (“IRCA, as we have pointed out, is delicately balanced to serve the
goal of preventing unauthorized alien employment while avoiding discrimination against citizens
and authorized aliens.”). Requiring an employer to immediately decide whether a document is
false or legitimate, with no opportunity for reflection or to consult its own database or materials
supplied by DHS to aid in the detection of fraudulent documents, would create a perverse incentive
for employers to be overinclusive in terminating employees who might otherwise be authorized to
work in the United States.
However, this conclusion presumes a showing of good faith and regularity with regard to
the employer’s hiring operations. An employer who, for instance, intentionally hired
undocumented persons but terminates them after their third day of employment, would
notwithstanding the regulation have violated the statute’s prohibition against an employer “hir[ing]
… for employment in the United States an alien knowing the alien is an unauthorized alien,” 8
U.S.C. § 1324a(a)(1). Similarly, an employer who maintained a reckless disregard for the
employment status of its employees, but that terminates its employees on the third day, is
chargeable with having knowingly hired an undocumented person for the same reason.
In the matter presently before this Court, the record at the dispositive motions phase
concerning the remaining Count IX employees is not sufficiently clear for the undersigned to either
conclude that the Respondent implemented a reasonably effective system in good faith, or that it
hired the employees in conscious disregard for the law.
Accordingly, the Court GRANTS Respondent’s motion with regard to persons 8, 9, and 11
of Amended Count IX.
The Court DENIES Complainant and Respondent’s cross-motions for all other persons in
this count (persons 1-7 and 10).
b. Knowing Hire and Continue to Employ Violations
and X.
The parties cross-move for summary decision as to the violations at issue in Counts VIII
i. Counts VIII, X: Knowingly Continued to Employ
Complainant argues that the Court should grant summary decision with respect to Counts
VIII and X of the Second Amended Complaint because Respondent knew or should have known
15
16 OCAHO no. 1446c
that these employees were unauthorized to work in the United States and nonetheless continued to
employ them. With regard to Count VIII, Complainant argues that the violation occurred due to
the employees’ work authorizations expiring, Complainant notifying Respondent of the expiration
of their data, and Respondent failing to take steps to reverify their employment status. Concerning
Count X, Complainant argues Respondent continued to employ four persons after receiving
Complainant’s letter stating that those persons had documents that did not match their identities (a
“No Match” Letter).
Respondent opposes the motion, arguing that it “did not have constructive knowledge
because there is no evidence that the Company ‘deliberately avoided learning the truth’ or ‘took
deliberate actions to avoid confirming a high probability of wrongdoing.’” Resp’t’s Resp. Mot.
Summ. Dec. 26 (citing Complainant’s Mot. Summ. Dec. at 32-33).
Respondent also cross-moves for summary decision for Count X, arguing that the prior
Notice of Suspect Documents did not create constructive knowledge that these employees were
unauthorized to work. Resp’t Mot. Partial Summ. Decision 23–26.
1. Constructive Knowledge of Violations
The resolution of the parties’ cross motions largely depends on determining what level of
knowledge is sufficient to hold Respondent legally accountable for the undocumented workers that
Respondent employed.
8 U.S.C. § 1324a(a)(2) directs that it is “unlawful for a person or other entity, after hiring
an alien for employment . . . to continue to employ the alien in the United States knowing the alien
is (or has become) an unauthorized alien with respect to such employment.” (emphasis added).
Respondent argues that it did not know that some of its employees became ineligible for
employment. Insofar as neither party has made an argument for Respondent having direct
knowledge of its employee’s work status, the Court evaluates whether the documents’ expiration
meets the standard of constructive knowledge.
8 C.F.R. § 274a.1(l) defines constructive knowledge as:
(1) […] knowledge which may fairly be inferred through notice of
certain facts and circumstances which would lead a person, through
the exercise of reasonable care, to know about a certain condition.
Constructive knowledge may include, but is not limited to,
situations where an employer:
(i) Fails to complete or improperly completes the
Employment Eligibility Verification Form, I-9;
(ii) Has information available to it that would indicate that
the alien is not authorized to work, such as Labor
16
16 OCAHO no. 1446c
Certification and/or an Application for Prospective
Employer; or
(iii) Acts with reckless and wanton disregard for the legal
consequences of permitting another individual to introduce
an unauthorized alien into its work force or to act on its
behalf.
OCAHO has found that an employer has “‘constructive knowledge of the alien worker’s
unauthorized status’ when the ‘employee wrote the expiration date for his employment
authorization document in section 1 of the Form I-9 and the employer failed to reverify the
individual’s work authorization prior to the expiration date of the document.’” United States v. El
Paso Paper Box, Inc., 17 OCAHO no. 1451, 14 (2022) (quoting United States v. Muniz Concrete
& Contracting, Inc., 12 OCAHO no. 1278, 8–9 (2016), and collecting cases). “OCAHO precedent
dictates that [a respondent has] constructive knowledge that it continued to employ [an] individual
despite his lack of work authorization because it inputted the employee’s employment
authorization card and its corresponding expiration date . . . in Section 2 of the employee’s I-9.”
Id.
2. Count VIII (Expired Work Authorization Documents)
Respondent hired the seven persons in Count VIII, entering the expiration date of their
work authorization documents into Section 2 of the Form I-9. Later, the work authorization
document expired, and there was a gap between the expiration date and the extension of their work
authorization. During that gap, Respondent continued to pay the employees’ wages. See Ex. G15 (containing Forms I-9 for each employee with ICE auditor notes, including USCIC Database
search results, AZ DES Wages, and KLJ Payroll Register Data).
The Court holds, as with El Paso Paper Box, that Respondent’s awareness of the work
authorization documents’ expiration, the employee’s continued employment, along with the
employer’s failure to obtain unexpired documents confirming the employee’s ability to work,
constitutes constructive knowledge of the employee’s inability to work in the United States.
In the language of the regulation, an employee’s ineligibility to work after the expiration
of their work expiration is “readily inferable” from the facts and circumstances. Moreover, an
employer exercising reasonable care would note the expiration date of the work authorization
document and inquire before the deadline as to whether renewed or additional information was
forthcoming. A contrary position would thwart the purpose of the Act, which places the onus on
employers to determine whether its employees can work lawfully.
This conclusion necessarily applies in Respondent’s context, where the facts are
undisputed that it created a database to capture relevant information about its employees’
employment status following the prior settlement with DHS, and it conducted reviews of this data
to determine whether it was in compliance with its obligations under § 1324a.
17
16 OCAHO no. 1446c
Complainant has therefore met its burden of constructive knowledge with regard to Count
VIII, and Complainant’s motion will be GRANTED and Respondent’s cross motion denied. 18
3. Count X (Notice of Suspect Documents)
As to the four employees in Count X, Complainant asserts that Respondent either continued
to employ or re-hired these persons after receiving a Notice of Suspect Documents informing
Respondent that the employees’ work authorization documents did not match the identity of the
employees.
“A violation of IRCA’s ‘continuing employment’ prohibition, 8 U.S.C. § 1324a(a)(2),
occurs when an employer fails to reverify the employment eligibility of one of its workers after
receiving specific and detailed information that the worker may, in fact, be ineligible for
employment in the United States.” United States v. Candlelight Inn, 4 OCAHO no. 611, 212, 223–
24 (1994) (citation omitted); see also United States v. Occupational Resources Mgmt. Co., 10
OCAHO no. 1166, 5 (2013) (“Generally speaking, when an employer receives specific information
that casts doubt on the employment authorization of an employee, and the employer continues to
employ the individual without taking adequate steps to reverify the individual’s employment
eligibility, a finding of constructive knowledge may result.”); United States v. Assoc. Painters,
Inc., 10 OCAHO no. 1151, 4-5 (2012).
However, “IRCA . . . is delicately balanced to serve the goal of preventing unauthorized
alien employment while avoiding discrimination against citizens and authorized aliens. The
doctrine of constructive knowledge has great potential to upset that balance, and it should not be
expansively applied.” Collins Foods, 948 F.2d at 554–55 (explaining that if the scope of liability
were to be expanded by constructive knowledge, the employer may then “avoid hiring anyone with
an appearance of alienage,” and therefore, the “doctrine of constructive knowledge must be
sparingly applied”); see also United States v. Occupational Res. Mgmt. Co., 10 OCAHO no. 1166,
4-5 (2013). Therefore, OCAHO has found that the “context” and “totality of the circumstances”
matter in considering whether an employer had constructive knowledge of an employee’s
unauthorized status, as “simple negligence or carelessness does not satisfy the rigorous standard”
for constructive knowledge. United States v. SKZ Harvesting, Inc., 11 OCAHO no. 1266, 11
(2016) (citing Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011)).
This analysis asks four questions: 1) did the employer receive information casting doubt
on the employee’s authorization to work, 2) was the information sufficient to specifically identify
the employee, 3) did the employer continue to employ this employee or reemploy them, 4) without
taking steps to reverify the employee’s work authorization?
a. Did Respondent Receive Information Concerning Employees
Authorization to Work?
As to the first question, the statute does not require that an employer receive information
about an employee’s unauthorized status in any particular way. Mester Mfg. Co. v. INS, 879 F.2d
561, 566-67 (9th Cir. 1989) (where ICE advised Respondent that three employees were “suspected
Employees 2, 3, 4, and 5 in Count VIII are also listed in Count II. Respondent will be liable for Employee 2 only
under Count VIII. Respondent will be liable for Employees 2, 3, and 5 only under Count VIII.
18
18
16 OCAHO no. 1446c
of green card fraud,”); Candlelight Inn, 4 OCAHO no. 611, at 224-27 (ICE agent advising
employer that employee social security card was fraudulent); United States v. Noel Plastering &
Stucco, Inc., 3 OCAHO no. 427, 318, 321-22 (1991), aff’d 15 F.3d 1088 (9th Cir. 1993) (where
ICE sent the Respondent a letter identifying the relevant employees); Split Rail Fence Co., Inc. v.
United States, 852 F.3d 1228, 1245 (10th Cir. 2017) (same).
In this matter, ICE issued a first Notice of Suspect Documents on July 22, 2014 as part of
the First Inspection. Complainant’s Mot. Summ. Dec. at 4; id. at 9449, Ex. G-64. The notice
advised Respondent that based on the information its employees provided, several appeared not to
be authorized to work in the United States. The notice further advised that their documentation
did not satisfy the Form I-9 requirements. The notice directed Respondent to “take reasonable
actions to verify the employment eligibility of the employees.” Id. at 9450, Ex. G-64.
The July 2014 Notice listed Employees 1, 3 and 4 at issue in Count X. Complainant’s Mot.
Summ. Dec. at 9454, 9477, 9486, Ex. G-64. Employee 1 worked at Respondent at some point
prior to the June 2014 Notice. Respondent hired Employee 3 on September 23, 2014, and despite
receipt of the same notice they continued to receive wages throughout Q4 2014 and 2016 through
the second quarter of 2017. Id., Ex. G-4, Supp. Exs. at 3005-06, G-17. Employee 4 was hired on
February 18, 2014, and notwithstanding the notice they continued receiving wages through 2017.
Id., Ex. G-4, Supp. Exs. at 3007-08, G-17.
Complainant sent a second Notice of Suspect Documents on November 13, 2014,
containing the same language concerning the potentially unauthorized status of Respondent’s
employees. Complainant’s Mot. Summ. Dec. at 4; id. at 9492, Ex. G-65. This notice listed
Employee 2 in Count X. Id. at 9495, Ex. G-65. The record reflects that Employee 2 was re-hired
on January 22, 2016, and despite the November 2014 Notice, the employee received his last check
in Q4 2017. Id., Ex. G-4, id. at 8858, Ex. G-30 (listing Employee 2 in the State Quarterly Report
for the quarter ending in March 2016), Ex. G-30; id. at 9114, Ex. G-30 (listing Employee 2 in the
State Quarterly Report for the quarter ending in December 2017); Supp. Exs. at 3003-04, G-17.
b. Notice Was Sufficient
The Court must next determine whether DHS’s notice was sufficiently clear and
unambiguous to put Respondent on notice of it potentially employing persons who were not
authorized to work in the United States. The most common way to achieve this notice is by
providing the employee’s name and a unique identifier (such as an A number, a social security
number, or REC number) that would unambiguously identify the person and provide notice should
the employer seek employment in the future.
With Employee 1, the June 2014 Notice listed an individual with the same last name,
employee number, and social security number from the Form I-9. Complainant’s Mot. Summ.
Dec. at 9454, Ex., G-64, Supp. Exs. 3001-02, Second Amended Compl. at 26.
Employee 2’s first and last names are the same on the November 2014 Notice of Suspect
Documents, the Complaint, and the Form I-9 submitted. Complainant’s Mot. Summ. Dec. at 9495,
Ex. G-65, Supp. Exs. 2079-80, Second Amended Compl. at 26. Additionally, the Social Security
19
16 OCAHO no. 1446c
Number and employee number identified for Employee 2 in the November 2014 Notice of Suspect
Document are both the same as in the employee’s Form I-9. Complainant’s Mot. Summ. Dec. at
9495, Ex. G-65, Supp. Exs. 2079-80.
Employee 3’s first name is spelled slightly differently between the June 2014 Notice of
Suspect Documents and the Form I-9, but his last name, Social Security Number, and A Number
are all the same between the Notice of Suspect Documents and the Form I-9. Complainant’s Mot.
Summ. Dec. at 9477, Ex. G-64; Supp. Exs. at 3005-06; Second Amended Compl. at 26.
For Employee 4, the June 2014 Notice listed an individual with the same Social Security
number, a similar, but not identical name, 19 a different employee number, and a different ANumber to the individual listed as Employee 4 under Count X in the Second Amended Complaint
and in the relevant Form I-9. Complainant’s Mot. Summ. Dec. at 9486, G-64, Supp. Exs. 300708, SAC 26.
The Court finds that for all four employees the unique identifier of the Social Security
number in combination with the similarity with the names would give a reasonable employer
notice that the person identified in the notice is potentially one of Respondent’s employees.
As in United States v. Noel Plastering & Stucco, Inc., 3 OCAHO no. 427, 318, 321 (1991),
aff’d 15 F.3d 1088 (9th Cir. 1993), these notices identified the relevant employees, reflected ICE’s
conclusion that the documents the employees used to work did not pertain to them, and expressed
ICE’s suspicion that they were not authorized to work in the United States. See also Split Rail
Fence Co., Inc. v. United States, 852 F.3d 1228, 1243 (10th Cir. 2017); cf. Aramark Facility Servs.
v. Serv. Emps. Int’l. Union, 530 F.3d 817, 826 (9th Cir. 2008) (finding notification of SSN
discrepancy did not suffice because it “does not automatically mean that an employee is
undocumented or lacks proper work authorization”).
c. Continued Employment or Rehire
There is no question of fact that Respondent either continued to employ the persons in
Count X, or rehired them after they separated their employment.
d. Failure to Reverify Employment Eligibility
Respondent appears to concede that all four employees in Count X did not have their
employment reverified, even though some were flagged for further review. Respondent instead
argues that it engaged in a robust system to verify the employment of all its present and future
employees following the first DHS investigation. It asserts that these four persons were not
flagged, but that infrequent errors sometimes occur with a large business operation involving many
The last name on the June 2014 Notice of Suspect Document is spelled slightly differently than the last name on
the Form I-9, and whereas the first name in the Notice of Suspect Documents is a single name, the first name on the
Form I-9 is two names (i.e., Ann vs. Mary Ann).
19
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seasonal hires. Respondent further contends that the good faith efforts it put into identifying and
rejecting the persons identified in the DHS notice should prevent a finding of liability.
As with the prior analysis concerning the Respondent’s efforts at screening employees, the
record is devoid of facts from which the Court can determine whether the screening system
Respondent created was effective, in the sense that it had a low error rate, that it was
comprehensive, or that it was consistently implemented. The absence of this information prevents
the Court from properly considering Respondent’s defenses. Accordingly, the Court DENIES both
the Complainant’s and Respondent’s motions for summary decision with regard to the employees
in Count X.
A. Paperwork Violations
1. Counts XI–XII (Failure to Prepare/Present--Audit Trails) 20
Complainant alleges in Counts XI and XII 21 that Respondent failed to present the audit
trails, or metadata, for its Form I-9 upon request. Complainant alleges this failure to present the
electronic data violates 8 U.S.C. § 1324a(a)(1)(B). Complainant further argues that when many
of the audit trails were eventually produced, they could not be authenticated. Second Amended
Compl. 28, 32; Complainant’s Mot. Summ. Dec. 36-38. It argues that the regulations provide no
exception for good faith but delayed submissions. Reply Mot. Summ. Decision 13-15.
Respondent objects to Complainant’s request for summary decision as to Counts XI and
XII, arguing that the audit trails were not produced upon request due to technical errors. Resp.
Mot. Summ. Decision 4. It further argues that once DHS advised it of the missing data, it worked
to produce the information. Respondent stresses that it established a system to collect I-9 data in
good faith, and it argues that it should not be punished for technical errors in a generally compliant
and widely used Form I-9 system. Id. at 7.
i.
Standards of Law – Audit Trails
Complainant alleges in Counts XI and XII that Respondent violated 8 U.S.C. §
1324a(a)(1)(B), which renders non-compliance with § 1324a(b) unlawful. Section 1324a(b)
creates three general requirements for Forms I-9. On the first section of the Form I-9, the applicant
20
The Court presumes that the Complainant’s arguments on liability relate to Respondent’s alleged failure to prepare
or present the audit trails along with the Forms I-9 by the regulatory deadline. This comports with the Complainant’s
arguments in its motion for summary decision, as well as being the main point concerning Counts XI and XII that
Respondent engages with in its cross motion and opposition. The Court notes, however, that in the Second Amended
Complaint, the motion heading for Count XI is “Failed to Ensure that Employee Properly Completed Section 1 and/or
Failed to Properly Complete Section 2 or 3 of the Employment Eligibility Verification Form (Form I-9) (Substantive
Paperwork Violations).” Second Amended Compl. at 27.
21
In the Second Amended Complaint Complainant refers to the violations constituting Count XI and XII using the
same language, and the same citation to the statute, however, in its motion for summary decision Complainant clarifies
that Count XII constitutes the employees who were on DHS’s Notice of Suspect Documents list and for whom
metadata was not timely produced. Count XI are employees who were not on the Notice of Suspect Documents list
for whom metadata was not timely produced. Second Amended Complaint at 36.
21
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must attest that they are a citizen or national of the United States, a permanent resident, or
otherwise authorized to work (the “Section 1” attestation). 8 U.S.C. § 1324a(b)(2). On the second
section of the Form I-9, the employer must attest that they have verified that an applicant is not an
“unauthorized alien” by examining work authorization and identification documents (the “Section
2” attestation). 8 U.S.C. § 1324a(b)(1). Third, 8 U.S.C. § 1324a(b)(3) provides that an employer
“must retain a paper, microfiche, microfilm, or electronic version of the [Form I-9] and make it
available for inspection . . . .”
Opting to store Form I-9 data electronically carries with it obligations to maintain the data
in a manner that permits one to see when changes were made to the forms, and by whom. See,
e.g., 8 C.F.R. § 274a.2(f)(1) (“A person or entity who chooses to complete and/or retain Forms I9 electronically must maintain and make available to an agency of the United States upon request
documentation of the business processes that . . . [e]stablish the authenticity and integrity of the
Forms I-9, such as audit trails.”). 22
The timeframe for compliance comes from 8 C.F.R. § 274a.2(b)(2)(ii), which directs that
employers must produce Forms I-9 within three business days of the request, and that “[a]ny
refusal or delay in presentation of the Forms I-9 for inspection is a violation of the retention
requirements set forth in section 274A(b)(3) of the Act.”
The data retention obligations come from 8 C.F.R. § 274a.2(f)(1)–(2), which directs that if
an employer elects to complete or retain copies of Forms I-9 electronically, they must retain and
make available to DHS the process they used to: 1) create the retained Form I-9, 2) modify or
maintain the form, and 3) establish the authenticity and integrity of the form. The regulation directs
that failure to maintain documentation showing its process for validating the data is a violation of
the statute.
8 C.F.R. § 274a.2(e)(8), which directly references an employer’s duty to produce
audit trails upon request, bears verbatim inclusion in this order:
At the time of an inspection, the person or entity required to retain
completed Forms I-9 must:
(i) Retrieve and reproduce (including printing copies on paper, if
requested) only the Forms I-9 electronically retained in the
electronic storage system and supporting documentation
specifically requested by an agency of the United States, along with
22
On August 22, 2012, Executive Associate Director of Homeland Security Investigations James A. Dinkins issued
a Memorandum to Assistant Directors, Deputy Assistant Directors, and Special Agents in Charge at DHS with the
subject “Guidance on the Collection and Audit Trail Requirements for Electronically Generated Forms I-9.” James
A. Dinkins, Guidance on the Collection and Audit Trail Requirements for Electronically Generated Forms I-9” (Aug.
22, 2012), available at https://www.ice.gov/doclib/foia/dro_policy_memos/collect-audit-forms-i9.pdf (Dinkins
Memo). This Memorandum includes a flowchart to “illustrate the minimum acceptable standards for electronically
generated Forms I-9” to ensure compliance with the electronic Form I-9 regulations. Id. at 2. This document is also
relevant to the Court’s analysis of employer obligations when creating, retaining, and presenting electronic Forms I9.
22
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associated audit trails. Generally, an audit trail is a record showing
who has accessed a computer system and the actions performed
within or on the computer system during a given period of time . . .
.
(emphasis added).
ii.
Analysis
There is no debate that Respondent failed to produce the audit trails for the Forms I-9
referenced in Counts XI and XII within the regulatory timeframe, or by the more lenient
timeframes outlined in Complainant’s correspondence with Respondent. Respondent asserts that
the data was not produced due to a technical error which it ultimately rectified; it produced the
audit trails roughly a month and a half late.
An audit trail is an essential component of the electronic Form I-9—it serves to verify the
“authenticity and integrity” of the Forms I-9, in particular the Sections 1 and 2 signatures, by
verifying who accessed the computer system when these signatures are completed. An untimelypresented audit trail is a violation of 8 C.F.R. §§ 274a.2(b)(2)(ii), (e)(8), (f), and 8 U.S.C. §§
1324a(a)(1)(B), (b)(3) in the same way as an untimely-presented paper Form I-9.
Further, a party may not avoid liability by tardily producing audit trail data. The
regulations make clear that the metadata is effectively inseparable from the electronic Forms I-9,
and that without the data advising how the Forms I-9 were created the underlying documents are
of little to no utility. See also United States v. Eriksmoen Cottages, Ltd., 14 OCAHO no. 1355, 6
(2020) (“The failure to timely present an I-9 is a different matter from the failure to timely
complete section 1 and/or section 2 of an I-9” and “the employer cannot avoid liability by
submitting I-9 forms at some later point in the process, absent an extension of time.”)
Accordingly, the Court finds that Complainant has established liability for failure to timely
present for each of the employees in Counts XI and XII, as the complete Forms I-9 with associated
audit trails for those employees were not presented until after due date.
Complainant’s Motion for Summary Decision is GRANTED for Counts XI and XII.
Given that an employer is only liable for one violation per Form I-9, Respondent will be
liable for the Forms I-9 for Employee Reference #: 1, 4, 6, 26, and 41 under Count XI, and will
not be liable under Counts II or Count VII. Likewise, a number of employees listed under Count
XII are also listed under Counts IV or Count VII. 23 Respondent will be liable for the Forms I-9
for the employees noted in the footnote only under Count XII.
Count XII employee reference #s: 8, 14, 15, 17, 18, 20, 22, 26, 28, 29, 32, 35, 37, 41, 42, 47, 48, 50, 52, 54, 55, 58,
59, 60, 61, 63, 65, 66, 67, 68, 71, 72, 73, 76, 77, 78, 80, 82, 83, 84, 85, 86, 88, and 89.
23
23
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iii.
Good Faith Defense
Respondent has argued that even if it failed to produce the audit trails within the requisite
timeframe, the error is harmless because these violations are “technical or procedural,” and that it
did not receive the required notice and ten-day time period in which to correct the errors.
Complainant counters that the errors are substantive, and that consequently Respondent is due no
additional notice or grace period to produce the missing information.
Errors in satisfying the requirements of the employment verification system are known as
“paperwork violations,” which are categorized as either substantive or technical and procedural.
United States. v. Cawoods Produce, Inc., 12 OCAHO no. 1280, 8 (2016) (citing Memorandum
from Paul W. Virtue, INS Acting Exec. Comm’r of Programs, Interim Guidelines: Section
274A(b)(6) of the Immigration & Nationality Act Added by Section 411 of the Illegal Immigration
Reform & Immigrant Responsibility Act of 1996 (Mar. 6, 1997) (Virtue Memorandum)).
“Failure to present, failure to prepare, and failure to timely prepare are all substantive
violations.” United States v. El Paso Paper Box, 17 OCAHO no. 1451a, 4 (2022); See also
Eriksmoen Cottages, Ltd., 14 OCAHO no. 1355, at 3–4 (“According to OCAHO case law, the
employer cannot avoid liability by submitting I-9 forms at some later point in the process, absent
an extension of time) (emphasis in original); United States v. Frio Cnty. Partners, Inc., 12 OCAHO
no. 1276, 11 (2016) (“Failure to timely prepare a Form I-9 is a substantive violation”) (citation
omitted)).
The Court finds that Respondent’s failure to timely present an audit trail for these Forms
I-9 is a substantive violation. Like failure to timely present a paper Form I-9, a failure to timely
present an audit trail undermines the “basic requirements of the act,” United States v. LFW Dairy
Corp., 10 OCAHO no. 1129, 5 (2009), under § 1324a(b)(1)-(3), by preventing an auditor from
timely verifying the authenticity and integrity of the attestations in the Form I-9. Instead of
constituting a “minor, unintentional violation[] of the verification requirement,” this Court finds
that the failure to produce an audit trail verifying the information in the Form I-9 constitutes a
“failure[] to comply with the verification requirements as a whole.” LFW Dairy Corp., 10 OCAHO
no. 1129, at 4.
Accordingly, the Court does not find that a good faith defense applies to the violations in
Counts XI and XII. The Court may nonetheless consider Respondent’s arguments regarding its
reliance on its electronic Form I-9 provider, and the inadvertent nature of the failure, when
calculating a penalty for these Counts.
VI.
BIFURCATION
The decision to bifurcate proceedings is in the Court’s discretion. Eriksmoen Cottages,
Ltd., 14 OCAHO no. 1355, at 8 (citing Hernandez v. Farley Candy Co., 5 OCAHO no. 781, 464,
465 (1995)). Having addressed liability for these counts in this order, the Court will address the
penalty assessment for these and the remaining counts in a future order.
24
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VII.
ORDERS
Complainant’s Motion for Summary Decision is GRANTED as to Count VIII, Count XI
and Count XII. Complainant’s Motion for Summary Decision is DENIED as to Count VII, Count
IX, and Count X.
Respondent’s Motion for Summary Decision is GRANTED as to employees 8, 9, and 11
of Count IX. Respondent’s Motion for Summary Decision is DENIED as to Count VII, Count
VIII, employees 1-7 and 10 in Count IX, Count X, Count XI, Count XII.
Because the Court finds issues of material fact with Count VII, employees 1-7 and 10 in
Count IX, and Count X, those Counts will proceed to a hearing on liability.
SO ORDERED.
Dated and entered on July 11, 2025.
__________________________________
Honorable John A. Henderson
Administrative Law Judge
25
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.