According to the U.S. Chamber of Commerce, the Department of Defense, NASA, and General Services Administration agreed to delay implementation of the final rule, 73 Fed. Reg. 67,651, amending the Federal Acquisition Regulation (FAR) to require that U.S. government contractors and subcontractors use the E-Verify program to check the employment eligibility of all new hires and employees directly performing work under federal contracts until February 20, 2009. The rule was previously set to take effect on January 15, 2009. (To view our alert on the final rule, click here.)  

Chamber of Commerce of the United States of America, et al. v. Michael Chertoff:  

On December 23, 2008, the U.S. Chamber of Commerce, the Society for Human Resource Management, the Associated Builders and Contractors, the HR Policy Association, and the American Council on International Personnel filed a lawsuit against Michael Chertoff, the Secretary of Homeland Security, challenging the final rule’s legality. The lawsuit argues that the both President Bush and FAR Council exceeded their authority under the applicable immigration and procurement statutes. Specifically, the complaint alleges:  

  • Secretary Chertoff’s E-Verify designation notice violated the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA), Pub. L. No. 104-208;  
  • The requirements imposed by Executive Order 13,465 and the final rule are expressly prohibited by IIRIRA;  
  • Even if the requirements imposed by Executive Order 13,465 and the Final Rule are not expressly prohibited by IIRIRA, the requirements are not authorized by the Federal Property and Administrative Services Act of 1949;  
  • The requirement to re-verify existing employees exceeds the E-Verify program’s statutory authority;  
  • The requirements imposed by Executive Order 13,465 and the Final Rule are legislative in nature and exceed the Executive Branch’s constitutional authority to take care that the laws be faithfully executed;  
  • The Final Rule may not be enforced because the U.S. government failed to publish the revised Memorandum of Understanding in the Federal Register; and  
  • The Final Rule may not be enforced because the U.S. government violated the Regulatory Flexibility Act.

The organizations bringing the lawsuit also requested that the U.S. government suspend the final rule until a final decision is rendered by the U.S. District Court. As part of an agreement reached by the parties, the rule will not take effect before February 20, 2009. Therefore, federal contracts issued prior to that date will not contain the new contract clause mandating the use of the E-Verify system. A formal announcement of the suspension is expected in the next few days.