Omnicare Settlement: Outlier Or Beginning Of Broader Trend?

February 06, 2018 | By Alexander V. Batoff

Employers have braced themselves for drastic changes as the Trump administration continues to play an active — and controversial — role in reshaping U.S. immigration policy. But behind the scenes in the U.S. Department of Justice’s Immigrant and Employee Rights Section (IER), whose tasks include enforcing the Immigration and Nationality Act (INA), a recently resolved asylum discrimination claim almost paints the picture of business as usual.

On Jan. 23, 2018, the IER finalized settlement of such a claim against Omnicare, a Cincinnati-based CVS Pharmacy subsidiary and long-term care pharmacy services provider. An outside recruiting firm acting on Omnicare’s behalf allegedly declined to refer a job applicant for an interview because he was not a U.S. citizen or legal permanent resident. However, the applicant had been granted asylum — which provides safe haven to people who flee persecution based on race, religion, nationality, social group membership, or political belief. Asylees are authorized to work in the U.S. and, along with permanent and temporary residents and refugees, are protected by the INA’s employment discrimination provisions.

Among other settlement terms, Omnicare has agreed to pay a $3,621 civil penalty to the U.S. Department of Treasury — the maximum that may be imposed for each individual violation, pledged to refrain from immigration status discrimination, committed to training its staff and contractors on their obligations under the INA, and promised to display English and foreign-language posters advising employees and job applicants of their rights under the INA. If Omnicare does not uphold its end of the bargain, which places Omnicare under the DOJ’s watchful eye for two years, the IER can file a lawsuit to enforce the agreement in federal court.

A $3,621 fine is seldom a “bet-the-company” proposition. However, had Omnicare been a small business and faced litigation from a larger class of applicants, the outcome could have been different. For example, the maximum INA civil penalty multiplied by a class of 50 would equal $181,050 in statutory liability, with possible additional liability for legal costs and attorneys’ fees at the discretion of an administrative law judge.

Differential treatment of asylees could potentially implicate other federal, state and local anti-discrimination laws, like Title VII of the Civil Rights Act of 1964, the Pennsylvania Human Relations Act, and the Philadelphia Fair Practices Ordinance. Throw in damages from these statutes, like lost wages, emotional distress, and awards of legal costs and attorneys’ fees that are often mandatory, and it is easy to envision a larger-scale asylum discrimination case causing extensive damage to a company’s financial status, business goodwill and public-facing reputation.

This settlement is a good reminder that employers should carefully consider including appropriate defense and indemnification language in contracts with third parties, such as staffing agencies, who make decisions regarding job seekers and employees. It is unclear whether the outside recruiting firm had agreed to indemnify and hold harmless Omnicare, or absolve Omnicare of liability and reimburse Omnicare for losses incurred that were the fault of the recruiting firm. Even though Omnicare would still most likely be responsible for the recruiting agency’s actions as a matter of law, making the recruiting agency contractually beholden to cooperate with and defend Omnicare, and make Omnicare whole for any monetary losses, would greatly alleviate the impact of an adverse legal finding. It would also incentivize the recruiting agency to exercise greater caution in the first place.

Better yet, employers should review their own recruitment policies and procedures and ensure that nothing on paper, or in practice, ends up screening out job applicants based on refugee or asylee status, or any other legally protected class or category. Employers can ask job applicants if they are authorized to work lawfully in the United States and must verify the work eligibility of all new employees as instructed on Forms I-9. However, employers cannot impose greater restrictions on the list of documents that the Form I-9 deems acceptable for establishing personal identity and employment authorization. Employers also cannot reject documents that reasonably appear to be genuine and pertain to the individual presenting them, or turn away applicants or revoke offers of employment based on the expiration date of the documents presented.

Furthermore, regardless of apparent trends — or even seeming pronouncements from the president or key executive department officials — all immigration-related laws and regulations should be treated as the law of the land until proven otherwise. The same DOJ that entered into the asylum discrimination settlement agreement with Omnicare threatened to subpoena 23 sanctuary cities for documents showing cooperation between local law enforcement and federal immigration authorities and set tighter timetables on the adjudication of “priority” immigration court cases. Even if this appears incongruous in spirit, it is not technically inconsistent in practice.

The IER itself has shown a split personality in INA enforcement priorities, which include a U.S. worker protection initiative. Last December, the IER settled a much different lawsuit against Crop Production Services Inc., a Loveland, Colorado, headquartered agricultural product retailer and advice consultant, for alleged discrimination against three U.S. citizens in favor of temporary foreign visa workers. The company had allegedly refused to employ U.S. citizens as seasonal technicians in their El Campo, Texas, outpost, and imposed more burdensome background check and drug testing requirements on U.S. citizens to discourage them from seeking employment. However, just as Title VII of the Civil Rights Act of 1964 and its state and local counterparts prohibit all forms of race discrimination, the INA equally applies to U.S. citizens and foreign nationals.

Only time will tell whether the Omnicare settlement is a rare outlier, or the beginning of a broader trend where the IER, and other agencies tasked with enforcing employment discrimination laws, select initiatives that implement these laws based on a variety of priorities and perspectives. It would not be the first time that employers feel like they must navigate a tightrope to stay in compliance and fulfill their legal obligations.

A copy of Omnicare’s settlement agreement with the DOJ can be viewed here.

Alexander V. Batoff is an associate at Obermayer Rebmann Maxwell & Hippel LLP in Philadelphia.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

About the Authors

Alex Batoff

Alexander V. Batoff


Alex primarily focuses his practice on counseling management in all aspects of labor relations and employment law. He counsels clients on state and federal employment laws, including discipline, termination, reductions-in-force, document retention,...

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