Gridley, California-based natural food company Mary’s Gone Crackers Inc. agreed and consented to payment of $1.5 million and establishment of a corporate compliance program under a non-prosecution agreement reached with the U.S. Attorney’s Office for the Eastern District of California on July 19, 2016. The agreement requires the company to establish a corporate compliance program covering its I-9 procedures and its E-verify system, in addition to requiring complete disclosure of immigration violations within 24 hours of discovery. The company also agreed to provide corporate compliance reporting to the U.S. Attorney’s Office for two years. In exchange for compliance, no federal charges will be brought against the company. However, if the company fails to perform or to fulfill completely each of its obligations under the agreement, regardless of whether the U.S. Attorney’s Office becomes aware of the breach after the Term of Agreement is complete, the company will be subject to prosecution for any federal criminal violation of which the U.S. Attorney’s Office has knowledge.
The alleged violations date back to March 2012, when U.S. Immigration and Customs Enforcement (ICE) audited the company’s I-9 immigration forms for its employees and notified the company that 49 of its employees did not appear to have valid U.S. work authorization.
Mary’s Gone Crackers Inc. subsequently informed ICE that 48 of the employees had resigned or had been terminated and that one employee had provided corrected documents. Within weeks, however, the company rehired, under new names, at least 13 of the employees who were terminated or resigned. One such undocumented employee never actually stopped working for the company at all, but continued to work under an assumed name and received payment as an independent contractor – thereby avoiding being listed on the company’s payroll.
In January 2013, federal law enforcement (Homeland Security Investigations) executed a search warrant at the company’s Gridley facility and discovered that at least 12 of the 13 rehired individuals were still working at Mary’s Gone Crackers Inc. Following the January 2013 search warrant the company cooperated with the Department of Justice’s investigation and took remedial measures that included terminating employees, stopping use of outside counsel involved in the alleged violations, and taking steps to ensure compliance with immigration laws and I-9 regulations.