J. Robert Brame and David S. Fortney, Editors
McGuireWoods LLP and Fortney & Scott, LLC

Vol. 5, No. 2
October 2007

WORKPLACE ISSUES

Dealing with the U.S. government — beginning a new phase?

Dealing with government enforcement agencies is a major part of the daily work of HR and other company managers, but with the increased enforcement of immigration laws and post-9/11 security concerns, employers are encountering new issues and challenges. Recently, your editors have seen an increase in new challenges. Since they're so different from the usual enforcement issues, it's important to be forewarned.

Enforcement — the usual parameters

Most government agencies proclaim a strict enforcement policy. The National Labor Relations Board (NLRB), for example, doesn't recognize de minimis (minimal) violations of its antidiscrimination provisions, and a "no harm, no foul" defense doesn't carry weight with the typical NLRB regional office. Perhaps an experienced Equal Employment Opportunity Commission investigator will overlook ambiguous employment actions when there was no harm and no wrongful intent. Generally, however, civil enforcement is somewhat uniform, and employers' responsibilities are generally well known.

New expectations

Criminal laws are enforced somewhat differently. Intent and motive are key elements for which direct evidence is often lacking. Moreover, the mass of statutes is so complex that if they were strictly applied, the enforcement burden would be greater than the enforcement agencies could handle. (For example, consider the cost — in enforcement personnel and public outcry — if speed limits were enforced to the exact limit.)

The law has long recognized the absolute necessity of vesting discretion in criminal enforcers and the cases they file, and that discretion commonly has been exercised within appropriate limits (which is why the recent treatment of the Duke lacrosse players has caused such an outcry).

Very broad discretion is regularly vested in the U.S. attorneys' offices, which represent the branch of the U.S. Department of Justice charged with primary enforcement of the U.S. Criminal Code, among other statutes. The typical assistant U.S. attorney (AUSA) regularly exercises a wide range of discretion in prosecuting or ignoring possible violations that aren't reviewable. Businesses sometimes encounter that when they can't get the U.S. attorney's attention on embezzlement or sophisticated property crimes, such as the apparent theft of intellectual property. What your editors have noticed is a more visible exercise of that discretion directed toward employers with the goal of requiring or "encouraging" them to undertake certain actions.

Example 1: immigration

The Immigration Reform and Control Act of 1986 (IRCA) prohibited employers from both hiring undocumented workers and discriminating against applicants because of national origin (thus adding criminal penalties to Title VII of the Civil Rights Act of 1964's prohibition against national origin discrimination). Employers were counseled not to look behind facially conforming I-9 documents. The statute was ambiguous, and the limited official advice was unhelpful. As a result, employers were cautioned against investigating more than necessary to avoid the appearance of discrimination.

This situation lasted from 1986 until approximately two years ago, when Immigration and Customs Enforcement (ICE) raids at multiple plants uncovered thousands of illegal workers, some hired with knowing employer complicity and others simply with well-forged documents. Since then, IRCA's criminal penalties have increasingly been used against complicit employers.

Employers with large numbers of no-match letters have sometimes been put in difficult situations. The official advice has tended to downplay the employer's duty to look behind documents, but in some instances, the AUSAs involved in raids or ICE enforcement of IRCA have "suggested" that IRCA Sec. 274A required the employer to suspend workers with no-match letters after giving them at most a short time to correct or explain the discrepancy in the I-9 documents. At the same time, ICE's official position has remained that under IRCA Sec. 274B (the no-discrimination provision), an employer shouldn't act precipitously.

An employer with large numbers of no-match letters that heeds the advice to move promptly and decisively by suspending or terminating employees who can't adequately explain the letter could lose a significant part of its workforce, face strikes by a union representing the employees, and encounter significant community reaction, including adverse national publicity. At the same time, however, an employer that shrugs off an AUSA's suggestion risks having the AUSA exercise her prosecutorial discretion to its detriment. A single criminal conviction can have horrible, unforeseen consequences — loss of government contracts, loss of franchise, and even dissolution of the business — as the former partners of the venerable accounting firm of Arthur Andersen & Co. can testify.

Example 2: plant security and terrorism

In an entirely different context, employers with plants or facilities thought to be vulnerable to sabotage have been invited to nonpublic meetings conducted jointly by agents of the U.S. Department of Homeland Security (DHS) and regulatory agencies with some jurisdiction over the employers. Sometimes, they're given lists of immediate steps that are necessary to reduce the vulnerability of facilities that might be key parts of a communication network or otherwise targets for sabotage. They may be given a timetable and told to report progress monthly. Some of the steps include background checks on employees who have unescorted access to critical areas.

Section 604(b) of the Fair Credit Reporting Act requires that a third party undertaking a background check obtain a release from the subject authorizing a "credit check" (the statutory definition of "credit check" includes a third- party review of criminal court records). Failure to have a release puts both the employer and the third-party investigator at substantial legal risk.

If a union represents the employee, however, suddenly requiring him to sign a release constitutes a change in the "terms and conditions of employment." The employer can't insist that he sign a release without first negotiating with the union or establishing that the check was mandated by a government authority, and thus its duty to obey the federal mandate overrides its duty to bargain. If the union resists — and typically it will without some proof of the legitimacy of the demand, and sometimes even after — what is the employer to do?

Risk and awareness

In both examples, the request or "suggestion" was entirely oral and given in a private meeting. The employer may not presume that the agency involved will provide a written or even oral confirmation of the request when it encounters pushback, including civil litigation or a criminal investigation of its compliance efforts.

Sometimes — as in the case of immigration — the suggestion may simply result from differing interpretations of the employer's duty under § 274A by the AUSA on the ground and ICE headquarters. And with security directives, the nonpublic nature may result in part from a reluctance to publish a directive that could serve as a road map of potential vulnerability to America's enemies.

Solution

There is no easy solution to these new types of problems. The first step is to understand the risks that such informal pressures pose and immediately involve competent counsel with an understanding of the issues and processes. If the moving party is an AUSA, involving a knowledgeable white-collar criminal lawyer who is used to dealing with street-level AUSAs is essential. If the moving party is the DHS or a coordinating regulatory agency, involve counsel knowledgeable of and experienced with the agency.

Next, the employer and counsel must anticipate the legal and extralegal consequences of such a step, the actual authority of the agent, and the extent of regulatory oversight over the employer. Simple conflicts between an AUSA's interpretation of IRCA § 274A and ICE can often be resolved by pushing the issue up the line. Concerns about publishing potential security vulnerability may be addressed, for example, by having the agency contact the local union's international office.

Depending on the circumstances, other approaches may be used. Often, the key lies in involving the top staff of the agency, and that may require special outside counsel. Initially, however, the first step is to recognize that without describing likely obstacles and pressing for clarification at the time of the meeting or immediately afterward, the employer may be left to bear the brunt of its complying action but without any support or cover from the initiating government agency.

Copyright 2007 M. Lee Smith Publishers LLC

FEDERAL EMPLOYMENT LAW INSIDER does not attempt to offer solutions to individual problems but rather to provide information about current developments in federal employment law. Questions about individual problems should be addressed to the federal employment law attorney of your choice.