A new organization by the name of "IllegalEmployers.org" has established a website for reporting employers alleged to be engaged in the employment of unauthorized workers in California and elsewhere. The website describes the organization as a network of law firms, labor organizations, immigration reform advocates and others working to eliminate the incentive for illegal immigration. David Klehm, an Orange County attorney and founder of the website, together with the Immigration Reform Law Institute, an affiliate of the Federation for American Immigration Reform, are planning to file lawsuits against companies that allegedly knowingly hire illegal aliens under the California Unfair Practices Act, Business & Professions Code Section 17200, et seq. They seek to act as private attorneys general, taking on the job they claim the Department of Homeland Security’s division of Immigration and Customs Enforcement is failing to perform, and in the process reap large attorney fee awards.

Klehm filed the first such suit on Tuesday, August 22, 2006, in Kern County, California, on behalf Global Horizons, Inc. (GHI), a temporary help company that supplies workers to U.S. businesses operating in a number of market sectors, including agriculture. GHI alleges that it lost a contract to supply blueberry pickers to Munger Bros. LLC because two competitors, Ayala Agricultural Services and J & A Contractors, were able to undercut their price by using undocumented workers. 

To prevail, GHI will have to jump through several hurdles. As a result of Proposition 64, passed in 2004 to modify California’s Unfair Practices Act, GHI will be required to prove it suffered actual damage as a result of Munger’s decision to enter into contracts with Ayala and J&A after discovering that they were supplying undocumented workers. Yet, GHI acknowledges in its suit papers that Munger Bros. cited a lawful reason for terminating GHI’s labor supply contract, i.e., slow production results. GHI alleges this explanation to be a subterfuge and that Munger Bros. really wanted to reduce its labor costs by using local undocumented laborers at a lower rate. 

GHI had recruited its workers under the H-2A seasonal agricultural visa program which required GHI to provide worker housing, an added cost it passed on to Munger Bros. Because the replacement contractors were not supplying H-2A workers, there were no added housing costs – another potential legitimate economic factor unrelated to the immigration status of the subcontractors’ workforce that could account for Mungers’ decision to switch contractors. Ultimately, GHI will be required to prove that Munger knew that the replacement contractors’ employees were illegal before it entered into the new contracts. The suit papers give no hint as to how GHI intends to prove this. 

Mr. Klehm and his organization have made clear their intent to file many more Unfair Practices Act lawsuits in the near future. An affiliated organization, the Federation for Immigration Reform and Enforcement, has posted the names of more than 100 employers alleged to be engaged in the employment of undocumented workers at www.wehirealiens.com. Household names in the retail, construction, restaurant, and hospitality industry populate the list. Any one of them could be the target of the next action. 

Employers in targeted industries can and should take prompt action to reduce their risk of liability by auditing their immigration compliance and contractor systems to establish an adequate defense to knowing hire charges. Care should be taken to preserve the confidentiality of the results of the investigation by working under the supervision and direction of qualified immigration counsel.