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The United States Supreme Court has ruled that federal immigration policies
prohibit the National Labor Relations Board (NLRB) from awarding undocumented
workers back pay under the provisions of the National Labor Relations Act (NLRA).
Under the NLRA, back pay is a remedy available to workers who are fired for
engaging in union activities. The NLRB awards back pay as a means of compensating
workers for the wages they would have earned had the employer not fired them.
The 5 to 4 decision in the case of Hoffman Plastic Compounds, Inc. v. National
Labor Relations Board has tremendous ramifications for the rights of low-wage
immigrant workers across the country and for the labor movement in general.
Procedural Background.
In January 1989, Hoffman Plastic Compounds fired José Castro and
several of his coworkers after they began a union organizing campaign at Hoffman's
plant. The United Rubber, Cork, Linoleum, and Plastic Workers of America, AFL-CIO,
filed charges with the NLRB on behalf of four workers. In January 1992, the
NLRB found that Hoffman had violated the NLRA when it terminated the workers
"in order to rid itself of known union supporters" and ordered Hoffman to (1)
cease and desist from future violations, (2) post a notice at the plant for
its employees regarding the NLRB's order, and (3) offer reinstatement and back
pay to the workers it had retaliated against. As a result, the NLRB held compliance
proceedings—i.e., an administrative hearing before an administrative law
judge (ALJ)—to determine the amount of back pay Hoffman owed each of the
workers. During the hearing, Castro admitted to being undocumented and to having
used false documents to get his job at the Hoffman plant.
As a result of this testimony, in June 1993, the ALJ held that Castro was not
entitled to back pay because the Immigration Reform and Control Act of 1986
(IRCA) made it unlawful for employers to knowingly hire undocumented workers
and for workers to use false documents to obtain work. The ALJ's decision was
appealed, and the NLRB ultimately held in September 1998 that Castro was indeed
entitled to back pay but that the amount he was owed would be limited to what
he would have earned in the period between the date he was discriminatorily
fired and the date that the employer discovered that Castro was undocumented.
Subsequently, Hoffman appealed that decision to the Court of Appeals for the
District of Columbia Circuit and then petitioned the court for a rehearing en
banc (i.e., a hearing before all of the justices on the court of appeals, rather
than a panel of three judges), but the court affirmed the NLRB's decision to
award the limited back pay. Hoffman appealed once again, and the Supreme Court
has now reversed the NLRB's decision, finding that no award of back pay may
be made to Castro.
The Court's Reasoning.
In reaching its decision, the Court, in an opinion written by Chief
Justice Rhenquist, first relied on previous decisions in holding that the NLRB's
authority to award back pay to a worker who had engaged in "serious illegal
conduct" is limited, particularly when the NLRB's decision might conflict with
federal laws or policies. The Court noted that in enacting IRCA, Congress set
up a comprehensive employment eligibility verification system aimed at combating
the hiring of undocumented workers in the U.S., which became central to the
policy of immigration law.
The Court distinguished Hoffman from its pre-IRCA decision in Sure-Tan,
Inc. v. NLRB, 467 U.S. 883 (1984), in which it affirmed the NLRB's award
of reinstatement and back pay for undocumented workers who had been reported
to the INS in retaliation for their union activities. In Sure-Tan, the
Court had held that undocumented workers were protected by the NLRA and were
entitled to remedies, although it limited back pay for those workers who were
"unavailable," since some of the workers had already been deported from the
U.S. The Court held that the NLRB's remedies in Sure-Tan did not conflict
with the immigration laws at the time, whereas now the legal landscape has changed
dramatically because of the enactment of IRCA's provisions.
The Court held that the NLRB's decision in the Hoffman case is not entitled
to the deference that administrative agencies normally get for their expertise
in enforcing the laws under their jurisdiction. The Court found that the NLRB's
authority had to yield to the policies set forth by IRCA, which requires that
employers verify the employment eligibility of each new employee hired. Under
this employment eligibility verification system, it is illegal for an employer
to hire a worker who is unable to establish that he or she is eligible to work
in the U.S. The Court noted that if an employer hires someone who later turns
out to be undocumented or whose work authorization expires, the employer must
fire that worker. On the other hand, IRCA provides that an employer who "knowingly"
hires an undocumented worker is subject to fines and potential criminal prosecution
under IRCA's employer sanctions provisions. Finally, the immigration laws also
make it a crime for an employee to use fraudulent documents to try to comply
with the employment eligibility verification process. The Court concluded that
awarding back pay to undocumented workers runs counter to IRCA, since "it is
impossible for an undocumented alien to obtain employment in the United States
without some party directly contravening explicit Congressional policies."
The Court rejected the arguments of Justice Breyer (who wrote the minority
decision) and of the NLRB that in awarding back pay to Castro the NLRB had "reasonably
accommodated" the federal policies enunciated in both the NLRA and IRCA, because
back pay helps deter violations of both labor and immigration laws. In fact,
as Justice Breyer noted, "As all the relevant agencies (including the
Department of Justice) have told us, the National Labor Relations Board's limited
backpay order will not interfere with the implementation of immigration
policy" (emphasis in original). The NLRB further asserted that in tolling Castro's
back pay award at the time when the employer discovered his wrongdoing, the
award was tailored so as not to conflict with IRCA while still enforcing the
remedies available to persons found, under the provisions of the NLRA, to have
been discriminated against. As the NLRB noted, while IRCA criminalized the use
of false documents, it did not explicitly take back pay or other remedies away
from undocumented workers. However, because IRCA makes it a crime for an individual
to use false documents to get a job, the Court majority found that there is
no reason to believe that Congress would allow that worker to be awarded back
pay. The majority concluded that, "[f]ar from 'accommodating' IRCA, the [NLRB]'s
position, recognizing employer misconduct but discounting the misconduct of
illegal alien employees, subverts it. Indeed, awarding backpay in a case like
this not only trivializes the immigration laws, it also condones future violations."
The majority dismissed Justice Breyer's argument that awarding back pay to
undocumented workers is actually in line with Congress's intent as set forth
in IRCA's legislative history. Justice Breyer pointed to a congressional committee
report which states that in enacting IRCA Congress did not intend to "undermine
or diminish in any way labor protections in existing law, or . . . limit the
power of federal or state labor relations boards . . . to remedy unfair practices
committed against undocumented employees." He also contended that denying back
pay to undocumented workers will only serve as an incentive for employers to
hire undocumented workers, since the cost of labor violations will be less if
a back pay remedy is not available to workers who are wronged. Without responding
to this argument, the majority asserted that the NLRB's lack of authority to
award back pay to undocumented workers "does not mean that employers get off
scott-free." The majority pointed to the fact that in Hoffman the NLRB
also imposed other "significant sanctions," such as the cease and desist order
and the requirement that Hoffman post a notice at its plant. In holding that
the NLRB does not have the authority to award back pay to undocumented workers,
the Court concluded that, given "the practical workings of the immigration laws,
any 'perceived deficienc[y] in the NLRA's existing remedial arsenal' must be
'addressed by congressional action,' not the courts."
Legal Ramifications of
Hoffman. The Supreme Court's holding in Hoffman that
undocumented workers are no longer entitled to back pay under the NLRA has a
direct impact on all employees—not just those who are undocumented—trying
to organize a union or to collectively improve their workplace conditions. Implicit
in the Court's decision is that undocumented workers continue to be "employees"
under the NLRA, which provides workers with the right to form a union. However,
if an undocumented worker is fired for organizing a union, then that worker
is not entitled to back pay. Because the NLRA protects not only workers engaged
in union organizing but also those who engage in "concerted activity" to improve
conditions at their workplace, the decision will have a chilling effect on workers
who seek to complain about violations such as failure to pay minimum wage or
overtime, or about health and safety hazards.
Part of the Court's reasoning in denying back pay to undocumented workers is
that under the NLRA the back pay award is "remedial" in nature and the NLRB
is prohibited from imposing punitive remedies against employers. In other words,
back pay under the NLRA is to compensate the worker who has been discriminated
against for the harm he or she has suffered. The Court's position is that an
undocumented worker who is in the U.S. unlawfully and cannot obtain work without
violating the immigration laws cannot technically be "harmed." The Court's reasoning
may have repercussions for back pay as a remedy provided under other statutes
such as Title VII of the Civil Rights Act of 1964 (Title VII), which protects
workers from discrimination based on race, religion, national origin, or gender
(which includes sexual harassment). Because courts have traditionally looked
to similar statutory schemes in analyzing an employment statute such as Title
VII, future courts will look to the Supreme Court's holding in Hoffman
to analyze back pay-related provisions in employment and labor statutes other
than the NLRA. In October 1998, the Equal Employment Opportunity Commission
(EEOC) issued a guidance on remedies available to undocumented workers under
Title VII, the Age Discrimination in Employment Act, and the Americans with
Disabilities Act, specifically relying on the NLRB's position prior to Hoffman.
However, because these statutes do have additional remedies such as compensatory
and punitive damages that can be assessed against employers, only the back pay
remedy should be affected by this Hoffman decision. Administrative agencies
such as the EEOC may also be reviewing their positions based on the Hoffman
decision.
Despite the Court's decision in Hoffman with respect to an undocumented
worker's right to back pay under the NLRA, this decision does not affect the
many other basic employment rights undocumented workers have, such as protection
from national origin (including language-related) or racial discrimination and
sexual harassment, and the right to worker's compensation benefits and safe
work environments. As stated above, however, Hoffman potentially limits
the remedies available to undocumented workers under the laws providing for
these rights. Moreover, it should be noted that the Supreme Court's decision
does not affect the authority of courts or administrative agencies to order
employers that have violated state or federal minimum wage and overtime laws
to pay undocumented workers for unpaid wages for work already performed.
Hoffman Plastic Compounds, Inc. v. National Labor Relations Board,
535
U.S. __ , No. 00-1595 (Mar. 27, 2002).
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