Volume 37, Issue 6, June 2002


        Court Refuses Backpay to Illegal Immigrants
by David Barron

If an illegal alien charges that he has been unfairly terminated from his job, does he have a right to damages and lost wages for the job to which he was not entitled in the first place? In a recent Supreme Court case involving a Mexican national terminated after participating in union activities, the answer was no. Although the decision may reduce the likelihood of employee-related lawsuits from undocumented workers over the short term, it is probably not the final answer to such issues. 

Hoffman Plastic Compounds Inc. vs. the NCRB
The 5-4 decision overturned a $67,000 back pay award that the National Labor Relations Board (NLRB) had given to Jose Castro, a Mexican national. In 1989, Castro’s employer, Hoffman Plastics, selected four employees, including Castro, for layoff “in order to rid itself of known union supporters.” The NLRB found that the layoffs violated the National Labor Relations Act and ordered back pay and other damages. But at a compliance hearing to determine the amount of back pay, Castro admitted that he had obtained his job by presenting fraudulent documents, including a friend’s birth certificate from Texas, and that he had never been authorized legally to work in the United States. Castro’s acts constituted violations of federal immigration law, which makes it a crime for an unauthorized alien to subvert the employer-verification system by tendering fraudulent documents. 
The Supreme Court determined that allowing the NLRB to award back pay to illegal aliens would encourage the successful evasion of apprehension by immigration authorities, condone prior violations of the immigration laws and encourage future violations. 

“Awarding back pay to illegal aliens runs counter to policies underlying federal immigration laws,” Chief Justice William H. Rehnquist wrote in the Court’s opinion. The majority felt that the NLRB’s other sanctions, including cease-and-desist orders, constituted sufficient punitive measures without the back pay. 

In the dissenting opinion, Justice Stephen Breyer disagreed, claiming that the back pay “helps to deter activity that both labor laws and immigration laws seek to prevent.” He felt the NLRB sanctions were not enough to deter employers from exploiting illegal workers, a sentiment echoed by former NLRB chairperson William B. Gould IV. “This decision has ominous implications for the enforcement of labor laws across the board,” he said in a statement. “It will bring into our borders more exploitable low-wage workers.” The decision reverses NLRB rulings dating back to 1995 that allowed back pay for undocumented workers terminated for union activities.

The minority opinion has other supporters. Several states with large immigrant populations, including Arizona, California, Massachusetts and New York, had urged the Supreme Court to uphold the appeals decision that sided with the worker. The Bush administration has argued that without the threat of punishment for employers, some of the undocumented workers in the United States might be exploited. The number of illegals currently is estimated at seven million ( an estimated 4 percent of the urban work-force) with high concentrations in labor intensive and low-wage jobs such as meat-packing, garment making, construction and manufacturing. 

Implications for Employers
Although federal courts have held that labor laws should apply to undocumented workers wrongfully fired or demoted, this decision effectively eliminates any right to monetary relief. While the decision arose in the context of an appeal from the NLRB and related to the discrimination of employees for union activities, the Supreme Court’s logic will most likely be expanded to include discrimination cases under federal civil rights laws and other areas of recovery.

However, it will probably be years before the ruling is fully interpreted by lower courts. In the meantime, employers should avoid interpreting the decision too broadly, particularly in suits involving wage and hour disputes. Judges in state and federal court in California have already taken a narrow view of the Supreme Court decision, which was cited unsuccessfully by employers in one case involving a taco-stand worker who was paid $2 an hour for seven years as well as in a class-action lawsuit by supermarket janitors seeking to collect minimum wages for years of work. In both cases, the judge decided that the plaintiffs’ immigrant status was not relevant and that the workers were entitled to the missing minimum wage. 

The U.S. Labor Department also issued a strong statement about the case in late April, insisting that wage, hour and safety regulations will be enforced “vigorously” for all workers. However the statement did not address the question of what remedies undocumented workers have if they are fired for asserting these protections. The NLRB and the Labor Department later issued similar statements to the effect that they will try to protect employees from retaliatory discharge to the extent possible. It is the extent that is now in question.

Judging from the controversy generated from the decision, there is little question that this ruling will lead to efforts to change federal law in this regard. Unfortunately for employers, efforts to “fix” the law tend to snowball and lead to legislation that goes far beyond the original purpose. Accordingly, the apparent benefit of the decision may be short-lived. Until then, however, this decision most likely will serve as a deterrent to employee lawsuits filed by undocumented workers and legal counsel representing them, as no significant damages will be available. 


David Barron is an attorney at Alaniz and Schraeder in Houston. He represents employers in employment-related matters.


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