Enforcement Advisor

Your Reliable Source of Worksite Enforcement, Employer Compliance & Business Immigration News
Volume 3, Issue 9October 2010
In This Issue
USCIS Proposes H-1B Pre-registration Form
DOJ Settles With Health Care Provider on Immigration-Related Employment Discrimination Claims
Shareholders Sue American Apparel, Inc. for Declining Stock Price After ICE Audit
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USCIS Proposes
H-1B Pre-registration Form
 
U.S. Citizenship and Immigration Services (USCIS) has submitted an H-1B pre-registration form to the federal Office of Management and Budget (OMB) for review.

The proposed rule would require employers to pre-register before filing an H-1B cap petition. Details of the proposal and the form are confidential and will not be disclosed until the proposed rule is published for public comment in the Federal Register.

The proposed system, including the form, would not be implemented until a final version of the regulation is approved by OMB and published, a process that can take several months or more.

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DOJ Settles With Health Care Provider on Immigration-Related Employment Discrimination Claims 

 

 

On October 19, 2010, the Department of Justice (DOJ) announced that it reached a settlement with Catholic Healthcare West (CHW) to resolve claims that CHW engaged in a pattern or practice of citizenship status discrimination by imposing unnecessary and discriminatory hurdles to employment for work-authorized individuals. CHW is the eighth largest hospital in the nation, operating facilities in Arizona, California, and Nevada.

 

The DOJ found that CHW required non-U.S.-citizen and naturalized-U.S.-citizen new hires to present more work authorization documents than required by federal law, but permitted native-born U.S. citizens to provide documents of their own choice. The INA prohibits employers from imposing different or greater employment-eligibility verification (I-9) standards on the basis of a worker's citizenship status.


As part of the settlement, CHW agreed to pay $257,000 in civil penalties -- the largest amount of civil penalties ever paid to resolve such allegations--and $1,000 in back pay to the charging party. CHW also agreed to review its past I-9 practices at all of its 41 facilities in order to identify and compensate any additional victims of over-documentation who have lost wages as a result and to devise and implement policies and procedures on hiring and employment eligiblity verification. CHW further agreed to train its recruitment personnel on their responsibility not to discriminate and to provide periodic reports to the DOJ for three years. 

 

While the U.S. government is cracking down on the hiring and retention of undocumented workers, it is equally important for employers to not discriminate based on whether the applicant's citizenship status. "All workers who are authorized to work in the USA have the right to look for a job without encountering discrimination because of their immigration status or national origin," said Thomas E. Prerez, Asst. Attorney General for the Justice Department's Civil Rights Division.


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Shareholders Sue American Apparel, Inc. for Declining Stock Price After ICE Audit

A class action lawsuit was filed on behalf of certain shareholders, claiming that American Apparel, Inc. and some of its officers and directors violated the Securities Exchange Act in connection with statements the company made about falling stock value after it was forced to dismiss 1,600 employees who U.S. Immigration and Customs Enforcement (ICE) charged as undocumented immigrants.

 

A 2009 ICE audit of American Apparel's I-9 employment eligibility verification forms revealed discrepancies between the documents submitted by approximately 1,600 employees -- nearly one third of the company's workforc --and Social Security Administration or Department of Homeland Security records. In September 2009, the company announced that it was forced to dismiss the workers, but said that no major loss in productivity was expected. The value of American Apparel's stock then dropped by approximately forty-one percent. 
 

On August 17, 2010, the company issued a press release announcing that it expected to report a loss of $5 million to $7 million in the second quarter of 2010 on net sales of $132 million to $143 million. The company noted that a primary reason for such losses was "lower labor efficiency at the Company's production facilities." The lower labor efficiency "was primarily a result of the hiring of

over 1,600 net new manufacturing workers during the second quarter of 2010," according to the press release.

 

The complaint alleges that during the period from December 20, 2006 to August 17, 2010 (the "Class Period"), defendants made false and misleading statements about the company's hiring practices and the effect of such practices on the company's financial performance. The lawsuit was filed in the U.S. District Court for the Central District of California on behalf of all persons who purchased American Apparel stock during the Class Period. American Apparel is a manufacturer and clothing retailer that has marketed itself as "Sweatshop Free," using a single factory in Los Angeles.

 

This lawsuit underscores the need for employers to comply with I-9 requirements and develop procedures to ensure that their employees are authorized to work.