Company Fined $305,050 for I-9 Violations by HR Director Who “Stuffed Paperwork in Drawers”

DLS Precision Fab was recently fined $305,050 for more than 500 immigration violations of 8 U.S.C. § 1324a, 489 of which were I-9 compliance related. The Immigration and Nationality Act (INA) requires employers to use Form I-9 to verify that employees are authorized to work in the U.S., and to retain them for possible inspection. Employers are prohibited from knowingly continuing to employ “an unauthorized alien with respect to such employment.”

The Phoenix-based company hired a “well credentialed human resources director” to handle its expansion and to comply with employment laws. Unbeknownst to DLS, their new HR director shirked his duty to ensure compliance to the point “of literally stuffing the government’s correspondence in a drawer and never responding.”

DLS claimed it had no idea it was in violation of the law and in trouble with Immigration and Customs Enforcement (ICE).  The company argued that it made a “good-faith” effort to comply with INA by hiring an HR director.

However, the Ninth Circuit denied DLS’ petition to review a judge’s finding that it was liable for 504 violations, including I-9 paperwork violations, and knowingly employing 15 individuals ineligible to work in the U.S. According to the court, “DLS was not the first employer to expect an employee to comply with the law only to be disappointed—and DLS was essentially asking the court to disregard the company’s responsibility to hire and supervise its own employees. The HR director was acting as the company’s agent and his failure could properly be imputed to DLS.”

This ruling sends a clear message to employers – You are responsible to supervise your employees and hiring processes. With the increasing scrutiny on employers by ICE, it is imperative that your I-9 program is compliant.

Cisive has created an informative white paper, The Impact of I-9 and E-Verify Legislation on U.S. Employers, which examines the current status of I-9 and E-Verify legislation and how changes have and may continue to impact U.S. employers.


DLS Precision Fab LLC, dba Di-Matrix Precision Manufacturing v. U.S. Immigration & Customs Enforcement

Barclays Center Accused of Unlawful Criminal History Background Screening of Job Applicants

Barclays Center, a Brooklyn, New York, sports and entertainment center, was accused of violating the Fair Credit Reporting Act (FCRA) and New York City’s Ban the Box legislation (the Fair Chance Act) by its practice of unlawful criminal background screening of job applicants.

According to Outten & Golden LLP, the law firm that filed the claim along with the nonprofit organization Youth Represent, Barclays used “flawed and discriminatory criminal history screening policies and practices” to deny employment opportunities to otherwise qualified job applicants. The defendants are Barclays Events Center, LLC, doing business as Barclays Center, Levy Restaurants, Inc., and Professional Sports Catering LLC.

The plaintiff, Felipe Kelly, applied for a job in August 2016 to work for a restaurant operated by Levy Restaurants and/or Professional Sports Catering LLC at Barclays. Mr. Kelly alleges Barclays refused to hire him after conducting a criminal background check. He further alleges that he was never provided the information they used to deny him employment, and never given the “Fair Chance Notice” that employers are now required to provide applicants under New York City law.

According to the lawsuit, “Because Defendants never provided Mr. Kelly with crucial information regarding his denial of employment, Mr. Kelly was unaware of what information was being reported on him, unable to review the information reported about him for accuracy and completeness, contextualize even true information, review Defendants’ arguments (if any) for why they believed his conviction barred him from employment, and/or explain why he was nonetheless entitled to employment, including any evidence of rehabilitation and good conduct.” This is a clear violation of the FCRA.

Under the FCRA, when an employer uses a “consumer report” to evaluate a job applicant, the employer must give the applicant a copy of the report and a notice of their rights under the FCRA before taking any adverse action based on the report’s contents.

Christopher M. McNerney, of Outten & Golden LLP, said, “As a matter of basic fairness, federal and New York state laws require that job applicants with criminal histories be provided with the same criminal history information relied on by the prospective employer so that they might evaluate that information, ensure it is accurate, and even if it is accurate explain why they nonetheless are qualified for employment This legal framework is an essential aspect of reentering society for individuals with criminal records.”

Michael C. Pope, of Youth Represent, said, “State and federal law are clear: job applicants with criminal histories are entitled to be advised of and review the source and content of background checks. Job applicants like Mr. Kelly and many others are entitled to provide information regarding the criminal history – including the circumstances of their criminal history and their rehabilitation and good conduct.”

Plaintiff’s attorney is seeking to have the case certified as a class action that covers proposed classes of affected job applicants since Oct. 27, 2015.

Cisive has prepared an informative White Paper which examines the issues of pre-decision and adverse notifications as required by the Fair Credit Reporting Act and provides a series of best practices for employers to avoid potential civil liability when using background checks to make employment decisions.

 Click here to view this complimentary White Paper: A Class Action Lawsuit Bonanza – Failure to Notify: FCRA Required Pre-decision and Adverse Action.



The case is Felipe Kelly, et al., v. Barclays Event Center, et al.

Cisive is Exhibiting at the ASHHRA 53rd Annual Conference & Exposition

September 16-19, 2017

Washington State Convention Center, Seattle, WA

Booth #100


Are you taking the right steps to ensure compliance in your pre-employment background screening process?

Maybe it’s time for a compliance check-up!

Stop by Booth #100 to learn about how Cisive’s high quality, tech-enabled Onboarding Solution helps to ensure compliance.

While you’re there, enter to win a fitbit blazeTM!

Can’t attend the conference and want to learn more? Click here or call 1-866-557-5984 to speak with a Cisive Specialist!

Summary of Final Regulations Clarifying and Expanding New York City “Ban the Box” Law, Effective August 5, 2017

New York City has imposed its own “ban the box” law, the Fair Chance Act (FCA), and associated set of regulations on employers, which took effect on October 27, 2015. Recently New York City has issued the final guidelines, effective August 5, 2017, regarding how employers should be conforming to this law. The final regulations expand on and clarify the already burdensome requirements of the FCA, making it more difficult for New York City employers, and national employers doing business in New York City, to screen applicants whose criminal history may affect their ability to do their job or present an unreasonable risk to their business, customers or employees.

Given the large population of Cisive’s New York City clients and hiring conduct in New York City, we thought it important that we post a summary of the key provisions of the final regulations.

Click here to review an excellent summary of the regulations and the recent guidance that was put together by Stephen A. Fuchs of Littler Mendelson, P.C., the largest global employment and labor law practice. According to Fuchs, “Employers with a consolidated hiring process used in multiple jurisdictions in particular should carefully review the final regulations to ensure that their process does not constitute a per se violation of the FCA.”

Below is a list of the topics covered in-depth in the summary:

  • Clarification on Per Se Violations
  • Employers Cannot Consider Non-Convictions
  • Pending Criminal Charges Cannot be Considered Prior to a Conditional Offer
  • Guidance Regarding Inadvertent or Unsolicited Disclosure of Criminal History Prior to Conditional Offer
  • Additional Steps Must be Taken Before Withdrawing a Conditional Offer
  • Provisions Relating to Temporary Help Firms
  • Rebuttable Presumption That a Conditional Offer Was Withdrawn Because of Criminal History
  • Enforcement Initiatives
  • Compliance Recommendations for Employers

Court Rules Home Depot May Be Held Liable For Employing a Murderer

Requiring employees to pass a criminal background check does not exempt your company from being held liable for intentional acts committed by someone in a supervisory position.

The Seventh Circuit Court of Appeals recently held that an employer may be liable for intentional actions committed by a supervisor against other employees outside of work if the employer has been negligent.

The tragic case arose from the death and rape of a pregnant employee by her supervisor. Alisha Bromfeld began working for Home Depot as a teenager, working there seasonally until her death six years later. Her supervisor Brian Cooper had a history of harassing young female subordinates. According to her estate, Bromfeld repeatedly complained to management that Cooper called her his girlfriend, swore and yelled at her, and verbally abused her in front of customers. He would also call and text her outside of work and pressured her to spend time with him alone. When she became pregnant, he reacted angrily.

When Bromfield was seven months pregnant, Cooper forced her to attend his sister’s wedding in Wisconsin or risk being fired. He killed her after she refused to commit to a relationship with him, the complaint said.

Despite being fully aware of Bromfeld’s complaints,  senior management failed to take reasonable steps to protect her, ensure that Cooper completed mandated anger management training or remove his supervisory duties. This ended in tragedy.

A lower court judge originally said Bromfield’s estate failed to plausibly allege that Home Depot had a duty to protect her from Cooper’s criminal conduct, justifying damages.

But the appeals court said a reasonable jury could find that Home Depot and Grand Flower Growers, which jointly employed Cooper, should have foreseen he might “take the small further step” to violence.

“Alisha’s story is an old story that has been told too many times,” Circuit Judge David Hamilton wrote. “Its ending is both shocking and predictable. Alisha’s family is entitled to try to prove its truth.”

The Court held that employers have a duty to act reasonably in hiring, supervising, and retaining their employees, and that this was part of a broader trend toward recognizing employer liability for supervisors’ intentional torts committed outside the scope of employment. An employer may be vicariously liable for the off-duty conduct of a supervisor it knows or should have known was sexually harassing the victim, the court said.

There is a lesson here for employers. According to labor and employment law firm SmithAmundsen LLC, this case is “instructive.” Employers that fail to act to stop an employee’s abuse of supervisory authority could be held liable for even the most extreme and gruesome intentional tortious and criminal conduct.

As such, employers must protect their businesses, including the following minimum steps:

  • Understand the risks associated with subcontracting and joint employer relationships, including supervision and control;
  • Implement and train employees on anti-discrimination, harassment, and sexual harassment policies, including a published complaint/reporting procedure, and prohibiting retaliation;
  • Take seriously and investigate all reports and complaints – no matter how minor, and even for repeat complainants;
  • Remediate any issues – including stripping supervisory authority, mandating training, and transferring/terminating employees;
  • Prohibit and protect those involved from retaliation;
  • Respect and comply with collective bargaining rights – and get the union’s buy-in when necessary; and
  • Seek the advice of and guidance from experienced employment counsel when issues arise to ensure legal compliance and implementation of best practices to mitigate exposure.

The case is Anicich v. Home Depot USA, Inc.

Disneyland Hit With Two Class Actions for Violations of FCRA in Background Check Process

A California Superior Court Judge grants motion for two certified Classes of job applicants who claim their background checks did not comply with the Fair Credit Reporting Act (FCRA).

According to Top Class Actions, the two plaintiffs (Roger Culberson II and Edward Joseph III) claim Disneyland has made hundreds of adverse employment decisions based on job applicants’ background check reports without giving those applicants the proper notifications required under the FCRA.

Culberson alleges he was denied employment at Disneyland after a background check erroneously showed he was convicted of battery in 2010. In actuality, he says, the conviction date was in 1998 and the conviction was expunged from his record in 2010.

He claims that he wasn’t given prior notice, which is required by the FCRA, and was therefore unable to correct the error before Disneyland denied him employment. The FCRA requires prospective employers to make certain disclosures to job applicants so that they will have a reasonable chance to contest any erroneous information contained in their background check report.

Under the FCRA, when a potential employer uses a “consumer report” to evaluate a job applicant, the employer must give the applicant a copy of the report and a notice of their rights under the FCRA before taking any adverse action based on the report’s contents.

Culberson and Joseph claim Disneyland has been violating this FCRA provision by sending the required notice to applicants after making a “No Hire” determination, instead of before.

The FCRA also prohibits a prospective employer from procuring a consumer report on an applicant without first disclosing to the applicant that such a report may be obtained for employment purposes. This disclosure must be “clear and conspicuous” and provided in a stand-alone written document that consists solely of the disclosure itself.

According to Culberson and Joseph, the disclosure form that Disneyland gave to its applicants contained extraneous information that by law should not have been there. That extra information supposedly included a purported waiver of liability, requiring the applicant to accept that “all employment decisions are based on legitimate non-discriminatory reasons.”

The judge’s order certifies two different Classes, each of which covers Disneyland job applicants who were affected under one of the two FCRA provisions at issue:

  • The “Pre-Adverse Action Notice Class” will include all such persons who were subject to a “No Hire” recommendation made on the basis of the contents of that report.
  • The “Defective Disclosure Class” will cover persons who were the subject of these reports and who executed a consent form identical to the one at issue.

Cisive has prepared an informative White Paper which examines the issues of pre-decision and adverse notifications as required by the Fair Credit Reporting Act and provides a series of best practices for employers to avoid potential civil liability when using background checks to make employment decisions.

 Click here to view this complimentary White Paper: A Class Action Lawsuit Bonanza – Failure to Notify: FCRA Required Pre-decision and Adverse Action.


Roger L. Culberson II and Edward Joseph III v. The Walt Disney Co., Case No. BC526351

Cisive is Exhibiting at the HR Technology Conference & Exposition

Cisive is exhibiting at the HR Technology Conference & Exposition

October 10-13, 2017

The Venetian, Las Vegas

Booth #3335

 We’d love to see you there! As an incentive, we are offering a $200.00 discount off of your registration!

 Just click here to register using Promo Code CV17!

Stop by Booth #3335 to learn more about Cisive’s high quality, tech-enabled and compliance-driven human capital management and risk management solutions including our core onboarding and pre-employment background screening offerings.

While you’re there, enter to win our grand prize Fitbit Blaze.

Can’t attend the conference but want to learn more? Click here or call 1-866-557-5984 to speak with a Cisive Specialist!

Summary of Changes for New Form I-9 Released Today by USCIS

By David Hair, Cisive’s I-9/E-Verify Product Manager

U.S. Citizenship and Immigration Services (USCIS) has released a new version of the Form I-9, Employment Eligibility Verification, on July 17, 2017. Employers may continue to use the existing Form I-9 with a revision date of 11/14/16 N through September 17, 2017.

Click here to visit the USCIS website to access the new form and associated supplements.

We have reviewed the new Form I-9 and prepared the following list of changes:

Revisions to the Form I-9 Instructions

The Office of Special Counsel for Immigration-Related Unfair Employment Practices has changed its name to “Immigrant and Employee Rights Section.” The new form version will reflect the office’s new name.

Under the “Presenting Form I-9 Documents” section on page 5 of the 15-paged instructions, the words “the end of” will be removed from the phrase “the first day of employment.”

Revisions related to the List of Acceptable Documents on Form I-9

The form will add the historic Consular Report of Birth Abroad (Form FS-240) to List C. The Department of State ceased issuing these documents on November 1, 1990. The document is making a comeback to the list of acceptable documents.

All the certifications of report of birth issued by the Department of State (Form FS-545, Form DS-1350 and Form FS-240) will be combined into the second selection under List C documents.

The List C document’s number order will be re-adjusted with the exception of the Unrestricted Social Security Card. For example, the current List C # 8 document (Employment Authorization Document issued by the Department of Homeland Security) will be re-listed as List C # 7 document.

Final International Entrepreneur Rule

Originally this change was to be included on this new version of the form. However, the Department of Homeland Security has delayed the effective date of this final rule from July 17, 2017 to March 14, 2018. Therefore, this change will not be implemented at this time. For more information about the Final International Entrepreneur Rule and the circumstances surrounding its delay, please review the two links below. – Summary of the Final International Entrepreneur Rule. – Summary of the details concerning the delay of the effective date of the Final International Entrepreneur Rule.


Panda Express Fined $400,000+ for Form I-9 Compliance Violation

Panda Express, the quick-service chain specializing in Chinese food, has agreed to settle a U.S. Department of Justice (DOJ) investigation into its Form I-9, Employment Eligibility Verification procedures.  According to the DOJ, the restaurant chain was fined hundreds of thousands of dollars for discriminating against non-U.S. citizens in its hiring practices.

The DOJ’s investigation focused on what they deemed discriminatory Form I-9 practices during Panda’s re-verification process, which was based on an employee’s citizenship status or national origin.

The DOJ’s investigation concluded that Panda Express unnecessarily required lawful permanent resident workers to re-establish their work authorization when their Permanent Resident Cards expired, while not making similar requests to U.S. citizen workers when their documents expired. The investigation also revealed that Panda Express routinely required other non-U.S. citizen workers to produce immigration documents to re-verify their ongoing work authorization despite evidence they had already provided sufficient documentation. DOJ deemed the practice to be discriminatory, outside of the Department of Homeland Security’s Form I-9 re-verification procedures, and a clear violation of federal immigration laws.

Under the settlement, Panda Express will pay a civil penalty of $400,000 to the United States, establish a $200,000 back pay fund to compensate workers who lost wages due to the company’s practices, train its human resources personnel on the requirements of the Immigration and Nationality Act’s (INA’s) anti-discrimination provision, and be subject to departmental monitoring and reporting requirements.

There is a message here for employers. Immigration and Customs Enforcement (ICE) random site inspections have been on the rise and fines for violations are steep. The Form I-9 process is more complex than most employers assume. Compliance is a must! “Employers should ensure that their reverification practices comply with laws that protect workers against discrimination,” said Acting Assistant Attorney General Tom Wheeler of the Civil Rights Division.

Cisive has written two informative White Papers to help employers ensure compliance with the Form I-9 process, which can be downloaded by clicking on the links below.

The Impact of I-9 and E-Verify Legislation on U.S. Employers.

What You Need to Know About Electronic I-9 Signature

Avoiding Litigation in the Era of Surging FCRA Class Action Suits

Fair Credit Reporting Act (FCRA) litigation has increased 47 percent in the last year according to ACA International. Background screening is a vital hiring tool for employers. However, amendments to the FCRA have significantly increased the rights of applicants and employees. Therefore, employers must ensure compliance with the detailed requirements of the FCRA. Adverse Action violations seem to be the most prevalent.

The FCRA requires that employers disclose to applicants that a background report may be obtained for employment purposes, and obtain signed authorization from applicants before procuring a background report.  Further, the FCRA requires that before an employer makes an adverse decision in whole or in part based on the contents of a consumer report that the applicant be given notice of potential adverse action, be provided with a copy of the report and a copy of the prescribed Summary of Rights.  Special attention should be given to the words “before” and “in whole or in part.”  Those words have been the subject of much discussion and litigation.  If a company makes a decision not to hire, promote or retain, and then sends out all required documents with a “pre-adverse” notification, it has not adhered to the law. If a company receives a potentially disqualifying consumer report, but then tries to sidestep the pre-adverse notification saying that they “found a better candidate”, it is in violation of the FCRA.

Following a reasonable time after the pre-adverse notification and deliverables allowing the applicant to dispute the reported information, the FCRA requires that a final adverse action notification be made. If any person takes any adverse action with respect to any applicant that is based in whole or in part on any information contained in a consumer report, the person shall:

  1. Provide oral, written, or electronic notice of the adverse action to the applicant;
  2. Provide to the applicant orally, in writing, or electronically:  A) the name, address, and telephone number of the consumer reporting agency  that furnished the report to the person; and B) a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the applicant the specific reasons why the adverse action was taken; and
  3. Provide to the applicant an oral, written, or electronic notice of the consumer’s right to: A) obtain a free copy of a consumer report on the applicant from the consumer reporting agency , which notice shall include an indication of the 60-day period under that section for obtaining such a copy; and B) dispute with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.

The above requirements seem relatively simple on the surface, but have turned out to be harder to implement properly in practice. Many companies have learned that the hard way after finding themselves in the crosshairs of legal action filed against them.

Litigation Avoidance

There are no fail-safe solutions to avoid litigation, but employers can take steps to ensure compliance and mitigate risk. Part of the compliance problem may be that company employees who are tasked with initiating the notices are uncertain as to when notices are required or what must be in those notices. The problem is further exacerbated by having insufficient tools with which to track the timing, delivery and receipt of such notices. Some employers are understandably cautious about outsourcing this function. The FCRA makes it absolutely clear that the employer is ultimately responsible for compliance in this area, but this function is often best outsourced to the Consumer Reporting Agency (CRA) performing the background, and is the practice that Cisive recommends.

Establishing and enforcing strict compliance procedures can certainly reduce exposure.  The difficulty that many companies have when it comes to complying with FCRA notification requirements is that the pre-adverse action notification is a triggered event that is not required for every employment background, and the final adverse action notification is also a triggered event that is not required for every pre-adverse action notification.

Also worthy of careful consideration are effects of various ban-the-box laws that alter the period to respond to adverse information that an applicant has, which can as a result alter the timing of any final adverse action letter. Proper sequencing of these events also requires close coordination with the employer’s CRA. Because of the irregularity of these events and the coordination required, employers are often ill-equipped to execute them properly, and recruiters and managers are often not fully aware of the employer’s responsibility.

Education of recruiters and managers helps. However, proper execution requires that they have the tools to comply. The best tools contain systematic, gated controls implemented by electronic workflow that recognize the triggers and guide those responsible through the compliance process.  These tools exist today and employers should aggressively engage in evaluation, selection, and implementation of the right tools to realize compliant pre-adverse and adverse notification and avoid expensive and brand-destroying class-action litigation.