July 24, 2023

A prominent e-commerce and shipping company claims it lost millions because it had to hire new workers. According to the company, it had to replace the unverified workers provided by staffing agencies. The company also claimed that the contractor who caused the issues should take responsibility, not hold the subcontractor liable.

According to the complaint, the staffing and consulting company agreed to supply seasonal workers for the holiday season. However, the company chose to subcontract with another staffing agency to have them supply the workers. The subcontractor did not screen its workers, failing to ensure they had authorization to work in the United States.

The staffing and consulting company requested separate summary judgment motions against the shipping company and the subcontractor. However, the shipping company objected. It claimed that the staffing and consulting company blamed the subcontractor while attempting to evade liability to the shipping company. 

They stated that the staffing and consulting company should fulfill its adequate management and auditing obligations. Furthermore, they claimed the staffing company allowed their subcontractor to send these unscreened workers to the facilities. Afterward, the discovery of their unauthorized status had the workers removed. This negligence led to the shipping company losing most of its temporary workforce during peak season. The company lost millions of dollars because it could not perform its functions.

As such, the shipping company found it inappropriate to accept summary judgment. The staffing company’s involvement and the “nature of the losses” incurred raised genuine issues of material fact. However, the staffing agency argued it appropriate to request summary judgment. It felt that the case involved interpreting clear and unambiguous contractual terms. As such, it should become a question of law. 

The subcontractor also opposed the motion for summary judgment. It claimed that the staffing company did not inform them they needed to use E-Verify. It also had an employee of the contractor staffing agency testify in a deposition that they did not find evidence of notifying the subcontractor. This deposition revealed that the shipping company required E-Verify.

In addition, the subcontractor claimed it informed the staffing company that it did not use E-Verify. Despite knowing this, the company took no action and did not inform them that they breached the contract. The subcontractor said they insured the company, which did not seek judgment on its claim in time.

This case shows the importance of verifying the employment eligibility of workers. The best way to do this is to use an electronic I-9 management system with E-Verify integration. This tool will guide employers through the employment eligibility process, store the forms and documentation, and send alerts when to take action to stay in compliance.

When it comes to your employees, automation makes eligibility verification quick and simple. Ensure compliance today with I-9 Compliance.

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