You are a successful business owner with a factory that is operated by 50 employees. You have operated the company for more than 20 years and it has grown considerably since you first opened the business doors. Your company has expanded over time in operations and staff. You have worked hard to develop a strong reputation for producing a quality product at low cost. Your competitors are jealous of your success. Every so often, you hear scuttlebutt at the local diner that some of your employees have “questionable citizenship” in the United States. You decide there is no need to ask questions since your capable human resources manager handles all the personnel matters at the company. Business is prosperous. Life is good.

Then on one uneventful Monday morning, you are driving into work sipping your coffee. As you approach your business, you see a number of large white passenger vans with tinted windows parked at the business. As you get closer, you see a number of heavily armed men and women in black military-style uniforms. Being a business owner, you begin to wonder if this might be some type of bizarre takeover robbery. As you park your car in the lot and consider whether to call the police on your cell phone, you notice the men have a three-letter acronym on the uniforms in large white letters. As you get out of your vehicle for a better look, a few men in black approach you with their weapons displayed and show you their official credentials. This is no robbery. The men and women in black military garb are federal law enforcement officers employed by immigration and Customs Enforcement, better known as ICE.

As the thoughts in your head begin to spin, you see the other agents are escorting a significant number of your employees, now wearing handcuffs, into the white vans. One of the senior agents asks you if you are the owner of the business and if you have a few moments to answer a few questions. You are in disbelief and nod your head slowly.

You realize there may be some problems at the factory.

ICE and DHS enforcement actions

Immigration is a hot topic in politics, business, and law today. ICE and the Department of Homeland Security have been particularly aggressive in bringing federal criminal cases against employers who have illegal aliens working at businesses. In years past, immigration agents would swoop into a business and arrest/detain a bunch of illegal aliens and deport them. Nowadays, ICE persuades some of the illegal aliens to become government witnesses and build criminal cases against the employers.

A prominent Nevada businessman who owned 11 fast food restaurants had the misfortune of being on the front page of the newspaper in Reno in 2007 when ICE agents (wearing black military style uniforms) swooped into the restaurants during the middle of the day and arrested 58 undocumented or fraudulently documented alien employees. Many months later, two executives from the company pled guilty to federal felony offenses. The fines for the corporation were $1 million. The businessman is now selling the 11 restaurants.

A Reno book distributor fired 50 employees after an ICE audit revealed problems with immigration documentation.

In addition to federal law, a three-judge panel for the 9th Circuit recently upheld a facial challenge to an Arizona state statute (Legal Arizona Workers Act) that made the use of E-Verify mandatory of all employers and that punishes employers for knowingly or intentionally hiring illegal aliens. The Arizona statute did not include any penalty for the failure to use E-Verify, but provided significant penalties for knowingly and intentionally hiring illegal aliens, including the revocation of the license to do business in Arizona. Nevada had a similar bill pending during the 2007 legislative session (AB 383). This bill was signed into law and now allows the Nevada Tax Commission to take state action against an employer who has received a final decision for the United States Attorney General that the employer has engaged in unlawful hiring of an illegal alien. As mitigating evidence, the employer may present the print-out generated through the use of E-verify.

Based on the enforcement of federal and state immigration statutes, the revised I-9 form, and prosecution of employers by ICE/DHS, it appears employers may want to review their HR policies (especially if they employ low-level workers who may or may not be US citizens).

Workplace policies and immigration practices and procedures

This article provides suggestions for employers to consider the following to avoid a visit from the ICE/DHS men in black. For starters, the company should develop and operate a credible I-9 process for the business with policy and protocol. This process should include: verification by audit and good completion practices; limitations on persons authorized to process I-9 forms; avoidance of sloppy practices of combining employment recruitment and I-9 responsibilities into a single HR job; and establishment of an I-9 protocol that is enforced at the company.

The above process and payment of market rates for labor should help minimize the motive for employees to become whistleblowers or government informants (known as “rats” by defense lawyers). While there will always be a disgruntled employee (or more than one), a company that follows fair employment practices should minimize grudges by unhappy employees or jealous competitors. Common sense needs to be applied by management as well. For example, a manager should not boast at local industry meetings about low labor costs. When there is a complaint, the company should be proactive in responding to inquiries. And when there is a known unauthorized individual at the business, management must balance the costs of discrimination suits versus information from credible sources about illegal employees at the company.

If such a problem is raised, the company needs to have a plan to deal with the issue. The first step is to determine if the allegation is credible. An internal investigation can be conducted. The company should be cooperative with federal agencies from Immigration & Customs Enforcement, Department of Homeland Security, or Social Security Administration. The company can manage evidence of constructive knowledge of employee status by following certain steps: respond to Social Security “mismatch” letters (i.e. name does not match the Social Security number); do not hire (or rehire) obvious illegal aliens (i.e. the candidate has documents that do not appear to be legitimate); respond to IRS/third-party reports of double names of an employee; review employee identification for signs of fraud.

Another decision for the company to make is whether to enroll and use ICE's “E-Verify” program. This requires a memorandum of understanding with ICE. It is already mandatory for federal contractors and some states, such as Arizona, are now adopting the program for employers.

The final critical item for the business is to develop protocol for responding to a civil or criminal investigation. The company should have an emergency plan so management and employees know what they should do. For example, employees should be cooperative with agents to avoid obstruction of justice charges. However, “cooperation” does not mean that any employee is required to make statements to law enforcement when the “men in black” swoop in on the workplace. Most certainly the employer should not accept the invitation to submit to an interview without counsel present. The company should also have a workplace replacement strategy for an emergency situation to cope with the crisis of a manpower shortage. Whenever law enforcement appears at the company doors, the first step in the protocol should be to call the attorneys who can give objective and practical legal advice when emotions at the company are high. In today's world, a business owner needs to be cognizant of the immigration status of the business employees. ICE enforcement actions at factories and job-sites create unfavorable media coverage for businesses. By implementing a credible immigration policy, practices, and procedures, an employer can ensure the viability of the workforce at the business. This will also help the business and owner avoid potential violations of federal immigration laws that can lead to significant monetary penalties, imprisonment of company officials, and corporate bankruptcy.

Craig S. Denney is a counsel at Downey Brand LLP in Reno, where he represents corporate and individual clients in white collar criminal defense in Nevada and California. Michelle N. Kazmar is an associate at Downey Brand LLP, where she represents corporate and individual clients in civil litigation in Nevada and California.

© 2009 by the Northern Nevada Business Weekly.  Reproduced with permission. All rights reserved.