Clothing manufacturer American Apparel reportedly agreed on January 17, 2014, to pay $4.8 million to settle a class action lawsuit filed by its investors. The company’s investors claimed the company suffered substantial financial loss when it disclosed that, in 2009, one-third of its workforce was being terminated as the employees were not authorized to work in the U.S., and its stock price tumbled.  Although the company appeared to be a vocal advocate for U.S. immigration reform, its failure to review carefully the company’s internal immigration compliance policy and procedures had resulted in substantial financial loss.

Not only can a company suffer significant financial losses from private causes of action and government civil penalties and fines, responsible employees also may face severe criminal liabilities. In 2012, Homeland Security Investigations (HSI) of Immigration and Customs Enforcement (ICE) made 520 arrests tied to worksite enforcement investigations.  Of the 520 individuals arrested, 240 were owners, managers, supervisors or human resources employees.  In addition, HSI served more than 3,000 Notices of Inspection and 495 Final Orders, totaling $12,475,575 in administrative fines.    Employers, however, should be wary  of becoming overzealous in their compliance efforts. For example, a large producer of pork products was assessed a $290,400 fine for discrimination  because of I-9 over-documentation issues.  An employer also could be subject to immigration-related discrimination investigations when it fails to implement its hiring practice or I-9 employment eligibility verification process consistently.