Opinion ID: 3052183
Heading Depth: 4
Heading Rank: 2

Heading: Continuing employment

Text: It is unlawful for a person or other entity, after hiring an alien for employment in accordance with paragraph (1), to continue to employ the alien in the United States knowing the alien is (or has become) an unauthorized alien with respect to such employment. 2 Aramark also argues in passing that enforcement of the arbitrator’s award would violate tax policy, citing Treasury Department regulations prohibiting employers from reporting incorrect SSN information to the IRS. 26 C.F.R. § 301.6721-1(c)(2)(i). However, this policy would not ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L 6925 2. Whether the Policy Specifically Militates Against the Award The more difficult question is whether these policies “specifically militate” against the arbitrator’s award here — that is, whether the arbitrator’s award would have forced Aramark to reinstate and provide back-pay to undocumented workers where Aramark had “constructive knowledge” that they were undocumented. See 8 U.S.C. § 1324a(a)(1), (2); 8 C.F.R. § 274a.1(l). [3] As defined in the relevant regulation, “[c]onstructive knowledge is knowledge that may fairly be inferred through notice of certain facts and circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition.” 8 C.F.R. § 274a.1(l). We have stressed that, for purposes of the IRCA, “constructive knowledge” is to be narrowly construed: IRCA . . . is delicately balanced to serve the goal of preventing unauthorized alien employment while avoiding discrimination against citizens and authorized aliens. The doctrine of constructive knowledge has great potential to upset that balance, and it should not be expansively applied. The statute prohibits the hiring of an alien “knowing the alien is an unauthorized alien . . . with respect to such employment.” 8 U.S.C. § 1324a(a)(1)(A) (emphasis added). Insofar as that prohibition refers to actual knowledge, as it appears to on its face, any employer can “specifically militate” against the arbitrator’s award, because the award did not require reporting of incorrect numbers, or prohibit further verification procedures after the employees were reinstated. Aramark also suggests that it might be forced to violate RICO and the Sarbanes-Oxley Act if the arbitrator’s award were enforced. But it has waived these arguments by failing adequately to brief them. See Indep. Towers of Wash. v. Washington, 350 F.3d 925, 929-30 (9th Cir. 2003). 6926 ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L avoid the prohibited conduct with reasonable ease. When the scope of liability is expanded by the doc- trine of constructive knowledge, the employer is subject to penalties for a range of undefined acts that may result in knowledge being imputed to him. To guard against unknowing violations, the employer may, again, avoid hiring anyone with an appearance of alienage. To preserve Congress’ intent in passing the employer sanctions provisions of IRCA, then, the doctrine of constructive knowledge must be spar- ingly applied. Collins Foods Int’l, Inc. v. INS, 948 F.2d 549, 554-55 (9th Cir. 1991). In Collins, we reversed an ALJ’s holding that the employer had constructive knowledge of an immigration violation because it had extended an offer of employment over the telephone and overlooked that the employee’s social security card was fraudulent. See id. at 551, 555-56. We distinguished other cases finding constructive knowledge on the grounds that the employer there did not have “positive information” that the employee was undocumented. Id. at 555. In those distinguishable cases, on which Aramark relies heavily here, the INS specifically visited the employer and notified it that its employers were suspected unlawful aliens and should be terminated if inspection of their documents did not allay the concerns. See New El Rey Sausage Co. v. INS, 925 F.2d 1153, 1155 (9th Cir. 1991); Mester Mfg. Co. v. INS, 879 F.2d 561, 564 (9th Cir. 1989).3 3 Contrary to Aramark’s contention, Collins is not distinguishable on the ground that in this case, there is no accusation of discriminatory conduct by the employer. Collins did not involve discrimination either. Rather, the court stressed that by too expansively viewing constructive knowledge, the doctrine would risk encouraging employers to avoid liability through discriminatory practices. 948 F.2d at 554-55; see also Incalza v. Fendi N. Am., Inc., 479 F.3d 1005, 1013 (9th Cir. 2007) (holding that the IRCA did not require an employer to terminate a worker whose visa had expired but could be readily renewed). ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L 6927 Here, Aramark essentially argues that two facts gave it constructive notice of immigration violations: (1) the no-match letters themselves and (2) the employees’ responses (or lack thereof). We address each contention in turn.
[4] Given the narrow scope of the constructive knowledge doctrine, the “no-match” letters themselves could not have put Aramark on constructive notice that any particular employee mentioned was undocumented. To understand why, some background on the purpose of the no-match letters is helpful. The SSA routinely sends the letters when an employer’s W-2 records differ from the SSA’s database regarding an employee’s social security number (“SSN”). When there is a discrepancy, the SSA cannot post an employee’s social security earnings to his or her account, and instead must deposit the funds into a national “earnings suspense fund,” which is a very large fund containing more than 250 million mismatched records and totaling more than $500 billion. Social Security Number High-Risk Issues: Hearing Before the Subcomms. on Social Security and Oversight of the H. Comm. on Ways and Means, 109th Cong. 60 (Feb. 16, 2006) (statement of Patrick P. O’Carroll, SSA Inspector General), available at http://waysandmeans.house.gov/hearings.asp?formmode= printfriendly&id=4710 (last visited June 9, 2008).4 The Inspector General of the SSA believes that “the chief cause of wage items being posted to the [earnings suspense fund] instead of an individual’s earnings record is unauthorized work by noncitizens.” Id. However, the main purpose of the no-match letters is not immigration-related, but rather is simply to indicate to workers that their earnings are not being properly credited. See id. (statement of James B. Lockhart, III, Deputy Commissioner of Social Security), available at http:// 4 Both the parties and amicus cite various agency and legislative materials that are not part of the record. We treat these citations as requests for judicial notice and grant the requests. Fed. R. Evid. 201(b), (d). 6928 ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L waysandmeans.house.gov/hearings.asp?formmode= printfriendly&id=4708 (last visited June 9, 2008). In addition to misuse by undocumented workers, SSN mismatches could generate a no-match letter for many reasons, including typographical errors, name changes, compound last names prevalent in immigrant communities, and inaccurate or incomplete employer records. By SSA’s own estimates, approximately 17.8 million of the 430 million entries in its database (called “NUMIDENT”) contain errors, including about 3.3 million entries that mis-classify foreign-born U.S. citizens as aliens. Congressional Response Report: Accuracy of the Social Security Administration’s NUMIDENT File (Dec. 2006), available at http://www.socialsecurity.gov/oig/ ADOBEPDF/auditt xt/A-08-06-26100.htm (last visited June 9, 2008). [5] As a result, an SSN discrepancy does not automatically mean that an employee is undocumented or lacks proper work authorization. In fact, the SSA tells employers that the information it provides them “does not make any statement about . . . immigration status” and “is not a basis, in and of itself, to take any adverse action against the employee.” Social Security Number Verification Service Handbook, available at http://www.ssa.gov/employer/ssnvs_handbk.htm (last visited June 9, 2008). This information is included in the no-match letters, and was added at the urging of advocacy groups such as amicus National Immigration Law Center to combat abuses by employers who assumed that the workers mentioned in the letters were undocumented. Moreover, employers do not face any penalty from SSA, which lacks an enforcement arm, for ignoring a no-match letter. The IRS also imposes no sanctions stemming from the nomatch letters. It requires no additional solicitations of an employee’s SSN unless it sends a “penalty notice” to the employer indicating that the SSN is incorrect — a notice Aramark does not contend it received. Internal Revenue Service ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L 6929 Pub. 1586: Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs at 8-9 (2007 Rev.), available at http://www.irs.gov/pub/irs-pdf/p1586.pdf (last visited June 9, 2008). The IRS also does not require any reverification of a worker’s documents following receipt of a mismatch notice from the SSA. See id. at 9. To the same effect are statements from the Office of Special Counsel of Immigration-Related Practices, which is an agency of the Department of Justice authorized to investigate unfair immigration-related employment practices. See 8 U.S.C. § 1324b(c). The Office of Special Counsel states that “[a] no match does not mean that an individual is undocumented” and that employers “should not use the mismatch letter by itself as the reason for taking any adverse employment action against any employee.” Office of Special Counsel, Frequently Asked Questions, available at http://www.usdoj.gov/ crt/osc/htm/facts.htm#verify (last visited June 9, 2008). As Aramark notes, the Department of Homeland Security (“DHS”) recently has taken steps to use the no-match letters in its enforcement of the immigration laws. In June 2006, DHS proposed to amend 8 C.F.R. § 274a.1, which sets forth DHS interpretations of terms including “knowing,” to include receipt of no-match letters in its discussion of “constructive knowledge.” Safe-Harbor Procedures for Employers Who Receive a No-Match Letter, 71 Fed. Reg. 34281-01, 34281 (June 14, 2006). After some changes prompted by extensive public comment, see 72 Fed. Reg. 45611 (Aug. 15, 2007), the proposed amendment was adopted and the resulting regulation currently provides in relevant part: The term knowing includes having actual or con- structive knowledge. Constructive knowledge is knowledge that may fairly be inferred through notice of certain facts and circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition. Examples of situa- 6930 ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L tions where the employer may, depending on the totality of relevant circumstances, have constructive knowledge that an employee is an unauthorized alien include, but are not limited to, situations where the employer . . . [f]ails to take reasonable steps after receiving information indicating that the employee may be an alien who is not employment authorized, such as . . . [w]ritten notice to the employer from the Social Security Administration reporting earnings on a Form W-2 that employees’ names and correspond- ing social security account numbers fail to match Social Security Administration records. 8 C.F.R. § 274a.1(l) (emphases added). So, even the DHS regulations, which were adopted after Aramark received the letter at issue here and are currently subject to a preliminary injunction,5 would not treat the no-match letter by itself as creating constructive knowledge of an immigration violation. Instead, the regulations would look further to “the totality of the circumstances” and whether the employer took reasonable steps after receiving the no-match letter. [6] In sum, the letters Aramark received are not intended by the SSA to contain “positive information” of immigration status, and could be triggered by numerous reasons other than fraudulent documents, including various errors in the SSA’s NUMIDENT database. Indeed, the letters do not indicate that 5 In October 2007, the United States District Court for the Northern District of California preliminarily enjoined the government from enforcing the new regulations, including through sending no-match letters that refer to them. See AFL v. Chertoff, No. 07-4472, ___ F. Supp. 2d ___, 2007 WL 2972952, at  (N.D. Cal. Oct. 10, 2007). After the district court’s ruling, the government then moved to stay proceedings pending new administrative rule-making. The district court granted the motion and stayed proceedings until March 28, 2008. DHS then proposed to repromulgate the regulation without change. See Safe-Harbor Procedures for Employers Who Receive a No-Match Letter: Clarification; Initial Regulatory Flexibility Analysis, 73 Fed. Reg. 15944, 15955 (March 26, 2008). ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L 6931 the government suspects the workers of using fraudulent documents. Rather, they merely indicate that the worker’s earnings were not being properly credited, one explanation of which is fraudulent SSNs. This falls short of the “positive information” from the government that was held to provide constructive notice in Mester and New El Rey and held lacking in Collins. See Collins, 948 F.2d at 554-55. Without more, the letters did not provide constructive notice of any immigration violations.
Aramark also maintains that constructive notice resulted from the fired workers’ reactions to the no-match letters and Aramark’s directive to return quickly with documents from the SSA. It argues that it provided the employees a reasonable time in which to correct their SSN discrepancies, and that their failure to do so is sufficiently probative of their immigration status to rise to the level of “constructive notice” that they were undocumented. We disagree. Though the question is a close one, two considerations weigh against a finding of constructive notice here: (1) the arbitrator’s findings, and (2) the short turnaround time. Moreover, contrary to the district court’s conclusion, the analysis is unaffected by Aramark’s offer to rehire any terminated employees who later came forward with proper documentation. (1) The Arbitrator’s Findings [7] First, as we indicated above, the entire inquiry must proceed in light of the arbitrator’s finding that there was no “convincing information” that any of the fired workers were undocumented. The arbitration came down to essentially the same question that the court must answer here: whether it could be said that the fired workers were undocumented. The arbitrator weighed the same evidence that the parties point to, 6932 ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L and concluded that none of it constituted “convincing information” of immigration violations. While it is true that it is ultimately for the court to determine whether the arbitrator’s award would violate public policy, Foster Poultry Farms, 74 F.3d at 174, his factual findings are not up for discussion, see, e.g., Misco, 484 U.S. at 45, and weigh strongly against Aramark’s position. Put simply, it is difficult to conclude that Aramark had “constructive notice” — meaning “positive information” — of a fact when there was no “convincing information” of it.6 (2) The Turnaround Time [8] Second, and related, is the extremely short time period in which the workers were told they should respond before they would be fired. Both parties spin the record to some degree — SEIU says the workers had only three days to respond, while Aramark stretches the period to 90 days. In fact, workers were told they had three days from the postmark of a letter from Aramark to return with further documentation — either a new social security card, or a “verification form” from SSA that a new card was being processed. If the worker returned with the verification form, they would still have to provide a new card within 90 days. This adds up to an extremely demanding policy. The initial three-day deadline was from the post-mark of the letter from Aramark, so, given at least one day in the mail, it meant 6 Indeed, the arbitrator’s findings completely foreclose Aramark’s reliance on arbitration testimony that “[s]ome employees came in and said they were not able to provide the proper documentation and asked if they could work anyways.” The arbitrator excluded this statement as hearsay. The ruling was erroneous, as a statement from an employee in this context would be a party admission. Fed. R. Evid. 801(d)(2). Nonetheless, we must take the facts as found by the arbitrator, and we cannot revisit his evidentiary rulings. See Misco, 484 U.S. at 40 (“[W]hen the subject matter of a dispute is arbitrable, ‘procedural’ questions which grow out of the dispute and bear on its final disposition are to be left to the arbitrator.”). ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L 6933 workers had at most two days to respond. And in these two days, the workers were expected to gather information that would prove to SSA that they were entitled to a social security number, perhaps obtain legal representation, and navigate their way to a SSA office during business hours while still attending to whatever work and family obligations they had. It seems entirely possible — even likely — that many of the Staples Center employees concluded they could not meet the initial deadline, and then simply stopped trying. Nothing in the record indicates otherwise, and indeed nothing indicates that the workers understood beforehand that they would actually have seven to ten days before their terminations became effective.7 [9] Notably, and contrary to Aramark’s contention, its reverification policy was significantly more accelerated than the one envisioned by the federal safe harbor regulations (which, as we mentioned above, were promulgated after the arbitrator’s ruling in this case and are currently subject to a preliminary injunction). As currently written, employers would qualify for the safe-harbor (that is, not be subject to prosecution on a “constructive knowledge” theory) so long as they asked the employees to provide further documentation from the SSA within 90 days of the date the employer received the no-match letter. See 8 C.F.R. § 274a.1(l)(2)(i)(B).8 7 Moreover, Aramark has introduced no evidence to suggest that the “verification form” workers were instructed to obtain was actually available from nearby SSA offices. Testimony at the arbitration hearing indicated that not all SSA offices provide receipts that would evidence an applicant’s request for a new card. So, it is entirely possible that workers were asked to return with a document that was, in practice, unavailable. 8 This 90-day deadline was adopted after staff at the EEOC recommended to DHS that the initial proposal, which would have given only a 60-day deadline, be extended because it did not provided enough time for employees to “collect, organize, deliver documentation, and perhaps meet with the relevant federal agency and/or seek legal advice while maintaining their work hours.” Letter from Peggy R. Mastroianni, Associate Legal Council, EEOC (Aug. 14, 2006), available at http://www.eeoc.gov/foia/ letters/2006/vii_national_immigration.html (last visited June 9, 2008); see also 71 Fed. Reg. 34,281, 34,285 (June 14, 2006) (proposing Rule with 60-day deadline). 6934 ARAMARK FACILITY SERVS v. SERVICE EMPLOYEES INT’L Nothing requires the employer to demand action of any kind before 90 days, including any “verification form” indicating that the employee has contacted SSA. Moreover, even if the employee cannot resolve the discrepancy within 90 days, the employer can still qualify for the safe-harbor if it completes a new Form I-9 for the employee (using documents that do not depend on the disputed social security number). See id. § 274a.1(l)(2)(iii). Had the safe-harbor provision been in effect, Aramark could easily still have qualified for it when it fired the Staples Center employees. This weighs strongly against constructive notice here.