In a recent decision, the U.S. Court of Appeals for the Ninth

Circuit found, among other things, that an employer could not make

a good faith defense to a charge of continuing to employ

unauthorized workers or failing to properly complete, retain, or

produce I-9 employment verification forms.

DLS Precision Fab LLC, a Phoenix, Arizona-based custom sheet

metal fabrication company doing business as Di-Matrix Precision

Manufacturing, had dealt with the sudden growth of its workforce

due to an expansion of a Department of Defense program by hiring a

well-credentialed human resources director to ensure compliance

with applicable state and federal employment laws. Instead of doing

so, however, the HR director shirked his responsibilities to the

point of “literally stuffing the government's

correspondence in a drawer and never responding,” according to

DLS. U.S. Immigration and Customs Enforcement subsequently

inspected DLS's I-9 forms and other relevant business

information and served DLS with notices of suspect documents and

intent to fine.

The court noted that the good faith defense, as argued by DLS,

did not apply here. DLS conceded that its violations were

substantive but contended that the “peculiar facts of this

case” justified extending the good faith defense to the

substantive violations because DLS had made a good faith effort to

comply with the law's employment requirements by hiring an HR

director, but the HR director exhibited bad faith by neglecting his

duty to keep DLS compliant. The court was not persuaded. Among

other things, the court pointed out that under the law, such a

defense might apply to technical or procedural, but not

substantive, violations. Also, the court said, “DLS is not the

first employer to hire an employee with the expectation that he or

she will comply with the law only to be disappointed, nor is it

likely to be the last. More broadly, DLS asks us to disregard the

company's responsibility for hiring and supervising its own

employees. The HR director was acting as DLS's agent, and his

failure to perform his responsibility may properly be imputed to


The full text of the opinion, DLS Precision Fab LLC v. U.S.

Immigration & Customs Enforcement, 2017 S.O.S. 14-71980 (Aug.

7, 2017), is at

The content of this article is intended to provide a general

guide to the subject matter. Specialist advice should be sought

about your specific circumstances.

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