Undocumented Equals Unpayable for Purposes of NLRB Backpay Remedy?

On August 9, 2011, the National Labor Relations Board (Board) ruled that the U.S. Supreme Court’s decision in a 2002 case compelled the Board to conclude that it did not have the authority to award backpay to undocumented workers whose National Labor Relations Act (NLRA) rights were violated—even if the employer knew that the workers were undocumented.

A blank check ready to be signed. Stock Photo - 10870092The case, Mezonos Maven Bakery, involved several employees who never presented, and the employer never requested, work-authorization documents. The employees concertedly complained about how they were being treated by a supervisor.  In response, the employer discharged the employees.  The employees then filed unfair labor practice charges with the Board.  The parties settled the charges, and as part of the settlement, the Board ordered the employer to reinstate the employees and make them whole.  The settlement, however, also allowed the employer the opportunity to establish that the employees were not entitled to offers of reinstatement and also challenge the amount of backpay due.  The employer took the position that the U.S. Supreme Court’s decision in Hoffman Plastic Compounds prevented the employer from offering reinstatement or paying backpay because the workers were undocumented. 

Hoffman involved an undocumented worker who admitted in a Board compliance hearing that he had presented fraudulent work-authorization documents to a prospective employer.  The Board held that the undocumented worker was entitled to backpay, but only from the date that his employer learned that he was an undocumented worker.  The Supreme Court ultimately reversed the Board’s decision on the basis that federal immigration policy, specifically, the Immigration Reform and Control Act (IRCA), prohibited the awarding of backpay to an undocumented worker who was never legally authorized to work in theUnited States in the first place. 

The administrative law judge in Mezonos believed that Hoffman did not apply because the Mezonos employees never presented fraudulent documents to their employer; rather because the employer violated the IRCA by not requiring the proper documentation, the employees should still be entitled to backpay.  The Board disagreed and unanimously concluded that the Supreme Court’s decision in Hoffman “broadly precludes backpay award to undocumented workers” regardless of whether the employee or the employer violated federal immigration policy. 

While the Board’s decision was unanimous, two members were dissatisfied with the result because the NLRA’s enforcement was undermined and, in their opinion, some checks on workplace abuses were removed.  These two members made clear that they would be wiling to consider any remedy within the Board’s powers that would prevent employers from discriminating against undocumented workers on the basis of NLRA-protected activity. 

The Board’s decision makes clear that the Board cannot award backpay to undocumented workers in any circumstances.  Of course, employing undocumented workers violates the IRCA, and could quickly lead to other legal trouble.  While it is important to know that if you find yourself involved in an NLRA matter with an undocumented worker, you cannot pay the worker back pay, you must take all necessary steps to ensure that you are in compliance with federal immigration policy.