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In two simultaneously issued decisions, a New York appellate court ruled
that injured undocumented workers were not entitled to recover
lost-earnings damages based on the wages they may have earned in the
United States. Instead, the court limited the workers’ recovery for
lost earnings to the wages they would have been able to earn in their
countries of origin, since such an award that is “based on a prevailing
foreign wage would not offend any federal policy.”
Both cases, Balbuena v. IDR Realty LLC, et al.,
and Sanango v. East 16th St. Housing Corp., et al., involved
plaintiffs who were seriously injured while working on construction
sites. During proceedings in the cases, plaintiffs Gorgonio Balbuena
and Arcenio Sanango each admitted that he was not authorized to
work in the U.S.
Sanango sued under New York Labor Law Section 240,
which provides that an owner or contractor may be liable when a worker
is injured on a construction site due to a failure to provide proper
safety protection. A jury awarded Sanango over $2 million for pain and
suffering, and $96,000 for past and future lost earnings based on what
he would have been able to earn in the U.S. had he not been injured.
Balbuena also sued for damages for his workplace
injury under New York state tort law. In his case, the trial court held
that his status as an undocumented worker did not preclude him from
seeking damages under state tort law, including compensation for lost
wages (see “N.Y. Court
Rules That Undocumented Workers Are Entitled to Damages for Lost Wages
in State Tort Actions,”
Immigrants’ Rights Update, July 15, 2003, p. 12).
Both decisions were appealed to the same state
appellate court. Reviewing the cases, the court held that after the
U.S. Supreme Court’s decision in Hoffman Plastic Compounds, Inc. v.
NRLB, 535 U.S. 137 (2002), it is no longer viable to argue that the
employer sanctions provisions of the Immigration Reform and Control Act
of 1986 (IRCA) do not preempt state laws that authorize lost-wages
awards to undocumented workers who are found to have been treated
unjustly. The court acknowledged that workers are entitled to recover
damages for pain and suffering and for medical expenses regardless of
their immigration status. However, relying on Hoffman, the court
found that “a remedy based on the wages the plaintiffs might have earned
unlawfully in the United States ‘would unduly trench upon explicit
statutory prohibitions critical to federal immigration policy, as
expressed in IRCA.’” Sanango, 2004 N.Y. App. Div. LEXIS 15637 at
*3, quoting Hoffman, 535 U.S. at 151.
The court found the Hoffman decision
controlling for three reasons. First, it found that the cases involve
the IRCA’s interplay with state tort law in the same way Hoffman
involved the IRCA’s interplay with federal labor law. By rendering this
finding, the court concluded that an award of damages based on the U.S.
wages Sanango and Balbuena might have earned unlawfully “condones prior
violations of the immigration laws.” Sanango, 2004 N.Y. App. Div.
LEXIS 15637 at *9, quoting Hoffman, 535 U.S. at 151. Second, the
court found that an award of damages for lost U.S. wages in these cases
would, like the Hoffman back pay award, encourage future
violations of the IRCA, since mitigation of damages is a requirement
under both federal labor law and New York tort law. Finally, the court
argued that if the U.S. Supreme Court found that a co-equal federal
statute such as the National Labor Relations Act, under which the action
that resulted in the Hoffman decision was brought, must give way
to the IRCA, it follows that a state law, which pursuant to the U.S.
Constitution’s Supremacy Clause is subordinate to any federal policy,
must give way to the IRCA as well.
In its decision, the N.Y. appellate court cited a
recent lower court opinion, Majlinger v. Cassino Corp., which
found that the Hoffman decision should be read to preclude
undocumented workers from recovering wages they would have earned in the
U.S. (see “N.Y. Court, Relying on Hoffman, Denies Worker’s Lost
Earnings Award,” IRU,
Nov. 24, 2003, p. 9). It is important to note, however, that in another
recent decision, Assif Asgar-Ali v. Hilton Hotel Corp, a New York
court explicitly rejected Majlinger (see “New York Court Rejects
Discovery of Workers’ Immigration Status in Workers’ Compensation Claim,
IRU, Dec. 22, 2004, p. 5). Therefore, the issue of whether Hoffman
requires courts to find that the IRCA preempts New York state laws is
far from resolved.
Despite its ruling that Sanango and Balbuena are
not entitled to recover lost earnings damages based on the wages they
may have earned in the U.S, the appellate court also held that the IRCA
did not require a total bar to recovery of lost wages for the two
plaintiffs. It based this finding on the theory that “an award based on
a prevailing foreign wage would not offend any federal policy.”
Balbuena, 2004 N.Y. App. Div. LEXIS 15627 *2. The court therefore
remanded both cases to afford plaintiffs an opportunity to prove the
wages that, but for their injuries, they would have been able to earn in
their home countries.
These New York appellate court decisions represent
a very troubling expansion of Hoffman, one that severely limits
injured immigrant workers’ access to civil tort remedies. As the
dissenting opinion in Hoffman argues, punishing undocumented
workers in a way that provides an unfair advantage to an employer who
has violated the IRCA does not further, but instead contravenes, the
statute’s purpose and intent. Moreover, the position that the IRCA
preempts N.Y. labor law remedies is one that is extreme and that has
been rejected by other courts. The appellate court’s attempt to
mitigate the impact of its decisions by finding that the plaintiffs can
recover lost wages in relation to what they might have earned in their
home countries is equally troubling, as it rewards unscrupulous
employers who use the fact that their employees are undocumented to
intimidate them out of asserting their workplace rights.
Balbuena
v. IDR Realty LLC, et al., 787 N.Y.S.2d 35 (2004);
Sanango v. East 16th St. Housing Corp.,
2004 N.Y. App. Div. LEXIS 15637 (Dec. 28, 2004).
By
Anita Sinha, NILC staff
attorney
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