The corporate office of 7-Eleven told its 5,600 franchise owners of the chain's convenience stores on Thursday that it was requiring an internal review of personnel files after federal authorities seized 14 stores in New York and Virginia this week that employed undocumented workers in a "modern-day plantation system."
The owners of the 7-Eleven franchise stores allegedly forced undocumented workers with stolen identities to work 100 hours a week for a fraction of their wages, according to federal authorities.
Ten 7-Eleven stores in New York and four in Virginia were seized on Monday as part of the federal investigation that found the workers from Pakistan were given identities stolen from children and the deceased, according to federal prosecutor Loretta E. Lynch.
Farrukh Baig, his wife Bushra, and seven others were charged with fraud, identity theft and concealing illegal immigrants to work in their stores. Court records said they employed illegal workers since 2000, forced them to work long hours for less pay and required them to live in residences owned and controlled by the store owners.
In the letter to franchise owners sent on Thursday, 7-Eleven's chief operating officer and executive vice president, Darren Rebelez, explained that field consultants and market managers will conduct reviews on site to evaluate compliance.
"This letter is to remind you of the required I-9 compliance steps and to outline some of the consequences for failure to comply. These requirements are mandatory for all franchisees," wrote Rebelez. "Failure to comply will result in serious consequences, including the possible termination of your franchise agreement."
Incorrect or incomplete I-9 forms could result in fines from governmental agencies of $110 to $1,100 per I-9 form, Rebelez told franchise owners.
"More importantly, you could face criminal liability if you are found to have knowingly employed individuals who are not authorized or eligible to work in the United States," he said.
Franchise owners have until the end of June to conduct internal I-9 reviews and field consultants will visit stores starting July 1, Rebelez said.
"If any I-9 is determined to be missing or to have substantive violations, we will issue you a breach notice requiring an appropriate cure of the deficiencies," Rebelez wrote. "Failure to cure any such breach within the required time period could result in the termination of your Franchise Agreement."
Based in Dallas and established in 1927, 7-Eleven calls itself the world's largest convenience store chain with more than 50,250 stores in 16 countries. There are 10,100 stores in North America.
Rebelez said the company acknowledges franchise owners are the "sole employer of all associates in your stores, and we are not attempting to interfere with your employment relationship or control how you hire, fire or manage your employees."
"However, we have a critical need to protect the integrity and reputation of the 7-Eleven Brand, a right to insist upon your compliance with the Franchise Agreement, and to ensure that all franchised stores are being operated in a lawful manner," he wrote.
The government's investigation, which is one of the largest criminal immigrant employment investigations ever by the Department of Justice and the Department of Homeland Security, began when several of the employees tipped off police to the longstanding practice, authorities said.
Federal authorities located at least 18 undocumented workers on Monday and said they could face deportation.
"These defendants ruthlessly exploited their immigrant employees, stealing their wages and requiring them to live in unregulated boarding houses, in effect creating a modern-day plantation system," Lynch said.
The federal probe has widened to 40 locations in seven states, including Florida, Illinois, Maryland, Michigan, New Jersey, Pennsylvania and New York.
A spokeswoman for 7-Eleven previously said it "will take aggressive actions to audit the employment status of all its franchisees' employees" and pledged full cooperation with the federal probe.
After initial court appearances by eight of the nine defendants, they were ordered to be held without bail. Their next court appearances are scheduled for July 15.