Summary
- The Harvard Law Review, the No. 1 ranked law review in the U.S., recently published a piece suggesting that the City of Burlington, Vt., engage in “active resistance against a federal immigration system that illegalizes undocumented work”. How can Burlington join La Résistance? Burlington can un-illegalize undocumented work! (Or so the article claims.)
- The law-student-written piece acknowledges that the Immigration Reform and Control Act of 1986 (IRCA) established “employer sanctions” making it unlawful for employers to knowingly hire or employ aliens unauthorized to work under federal law and requiring employers to review the identity and work authorization documents of all new hires. But the piece proposes that Burlington simply retain as independent contractors, rather than hiring, the unauthorized aliens whose labor it seeks, in effect opening up a Burlington Fraud Factory.
- The author of the piece, and the HLR cite-checkers, apparently failed to notice language in IRCA itself specifying that “a person … who uses a contract … to obtain the labor of an alien … knowing that the alien is an unauthorized alien … shall be considered to have hired the alien for employment” Congress added this language to guard against, yes, “loopholes which enable the use of subcontractors to avoid liability”. And when the Immigration and Naturalization Service issued regulations implementing IRCA, it made clear that while “Those who engage the labor services of an independent contractor are not responsible for verification of the employment eligibility of the [contractor’s] employees … contracts may not be used for the purposes of circumventing the employment eligibility verification requirements.”
- Not only that, but the HLR piece blithely recommends to Burlington that it use independent contractors to evade federal immigration law without even mentioning the risks of doing so to Burlington’s human resources staff and other city officials. Violations of the knowing hire ban carry civil as well as potential criminal liability and have, in fact, resulted in imprisonment.
- Lest one think that Burlington can simply pull a Sergeant Schultz and say “I know nothing!”, as the 9th Circuit has instructed, “deliberate ignorance counts as knowledge”, as when “the defendant is aware that the fact in question is highly probable but consciously avoids enlightenment”. And “constructive knowledge” — what a reasonable and prudent employer should know — also counts as knowledge. As an article in another law review has concluded, “[t]he constructive knowledge standard … indicates that an employer could be held liable for the hiring practices of an independent contractor if it has adequate notice that the contractor is employing illegal aliens.”
- I would suggest that the City of Burlington cancel its subscription to the Harvard Law Review. Or, at the very least, it should take any advice the journal sends its way with a grain of salted caramel Ben & Jerry’s.
Introduction
In a recent piece given the riveting title “Recent Legislation: Local Government Noncitizen Voting and Immigrant Rights Burlington Expands Voting in Municipal Elections to Certain Immigrants, Vt. Stat. Ann. tit. 24 app., §§ 3-8 to -8a (2024)”, the Harvard Law Review — ranked the best law review in the United States — gave some unsolicited advice to the notoriously left-wing People’s Republic of Burlington, Vt. It (or, more precisely, a Harvard law-student-written note) suggested that Burlington “supplement[] its noncitizen voting effort with active resistance against a federal immigration system that illegalizes undocumented work”. (Emphasis added.) How can Burlington join La Résistance? Burlington can un-illegalize undocumented work! And Burlington can do it “without amending city charters and without requiring state authorization”!
But how can Burlington un-illegalize work by illegal aliens and other aliens not authorized to work? Didn’t the Immigration Reform and Control Act of 1986 (IRCA) establish “employer sanctions” making it unlawful for employers to knowingly hire and employ unauthorized aliens and requiring employers to review new hires’ identity and work authorization documents?
Indeed, IRCA created § 274A of the Immigration and Nationality Act (INA), which provides in part that “[i]t is unlawful for a person or other entity to hire, or to recruit or refer for a fee, for employment in the [U.S.] … an alien knowing the alien is an unauthorized alien … with respect to such employment, or … an[y] individual without complying” with the required employment eligibility verification process in which an employer certifies on an “I-9” form that it has reviewed a new hire’s specified documents demonstrating identity and employment eligibility and that the documents reasonably appear to be genuine and relate to the individual. Further, “It is unlawful for a person or other entity, after hiring an alien for employment ... to continue to employ the alien in the [U.S.] knowing the alien is (or has become) an unauthorized alien with respect to such employment.”
The Burlington Fraud Factory
So, how can Burlington do it? The HLR note essentially tells the city government of Burlington to open up a Burlington Fraud Factory:
Burlington can take advantage of the relaxed standards for independent contractors under immigration and labor laws. While immigration laws prevent employers from knowingly hiring immigrants without work authorization, they do not change that independent contractors need only a social security number (SSN) or individual taxpayer identification number (ITIN) to work.
Burlington can use its procurement processes to expand work opportunities for all its immigrants. Under immigration laws, the city only needs to verify the employment status of direct employees and is not required to ask independent contractors about their immigration status. So long as Burlington (and other contractors) ensure their postings are open to all independent contractors, they are free to choose a bid that best serves their needs, without inquiring about a bidder’s immigration status.
HLR also recommends that the City of Burlington recruit private employers to join its scheme, writing that “Burlington can also facilitate internships with local employers who hire interns as independent contractors, helping immigrants build deeper ties with local members of their communities.”
Can Burlington legally do this? It is certainly true that Department of Homeland Security (DHS) regulations (at 8 C.F.R. § 274a.1(g)) define an employer for purposes of the employer sanctions regime as:
The term employer means a person or entity, including an agent or anyone acting directly or indirectly in the interest thereof, who engages the services or labor of an employee to be performed in the [U.S.] for wages or other remuneration. In the case of an independent contractor or contract labor or services, the term employer shall mean the independent contractor or contractor and not the person or entity using the contract labor. [Emphasis added.]
So, as the Tenth Circuit Court of Appeals concluded in 2010 in Chamber of Commerce of the United States v. Edmondson, “[e]mployers are not required to verify the work eligibility of independent contractors” or the contractors’ employees. HLR shoots, it scores!
Not so fast. HLR may need to sit in the penalty box. It seems not to have read the old Immigration and Naturalization Service’s (INS) 1987 final rule Control of Employment of Aliens (the Federal Register is available online), clarifying that while “[t]hose who engage the labor services of an independent contractor are not responsible for verification of the employment eligibility of the employees of the independent contractor … [,] contracts may not be used for the purposes of circumventing the employment eligibility verification requirements of employees”, nor DHS’s U.S. Citizenship and Immigration Services’ and the U.S. Department of Justice’s (DOJ) Executive Office for Immigration Review’s 2009 interim final Application of Immigration Regulations to the Commonwealth of the Northern Mariana Islands, stating that “if the person or entity uses a contract … to obtain the labor or services of an alien knowing that the alien is unauthorized for employment in the [U.S.] with respect to such labor or services, the person or entity will be considered to have knowingly hired the individual in violation of section 274A(a)(4)”.
And what does § 274A(a)(4) of the INA say, which HLR also seemingly neglected to read, despite Harvard having “the largest academic law library in the world” (not that you need the largest academic law library in the world to access the U.S. Code. — just an internet connection)? It provides that:
For purposes of this section, a person or other entity who uses a contract, subcontract, or exchange, entered into, renegotiated, or extended after November 6, 1986, to obtain the labor of an alien in the [U.S.] knowing that the alien is an unauthorized alien … with respect to performing such labor, shall be considered to have hired the alien for employment in the [U.S.] in violation of paragraph (1)(A). [Emphasis added.]
Oh. Congress specifically added this provision to prevent employers from utilizing contractors as fronts to avoid liability for the hiring or employment of unauthorized aliens. The relevant U.S. House Judiciary Committee report in 1986 (which I would guess can be found in Harvard’s law library, or with a Lexis or Westlaw subscription) explained that:
Some [employer] sanctions laws of foreign countries have proved to be ineffective because of loopholes which enable the use of subcontractors to avoid liability. The Committee intends to prevent any such loophole in the instant legislation. To accomplish this objective, the bill specifically provides that an employer “who uses a contract, subcontract, or exchange, entered into, renegotiated, or extended after the date of enactment ... to obtain the labor of an alien in the United States knowing that the alien is an unauthorized (undocumented) alien” shall be considered to have hired the alien for employment.1
In fact, the administration of President George W. Bush stated that it “opposes proposed Section 274A(a)(4) which would impose vicarious liability on firms for any verification or recordkeeping violations of their contractors or subcontractors”.2 (Emphasis added.)
Just to pile on, DHS regulations state (at 8 C.F.R. § 274a.1(j)) that “[t]he use of labor or services of an independent contractor are subject to the restrictions in section 274A(a)(4) of the Act” and (at 8 C.F.R. § 274a.1(c)) that “[f]or purposes of section 274A(a)(4) … a hire occurs when a person or entity uses a contract, subcontract, or exchange entered into, renegotiated, or extended … to obtain the labor of an alien in the United States, knowing that the alien is an unauthorized alien”. (Emphasis added.)
Don’t HLR editors cite-check draft law review articles and student-written pieces before they are published? If they don’t do this at Harvard Law School, I shudder to think what might happen at law reviews not ranked No. 1 in the U.S. I thought that student-run law school law reviews cite-check as a matter of course, at least in order to give those lucky students who made it onto law review something to do. But what do I know? I didn’t make the law review at my law school.
Civil and Criminal Liability
I wrote in Bloomberg Law that 29 law professors who assured the University of California (UC) that no federal law prohibits it from hiring “undocumented” students had neglected to disclose the risks of doing so to UC’s human resources staff and to the UC regents themselves. The professors’ memo contended that IRCA’s ban on knowingly hiring or employing unauthorized aliens doesn’t apply to state government entities but skimmed over the seemingly relevant fact that violations of the ban carry civil as well as potential criminal liability and have, in fact, resulted in imprisonment. HLR, in blithely recommending to the City of Burlington that it use independent contractors to evade federal immigration law, similarly neglects to disclose the risks of doing so to Burlington’s human resources staff and other city officials.
I have also written that UC officials themselves picked up on this potential civil and criminal liability. Blake Jones reported in Politico that “three outside legal opinions solicited by the UC Office of the President have cast doubt on the [professors’] idea, adding to the reservations of some within the 10-campus system’s leadership, according to a senior leader who has reviewed the analyses”, and also reported that “[UC] President [Michael Blake], some regents, and other officials became increasingly skeptical in recent months that the university could hire the students without facing a lawsuit”. Additionally, Mikhail Zinshteyn reported in Cal Matters that:
UC’s general counsel, Charles Robinson, and his legal team were “very skeptical of the legal theory,” said Merhawi Tesfai, a UC regent and graduate student who votes on the board.
Tesfai said the general counsel’s office sought legal analysis from multiple outside law firms, and their conclusion was that “this wasn’t something that they would recommend and that it wouldn’t be legally viable,” Tesfai said, summarizing comments that Robinson and Drake made to him and other regents.
On January 25 of this year, UC announced that its board of regents had “voted to suspend implementation [of a plan to allow for the hiring of students unauthorized to work] … for one year… [and that] no further regental action will occur without a full vote”. President Drake himself stated that “As an individual, I would like nothing more than to [allow for the hiring of these students], right here, right now, because it is the right thing to do.” However:
Over several months, we consulted formally with numerous law firms and legal experts inside and outside the University. We also explored other legal options and approaches, including declaratory relief. And we carefully studied the possible, substantial risks — to our institution, to undocumented students and their families, and to other UC staff and other members of our university community.
[W]e have concluded that the proposed legal pathway is not viable at this time, and in fact carries significant risk for the institution and for those we serve. For that reason, it is inadvisable for the University to initiate implementation right now.
[W]e have a fiduciary responsibility to consider all possible ramifications of our actions. We must avoid exposing our students and their families to the possibility of criminal prosecution, deportation, or anything that might force a change in their immigration status.
We must also protect others who would be impacted by this action. That includes other employees who might be harmed — including human resources and legal professionals — who might be subject to criminal or civil prosecution if they knowingly participate in hiring practices deemed impermissible under federal law.
And we must protect our institution, which would be subject to civil fines, criminal penalties, or debarment from federal contracting if the University is found to be in violation of the federal [IRCA]. The University could endanger numerous existing federal contracts and grants that are conditioned on IRCA compliance. [Emphasis added.]
Well, the California legislature was not happy with UC. As I have written, on February 14, General Assembly Member David Alvarez reacted by introducing a bill (AB-2586) not merely authorizing California public colleges and universities to employ aliens unauthorized to work under federal law, but ordering them to do so (with the possible exception of UC itself). Then, on April 3, Mario Guerrero, legislative director of UC’s Office of State Government Relations, wrote a letter to Mike Fong, chair of the General Assembly’s Standing Committee on Higher Education, stating that:
While the University supports the author’s aim to provide equitable student employment opportunities, there are outstanding concerns about AB 2586 and how to implement such a policy. Those concerns include:
- The exposure of our undocumented students and their families to the possibility of criminal prosecution or deportation;
- The possibility of employees involved in the hiring process (i.e., faculty, human resources, and legal professionals) being subject to criminal or civil prosecution if they knowingly participate in practices deemed impermissible under federal law;
- Civil fines, criminal penalties, or debarment from federal contracting if the University is in violation of … IRCA … and
Unfortunately, AB 2586 does not protect our undocumented students or employees from prosecution, nor does it protect the University from the risk of potentially losing billions in federal dollars.
Guerrero also testified before the committee that:
The[re is a] possibility of employees that are involved in the hiring process, whether that's our faculty, human resources, legal professionals being subject to criminal and civil prosecution if they were [to] knowingly participate in practices deemed impermissible under federal law … [in addition to c]riminal fines, criminal penalties, and debarment from federal contracting if the university is in violation of [IRCA], and the potential of loss of billions of dollars in existing federal contracts and grants are conditional on following the IRCA.
Despite UC’s pleas, on May 22, the California General Assembly passed the bill by a vote of 59 to four, the California Senate passed it on August 20 by a vote of 30 to eight, and the House passed the amended version on August 26 by a vote of 63 to seven, sending it to California’s Democrat Governor Gavin Newsom.
A saner head prevailed, as Newsom vetoed the bill on September 22. The governor stated in his veto message that:
I am unfortunately unable to sign this legislation at this time. Given the gravity of the potential consequences of this bill, which include potential criminal and civil liability for state employees, it is critical that the courts address the legality of such a policy and the novel legal theory behind this legislation before proceeding.
For this reason, I cannot sign this bill.
I would hope that if Burlington’s City Council chooses to pursue HLR’s proposal that the mayor would veto it. Though I guess as this is Burlington, the mayor might ask what former mayor and now U.S. Sen. Bernie Sanders (I-Vt.) would do.
Civil Penalties
What potential penalties did IRCA and later legislation put in place for employers (yes, including the City of Burlington)? Here is the civil penalty structure (at § 274A(e)(4) of the INA) for violations of the bars to “knowing” hiring and employment:
Cease and Desist Order with Civil Money Penalty for Hiring, Recruiting, and Referral Violations
With respect to a violation … the order under this subsection—
(A) shall require the person or entity to cease and desist from such violations and to pay a civil penalty in an amount of—
(i) not less than $250 and not more than $2,000 for each unauthorized alien with respect to whom a violation … occurred,
(ii) not less than $2,000 and not more than $5,000 for each such alien in the case of a person or entity previously subject to one order … or
(ii) not less than $3,000 and not more than $10,000 for each such alien in the case of a person or entity previously subject to more than one order ..; and
(B) may require the person or entity—
(i) to comply with the [“I-9” verification] requirements of subsection (b) ... with respect to individuals hired (or recruited or referred for employment for a fee) during a period of up to three years, and
(ii) to take such other remedial action as is appropriate.
Here is the civil penalty structure (at § 274A(e)(5)of the INA) for violations of the verification requirements:
Order for civil money penalty for paperwork violations
With respect to a violation … the order … shall require the person or entity to pay a civil penalty in an amount of not less than $100 and not more than $1,000 for each individual with respect to whom such violation occurred. In determining the amount of the penalty, due consideration shall be given to the size of the business of the employer being charged, the good faith of the employer, the seriousness of the violation, whether or not the individual was an unauthorized alien, and the history of previous violations.
Criminal Penalties
What are the potential criminal penalties?
Pattern or Practice. The primary criminal offense established by IRCA for employer sanctions violations involves “pattern or practice” violations (at § 274A(f) of the INA) of the bars to “knowing” hiring and employment:
Any person or entity which engages in a pattern or practice of violations ... shall be fined not more than $3,000 for each unauthorized alien with respect to whom such a violation occurs, imprisoned for not more than six months for the entire pattern or practice, or both, notwithstanding the provisions of any other Federal law relating to fine levels. [Emphasis added.]
IRCA’s conference report stated that:
It is the intention of the Conferees that criminal sanctions are to be used for serious or repeat offenders who have clearly demonstrated an intention to evade the law by engaging in a pattern or practice. ... The Conferees expect the [INS] to target its enforcement resources on repeat offenders and that the size of the employer shall be a factor in the allocation of such resources.3
The House Judiciary Committee’s report explained that:
The term “pattern or practice” has received substantial judicial construction, since the term appears in the Voting Right Act ... the Civil Rights Act of 1964 ... and the Fair Housing Act of 1968 . ... The Committee emphasizes that it intends to follow the judicial construction of that term as set forth in [enumerated] cases [that] all indicate that the term ... has its generic meaning and shall apply to regular, repeated and intentional activities, but does not include isolated, sporadic or accidental acts.4
Ten Is Enough. The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) added an additional criminal penalty for the knowing hiring of at least 10 aliens who the employer knew had been smuggled into the U.S.:
Any person who, during any 12-month period, knowingly hires for employment at least 10 individuals with actual knowledge that the individuals are aliens [unauthorized to work in the U.S. who have been smuggled into the U.S.] shall be fined under Title 18 or imprisoned for not more than 5 years, or both. [Emphasis added.]
IIRIRA’s conference report explained that:
This provision creates a new offense for an employer to hire an alien who the employer knows is not authorized to be employed in the [U.S.], and who the employer also knows was brought into the [U.S.] in violation of INA section 274[, titled “Bringing in and Harboring Certain Aliens”]. In order to be liable under this provision, the employer must have actual knowledge both of the alien's unauthorized status and of the fact that the alien was brought into the [U.S.] illegally.
Harboring. The INA provides that:
Any person who ... knowing or in reckless disregard of the fact that an alien has come to, entered, or remains in the [U.S.] in violation of law, conceals, harbors, or shields from detection, or attempts to conceal, harbor, or shield from detection, such alien in any place, including any building or any means of transportation ... or ... engages in any conspiracy to commit any [such] act[], or ... aids or abets the commission of any ... [such] act[], shall be punished as provided [below].
A person who violates [the above] shall, for each alien in respect to whom such a violation occurs ...
... [if] the offense was done for the purpose of commercial advantage or private financial gain, be fined under title 18, imprisoned not more than 10 years, or both; in the case of a violation ... be fined under title 18, imprisoned not more than 5 years, or both. [Emphasis added.]
What does this have to do with employer sanctions? In 1952, Congress clarified the preexisting criminal penalties for concealing or harboring illegal aliens. At the same time, it added the infamous “Texas Proviso” — “Provided, however, That for the purposes of this section, employment (including the usual and normal practices incident to employment) shall not be deemed to constitute harboring.” IRCA struck the Texas Proviso. The House committee report stated that the bill “eliminate[s] the so-called ‘Texas proviso,’ which prevents employment from being considered as harboring an alien”.5
Encouraging or Inducing. The INA provides that:
Any person who ... encourages or induces an alien to come to, enter, or reside in the [U.S.], knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law ... or ... engages in any conspiracy to commit any [such] act[], or ... aids or abets the commission of any ... [such] act[], shall be punished as provided [below].
A person who violates [the above] shall, for each alien in respect to whom such a violation occurs ...
... [if] the offense was done for the purpose of commercial advantage or private financial gain, be fined under title 18, imprisoned not more than 10 years, or both; in the case of a violation ... be fined under title 18, imprisoned not more than 5 years, or both. [Emphasis added.]
In 2023, the Supreme Court ruled in United States v. Hansen that the encourages/induces offense is indeed constitutional since “[p]roperly interpreted”:
This provision forbids only the intentional solicitation or facilitation of certain unlawful acts. It does not “prohibi[t] a substantial amount of protected speech” — let alone enough to justify throwing out the law’s “plainly legitimate sweep.”
[T]he provision has a wide legitimate reach insofar as it applies to nonexpressive conduct and speech soliciting or facilitating criminal violations of immigration law. Even assuming that [it] reaches some protected speech, and even assuming that its application to all of that speech is unconstitutional, the ratio of unlawful-to-lawful applications is not lopsided enough to justify the “strong medicine” of facial invalidation for overbreadth.
But the court did note that “as-applied challenges can take it from here”, indicating that the provision could still be found to be unconstitutional depending on how it is applied to particular defendants and the words or conduct alleged to constitute encouragement or inducement.
As to solicitation and facilitation, the Court explained that:
Criminal solicitation is the intentional encouragement of an unlawful act. ... Facilitation — also called aiding and abetting — is the provision of assistance to a wrongdoer with the intent to further an offense’s commission ... . While the crime of solicitation is complete as soon as the encouragement occurs ... liability for aiding and abetting requires that a wrongful act be carried out ... . Neither solicitation nor facilitation requires lending physical aid; for both, words may be enough ... . Both require an intent to bring about a particular unlawful act ... . And both are longstanding criminal theories targeting those who support the crimes of a principal wrongdoer.
The terms “encourage” and “induce” are among the “most common” verbs used to denote solicitation and facilitation ... . In fact, their criminal-law usage dates back hundreds of years ... . A prominent early American legal dictionary, for instance, defines “abet” as “[t]o encourage or set another on to commit a crime.” [Emphasis added throughout by Hansen.]
This pattern is on display in the federal criminal code, which, for over a century, has punished one who “induces” a crime as a principal ... . The Government offers other examples as well: The ban on soliciting a crime of violence penalizes those who “solici[t], comman[d], induc[e], or otherwise endeavo[r] to persuade” another person “to engage in [the unlawful] conduct.” ... Federal law also criminalizes “persuad[ing], induc[ing], entic[ing], or coerc[ing]” one “to engage in prostitution” or other unlawful sexual activity involving interstate commerce ... . The Model Penal Code echoes these formulations, defining solicitation as, in relevant part, “command[ing], encourag[ing] or request[ing] another person to engage in specific [unlawful] conduct.”
RICO
As DOJ describes the Racketeer Influenced and Corrupt Organizations Act (RICO) to federal prosecutors:
[RICO] provides for civil as well as ... powerful criminal penalties for persons who engage in a “pattern of racketeering activity” ... and who have a specified relationship to an “enterprise” that affects interstate or foreign commerce. Under the RICO statute, “racketeering activity” includes … more than one hundred serious federal offenses including extortion, interstate theft, narcotics violations, mail fraud, securities fraud, currency reporting violations, certain immigration offenses, and terrorism related offenses. A “pattern” may be comprised of any combination of two or more of these state or federal crimes committed within a statutorily prescribed time period. Moreover, the predicate acts must be related and amount to, or pose a threat of, continued criminal activity ... . An “enterprise” includes any individual, partnership, corporation, association, or other legal entity, and any group of individuals associated in fact although not a legal entity. [Emphasis added throughout.]
Depending on the underlying racketeering activity ... criminal penalties rang[e] from ... a fine under Title 18 or any term of up to life imprisonment ... [and] forfeiture of the defendant’s interest in the enterprise connected to the offense, and his interests acquired through or proceeds derived from racketeering activity or unlawful debt collection.
The Anti-Terrorism and Effective Death Penalty Act of 1996 added certain immigration-related crimes to the list of RICO predicate offenses, including “any act which is indictable under [INA] section 274 (relating to bringing in and harboring certain aliens) ... if the act indictable ... was committed for the purpose of financial gain”.
As IIRIRA’s House Judiciary Committee report argued in support of making certain immigration crimes RICO predicate offenses, “Federal law enforcement should have the same tools to combat immigration crimes it does to combat other serious crimes that threaten public safety and national security.”
Corporate vs. Individual Liability
In 2006, John Pearce II, distinguished scholar in residence at Eastern University and previously the Villanova School of Business Endowed Chair in Strategic Management and Entrepreneurship and professor of Management, wrote in the Lewis & Clark Law Review that section 274A “has been interpreted to allow the government to hold company executives individually liable for the actions of the corporation”.
Pearce elaborated that:
In Steiben v. INS, the Eighth Circuit [in 1991] held that the “person or other entity” language of … IRCA can impose joint liability on both the corporate employer and its agent. In Steiben, the plaintiff was the chief executive officer and sole proprietor of a Missouri corporation charged by the INS with hiring unauthorized aliens. In rejecting his defense that the statute subjects only the corporation to liability, the court stated that his retention of control over hiring policies was sufficient to satisfy the “knowingly” standard.
Although the corporation, as the employer and principal, is liable under the IRCA, the court noted that the principal’s agent can also be charged where he or she has exercised control over the hiring, firing, and verification of the employees’ authorization. The key issue in the analysis, said the court, is not who the actual employer is but who is in charge of “knowingly hiring” the alien employees. Therefore, an agent of a company will not escape personal liability when hiring unauthorized aliens simply because he is acting on behalf of the company and not in an individual capacity.
…
The basis for liability in employment decisions does not rest on the individual's control over every aspect of the corporation's business, but instead on his or her retention of control over hiring policies … .
Under this standard, company executives exercising control over hiring may be liable individually should the company hire unauthorized aliens. During the settlement negotiations with Wal-Mart [(to be discussed), U.S. Immigration and Customs Enforcement] ICE gave serious consideration to attaching individual liability to specific senior executives as well as individual store managers for their actions in hiring and employing the unauthorized employees.
As I have written, there indeed have been cases of prison sentences handed out to employers for criminal violations of employer sanctions.
Is an Alien Worker Really an Independent Contractor?
Of course, even if we were to ignore IRCA’s proviso that an employer who uses a contract to obtain the labor of an alien knowing the alien to be unauthorized is considered to have itself hired the alien, Burlington could only get away with the independent contractor workaround if in fact the alien workers were actually independent contractors. Pearce has explained that under the employer/independent contractor relationship, while both parties “agree on the task to be completed, the independent contractor has control of its own work and the manner in which it performs the work”. Pearce noted that:
Courts have identified many factors relevant to the issue of control, including direct control over an individual, method of payment, scope of relationship, skill required in carrying out the work, whether or not the person or entity employed is in a distinct occupation, distinct business of the employer, length of the agreement, entity supplying the materials or tools, and substantive belief of the contracting parties.
An analysis of a working relationship and the subsequent classification of the legal status of the parties are usually highly fact-intensive and depend on the unique circumstances surrounding the relationship. In Weary v. Cochran, the Sixth Circuit Court of Appeals [in 2004] stated that the two most important factors in determining the status of the relationship are the “employer's ability to control job performance and the employer's ability to control employment opportunities.”
Weary's relevance and importance increase if the DOJ and ICE decide to take a more active role in pursuing employers under a vicarious liability cause of action due to the activities of its independent contractors. It is plausible, for example, that a court could consider the vast difference in bargaining power between a large corporation and an independent contractor as a factor. This may imply a source of control, even though actual control is difficult to locate.
This was also the old Immigration and Naturalization Service’s (INS) view. It explained in its 1987 final rule “Control of Employment of Aliens” that:
The final rule specifies criteria and factors that are to be considered in determining whether a particular business arrangement constitutes an agreement with an independent contractor as opposed to an employee. The criteria and factors which have been enumerated are consistent with current Internal Revenue Service guidelines.
The final rule’s criteria are still binding (at 8 C.F.R. § 274a.1(j)), and they define an independent contractor for purposes of employer sanctions as follows:
The term independent contractor includes individuals or entities who carry on independent business, contract to do a piece of work according to their own means and methods, and are subject to control only as to results. Whether an individual or entity is an independent contractor, regardless of what the individual or entity calls itself, will be determined on a case-by- case basis. Factors to be considered in that determination include, but are not limited to, whether the individual or entity: supplies the tools or materials; makes services available to the general public; works for a number of clients at the same time; has an opportunity for profit or loss as a result of labor or services provided; invests in the facilities for work; directs the order or sequence in which the work is to be done and determines the hours during which the work is to be done.
Thus, regardless of how Burlington and an alien describe their relationship, whether it is in fact an employer/independent contractor relationship is a question ultimately for DHS and for a federal court. As Pearce explained regarding an employer’s potential liability for the acts of an “independent contractor”:
The main justification for exempting an employer from liability for the actions of an independent contractor is that the employer is not exercising control over the contractor. Consequently, when the employer retains some degree of control and thus eliminates this rationale, liability may arise. In the event of control by the employer over the independent contractor, the means of production, or the work product, the emergent relationship between the two parties as employer and employee trumps the intended relationship as employer and independent contractor.
It is an open question (at least to me) as to whether Burlington could give up the level of control necessary to be able to claim that an alien worker is in reality an independent contractor.
The “Knowing” Problem
As a practical matter, how would DHS or a federal prosecutor be able to demonstrate (meeting whatever civil or criminal standard of proof applies) that an employer used an independent contractor relationship to obtain the labor of an alien “knowing” that the alien is unauthorized to work?
The “knowing” requirement in general has been a significant barrier to enforcement of employer sanctions. As I have written, the Achilles Heel of IRCA’s I-9 process has been that, as the U.S. General Accounting Office (GAO — now the Government Accountability Office) noted in 1999, “INS officials ... stated that the widespread use of fraudulent documents made it difficult for INS to prove that an employer knowingly hired an unauthorized alien.” In 2005, GAO similarly concluded that:
[T]he widespread use of counterfeit documents ... make[s] it difficult for ICE agents to prove employer violations.
ICE officials told us that employers who agents suspect of knowingly hiring unauthorized workers can claim that they were unaware that their workers presented false documents at the time of hire, making it difficult for agents to prove that the employer willfully violated IRCA.
In testimony before Congress in 2011, ICE Deputy Director Kumar Kibble concurred, stating that “In many instances, we may not be able to ... meet that burden, in terms of knowledge on the part of the employer.”
Specifically in regard to the use of contractors, in 2019, Roy Maurer wrote for the Society for Human Resource Management that “The ‘knowingly’ language has not only spawned a cottage industry for fake documents, but it has also led some employers to engage in layered hiring — using staffing agencies and contractors who hire subcontractors — to shield themselves from knowledge of foreign workers' employment authorization status.”
However, proof of knowledge should not be difficult in the case of the City of Burlington explicitly adopting a policy of utilizing independent contractors to obtain the labor of aliens despite knowing them to be unauthorized to work under federal law.
But even should Burlington choose to act more covertly, it could still be vulnerable to charges of knowing that an independent contractor was themself unauthorized or hired unauthorized aliens. The 9th Circuit ruled in 1979 in United States v. Mills that a “jury ... [can] infer actual knowledge from circumstantial evidence”, and ruled in 1976 in United States v. Jewell that deliberate ignorance counts as knowledge — “‘knowingly’ includes a mental state in which the defendant is aware that the fact in question is highly probable but consciously avoids enlightenment. ... [There must be] a calculated effort to avoid the sanctions of the statute while violating its substance.”
And then there is “constructive knowledge”.
DHS regulations (at 8 C.F.R. § 274a.a(l)(1)) provide that:
The term knowing includes not only actual knowledge but also knowledge which may fairly be inferred through notice of certain facts and circumstances which would lead a person, through the exercise of reasonable care, to know about a certain condition. Constructive knowledge may include, but is not limited to, situations where an employer:
(i) Fails to complete or improperly completes the Employment Eligibility Verification Form, I–9;
(ii) Has information available to it that would indicate that the alien is not authorized to work, such as Labor Certification and/or an Application for Prospective Employer; or
(iii) Acts with reckless and wanton disregard for the legal consequences of permitting another individual to introduce an unauthorized alien into its work force or to act on its behalf.
The 9th Circuit ruled in 1989 in Mester Mfg. Co. v. INS that constructive knowledge counts as knowledge in the context of employer sanctions, concluding that “[The employer] received specific information that several of his employees were likely to be unauthorized. He made no further inquiry of the INS, and failed to take appropriate corrective action.” Pearce has explained that:
As defined in [the U.S. District Court for the Eastern District of New York’s 1992 decision in] Etuk v. Slattery, constructive knowledge is what a reasonable and prudent employer should know.
The constructive knowledge standard has implications for all employers that utilize independent contractors. It indicates that an employer could be held liable for the hiring practices of an independent contractor if it has adequate notice that the contractor is employing illegal aliens.
The important issue to determine is who had control and, by virtue of such control, had constructive knowledge of the illegal hiring and employment.
[I]gnoring the hiring policies of an independent contractor could constitute “constructive knowledge” if the employer was reckless in its disregard of the contractor's employment of unauthorized aliens. Under Etuk's “reasonably prudent employer” standard, it is also very possible that an employer that consciously disregards a likelihood of illegal labor could be found in violation of the statute, since a reasonable and prudent employer would investigate the situation where such likelihood exists.
Consider, for example, a situation where an employer receives a bid from a small independent contractor that the employer has reason to believe is only attainable if below-market labor wages are paid by the independent contractor. Would a reasonable and prudent employer accept such a bid? A statutory argument exists that an employer's turning of a blind eye to the high probability of the use of illegal alien labor in this situation is sufficient to constitute constructive knowledge.
Keep in mind, however, that subsequent to Mester, the 9th Circuit in 1991 concluded in Collins Foods Int’l v. U.S. that “the doctrine of constructive knowledge must be sparingly applied” in employer sanctions cases. The court stated that:
[T]he [administrative law judge] ALJ's holding extends the constructive knowledge doctrine far beyond its permissible application in IRCA employer sanction cases. 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…. When the scope of liability is expanded by the doctrine 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 sparingly applied.
[A] finding of constructive knowledge … requires more than the ALJ found to exist here. Failure to compare the back of a Social Security card with the example in the INS handbook, when neither statute nor regulation requires the employer to do so, falls far short of the “willful blindness” found in Mester and New El Rey Sausage [Co. v. INS].
Collins Foods did not have the kind of positive information that the INS had provided in Mester and New El Rey Sausage to support a finding of constructive knowledge. Neither the failure to verify documentation before offering employment, nor the failure to compare the back of the applicant's Social Security card with the example in the INS manual, justifies such a finding. There is no support in the employer sanctions provisions of IRCA or in their legislative history to charge Collins Foods, on the basis of the facts relied on by the ALJ here, with constructive knowledge of Rodriguez’ unauthorized status.
Thus, HLR’s claim that “as long as Burlington (and other contractors) ensure their postings are open to all independent contractors, they are free to … [fail to] inquir[e] about a bidder’s immigration status” is providing Burlington (and other contractors) with a false sense of security. Burlington cannot simply pull a Sergent Schultz and proclaim “I know nothing!”
Burlington and its officials and human resources employees could indeed be vulnerable to pattern or practice prosecutions, especially if the city establishes an official policy of utilizing independent contractors to obtain the labor of unauthorized aliens and then actually obtains the labor of multiple unauthorized aliens over a period of time pursuant to the policy.
Potential prosecutions for the knowing hiring of at least 10 aliens known to have been smuggled into the U.S. should not be a major concern for Burlington, as it would be unlikely for its hiring officials to have knowledge that specific unauthorized aliens were smuggled into the U.S. However, I can imagine scenarios in which aliens would voluntarily disclose this information to Burlington officials or make it publicly available on social media. Hiring officials who do not perform due diligence might be vulnerable to allegations of willful blindness.
Burlington officials and employees should be most concerned about harboring prosecutions because of the long prison sentences authorized by federal law. They could potentially be charged not only with harboring, but additionally or alternately with being part of a conspiracy to do so, or with aiding or abetting the harboring, or even under RICO.
As with harboring, Burlington could potentially be charged not only with “encouraging or inducing” illegal aliens to reside in the U.S., but additionally or alternately with being part of a conspiracy to do so, or with aiding or abetting.
Prospects for Enforcement
This all leads to the question of how likely would be civil and criminal enforcement against Burlington.
Pearce expressed alarm that “a 2005 settlement involving … Wal-Mart … raises troubling questions for managers regarding the enforcement of independent contractor law as it relates to long-standing beliefs regarding corporate responsibility for the illegal actions of independent contractors”. He explained that “following a four-year investigation, [ICE] announced that Wal-Mart would pay $11 million to settle a complaint stemming from the company's hiring of independent contractors that employed illegal aliens”. ICE had alleged “that Wal-Mart, through the use of independent contractors, ‘knowingly employed’ illegal aliens in violation of … IRCA”, but “According to federal investigators, charges were settled because Wal-Mart ‘had pledged strong action to prevent future employment of illegal immigrants’ at its U.S. stores.” Wal-Mart’s general counsel stated that the company agreed to “support fair enforcement of immigration laws” and “acknowledge[ed] that our compliance program did not include all the procedures necessary to identify independent floor cleaning contractors who did not comply with federal immigration laws”.
Pearce wrote that “Since it is rare for a company to accept liability for the actions of independent contractors, Wal-Mart's agreement to pay $11 million is a significant and unsettling development.” He noted that Wal-Mart agreed to “three extraordinary conditions not traditionally required under the laws governing employer-contractor responsibilities”. The settlement:
“Directs Wal-Mart to … establish … a means to verify that independent contractors are also taking reasonable steps to comply with immigration laws”
“Directs Wal-Mart to provide … all of its store managers and future store managers with training regarding their legal obligations to prevent the knowing hiring, recruitment and continued employment of unauthorized aliens while complying with pertinent anti-discrimination laws”
“Directs Wal-Mart to continue to cooperate … in … the investigation of the alleged illegal employment.”
Michael J. Garcia, DHS assistant secretary, stated that the settlement “breaks new ground not only because this is a record dollar amount for a civil immigration settlement, but because this settlement requires Wal-Mart to create an internal program to ensure future compliance with immigration laws by Wal-Mart contractors and by Wal-Mart itself.”
Pearce predicted that:
[Wall Mart] will face increased liability under the constructive or actual notice standards because of an increased degree of control [over independent contractors in the future].
By agreeing to provide “all of its store managers and future store managers with training regarding immigration employment laws while complying with pertinent anti-discrimination laws,” the company will incur … increased liability because added knowledge will require a higher standard of performance for a “reasonable and prudent” employer.
Finally, by agreeing to “continue cooperation in the investigation of the alleged illegal employment,” the company will … face increased liability exposure because [its oversight] program will raise the company’s “reasonable and prudent” standard, with the likely result that any violations under the IRCA could be categorized as serious and direct.
Pearce most of all worried that “The significance of these three requirements increases dramatically if they are becoming the ICE's de facto expectations for all employers.” He wrote that:
[T]he implications of the settlement on corporate America remain cloudy and worrisome. … Does the settlement suggest that ICE will soon expect other companies to implement “Wal-Mart-like” programs to demonstrate their compliance with immigration laws and to monitor the actions of its independent contractors? Does the initiation of this action by ICE and the DOJ reflect a new priority to scrutinize the relationships between companies and their independent contractors more carefully?
It does not appear that ICE has in fact pushed other employers to implement Wal-Mart-like programs. The George W. Bush administration’s tough immigration enforcement actions circa 2005 were designed to convince immigration hawks in Congress to agree to large-scale amnesty and guestworker programs. When Republicans in the House of Representatives didn’t budge, the Bush administration’s appetite for enforcement waned.
It is the case that plea agreements often contain compliance obligations that:
Require contractors employed by [the employer] to submit a sworn affidavit, signed under penalty of perjury, attesting that the contractor has examined identification document(s) relating to its employees and that such identification document(s) appear to be genuine and relate to the employee named and, to the best of the contractor's knowledge, such employee is authorized to work in the [U.S.]
But this is pretty thin gruel.
An Indecent Proposal
HLR has one other bright idea:
Burlington can partner with United States Citizenship and Immigration Services (USCIS) to create flexible work authorization programs. Currently, USCIS is solely responsible for issuing employment authorization documents that immigrants must have to lawfully be employed by another business, and there is a substantial backlog to receive them. Burlington can propose partnerships to help alleviate the backlog. For example, it might propose that its municipal departments could issue “Employment Authorization Permits” that function only within city bounds.
Such partnerships would not be unprecedented, as the federal government frequently partners with city governments to enforce immigration law.
Burlington can propose whatever it wants. However, what HLR proposes that Burlington do is an indecent proposal. Indecent in that it would violate federal law.
Section 274A(b)(1)(A) of the INA — setting forth the I-9 process — provides that:
[An employer must] attest, under penalty of perjury … that it has verified that the individual [being hired, recruited or referred] is not an unauthorized alien by examining … a document described in subparagraph (B) [establishing both employment authorization and identity], or a document described in subparagraph (C) [evidencing employment authorization] and a document described in subparagraph (D) [establishing identity].
Subparagraph (B) describes the following documents:
(i) [U.S.] passport;
(ii) resident alien card, alien registration card, or other document designated by [the Secretary of Homeland Security], if the document—
(I) contains a photograph of the individual and such other personal identifying information relating to the individual as the [Secretary] finds, by regulation, sufficient for purposes of this subsection,
(II) is evidence of authorization of employment in the [U.S.], and
(III) contains security features to make it resistant to tampering, counterfeiting, and fraudulent use.
Subparagraph (C) describes the following documents:
(i) social security account number card (other than such a card which specifies on the face that the issuance of the card does not authorize employment in the [U.S.]); or
(ii) other documentation evidencing authorization of employment in the [U.S.] which the [Secretary] finds, by regulation, to be acceptable for purposes of this section.
Thus, a new hire must provide an employer with a document that provides evidence of authorization of employment in the U.S. And under § 274A(h)(3) of the INA, an “unauthorized alien” “means, with respect to the employment of an alien at a particular time, that the alien is not at that time either … an alien lawfully admitted for permanent residence, or … authorized to be so employed by this chapter or by the [secretary of Homeland Security].” Only federal statute and DHS can convey upon an alien the eligibility to work in the U.S., not the City of Burlington, Vt.
Conclusion
I would suggest that the City of Burlington cancel its subscription to the Harvard Law Review. Or, at the very least, it should take any advice the journal sends its way with a grain of salted caramel Ben & Jerry’s.
End Notes
1 H.R. Rept. 99-682, pt. 1, at 62 (1986).
2 Id. at 109.
3 H.R. Rep. No. 99-1000 at 86 (1986) (conference report).
4 H.R. Rep. No. 99-682, pt. 1, at 59.
5 Id. at 94.