Last week Scott Judy, Editor-in-Chief of Southeast Construction magazine, sent me a tweet about a courthouse project in Jacksonsville, Florida where a large number of fake IDs surfaced on the site.   As reported in the article, Federal officials discovered about 100 fake documents after looking at the paperwork collected by the city.  The mayor was expected to forward the list of 100 illegal workers to the contractor, Turner Construction, last week and demand that the badges badges be revoked for those workers.  

Scott then raised an interesting question: Can the owner use the issue of job-site fake IDs to consider the builder in breach of contract?  I hate to be trumpeting the same tune, but again the answer to this problem is, “It depends.” Here is why:

• As you might expect, the parties’ contract will largely dictate the rights and obligations of each party, whether it relates to payment, building specifications, delays, insurance requirements, and even compliance with federal, state and local law. So whether an owner has a cause of action for breach of contract for the presence and employment of undocumented workers on the site will largely depend on the exact terms of the parties’ contract.
• The applicable laws and regulations will often dictate additional obligations or provisions that must be included in the parties’ contract. For example, in 2007 Tennessee enacted a new requirement that "no person may enter into a contract to supply goods or services to the state or other state entities without first attesting in writing that the person will not knowingly utiluze the services of illegal immigrants in the performance of the work…." Tenn. Code 12-4-124.  Practically speaking, this means the contractor working on a public job is required to certify in writing that it will not use undocumented workers.  It must also require that its subcontractor sign the same type of attestation clause.  These statutory obligations are written into the parties’ contract.
• Even if there is not a contractual requirement, there may be some statute or regulation that gives rise to liability for a contractors use and employment of undocumented workers. For instance, the same Tennessee statute cited above carries a penalty of debarment (i.e., prohibited from submitted a bid on any public project for period of one year) for any knowing violation of the law.  This statute applies ever wheter the requirement is not written into the parties’ contract.

One way for a contractor to protect itself in these types of circumstances is to include a blended attestation-indemnification clause, such as:

The subcontractor, identified above, does hereby attest, certify, warrant, and assure that the subcontractor shall not knowingly utilize the services of an illegal immigrant in the performance of the Work and shall not knowingly utilize the services of any sub-subcontractor who will utilize the services of an illegal immigrant in the performance of the Work.  Subcontractor further agrees to indemnify and hold harmless the contractor for any violation of this provision.

Applying these principals to the situation in Florida, it will be interesting to watch how the contractor responds to the allegations raised. It appears from the article that "the city’s contract with Turner prohibits knowingly hiring undocumented workers and Turner’s agreements with subcontractors contain the same language."  Whether there is a breach of those contracts will depend largely on; (a) the express language of agreement, (b) the "intent" requirement of the statute, (c) the knowledge of the parties involved, and (d) the immigration status of the workers.