Two decades ago, Mi Pueblo Food Center began modestly as a small butcher shop run by an illegal immigrant. Now, the supermarket that caters to the Latino immigrant community has grown into a popular California chain of 21 stores, including one in San Rafael.

But with growth and success have come scrutiny from federal immigration authorities and clashes with a union that wants to represent Mi Pueblo's 3,200 workers and is leading a consumer boycott.

The predicament is thorny for a family-owned firm that relies almost exclusively on Latino immigrants for its workforce and its customer base.

The company is under pressure from an ongoing immigration audit and its decision to use a controversial federal program that screens the eligibility of new employees to work in the United States.

"We are feeling what is happening to us in a way that most companies might not, because we are founded by an immigrant and depend on immigrants to survive," said Perla Rodriguez, spokeswoman for the San Jose-based company.

She said the company did not knowingly hire any illegal immigrants.

To San Jose-based United Food and Commercial Workers Local 5, which has been organizing Mi Pueblo workers around the state, the company's move to E-Verify in mid-August meant one thing only: The self-styled immigrant-friendly employer was cooperating with ICE.

The Obama administration has increasingly relied on workplace audits as an alternative to immigration raids in which agents with weapons handcuffed workers and placed them in deportation proceedings.

But the move toward the so-called "silent raids" -- which have increased from 254 to 2,736 in the past five years -- has carried unintended consequences for some employers. They have to fire workers who lack employment authorization, but they also can face the ire of labor unions.

Experts say immigration audits can cause a particular dilemma for companies that cater to immigrants.

"There's a great irony for companies who serve immigrant communities, because of the possibility that many of their customers are undocumented. They can serve them, but they're not supposed to hire them," said Aarti Kohli, an immigration policy expert at the University of California, Berkeley.

"I think sometimes community members feel, here is a company that wants us to buy their services and in return, what are they doing for us?"

In response to the audit, Mi Pueblo defended itself on the radio and in community meetings, and launched a campaign to promote immigration reform.

Mi Pueblo officials say they were "forced" to use the E-Verify program by immigration officials after the government started conducting an audit of the company's hiring records to ensure Mi Pueblo was not employing illegal immigrants.

U.S. Immigration and Customs Enforcement officials would not confirm the audit, because the agency releases information only if an investigation results in fines or criminal convictions.

ICE spokeswoman Virginia Kice said audits are usually triggered by leads or complaints from various sources and that investigators don't force companies to use E-Verify, which is a voluntary program.

The early journey of Juvenal Chavez, founder and CEO of Mi Pueblo, may mirror that of some customers and workers. A former teacher from the Mexican state of Michoacan, Chavez came to the U.S. illegally in 1984 at age 24.

He did odd jobs -- working as a janitor and bartender and washing glassware in laboratories at Stanford University. He took adult education classes to learn English, and his company says he gained legal status.

Chavez helped his brother run a small Mexican market in Redwood City. By 1991, he had saved enough to open his own butcher shop in a storefront in San Jose. Over the next decade, Chavez opened 10 more stores. In Spanish, Mi Pueblo means "my village" or "my home."

In the stores, ranchera music belts from speakers, the decor shines in bright primary colors and bilingual employees wear badges with their hometown printed below their name. Mounds of tomatillos, cilantro, fresh tortillas and Mexican baked goods are for sale.

Since 2009, Mi Pueblo has doubled the number of stores and today grosses more than $300 million annually. The San Rafael store opened in a former Circuit City on Bellam Boulevard in in 2010.

The 52-year-old Chavez, who lives in a sprawling house on the outskirts of San Jose, touts his work in helping workers achieve their version of the American Dream. Mi Pueblo runs in-house training and leadership programs for employees and awards thousands of dollars in college scholarships.

Through a company spokeswoman, Chavez declined to be interviewed, citing ongoing legal issues.

Union organizers have accused the company of wage, overtime and other violations. In the past three years, the UFCW and the International Brotherhood of Teamsters have won two court decisions against Mi Pueblo for violating labor laws. Both cases are under appeal.

The union is encouraging people not to shop at Mi Pueblo until the company stops using the E-Verify program. The union also wants ICE to stop the audit.

To defend itself, the company hired a prominent labor lawyer and an immigrant rights activist. Mi Pueblo officials also met with dozens of city officials, church leaders and immigrant advocacy groups to talk about immigration reform.

"Undocumented individuals who have demonstrated their commitment to America by being good citizens, working and paying taxes ... should be provided legal status to work and pathways to citizenship," said Julie Pace, a Phoenix lawyer representing Mi Pueblo.

But to the union that has been organizing the company's workers, such statements do not blunt the anger at the company's use of the employment verification program and the effects it could have.

"Mi Pueblo is a traitor," said UFCW organizing director Gerardo Dominguez. "When you have customers and workers who are recent immigrants from Latin America and Mexico, by checking the immigration status of prospective employees what are you telling your community? You can't give me a job, but you want my dollars?"