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michael-l-fox-smallThe United States Court of Appeals for the Second Circuit, in Palma v. National Labor Relations Board, Docket No. 12-1199 (2013), recently held that the Congressional intent in the Immigration Reform Control Act of 1986 (“IRCA”) prevents an award of back-pay to undocumented workers in a labor dispute.

The Second Circuit in making its ruling relied not only on its interpretation of the IRCA, but also cited the U.S. Supreme Court’s decision in Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002). In Hoffman, the National Labor Relations Board ruled that the employer had to provide back-pay to undocumented employees. The Supreme Court later reversed that decision, holding that the Board’s remedy of back-pay was required to yield to a federal statute or policy outside of the Board’s competence or authority. That federal statute – IRCA; the federal policy – immigration policy. Furthermore, in Hoffman the Supreme Court noted that back-pay had been awarded to an undocumented alien who had never been legally authorized to work in the United States. The Supreme Court further recognized that Federal immigration policy as expressed by Congress in the IRCA prohibits such an award.

While there was some discussion about whether it should matter if the undocumented worker presented false documentation to an employer, or whether an employer knew from the start that the worker was undocumented, at the end of the day the Second Circuit determined that an undocumented worker – regardless of how they obtained employment – is unable to obtain back-pay as an award in labor disputes. The Courts speak to an award of back-pay being an option for those workers who are lawfully present within, and entitled to be employed in the United States. The Second Circuit has held, as has the Supreme Court, that there are other sanctions available to courts to discourage employers from hiring undocumented workers, such that an award of back-pay is not a needed sanction. Awards of back-pay, it has been determined, run afoul of Congress’ action in IRCA.

Even though conditional reinstatement of undocumented workers was remanded to the Board for further evaluation in Palma, it would be difficult to imagine a scenario where the undocumented workers could be reinstated conditionally to their employment if they are not in the process of obtaining immigration documentation in the United States, since the employment of the undocumented worker itself would run afoul of the Congressional intent in the IRCA.

Finally, it is important to note that although these holdings by the U.S. Supreme Court and the Second Circuit Court of Appeals concern awards under the National Labor Relations Act, because the Courts base their decisions on the Congressional intent in the IRCA – and given the fact that Congress controls immigration policy for the United States and the several states – it is hard to imagine that in any future disputes concerning provisions of the Fair Labor Standards Act (“FLSA”) or the New York State Labor Law, where plaintiffs/petitioners request back-pay as an award for damages in the dispute, that the Federal court or State court hearing the matter would not be constrained to reach the same decision as in Palma and Hoffman.

However, it is important that if you believe you have a claim under any of the relevant statutes, that you speak with a labor and employment attorney immediately so that your matter can be fully evaluated. If you are an immigrant who is either documented or undocumented, you should also consider speaking with an attorney who practices immigration law to better understand your rights, obligations and options.

Michael L. Fox is Senior Counsel and Managing attorney on our Litigation Team. He can be reached by calling 845-778-2121 toll free or 845-778-2121 and by email.

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