Hoffman Plastics Compounds, Inc. v. NLRB: D.C. Circuit Court Affirms the Right of Undocumented Workers to Receive Back Pay

IMMIGRANTS & EMPLOYMENT

Immigrants' Employment Rights and Remedies

Hoffman Plastic Compounds, Inc. v. NLRB: D.C. Circuit Court affirms the right of undocumented workers to receive back pay
Immigrants' Rights Update, Vol. 15, No. 1, Feb. 28, 2001

(NOTE: The D.C. Circuit Court's decision was superseded by the U.S. Supreme Court, which ruled that unauthorized workers are not entitled to back pay. Please see "U.S. Supreme Court Bars Undocumented Worker From Receiving Backpay Remedy For Unlawful Firing.")

In a decision anxiously awaited by advocates for immigrant workers, the D.C. Circuit Court of Appeals has rejected an employer's argument that undocumented workers are not entitled to back pay and has held that back pay can be tolled to the date when the employer obtained "after-acquired" evidence of a worker's undocumented status. (After-acquired evidence is evidence obtained by an employer subsequent to the employer's taking the action against an employee that is being challenged.)

At issue in this case were multiple unfair labor practices committed by Hoffman Plastic Compounds, Inc., against workers who were attempting to organize a union. Among other things, Hoffman discharged known union supporters. After the National Labor Relations Board (NLRB) found Hoffman to be in violation of the workers' rights under the National Labor Relations Act (NLRA) to organize a union, a dispute arose over how much back pay was owed to the illegally fired workers. During a compliance hearing, when one of the fired workers admitted to having used a borrowed birth certificate to complete the employment eligibility verification requirement when he was hired, the administrative law judge (ALJ) denied him reinstatement and back pay. While the NLRB agreed that it could not order the reinstatement of an undocumented worker, since the Immigration Reform and Control Act of 1986 (IRCA) prohibits employers from knowingly hiring undocumented workers, it disagreed with the ALJ with respect to back pay. Since IRCA also prohibits workers from using false documents, the NLRB followed its well-established rule regarding after-acquired evidence, which dictates that back pay owed to a worker who has been illegally discriminated against, but who has also engaged in wrongful conduct, must be tolled to the date when the employer first discovered the wrongful conduct.

Hoffman challenged that award of back pay, arguing that under both Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984), and IRCA, undocumented workers do not have a right to back pay because they are not entitled to be present and employed in the United States. A divided panel of the D.C. Circuit Court of Appeals affirmed the NLRB's decision ordering limited back pay. See 208 F.3d 229 (D.C. Cir. 2000). Hoffman's petition for an en banc rehearing was subsequently granted, and the panel's opinion was vacated.

The D.C. Circuit, persuaded by the reasoning of the Second and Ninth Circuits on this same issue, held that the Supreme Court in Sure-Tan denied back pay only to those undocumented workers who had left the country after signing voluntary departures. Furthermore, it held that back pay was denied only so that workers would not have an incentive to reenter the U.S. unlawfully in order to obtain their back pay award. The D.C. Circuit concluded that under Sure-Tan and subsequent case law, undocumented workers are as entitled to back pay as documented workers are so long as they remain in the U.S. and the back pay is tailored to their actual loss. The court also held that IRCA's legislative history makes clear that Congress did not intend to undermine the employment and labor rights of undocumented workers, and it found that the NLRB had properly accommodated the provisions of both the NLRA and IRCA in ordering a limited back pay award in the Hoffman case.

Following the Supreme Court's guidance in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995), and ABF Freight System v. NLRB, 510 U.S. 317 (1994), in which the Court states that the after-acquired evidence rule should be used to help the NLRB balance its responsibility of remedying and deterring unfair labor practices against an employee's misconduct, the D.C. Circuit found that it was entirely appropriate to award limited back pay to the fired undocumented worker. Moreover, the court pointed out that Hoffman itself could have mitigated its back pay liability by making a bona fide reinstatement offer before it discovered this worker was undocumented, since the immigration regulations do not require an employer to verify the employment eligibility of an individual reinstated after an unlawful discharge.

Hoffman Plastic Compounds, Inc. v. NLRB, __F3d__, No. 98-1570 (D.C. Cir. Jan. 16, 2001).