Carlyle Group Goes After Undocumented Immigrants; What's Their Motive?

Dunkin' Donuts is getting "tough on illegals," but forcing out small operators may be the ultimate goal.

Immigration advocates met at the corporate headquarters of the Carlyle Group in New York City on April 22 to protest the global private equity firm’s targeting of low-wage immigrant workers at two popular U.S. food chains, Dunkin’ Donuts and Baskin-Robbins.

As part of a consortium of private equity firms including Bain Capital Partners and Thomas H. Lee Partners, Carlyle is part-owner of Dunkin’ Brands, the company that owns the two chains. Individual stores are independently owned franchises, with franchisees paying the parent company a fee or a share of their profits.

Carlyle has directed franchisees to institute the Social Security Administration’s E-Verify system, ostensibly to ensure that their employees are legally allowed to work in the United States. Under the system, employers submit workers’ Social Security numbers and are notified if the numbers are valid or invalid.

But the agency’s database has been shown to be unreliable. According to the National Immigration Law Center, foreign-born U.S. citizens have a 10% chance of receiving so-called “tentative nonconfirmation” notices in error. Legal immigrants who are not U.S. citizens face even higher odds of receiving false nonconfirmation notices. There have also been reports of businesses failing to comply with some of the E-Verify program’s rules, for example, illegally failing to allow workers to contest a tentative nonconfirmation notice.

Carlyle has pursued aggressive tactics against franchise owners who aren’t complying with their directive to use the E-Verify system. Last spring Carlyle made news when it sued a Dunkin’ Donuts franchise in West Concord, Mass., claiming that the franchise “knowingly accepted false identification documents” in order to employ immigrant workers.

Perhaps for tactical reasons, the campaign against Carlyle has emphasized the plight of naturalized and legal immigrant workers whose Social Security numbers are erroneously tagged by E-Verify—rather than the larger, more fraught question of defending undocumented immigrant workers. But a recent New York Daily News op-ed by a Dunkin’ Donuts franchisee suggests that Carlyle’s motive may have more to do with corporate strategy than it does with immigrant workers, undocumented or otherwise. In order to compete with Starbucks, Carlyle has set a goal of tripling the number of Dunkin’ Donuts stores by 2016. Doing so will require forcing out small franchise owners in favor of multi-store owners who have the resources to expand rapidly. Carlyle’s pursuit of profit is at the expense of small franchise owners—many of whom are themselves immigrants—and of low-wage immigrant workers—documented and undocumented—who stand to lose their livelihoods because of the E-Verify system.

The April protests in New York are part of a larger nationwide advocacy movement for immigrant workers spearheaded by a new group, the Low-Wage Immigrant Worker Coalition. In addition to the New York action, the coalition has staged protests in Los Angeles, Boston, Washington, D.C., Chicago, and Milwaukee to focus attention on Carlyle’s crackdown on immigrant workers.

Visit the Low-Wage Immigrant Worker Coalition’s website for more information on the Carlyle campaign.

Ryan Lynch is a Dollars & Sense intern.