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A little more than a year ago, the U.S. Supreme Court in Hoffman Plastic Compounds Inc. v. National Labor Relations Board, 122 S. Ct. 1275 (2002), held that illegal aliens are not entitled to receive backpay for employment actions that were found to have violated the National Labor Relations Act, as amended (NLRA), 29 U.S.C. 151 et seq. The Court’s decision immediately raised questions about whether backpay (compensation for work not performed) and other remedies would remain available to undocumented workers under other federal and state discrimination laws. Despite a flurry of activity designed to minimize the impact of Hoffman, it seems clear the decision likely precludes the award of backpay to undocumented workers in all state and federal employment cases. Although undocumented workers have been considered “employees” for purposes of coverage of the nation’s labor and employment laws for some time, the remedies available to such unauthorized workers has been a subject of dispute. See e.g., Sure-Tan Inc. v. National Labor Relations Board, 467 U.S. 883 (1984) (NLRA protects undocumented workers); Patel v. Quality Inn South, 846 F.2d 700 (11th Cir. 1988) (Fair Labor Standards Act covers undocumented workers). Though there are considerable legal restrictions on the hiring of illegal immigrants in the United States, the economic reality is that an estimated 8 million such persons hold jobs in this country. Undocumented employees are not legally allowed to work in the United States, but they often do. When these employees find work they are covered under discrimination laws, if for no other reason than not to offer them such protection would create a “subclass” of people who would be completely at the mercy of their employers. Sure-Tan, 467 U.S. at 892. Whether illegal aliens are entitled to all remedies available to legally authorized employees has been the focus of most of the litigation in the employment law context. The tension is perhaps greatest when, as in the case of Hoffman, the undocumented worker is hired without the employer’s knowledge of unauthorized status. Hoffman narrowly considered the issue of an employee who flouted federal immigration policy. The applicability of the NLRA to the situation was not a central focus of the high court’s decision in Hoffman. The Court discussed National Labor Relations Board precedents only to provide a historical background; indeed, there was no dispute that the employer had committed unfair labor practices when it laid off a number of employees, including Jose Castro (the undocumented worker who sought backpay), in response to a union organizing drive. The specific issue before the Court in Hoffman was whether federal immigration policy, as expressed in the Immigration Reform and Control Act of 1986, 8 U.S.C. 1324a et seq., foreclosed the board from awarding backpay as a remedy when the employer unknowingly hired an undocumented worker. PROHIBITED CONDUCT The types of conduct prohibited by the Immigration Reform and Control Act provided the foundation for the Court’s ruling. First, the act prohibits employers from knowingly hiring illegal aliens. See id. � 1324a(a)(1). Second, if an employer unknowingly hires an unauthorized alien, the employer is compelled to discharge the worker. See Immigration Reform and Control Act, � 1324a(a)(2). Third, it is unlawful for an alien to use or attempt to use any “forged, counterfeit, altered, or falsely made document” or “any document lawfully issued to or with respect to a person other than the possessor” in order to obtain a job. Id. � 1324c(a)(1)-(3). The Court noted that under the Immigration Reform and Control Act, it is impossible for an illegal alien to obtain employment in the United States without either the employer or alien violating immigration policy. Also, the Court noted that the unauthorized employee cannot mitigate damages, something required under the NLRA (and other employment statutes), without violating the immigration act. 122 S. Ct. at 1284. If it is the employee who violates the immigration act, then that unauthorized alien did not have a right to have the job in the first place and it would be counter to these policies “to award backpay to an illegal alien for years of work not performed, for wages that could not lawfully have been earned, and for a job obtained in the first instance by a criminal fraud.” Id. at 1283. The Court’s ruling in Hoffman caused an immediate reassessment of enforcement of other employment laws when the employee in question was the one who violated the Immigration Reform and Control Act. But compare Singh v. Jutla, 214 F. Supp. 2d 1056, 1061 (N.D. Calif. 2002) (Hoffman preclusion unavailable when employer knowingly hired unauthorized worker). Federal and state authorities scrambled to assess the impact the decision would have on the laws within their domain, but courts by and large read the decision as having an impact only on the narrow issue of an undocumented employee who obtains employment by fraudulent means. That the holding in Hoffman would have an impact beyond the National Labor Relations Board’s remedial powers and extend to other anti-discrimination authorities became immediately apparent. Within a few months of the decision, the Equal Employment Opportunity Commission, the federal agency responsible for enforcing most other federal employment laws (such as the Americans With Disabilities Act, Title VII of the 1964 Civil Rights Act and the Family Medical Leave Act), rescinded its 1999 enforcement guidance regarding the payment of backpay and other remedies to illegal aliens. That 1999 guidance concluded backpay and other remedies were available to undocumented aliens. In its rescission, the commission reiterated its position that undocumented aliens were protected under federal discrimination laws, but since the prior guidance had relied on board decisions to reach its conclusions, the agency believed it needed to re-examine its policy. In an effort to contain further the impact Hoffman might have on its enforcement role, the agency stated that it would not on its own initiative inquire into an employee’s immigration status. See Equal Employment Opportunity Commission’s Rescission of Enforcement Guidance on Remedies Available to Undocumented Workers Under Federal Employment Discrimination Laws, June 28, 2002, available at www.eeoc.gov/policy/index. Since the rescission of the enforcement guidance in June 2002, the commission has not issued any other guidance on this issue. Presumably, this is because the agency views Hoffman, and its reliance on the Immigration Reform and Control Act, as precluding the award of backpay in cases under all other federal discrimination laws. This remains to be seen. CALIFORNIA DREAMIN’? At least one state has taken steps to curb the impact of Hoffman. The state of California, ever at the forefront of employee rights legislation, hurriedly enacted into law a reaffirmation that all state employment law remedies, except for reinstatement, would remain available to all employees regardless of immigration status. Senate Bill 1818 (2002) (Gloria Romero), Calif. Lab. Code Section 1171.5. The new legislation deems “irrelevant” immigration status as it applies to employer liability. The new law also prohibits inquiry into a person’s immigration status in “proceedings or discovery” to enforce the state discrimination laws except where the person seeking to make the inquiry has shown by clear and convincing evidence that such an inquiry is necessary to comply with federal immigration law. There are, however, no penalty or enforcement provisions of this new legislation even though draft versions contemplated penalties. Although California passed this legislation to attempt to separate itself from Hoffman, it apparently recognizes the supremacy of federal immigration policy under the Immigration Reform and Control Act. The new legislation doubtless will provide endless opportunities to test the viability of Hoffman at the state law level. However, the careful wording of the law underscores California’s belief that Hoffman eventually will be extended to preclude backpay under state employment laws. The new California law has yet to be tested, but an analysis of it illustrates a position not materially different from that taken by the Equal Employment Opportunity Commission: Undocumented workers are still covered by state discrimination laws and that the state itself will not inquire into a person’s status. This latter purpose is undoubtedly to allay, somewhat, the general sense of fear and intimidation such workers feel about reporting misconduct to governmental authorities. UNKNOWN ROAD AHEAD The true impact of Hoffman remains to be seen. The biggest area of dispute most likely will be the ability of employers to inquire into an employee’s immigration status after an employment claim has been filed in an effort to reduce potential damages. Consistent with the narrow nature of Hoffman, courts generally have taken the position such discovery is inappropriate and irrelevant in claims for unpaid wages, as opposed to backpay. See Zeng Liu v. Donna Karan International Inc., 207 F. Supp. 2d 191, 192 (S.D.N.Y. 2002). Such inquiries may be considered more appropriate in the compliance stage of the labor and employment proceeding. The Supreme Court has sanctioned the use of “after-acquired” evidence of employee misconduct (in the case of Hoffman, fraudulently obtaining employment in the U.S.) to curtail damages under federal employment law. See McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995). Until this issue becomes settled, defense counsel would have a duty to make such inquiries. The Supreme Court’s decision in Hoffman likely precludes payment of backpay under federal and state employment laws to an undocumented worker who violates federal immigration law. The ruling does not appear to extend to other remedies and does not have an impact on employment laws’ applicability to undocumented workers. The biggest unresolved issue will be under what circumstances employers will be allowed to inquire into an employee’s immigration status when defending an employment claim. Mark Theodore, a partner in the Los Angeles office of New York’s Proskauer Rose (www.proskauer.com), represents companies of all sizes in all aspects of labor and employment law. He can be reached at [email protected]. If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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