United States: COVID-19 - Cos. Must Prep For More DOJ Probes To Protect US Workers

In brief

Original article published in Law360

In the wake of the economic downturn resulting from the COVID-19 pandemic, government investigations into perceived preferential treatment of foreign workers by U.S. employers is expected.


At-risk companies include those in industries that typically employ a higher number of foreign workers under H-1B, H-2A and H-2B visas, from technology and consulting to hospitality and food production/agriculture. The risk is greater for those companies that have also implemented reductions in force, furloughs, salary reductions or similar measures in response to the COVID-19 crisis.

In April, the U.S. Department of Justice celebrated the three-year anniversary of the president's 2017 Buy American and Hire American executive order and issued a press release "reaffirming its commitment to fight discrimination against U.S. workers." The press release emphasizes the mission of protectingU.S. workers from discrimination in the workplace and attacking policies that favor foreign workers given the impact of COVID-19 on the U.S. economy.

Since the president's 2017 order, 39% of citizenship status discrimination actions settled by the DOJ have focused on protecting U.S. workers from discrimination by U.S. employers who allegedly favored foreign workers. This article will provide an overview of the relevant law and penalties, the evolution of enforcement of the anti-discrimination provisions against U.S. employers,and steps U.S. employers should take to mitigate risk.

The Anti-Discrimination Provisions of the INA

The anti-discrimination provisions of the Immigration and Nationality Act prohibit a range of employment-based discrimination, including citizenship or immigration status discrimination by employers with four or more employees; national origin discrimination by employers with more than three and fewer than 15 employees; unfair documentary practices; and retaliation/intimidation.

The anti-discrimination provisions make clear that it is an unfair immigration-related employment practice for a person or entity to knowingly or intentionally discriminate against any individual, other than an unauthorized immigrant, with respect to the hiring, or recruitment or referral for a fee, of the individual for employment. Discharge of the individual from employment, because of national origin, or, in the case of a protected individual, because of such individual's citizenship status is also an unfair immigration-related employment practice.

Protected individuals include: a U.S. citizen or national; a lawful permanent resident;[1] thoseadmitted for temporary residence under Section 1160(a) or 1255a(a)(1); a refugee; or an asylee.

Claims of discrimination may encompass both individual claims and pattern or practice claims. For individual claims, the plaintiff must establish that the employer regularly and purposefully treated a disfavored group less favorably than the preferred group. Critically, discriminatory intent may be established by direct or circumstantial evidence such as a discriminatory pattern in hiring practices. In other words, so long as the act that favors one group over the other is intentional, there is no requirement for a specific discriminatory intent by the employer to incur liability.

Why Should Employers Care?

The penalties can be significant. The vast majority of cases initiated under the anti-discrimination provisions result in settlement and do not reach an administrative law judge. The ALJ, or DOJ via settlement, can impose significant financial penalties for violations of the anti-discrimination provisions, including up to $3,695 for each individual discriminated against for employers who are alleged to have violated the provisions in the first instance.

Additionally, the ALJ or DOJ can impose nonfinancial penalties that can severely impede business operations and cause reputational damage. For example, a settlement or order could require that the employer hire individuals directly/adversely affected with back pay.

The employer could also be required to lift restrictions on the employee's employment, which could be of particular note given COVID-19-based furloughs. Finally, the employer may be required to report to the DOJ regarding its hiring, training and other employment-related actions for months or even years.

Additionally, the government's burden of proof for establishing citizenship status discrimination under the INA is lower than for establishing other types of employment discrimination under Title VII. Specifically, the employer's motive for taking an adverse employment action is not dispositive to a finding of citizenship status discrimination under the INA.

The INA defines discrimination as intentionally treating an individual differently from other individuals because of citizenship status, or national origin, regardless of the explanation for the different treatment, and regardless of whether such treatment is because of animus or hostility.

Thus, where different treatment because of citizenship status is established in fact, an employer's legitimate, nondiscriminatory reason for the different treatment will not necessarily protect the employer from penalties. This distinction makes asserting a claim of discrimination under the INA potentially more attractive to an aggrieved U.S. citizen employee.

The Evolution of Enforcement

The Immigrant and Employee Rights Section, or IER, of the DOJ's Civil Rights Division may initiate an investigation based on a complaint or on its own accord. As its name suggests, the IER has historically been tasked with protecting foreign workers from discrimination in employment. Indeed, the vast majority of settlements and assessed penalties for investigations initiated in the years prior to the Buy American and Hire American executive order involved U.S. employers discriminating against non-U.S. citizens.

In April 2017, President Donald Trump issued the Buy American and Hire American order. The stated aim of the order was to protect U.S. workers.

Since the issuance of the order, the IER has increasingly focused on investigating U.S. employers that have discriminated against U.S. workers under the Protecting U.S. Workers Initiative, which was launched shortly after the issuance of the Buy American and Hire American order. There has not been a change in law enacted by Congress or even a federal rule promulgated by the DOJ; rather, the IER has utilized the existing anti-discrimination provisions of the INA to pursue employers in this entirely new way.

Between 2017 and 2018, the IER announced memoranda of understanding with other federal agencies that oversee critical components of the U.S. immigration system, including the U.S. Department of Labor, U.S. Department of State and U.S. Department of Homeland Security.

The purpose of the memoranda was clear: information sharing to prevent immigration fraud and protect U.S. workers. This has increased the frequency in which the IER has utilized information regarding the immigration practices of U.S. employers to determine whether the anti-discrimination provisions had been violated.

In April 2020, the IER issued a press release to recognize the anniversary of the Buy American and Hire American order by "reaffirming its commitment to fight discrimination against U.S. workers."[2] The press release notes that the IER has reached numerous settlements under the Protecting U.S. Workers Initiative, including more than $1.2 million in back pay to affected U.S. workers and civil penalties. Settlements have included employers that purportedly discriminated against U.S. workers by use of the H-1B, H-2A and H-2B visa programs.

The press release provides a clear map to the future of the IER: increased investigations to protect U.S. workers. Given the impact of COVID-19 on the U.S. economy, the press release reemphasizes its mandate of protecting U.S. workers and comments that it "is especially important at a time when more U.S. workers may be looking for employment as a result of the economic impact of COVID-19."

A review of settlements by the IER from 2017-present shows that a staggering 39% of citizenship- based discrimination claims involved sustained allegations of discrimination against U.S. workers. Recent settlements by the IER with U.S. employers are indicative of the types of investigations being conducted. This includes:

  • Hallaton Inc. in March: Hallaton allegedly discriminated against U.S. workers by failing to consider them for construction laborer positions. Under the settlement agreement, Hallaton will pay a civil penalty of $43,143 to the U.S., pay up to $80,000 in back pay to affected U.S. workers, and conduct enhanced U.S. worker recruitment and advertising for future positions.

  • Sam Williamson Farms Inc. in June 2019: The IER's investigation concluded that at the end of the 2016-2017 strawberry picking season, SWF informed its existing U.S. workers that in the future it would rely instead on workers with H-2A visas from a farm labor contractor to harvest its strawberries for the next season, and then retained a farm labor contractor for the express purpose of obtaining workers with H-2A visas. Under the agreement, SWF agreed to pay $60,000 in civil penalties to the U.S., make up to $85,000 available for back pay to U.S. workers, engage in enhanced recruitment efforts for U.S. workers, and other training and reporting obligations.

  • El Expreso Bus Company in May 2019: The IER's reasonable cause conclusion stated that the company failed to consider U.S. workers for its temporary bus driving position in 2016 because it preferred to hire temporary H-2B visa workers for those positions, in violation of Title 8 of U.S. Code Section 1324b(a)(1). Under the agreement, El Expreso agreed to pay $31,500 in civil penalties to the U.S., make up to $197,500 available to satisfy back pay awards to U.S. workers denied employment, and other nonfinancial penalties.

Mitigation and Defense

While all employers have been placed in a difficult position due to COVID-19, companies with foreign national employees are faced with unique and difficult decisions. Such considerations have included the treatment of H-1B visa holders and the impact of salary reductions; the impact of layoffs or furloughs on visa holders and the company's ability to rehire them at a later stage; ongoing permanent residence processes and tests of the U.S. labor market.

Employers in this scenario must be careful to ensure employment decisions do not run afoul of the anti-discrimination provision, particularly given the continued and increased focus on perceived preference of foreign workers by the DOJ. Steps to be taken should include:

  • Ensure your employment decisions relating to COVID-19 have a justifiable, nondiscriminatory basis. Immigration status, or even costs and ability to rehire in the future, could be perceived by the DOJ as unfair treatment of U.S. workers. Document your COVID-19 employment policies and how difficult decisions were reached, and why.

  • Review all formal and informal policies relating to the hiring, firing or promotion of workers to confirm equal treatment of all employees. Ensure consistent treatment in all employment policies between U.S. workers and foreign nationals. Never create dual policies.

  • Review, in practical terms, the onboarding and off-boarding experience of employees to ensure consistent treatment of all workers regardless of nationality or immigration status. This may include electronic platforms, offer letters, employee manuals, trainings, etc.

  • Conduct internal training with your human resources team regarding discrimination, document abuse and retaliation, and document the training by issuing a certification of completion or similar documents.

  • Review hiring policies with talent and recruitment to review the dos and don'ts of what can be said and requested during the hiring process. Conduct training with talent and recruitment and document the training by issuing a certification of completion or similar documents.

  • Review I-9 policies to avoid document abuse claims. If your company does not have an I-9 policy, create one with the help of counsel.

     

Taking the above steps can help mitigate the risk of an investigation and, should an investigation occur, create a mitigation and good faith defense to claims of discrimination under the INA. It is not possible to entirely mitigate the risk of investigation or complaint. However, U.S. employers should take the proper steps now to ensure protection in the future given the expected increase in investigations throughout 2020.

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[1] Except an individual who fails to apply for naturalization within six months of becoming eligible or, if later, within six months after Nov. 6, 1986; and an individual who has applied on a timely basis, but has not been naturalized as a citizen within two years after the date of the application, active pursuit of naturalization can be established.

[2] https://www.justice.gov/opa/pr/justice-department-recognizes-anniversary-buy-american-and- hire-american-executive-order.


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