Welcome to our Summer edition of our e-newsletter, RESOURCES. We are excited to produce this exciting forum for the communication of issues pertinent and relevant to HR Professionals.


We hope you enjoy the newsletter. It can only get better with your input and comments. If you have any articles for inclusion, comments or requests, please email them to Barry Lippold with the subject: "Resources Article" to:




Patrick Hicks, Founding Shareholder, and Wesley Shelton, Associate of Littler Mendelson review current law and a recent ruling that receipt of a No-Match letter, without more, is not "Constructive Knowledge" that an employee is undocumented.

The Immigration Reform and Control Act of 1986 (IRCA) subjects employers to civil and criminal liability if they knowingly employ undocumented workers or if they have "constructive knowledge" of a worker's undocumented status. In Aramark Facility Services v. Service Employees Int'l Union Local 1877, No. 06-56662, 2008 U.S. App. LEXIS 12704 (9th Cir. June 16, 2008), Service Employees International Union (SEIU) filed a grievance in arbitration on behalf of several terminated employees, claiming that they had been terminated without just cause in violation of SEIU's collective bargaining agreement with Aramark. Because the just cause standard modifies the general principle of "at will" employment, an employer that terminates an employee subject to a just cause provision in a labor agreement has the burden of justifying the discharge. The arbitrator agreed with SEIU that just cause did not exist to terminate the employees and found that Aramark had failed to present "convincing information" that any of the terminated employees were undocumented workers. As a result, the arbitrator reinstated the employees and awarded them backpay.

The Ninth Circuit, the appellate court which specifically covers Nevada employers, agreed that the arbitrator's award would contradict the policies articulated in the IRCA if reinstatement would result in Aramark "knowingly" reinstating undocumented workers. However, given the fact that Aramark failed to present any evidence that it had actual knowledge that any of the employees were undocumented, the focus of the court's analysis centered on whether Aramark had "constructive knowledge" of this fact. Aramark's only evidence that the 33 employees may have been undocumented rested solely on Aramark's receipt of the no-match letters and the employees' failure to correct the discrepancies within the short time allowed by Aramark. Faced with these limited facts, the Ninth Circuit disagreed that Aramark had constructive knowledge of the employees' undocumented status and rejected Aramark's argument that reinstating the employees would violate the IRCA's policy against employing undocumented workers.

The IRCA's regulations define "constructive knowledge" as "knowledge that may be fairly inferred through notice of certain facts and circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition." Aramark argued that it had constructive knowledge of the employees' undocumented status given its receipt of the no-match letters along with the employees' response (or lack thereof) when Aramark directed them to correct the discrepancy. Noting that the IRCA "prohibits the hiring of an alien 'knowing the alien is an unauthorized alien,'" the court disagreed with Aramark.

In holding that the no-match letters alone could not support a finding of constructive knowledge of an employee's undocumented status, the Ninth Circuit noted that the underlying purpose behind the SSA's no-match letters "is not immigration-related," but rather is simply to provide notice that the employee's earnings are not being properly credited for social security purposes. The court further added that a no-match letter could result from a number of issues, including a typographical error, a name change, inaccurate or incomplete employer records, or "compound last names prevalent in immigrant communities." As a result, the court reasoned that a discrepancy between information in a W-2 and the SSA's records "does not automatically mean that an employee is undocumented or lacks proper work authorization." In fact, the SSA notifies employers in no-match letters that the information provided in the letters is not designed to pass judgment on an employee's immigration status and "is not a basis, in and of itself, to take any adverse action against the employee." The court also cited to a statement from the Office of Special Counsel of Immigration-Related Practices that "[a] no match does not mean that an individual is undocumented" and that employers should not rely on the mere receipt of a no-match letter "as the reason for taking any adverse employment action against any employee."

The court then turned to Aramark's argument that the employees' failure to respond to the discrepancy provided Aramark with constructive knowledge of their undocumented status. The court disagreed, given what it characterized as Aramark's "extremely demanding policy" that employees resolve the discrepancy within three days, which the court found was simply too short a period of time for a worker to gather the documents necessary to correct a mismatch. Moreover, in the absence of any "convincing information" of immigration violations, the court held that it was improper for the district court to draw negative inferences against any given employee due to his or her failure to correct the discrepancy within a certain period of time.

As the Ninth Circuit stated, the SSA does not intend for a no-match letter to contain "positive information" of immigration status. Instead, the primary purpose of the no-match letter is to state that an employer's earnings are not being credited properly for social security purposes. As the court recognized, one explanation for the mismatch could be "fraudulent SSNs," but a fraudulent social security number is not the only explanation for a mismatch. Rather, the no-match letter could be the result of a number of other issues that can be explained or corrected. Without any other evidence to suggest that the employees were unauthorized to work in the United States, the court agreed with the arbitrator that Aramark did not have constructive knowledge of immigration violations and, therefore, did not have just cause to terminate the employees under the collective bargaining agreement.

Implications for Employers

The Ninth Circuit in Aramark did not provide any guidance – other than exercising additional patience – as to what the company could have done differently to avoid the substantial monetary liability that was ultimately imposed, while at the same time avoiding criminal and civil penalties for employing undocumented workers. Nevertheless, there are many lessons to be learned from the court's ruling, and the current state of the Department of Homeland Security's (DHS) final and supplemental rules:

  • Employers that receive a no-match letter should allow employees a reasonable period of time to correct the mismatch and not terminate employees based solely upon the receipt of the no-match letter. A reasonable time period is approximately 90 days, using the DHS rule as guidance.

  • Employers with unionized workforces should consider the use of E-Verify to determine immigration status, allowing for clearer evidence of potential non-legal status and termination during any probationary period that exists.

  • Employers should respond rationally and in measured fashion to no-match situations, including providing time to respond and assessing whatever information the employees in question provide.

  • Employers should conduct I-9 audits to ensure that all employees have submitted a proper I-9 form and that human resources staff are properly trained on I-9 verification.

  • Employers should put procedures and protocols into place before the receipt of the first no-match letter, so that they are prepared to respond quickly if and when a letter is received.

  • Employers should monitor future developments with DHS' safe harbor program. Additional judicial analysis of those rules will occur.

  • Employers should seek counsel before discharging an employee under the immigration laws.

Patrick H. Hicks is Founding Shareholder of Littler Mendelson’s Las Vegas and Reno offices. He can be reached at  Wesley Shelton is an Associate in Littler Mendelson’s Las Vegas office.  He can be reached at




On a single day last week, I coached three women in their Las Vegas job search. Although they do not know each other, they share many things in common. A proven record of accomplishment in their respective career fields, intelligence, advanced education, all are seeking employment, and their peers are advising them to “dumb-down” their resume. In my fifteen years of living in Las Vegas, I have come to realize education is not valued as much as in other cities, but I did not think employers were sending this type of message to job seekers.


This trend is in part related to the economy and the difficulty in finding positions that best match an applicants experience and education. As qualified workers fall victim to layoffs, many are seeking employment in a market where few open positions exist and sacrificing pay, benefits, title and responsibilities for the sake of a job. Many job seekers are trying to match their education and work experience to jobs that may not require all they have to offer. Instead of seeing this as a future investment opportunity, employers are falling back on the shortsighted refrain “you’re overqualified”, leaving a pool of highly talented individuals in the unemployment line.


I responded to these women by sharing my personal thoughts on the issue. I believe we have worked too hard for too long to “hide” our accomplishments, educational or otherwise. Take pride in your achievements and openly discuss them when searching for a job. Remember, an interview is a two-way street. If an employer does not value your education and what you can bring to the organization long-term, why would you want to work for them?


Mary Beth Hartleb, J.D., SPHR-CA, President of PRISM Human Resource Consulting Services, LLC. • 701 N. Green Valley Parkway, Ste. 200, Henderson, NV 89074, P. 702.990.3344 F. 702.446.8021
Additional Locations
: California: 619.817.8168, Texas: 713.568.5770 Tollfree: 1.877.446.012




by Dianna Russo, CPA, Houldsworth, Russo and Company


When we offer and provide 401 (k) benefits to our employees, we have a responsibility to help protect the assets and the financial integrity of your employee benefit plan and ensure that the necessary funds will be available to pay at retirement. Federal law requires employee benefit plans with 100 or more participants to have an audit as part of their obligation to file an annual Form 5500 tax return/report for the plan.


In November 2007, the Department of Labor issued amended regulations eliminating an exemption granted to 403(b) plans from the annual Form 5500 reporting effective with their 2009 filings. Generally, 403(b) plans sponsored by charities are subject to ERISA, whereas 403(b) plans sponsored by religious organizations and governments are not covered under ERISA. In addition, plans with 100 or more participants will require an audit as with employee benefit plans in businesses.

If an employee benefit plan is required to have an audit, one of the most important duties of the plan administrator is to hire an independent auditor for the plan. A quality audit helps ensure the financial integrity of a plan and protect plan assets. A quality audit also will help a plan administrator carry out its legal responsibility to file a complete and accurate annual return/report for the plan each year. Because an incomplete, inadequate, or untimely audit report may result in penalties being assessed against you as the plan’s administrator, selection of an experienced and reliable auditor is very important.


At the conclusion of the audit, the auditor will issue a report and state an opinion on the plan’s financial statements as well as any schedules required to be included as a part of the plan’s annual report filing. Auditors will also report on significant problems, if any were found. The auditor may also suggest ways for you to improve internal controls and plan operations.


If you have any questions about these new requirements, call me at 702-269-9992 and we can help you determine if your employee benefit plan is covered under these new regulations.





The Society for Human Resource Management (SHRM) and the Rutgers University School of Management and Labor Relations are working in collaboration to produce and publish a new monthly indicator, the SHRM/Rutgers Leading Indicator of National Employment (LINE).


The SHRM/Rutgers LINE index is based on a monthly survey of Human Resource professionals at manufacturing firms. LINE measures change in five components: number of employees, number of vacant positions, difficulty in recruiting highly qualified employees, compensation offered to new hires, and hiring plans for the upcoming month.


You can sign up to receive updates when the SHRM/Rutgers LINE is released each month. To find out more about LINE, go to





Our Annual Best Places to Work Awards, in cooperation with InBusiness, will be held October 10 at the Gold Coast.  Click here to RSVP to this exciting event.


We are proud to announce
our Keynote Speaker:

Author David Maxfield



All attendees will receive a copy of David's bestseller
"Influencer: The Power to Change Anything"


For more than twenty years, David Maxfield has helped companies by leading research projects involving dialogue skills, performance improvement, and conflict management. David's career began with his doctoral work in psychology at Stanford University; His impact on organizational performance has been wide reaching as he's helped clients such as Hewlett Packard, IBM, Ford Motor Company, Covenant Healthcare, and VISA increase organizational effectiveness and become measurably more vital.


Juana Hart reprises her role as our fabulous Emcee



Nominations and Applications are now closed.  Congratulations to all of the nominated companies and Good Luck!


Click here to visit our Best Places to Work website to find out more. 




For our Annual Company Picnic, management had decided that because of liability issues, we could have alcohol, but only one (1) drink per person...


I was fired for ordering the cups."




We hope that all of our Members and Friends find the articles contained within R E S O U R C E S  useful in your HR environment. Many thanks to all of you who responded to our requests for articles and research for this newsletter.


If you have anything you wish to contribute to the next issue, please do not hesitate to email Barry Lippold at






Contact Barry Lippold at 702-281-6528 for pricing and availability
to sponsor future R E S O U R C E S editions











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Newsletter: May 2008 Issue