Can Discharged Undocumented Workers Receive Backpay and Reinstatement?

[Editor’s Note: Today’s blog is authored by Bruce E. Buchanan, an Attorney at the Nashville office of Siskind Susser, P.C.]

In a recent decision, the Second Circuit Court of Appeals returned to the National Labor Relations Board (NLRB) the issue of whether unlawfully discharged undocumented workers may receive “conditional reinstatement.”

The case arose when five employees of Mezonos Maven Bakery (“Mezonos”) were discharged. They filed a charge with the NLRB, claiming they were engaged in protected activities under the National Labor Relations Act. Mezonos did not dispute this issue; rather, it asserted they were not entitled to any remedy – backpay or reinstatement because they were not authorized to work in the U.S.

The issue of backpay for unlawfully discharged undocumented workers was decided by the U.S. Supreme Court in Hoffman Plastic Compounds v. NLRB (2002), which held undocumented workers were not entitled to backpay after their discharge. Of course, the NLRB and the Court deferred to the Supreme Court’s decision.  Though, amazingly, the Administrative Law Judge (ALJ) who heard the case did not do so based on a distinction of whether the employer was aware of their undocumented status (a meaningless distinction under labor law).

Mezonos asserted it offered to reinstate five employees if they produced valid work authorization documents to which none of the five employees did.

Although the ALJ found the workers were entitled to “conditional reinstatement”, the NLRB, in its 2011 compliance decision, did not discuss the issue because it was not in the ALJ’s order and no one appealed that issue. The Court stated the Hoffman Plastic Court did not directly deal with the issue of reinstatement but did not preclude such if the employee submitted valid documentation.

The Court concluded that due to the unusual circumstances of the case – the ALJ’s Decision and Order being in conflict and the lack of consideration and discussion by the NLRB of conditional reinstatement, the case should be returned to the NLRB TO determine whether conditional reinstatement is appropriate, and/or whether the issues of waiver and estoppel apply.

Interestingly, the outcome for undocumented workers is different if the issue is unpaid wages and/or underpaid wages while employed under the Fair Labor Standards Act. A most recent example of this outcome was the Eighth Circuit Court of Appeals’ decision in Lucas v. Jerusalem Café (July 2013).

A few attorneys have already questioned the practical effects of the Court’s decision in Mezonos.  If conditional reinstatement is allowed, then the five workers may well present fraudulent documentation to receive reinstatement.    Cases like this create quandaries for employers.  By offering reinstatement to those employees, employers reduce the risk of paying more back wages. Yet, this strategy is inherently at odds with immigration law compliance.  Although the concept of conditional reinstatement takes into account the changing nature of individual work status (i.e.: because of adjustment of status or deferred action), it could also be a vehicle for undocumented individuals to present fraudulent documents, which would become a nightmare for employers.

While E-Verify might be the answer to flag workers using invalid documents, the question of whether employers can reverify reinstated employees is another issue this case fails to address.  In my opinion, employers should not be initiating a case in E-Verify for employees who have been reinstated because reinstated employees are more akin to a recall from layoff, rather than a re-hire. To my knowledge, the E-Verify manual does not address whether it is permissible for employers to initiate cases for employees who have been reinstated. I would be interested in anyone else’s thoughts on this situation.

The safest approach may be to offer conditional reinstatement while still being vigilant about immigration compliance.  This requires employers to carefully inspect Section 2 documentation and ask employees for clarification whenever there are obvious discrepancies on the documents.  As long as the employer does not “knowingly” hire/employ undocumented workers, one will not be found to be in violation of immigration laws.

The decision is another instance of immigration law and labor law intersecting. It will be interesting to see which one prevails. As a former NLRB attorney and now an immigration compliance attorney, these issues are fascinating and will only become more prevalent in the future.

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Bruce E. Buchanan is an Attorney at the Nashville Office of Siskind Susser, P.C. He represents individuals and employers in all aspects of immigration law, with an emphasis on employer immigration compliance, as well as employers in employment/labor law matters. He is Past-Chair of the Tennessee Bar Association’s Immigration Law Section from 2011 to 2012 and has been the editor of the TBA’s Immigration Law Section Newsletter and the TBA’s Labor and Employment Law Section Newsletter since 2009. Mr. Buchanan also serves on the Board of Directors for the Nashville International Center for Empowerment (NICE) and the United Cerebral Palsy of Middle Tennessee and Middle Tennessee Seminole Club. He is an associate member of the Mid-Tennessee Chapter of the Associated Builders & Contractors (ABC).