Lately, it seems like every article warns about the prowess of ICE, punctuating the immigration enforcement landscape by its mighty ability to impose (and collect) fines from U.S. employers as a result of I-9 paperwork violations. The case of United States v. Ronning Landscape, Inc. marks an ever so slight departure from this track record.
In early May, the Executive Office of Immigration Review’s Office of the Chief Administrative Hearing Officer (OCAHO) entered its decision regarding a case brought by Ronning Landscape, Inc. (“Ronning Landscape”), a small “mom-and-pop” landscaping business located in Mesa, Arizona. The 19-page decision was decided by Administrative Law Judge Ellen Thomas.
You might recall that Judge Thomas was previously mentioned here, when I provided updates after personally attending the Second Annual Worksite Immigration Compliance Symposium at Stanford Law Schools’ Rock Center for Corporate Governance in April 2012. It was an honor to listen, first hand, to Judge Thomas’ discussion on OCAHO’s decision processes when ruling on these matters. Today, we have the pleasure of reading one of her decisions!
In this case, ICE filed two counts against Ronning Landscape for violations under 8 USC § 1324a(b) and 8 CFR § 274a.2(b). Count I was Ronning Landscape’s alleged failure to complete Section 1 or 2 or 3 of Form I-9 for 65 of its employees. Count II was Ronning Landscape’s alleged failure to prepare or present Forms I-9 for 29 of its employees upon request.
Ronning Landscape received a Notice of Inspection on July 1, 2009. After ICE conducted its investigation, Ronning Landscape received a Notice of Intent to Fine on March 1, 2010. Ronning Landscape then requested a hearing instead of paying the fine. In reviewing the case, the Judge reviewed multiple documents and facts, including pleadings, exhibits and other materials of record.
A (Very) Small Victory of U.S. Employers?
In its summary judgment motion to the court, Ronning Landscape argued that at 23 of the named individuals were not actually employees of Ronning Landscape, but rather, employees of a third company. From October 2008 to December 2008, Ronning Landscape paid the 23 individuals for work performed on behalf of third company but was later reimbursed by the third company. The third company controlled the ability to hire, fire and adjust the working conditions of those 23 individuals.
Further, the government did not dispute these facts. The government argued that the Ronning Landscape benefitted “on paper” by collecting a payment processing fee from the third Party, which should have been sufficient to establish that Ronning was required to prepare I-9 forms for those individuals. This argument was not supported by the regulatory definitions of “work for pay” nor did the court find it a convincing argument.
After reviewing the facts on record and the totality of the circumstance, most of which the government did not dispute, the court held that Ronning Landscape did not create an employer/employee relationship with 23 of the named individuals. Summary judgment was granted to Ronning Landscape dismissing those charges against Ronning Landscape for the 23 name individuals. Indeed this was a small victory!
The Form I-9 Battle Continues
The remainder of the decision involved reviewing the evidence to determine Ronning Landscape’s liability for failing to properly complete or present Forms I-9 for its named employees to ICE during the audit. One interesting defense used by Ronning Landscape was that of substantial compliance. Unfortunately, the court stated that only in limited circumstances would this affirmative defense apply. (Substantial compliance was decided in this case for only seven employees’ Forms I-9.) For the remainder of the named employees, the court decided in favor of the government, which would have resulted in Ronning Landscape being liable for failing to complete or present a Form I-9 for the remainder of its employees listed in the complaint.
In the interest of space (and time), I’ve summarized three major takeaways:
• The Importance of Proper Documentation: Proper documentation and the right legal arguments (for both organizations and the government) are required in order to win cases in court. Judges carefully considered all the evidence presented to them. Mere allegations (and statements) without additional supporting evidence is not sufficient. In this case, having the proper documentation was critical for various arguments by either party.
• Never Underestimate the Power of Counsel: Experienced counselors can help employers navigate through the multiple counts and violations the government may assess during the imposition of fines. Having the right expertise to help guide you through an I-9 audit inspection is critical. This is where a licensed attorney well-versed with I-9 compliance will become an important asset to your organization.
• Take I-9 Compliance Seriously: The 19-page decision is quite robust in its review of one employer’s I-9 process. However, it highlights the greater efforts the government will go towards pursuing non-compliant employers for “mere paperwork” errors. Ignorance of the law can cost employers in hefty fines. This is why many employers have already adopted a smart technology to manage their I-9s electronically while simultaneously partnering with experienced counsel.
This article originally appeared on LawLogix Group Inc. Reprinted with permission.
Ann Cun is a U.S. based immigration attorney who has helped companies in the technology, science, business, sports, entertainment and arts fields secure complex work visas for their employees. With more than a decade of experience as a paralegal and attorney, Ms. Cun possesses a stellar record of success. Her legal expertise also includes conducting internal I-9 audits for companies and developing I-9 compliant strategies and solutions. She is a graduate of UCLA and UC Hastings School of Law and has been invited to speak by the Bar Association of San Francisco and the American Immigration Lawyers Association on U.S. immigration related topics, as well as other international conferences. Ms. Cun is a contributing author and currently serves as Counsel and Principal Editor for LawLogix Group.