No Back Pay For Undocumented Alien

Co-authored by Steve Hamann

The United States Supreme Court recently shot down the National Labor Relations Board’s award of back pay to an undocumented alien who had never been legally authorized to work in the United States. Hoffman Plastic Compounds, Inc. v. National Labor Relations Board, 122 S.Ct. 1275 (March 27, 2002).

In May 1988, when Hoffman Plastics hired Mexican-born Jose Castro, he presented documents that appeared to verify his eligibility for employment in the United States. About eight months later, during a union organizing drive at Castro’s plant, he and several other known union supporters were laid off. The union subsequently filed an unfair labor practice charge against Hoffman, claiming the layoffs were unlawful. Three years later, in January 1992, the Board found that the layoffs violated the National Labor Relations Act ("Act") and ordered, among other things, that Hoffman offer reinstatement and backpay to Castro and the other affected employees.

In June 1993, during a hearing on back pay, Castro testified that he had never been legally admitted to, or authorized to work in, the United States and that he gained employment with Hoffman after submitting a birth certificate belonging to a friend who was born in the United States. Based on this testimony, the Administrative Law Judge determined that Castro could not be offered reinstatement and was not entitled to back pay.

In September 1998, four years after the ALJ’s decision (and almost ten years after Castro had been laid off), the Board reversed the ALJ and awarded back pay to Castro from the date of his layoff to the date Hoffman learned he was undocumented, 3-½ years after the layoff. Hoffman’s petition for review of the Board order was denied by the U.S. Court of Appeals for the District of Columbia Circuit. However, the Supreme Court granted certiorari.

Under the Immigration Reform and Control Act ("IRCA"), it is a crime to tender false documents to an employer to subvert the employer verification system. Accordingly, it was undisputed that Castro’s use of false documents to obtain employment with Hoffman violated IRCA. The Supreme Court was persuaded by the fact that Castro, himself, had violated the law, and that he qualified for the Board’s award only by remaining in the United States illegally. Accordingly, the Court found that an award of back pay "in a case like this not only trivializes the immigration laws, it also condones and encourages future violations." Id. at 1284.

If there is any lesson to be learned from Hoffman Plastics, it may be just a reminder of the employer’s lack of control over an agency’s timetable. Thus, not only is it crucial that the employer be right in the first instance (e.g., thoroughly checking all documentation submitted by employees regarding eligibility to work), but it must retain the ability to prove its case years later while potential back pay is building. In this instance, it was five years from the time Castro was hired until the hearing at which it was established that he was an undocumented alien who violated the IRCA.