Employment Authorization Verification
ARCHIVED ISSUE PAGE (LAST UPDATED OCTOBER 2010)
This Litigation Issue Page highlights lawsuits challenging government initiatives related to employment verification, including the Internet based E-Verify system and "no-match" letters issued by the Social Security Administration.
Several states and local governments have enacted laws regulating employment verification. These laws have prompted litigation, typically challenging whether they are preempted by federal law. The following cases are on our State and Local Law Enforcement Issue Page
- Arizona Contractors Assoc., Inc. v. Napolitano, 526 F. Supp. 2d 968 (D. Ariz. 2007), aff'd sub nom. Chicanos Por La Causa, Inc. v. Napolitano, 558 F.3d 856 (9th Cir. 2009), petition for cert. filed sub nom. Chamber of Commerce v. Candelaria, (July 24, 2009) (No. 09-115)
- United States v. Illinois, No. 07-3261, 2009 U.S. Dist. LEXIS 19533 (C.D. Ill. 2009)
- Gray et al. v. City of Valley Park, No. 07-00881 (E.D. Mo. Jan. 31, 2008) appeal docketed, No. 08-1681 (8th Cir. argued Dec. 10, 2008)
- Chamber of Commerce v. Henry, No. 08-109 (W.D. Okla. filed Feb. 1, 2008), appeal docketed, No. 08-6128 (10th Cir. argued May 4, 2009)
Business Groups Challenge Rule Mandating Participation in E-Verify
Chamber of Commerce v. Chertoff, No. 08-03444 (D. Md. summary judgment granted Aug. 26, 2009) appeal docketed, No. 09-2006 (4th Cir. Sept. 3, 2009)
The United States Chamber of Commerce and other business groups filed a lawsuit challenging a new USCIS rule and a June 6, 2008, executive order that require certain government contractors and subcontractors to participate in the E-Verify program. E-Verify is a voluntary Internet-based system that allows employers to attempt to verify electronically that newly hired employees are authorized to work in the United States.
Plaintiffs allege that the rule and the executive order violate IIRIRA § 402(a) which precludes the Secretary of Homeland Security from requiring participation in a pilot program, such as E-Verify. Even if the requirements imposed by the executive order and the rule are not expressly prohibited by IIRIRA, the plaintiffs allege that the requirements are not authorized by government procurement law. In addition, the requirements exceed the E-Verify program's statutory mandate and are legislative and thus, exceed the executive branch's constitutional authority. Finally, plaintiffs allege that the rule is procedurally defective because defendants failed to comply with proper notice procedures and the Regulatory Flexibility Act.
The rule requiring participation in the program originally was scheduled to go into effect January 15, 2009. DHS agreed to suspend the rule, however, to allow President Obama's Administration an opportunity to review it. On July 8, 2009, DHS announced that it intended to "push ahead with full implementation of the rule," and that the rule would go into effect in September 2009. The court rejected plaintiffs' claims and granted defendants' cross motion for summary judgment on August 26, 2009. Plaintiffs filed a notice of appeal to the Fourth Circuit and asked the district court to grant an emergency motion for an injunction pending the appeal in order to prevent the rule from going into effect on September 8. On September 4, 2009, the court denied the request for an injunction. In December 2009, the plaintiffs voluntarily dismissed the appeal to the Fourth Circuit.
- DHS Announcement Regarding Intention to Implement the Rule (July 8, 2009)
- Plaintiffs' Memorandum in Support of Summary Judgment
- Defendants' Memorandum in Support of Summary Judgment
- Court Memorandum Granting Defendants’ Cross Motion for Summary Judgment
- Plaintiffs’ Emergency Motion for an Injunction Pending Appeal
- Order Denying Motion for an Injunction Pending Appeal
Social Security No-Match Letter Litigation
The Social Security Administration (SSA) issues no-match letters when the names or Social Security numbers listed on an employee's Form W-2 do not match the SSA's records. In August 2007, DHS issued a final rule outlining employers' obligations upon receiving a no-match letter. 72 Fed. Reg. 45611 (Aug. 15, 2007). As described in detail below, several labor unions filed a lawsuit challenging the rule and the court issued a preliminary injunction preventing implementation of the rule. On July 8, 2009, DHS said that it will rescind the no-match rule.
Additional information on the no-match rule is found on the National Immigration Law Center's (NILC) website.
Social Security No-Match Rule Challenged by Labor Unions
American Federation of Labor and Congress of Industrial Organizations. v. Napolitano, No. 07- 4472 (N.D. Cal. filed Aug. 29, 2007)
Several labor unions filed suit to prevent the implementation of DHS' final rule regarding employers who receive Social Security no-match letters. The rule, published in the Federal Register on August 15, 2007, had an effective date of September 14, 2007. Safe-Harbor Procedures for Employers Who Receive a No-Match Letter, 72 Fed. Reg. 45611 (Aug. 15, 2007). Days after filing suit, on August 31, 2007, the district court granted a temporary restraining order (TRO) enjoining defendants from "giving any effect or otherwise taking any action to implement" the new rule.
Several chambers of commerce and other business groups moved to intervene as plaintiffs in this case pursuant to Federal Rule of Civil Procedure 24(b). The court granted their unopposed motion on September 11, 2007.
On October 10, 2007, the court granted a preliminary injunction enjoining the government from enforcing the Social Security no-match rule. The court held that relief was appropriate because plaintiffs raised serious questions about whether 1) the rule is arbitrary and capricious because DHS failed to supply a reasoned analysis for its new position that a no-match letter is sufficient, by itself, to put an employer on notice of an employee's unauthorized status; 2) DHS exceeded its authority by interpreting the Immigration Reform and Control Act's (IRCA) anti-discrimination provision and 3) DHS violated the Regulatory Flexibility Act by not conducting a final flexibility analysis.
On October 28, 2008, DHS published a supplemental final rule, see 73 Fed. Reg 63843-67 (Oct. 28, 2008). According to the National Immigration Law Center (NILC), the supplemental final rule includes additional legal analysis and a Final Regulatory Flexibility Analysis, but essentially re-issued the August 2007 final rule "without substantive change." NILC states that the issuance of the final supplemental rule will not impact the injunction blocking the rule until the court rules to dissolve the injunction or determines the legality of the rule.
According to DHS, the supplemental rule clarified the "safe harbor" steps that employers can take upon receipt of a no-match letter, as described in INA § 274A.
On July 8, 2009, DHS announced that it plans to rescind the 2007 No-Match rule. Thereafter, DHS filed an unopposed motion to stay proceedings until the rule is formally rescinded.
- Motion to Intervene (Sept. 14, 2007)
- Court Order Granting Preliminary Injunction (Oct. 10, 2007)
- Government Motion to Stay Proceedings Pending New Rulemaking (Nov. 23, 2007)
- Government Motion to Vacate Court's Preliminary Injunction and for Summary Judgment
- DHS Announcement Regarding Decision to Rescind the Rule (July 8, 2009)
Ninth Circuit: No-Match Letter Not "Constructive Knowledge;" Does Not Resolve Challenge To Safe Harbor Rule
Aramark Facility Services v. SEIU, No. 06-56662, 2008 U.S. App. LEXIS 12704 (9th Cir. Jun. 16, 2008).
In a lawsuit filed by a labor union against an employer, the Ninth Circuit held that the SSA's no-match letter and the employees' failure to meet a short deadline to resolve the discrepancy did not put the employer on constructive notice that it was employing undocumented workers.
The Service Employees International Union (SEIU) sued Aramark after the company terminated 33 of its employees. The company had received no-match letters from the SSA and gave 48 employees three days to correct the mismatches. When 33 employees did not comply, Aramark terminated them. An arbitrator awarded backpay and reinstatement to the terminated employees, but a California district court vacated the award, reasoning that it violated public policy. SEIU appealed.
On appeal, the court found that the no-match letters themselves could not put the employer on notice that any particular employee was undocumented. The court noted that the purpose of the letters was not immigration-related and that SSA specifically told employers that the letter itself does not provide any information about immigration status. In addition, the court found that the fired employees' reactions to the no-match letters and to the employer's directive to the employees following receipt of the letters did not amount to constructive notice. After receiving the no-match letters, the employer sent letters to the employees directing them to go to the SSA office to correct the discrepancy and, within three days, provide verification that a new Social Security card was being processed; failure to comply with the directive would result in termination. This "extremely demanding policy" and the employees' failure to comply could not give rise to constructive notice.
The court compared the facts of the case to the safe harbor regulations. Specifically, the Court noted that even the new regulations, which "are currently subject to a preliminary injunction, would not treat the no-match letter itself as creating constructive knowledge of an immigration violation." Further, the court commented that the employer's policy of requiring employees to provide verification within three days, "was significantly more accelerated" than the policy envisioned under the safe harbor regulations, which gives the employer 90 days to resolve the discrepancy. Pursuant to the Ninth Circuit’s order, the original arbitration awarded was subsequently reinstated.
Importantly, the events that gave rise to this case took place in 2003, prior to DHS' promulgation of the new rule regarding no-match letters and the safe harbor procedures ("safe harbor regulations"), 72 Fed. Reg. 45611 (Aug. 15, 2007), and the proposed amendments to this rule, 73 Fed. Reg. 15944 (Mar. 26, 2008).
- Supplemental Final Rule on Safe Harbor Procedures for Employers Who Receive No Match Letters (Oct. 28, 2008).
- DHS Final Rule Regarding Employers Who Receive No-Match Letter (Aug. 15, 2007)