Defeating the Wage Loss Claims of Undocumented Aliens by Way of the Supreme Court's Hoffman Plastic Decision
January 2, 2008
Troy D. Hoyt- Chicago
Imagine you are sued for personal injuries arising out of an accident involving a product you manufactured. Not only is the plaintiff seeking recovery for his medical expenses and pain and suffering, but a substantial portion of his claimed damages is comprised of the wage loss he suffered following the accident, which wage loss may continue for the rest of his projected work life. Based on information received in discovery, you suspect the plaintiff may have been employed illegally due to his immigration status. You attempt to obtain additional information to confirm your suspicion that the plaintiff is an undocumented alien. However, plaintiff’s counsel rebuffs your efforts by arguing that the plaintiff’s immigration status is irrelevant and that your efforts to find out about his client’s status is nothing more than improper harassment.
You may suspect that if it is a crime for a plaintiff to work in the United States, his damages should not include an award for wage loss based on work he would have performed illegally in the United States. Moreover, you may also suspect that discovery that may lead to the elimination of a significant portion of a plaintiff’s damages claim against your company is absolutely relevant. The U.S. Supreme Court’s reasoning in Hoffman Plastics Compounds, Inc. v. NLRB, 535 U.S. 137 (2002), may offer you ammunition in pursuing both of these arguments.
In this 2002 Fair Labor Standards Act decision, the Supreme Court laid a blueprint for defeating claims for past and future wage loss by undocumented aliens. Not only does the rationale of this case provide a basis for motions seeking partial summary judgment to eliminate wage-loss claims, but it can also be used to combat the ill-founded argument often made by plaintiff’s counsel that discovery regarding the immigration status of a plaintiff is improper and irrelevant.
Hoffman Plastic
Hoffman Plastic holds that undocumented workers not legally authorized to work in the United States are not entitled to back pay, even if the worker was subject to unfair labor practices committed by an employer. In violation of the National Labor Relations Act (NLRA), Hoffman Plastic Compounds, Inc. (Hoffman), the employer, allegedly terminated the employment of several workers who had engaged in union activities. During the course of the litigation, one of the employees admitted that he was an undocumented alien, and that unknown to Hoffman, he had used false documentation to obtain his job. On this basis, the Administrative Law Judge denied reinstatement and back pay with respect to this employee, despite a finding that the employer had violated the NLRA. On appeal, the National Labor Relations Board (NLRB) upheld the decision to deny reinstatement, but concluded that the employee was eligible for back pay. The D.C. Circuit Court of Appeals affirmed the NLRB decision.
In the Hoffman Plastic decision, the U.S. Supreme Court reversed the Court of Appeals on the issue of back pay, finding that the employee “was never lawfully entitled to be present or employed in the United States,” and therefore was not entitled to back pay for work not yet performed.
Because this decision addresses such a specific area (i.e., back pay in a Fair Labor Standards Act (FSLA) context) a personal injury defendant is probably not well advised to merely assert that an undocumented alien is not entitled to lost wages, cite to Hoffman Plastic and be done. However, there is found within the case a conceptual framework for a solid argument to the effect that such a claim is not supported in the law. In its rawest form, the argument based on a Hoffman Plastic rationale would look like this:
• Congress enacted the Immigration Reform and Control Act (IRCA), a comprehensive scheme that made combating the employment of illegal aliens in the United States central to the policy of immigration law.
• The IRCA makes it a crime to obtain a job without proper documentation; therefore, awarding lost wages to an illegal alien is awarding lost wages for a job obtained in the first instance by a criminal fraud. Indeed, the Hoffman Plastic Court states “[w]e find, however, that awarding back pay to illegal aliens runs counter to policies underlying IRCA, ...” Id. at 149. Moreover, in observing that non-conformity with the IRCA is a criminal offense, the Court notes, “[t]here is no reason to think that Congress nonetheless intended to permit backpay where, but for an employer’s unfair labor practices, an alien-employee would have remained in the United States illegally, and continued to work illegally, all the while successfully evading apprehension by immigration authorities.”
• A lost wage claim remedy (in most personal injury cases) is founded upon a state’s tort law system, which is subject to federal preemption in certain instances. Federal statutes and regulations can preempt state law in the following circumstances: (1) the language of the statute or regulation expressly preempts state law; (2) Congress implemented a comprehensive regulatory scheme in a given area, removing the entire field from state law; or (3) state law as applied conflicts with federal law. Sprietsma v. Mercury Marine, 537 U.S. 51, 64 (2002).
• With respect to immigration and the ability of an alien to lawfully work, Congress implemented a comprehensive scheme concerning immigration. Hence, consistent with the holding in Hoffman Plastic, when a state’s tort law system and its chosen remedy encroaches upon a federal statute, such as the IRCA, the state law must yield. Moreover, to award lost wages to an undocumented alien would encourage the successful evasion of apprehension by immigration authorities, condone prior violations of the immigration laws, and encourage future violations.
• Finally, the undocumented alien plaintiff cannot mitigate damages, a duty the state’s tort law presumably requires, without triggering new IRCA violations, either by tendering false documents to employers or by finding employers willing to ignore IRCA and hire illegal workers.
A Peripheral But Complimentary Strand of Law
Additionally, there is relevant authority outside of the NLRB/FLSA realm that is consistent with the Hoffman Plastic rationale in terms of avoiding wage claims by undocumented aliens. For example, Egbuna v. Time-Life Libraries, 153 F.3d 184 (4th Cir. 1998) involved a wrongful termination in violation of Title VII, in which an alien whose visa had expired was allegedly discriminated against because he corroborated another employee’s sexual harassment claims. The court there noted that an employee was entitled to remedies provided by Title VII only upon a successful showing that the applicant was qualified for employment. Moreover, when the applicant was an alien, being qualified was not determined by capacity to perform the job, but rather by authorization for employment in this country. The court, pointing to the IRCA, based its decision on the fact that it is unlawful for employers to hire, recruit or refer for a fee all unauthorized aliens.
With reference to awarding the plaintiff the remedies he sought under Title VII, the court stated “[t]o do so would sanction the formation of a statutorily declared illegal relationship, expose [defendant] to civil and criminal penalties, and illogically create an entitlement simply because [plaintiff] applied for a job despite his illegal presence in this country and despite his having been statutorily disqualified from employment in the United States. In this instance, to rule [plaintiff] was entitled to the position he sought and to order [defendant] to hire an undocumented alien would nullify IRCA, which declares it illegal to hire or to continue to employ unauthorized aliens.” Id. at 188.
The conceptual framework for a strong argument to eliminate the wage loss component of an undocumented-alien-plaintiff is surely found within Hoffman Plastic and complimentary decisions such as Egbuna. It is certainly worth the effort to pursue this line of inquiry, whether at the discovery stage or subsequently, in a dispositive motion.
For more information, email Troy Hoyt at troy.hoyt@hklaw.com or call toll free, 1-888-688-8500.
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