"Immigration and Customs Enforcement (ICE or the government) filed a complaint alleging that Crescent City Meat Company, Inc. (Crescent City or the company) violated 8 U.S.C. § 1324a(a)(1)(B) by failing to prepare, retain, and/or present I-9 forms for fifteen employees. The total penalty sought was $14,025. ... Crescent is a small family business of a “mom and pop” character, that there is no indication of bad faith on the company’s part, no unauthorized employees, and no history of previous violations. Apart from the seriousness of the violations, the statutory factors incline in the company’s favor.
There are some troubling questions that arise from a review of the record. As the government is aware, the law requires employers to complete employment eligibility verification only for employees hired after November 6, 1986. The complaint in this matter specifically alleges that the employees named in Count I were hired after November 6, 1986. The complaint is worded this way because employers have no obligation to complete I-9 forms for employees hired priorto the effective date of the statute, because of the so-called “grandfather clause.” See 8 C.F.R. § 274a.7(a)(1); United States v. Anodizing Indus., 10 OCAHO no. 1184, 5 (2013). Here, the government’s memorandum to case file acknowledges that Crescent City expressly told the government that two of its nine current employees had worked there since before the effective date of the statute. Those employees are not identified by name. The government has apparently chosen to disregard that information. The government’s own memorandum undermines the company’s admissions of liability. ... A citizen has the right to expect fair dealing from the government. S & E Contractors, Inc. v. United States, 406 U.S. 1, 10 (1972). ICE overreaches when it issues a NIF and files a complaint containing allegations that the government actually knows to be false.
Because grandfathered status is a matter of affirmative defense, United States v. Gasper, 1 OCAHO no. 218, 1472, 1473-74 (1990), it is waived when not pleaded in an answer. See United States v. Haim Co., Inc., 7 OCAHO no. 988, 1030, 1039 (1998). A party having the benefit of counsel would know that, but a pro se party generally would not. Crescent City will be held to its admissions of liability, but the penalties in this matter will be reduced as a matter of discretion to the minimum permissible in light of the government’s overreach. The total penalty for the fifteen violations in this case is $1650." - USA v. Crescent City Meat Co., Inc., Apr. 22, 2014, emphasis added.