A recent settlement between the National Labor Relations Board (NLRB) and the Pacific Steel Casting Company (PSC), based in Berkeley, California, set a new standard for E-Verify compliance in the unionized labor arena.

The steps for the precedent-making settlement were set in motion when ICE conducted a Form I-9 audit for approximately 550 PSC employees in February 2011. At this time, PSC voluntarily enrolled in E-Verify without notifying its unionized employees or their union chapter, Local 164B. When Local 164B subsequently learned of the enrollment, the company contended that it was required to participate in E-Verify because of its role as a federal contractor. When this claim was found to be incorrect, the union filed a complaint with the NLRB alleging that PSC’s lack of bargaining over its E-Verify enrollment changed the terms and conditions of employment and amounted to a unilateral repudiation and/or modification of its contracts with unionized workers.

Under the terms of the settlement, PSC agreed to withdraw from E-Verify and to reinstate and award back pay and lost benefits to all employees who were erroneously terminated while contesting Tentative Non-Confirmations (TNCs), as well as workers who were denied the opportunity to contest TNCs at all. Under the rules governing E-Verify, an employee who wishes to contest a TNC must be afforded an opportunity to do so within ten federal government workdays and may not be terminated unless and until he/she receives a Final Non-Confirmation (FNC) or a “SSA/DHS No Show.”

The settlement breaks new ground for alerting employers with unionized employees to their bargaining and other union contract obligations when considering voluntary enrollment in E-Verify. Before making the decision to enroll, companies should carefully review their collective bargaining agreements, notify union and affected employees as required, and properly train human resources personnel on E-Verify rules to prevent unlawful terminations.