As the issue of discrepancies between Social Security numbers (SSNs) listed on workers’ W-2 (Wage and Tax Statement) reports and those that the Social Security Administration (SSA) has in its records continues to impact millions of low-wage workers, two unions have won arbitration decisions against employers that fired workers after the employers received information from the SSA indicating that information provided by workers did not match the SSA’s records. 

The first decision is an important victory for janitors in California as well as for many other contingent workers throughout the United States who work in industries with multiple contractors.  The decision in Service Performance Corp. and Service Employees International Union, Local 1877, is especially important because it deals not only with the “no-match” letters the SSA sends to employers and employees to inform them of discrepancies between information on W‑2s and the SSA’s records, but it also addresses an employer’s use of the SSA’s Employee Verification Service (EVS).

In this decision, the arbitrator concluded that the employer’s actions had violated the “just cause” provision of the collective bargaining agreement between the workers and their employer.  The arbitrator ordered the reinstatement with full back pay and benefits of three workers whom the employer fired after receiving “no-match” information by calling the EVS. 

The employer, Service Performance Corp. (SPC), had acquired the maintenance contract for a building in Oakland, Calif., where the three workers were permanent employees.  When the contract was transferred from the previous maintenance company, SPC required all the building’s maintenance workers to reverify their employment eligibility by completing new I‑9 employment eligibility verification forms and presenting documents to prove their employment eligibility, despite the fact that they had already completed the I‑9 process when the previous company hired them.  Though the employer accepted the documents proffered by the workers, it took the extra step of verifying the SSNs of all new hires by calling an SSA-provided toll-free number.  When SPC provided the name, SSN, date of birth, and gender of each of the workers, the EVS notified it that the information for three of the workers did not match the SSA’s records.  The company then notified the workers that they could not work until they cleared up these discrepancies. 

In deciding in favor of the workers, however, the arbitrator held that the employer was under “no obligation . . . , either by terms of the Collective Bargaining Agreement, or by terms of the law, . . . to call the [SSA] to determine whether the social security numbers on the I-9 Forms matched the records of the [SSA].”  The arbitrator rejected the employer’s argument that these workers were “new hires” subject to a probationary period and not subject to the “just cause” provisions of the collective bargaining agreement, and held that SPC is a successor employer that is “specifically prohibited from treating permanent employees as ‘new hires.’”  Therefore, the arbitrator held, the employer’s conduct was indeed subject to the “just cause” provisions of the agreement.

Most importantly, the arbitrator held that SSA no-match information does not establish whether an employee is legally eligible to work in the U.S., since many factors could cause a “no-match.”  The arbitrator wrote:  “When this Employer called the [SSA] and discovered that the three Grievants in the present case had no-match social security numbers, it knew nothing more about their legal status to work in the United States than it did before it made the call to the [SSA]. . . . Upon completion of the I-9 Form, the Employer had no reason to believe that the three employees were not legally permitted to work in the United States.” 

As a successor employer, SPC had two options for verifying whether the building’s workers were authorized to be employed in the U.S.  Either it could have acquired the workers’ previously completed I‑9 forms from the previous employer, or it could have required workers to complete new I‑9 forms.  “Once those employees had filled out the new I‑9 Forms, assuming they provided documents that were facially appropriate and did not cause the Employer to have any suspicion that they were fraudulent or improper, the Employer then complied with its obligation and no further action should have been taken,” the arbitrator held.  By not allowing these three workers to work once they completed I-9 forms without raising any suspicion with respect to the legitimacy of their documentation, SPC violated the terms of the collective bargaining agreement, the arbitrator held. 

Finally, the arbitrator held that if a court were to determine that these three workers were not entitled to back pay because of their immigration status, the employer would have to pay the union an amount equivalent to the workers’ back pay as damages for breach of contract.

In the second decision, Salisbury Hotel and the New York Hotel & Motel Trades Council, AFL-CIO, Local 6, a hotel employee obtained a reinstatement order with full back pay and benefits (including seniority).  The arbitrator in this case found that there was no “just cause” for the worker’s termination and that therefore the firing violated the collective bargaining agreement between the hotel and the union.  Furthermore, the arbitrator held that receiving an SSA no-match letter regarding an employee “does not give an employer the right to take adverse action against [the] employee unless it has additional information clearly indicating that the employee’s status is that of an [undocumented worker] under law.” 

The hotel fired the worker after receiving the last of three no-match letters regarding him and providing him a leave of absence to rectify the discrepancy.  However, the arbitrator found that, under provisions of the Immigration Reform and Control Act of 1986 (IRCA), the worker was a “grandfathered” employee.  Under IRCA, an employer that hired a worker prior to Nov. 6, 1986 (the IRCA’s date of enactment) is not, with respect to that “grandfathered” employee, subject to IRCA sections 274A(a)(1) and 274A(a)(2), which prohibit employers in the U.S. from knowingly hiring undocumented workers and from continuing to employ undocumented workers.  In other words, an employer is not legally required to verify the employment eligibility of any worker it hired prior to Nov. 6, 1986.  Accordingly, the Salisbury Hotel was not obligated to complete an I‑9 form for this worker and indeed had not done so. 

The arbitrator stated, “[T]here is simply no basis to conclude that the Hotel had actual or constructive knowledge that the grievant’s status would place the Hotel in jeopardy” of employer sanctions under the IRCA.  Further, he found that a no-match letter clearly does not provide the employer with such information.

These two important arbitration decisions highlight the critical need for unions to take the plethora of no-match cases to the grievance and arbitration stages as many employers seek to distinguish their circumstances from existing arbitration decisions.  In addition, while these no-match decisions involve union members, they have an impact on the larger nonunion, low-wage immigrant worker community.  Many advocates have successfully used these arbitration decisions to educate nonunion employers about the fact that it cannot automatically be assumed that no-match information received from the SSA about a particular worker means that the worker is undocumented. 

The decision in Service Performance Corporation will be particularly helpful as we enter an era in which employers will have even more methods of verifying workers’ SSNs (see “SSA Informs Re: Plans for Verifying Social Security Numbers in 2005,” Immigrants’ Rights Update, Dec. 22, 2004, p. 6).  The decision will provide an important tool for those who advocate on behalf of immigrant workers.

Service Performance Corp. and Service Employees International Union, Local 1877, No. 04-292 (Gerald R. McKay, Jan. 12, 2005);

Salisbury Hotel and the New York Hotel & Motel Trades Council, AFL-CIO, Local6, No. 2004-112 (Elliott Shriftman, Nov. 9, 2004).

By Marielena Hincapié, NILC director of programs