Illegal Worker Wins Retaliation Lawsuit

Illegal Worker Wins Retaliation Lawsuit


Most employers fully understand that it is unlawful to employ undocumented workers. One area of the law that has not been clear, however, is what rights, if any, undocumented workers have in the workplace. In 2002, the United States Supreme Court offered some guidance that seemed to favor employers. However, a recent case in the Ninth Circuit (the federal circuit that includes Oregon) highlights the fact that serious risks exist for employers who employ illegal aliens.

In Hoffman Plastics Compound, Inc. v. National Labor Relations Board, a Southern California factory worker and illegal alien was unlawfully fired for union activity. In a 5-4 decision, the Supreme Court held that undocumented workers who are discharged in retaliation for protected activity in violation of the National Labor Relations Act (“NLRA”) are not entitled to a remedy of back pay for periods they would have worked if they had not been terminated. The Court reasoned that awarding such damages for periods in which work would have been illegal would condone illegal immigration. May employers viewed Hoffman as a victory—and it was, to a degree.

A recent district court case in the Ninth Circuit has brought the very narrow application of Hoffman into focus. Macan Singh came to the United States in May 1995 after his uncle, owner of C.D.&R’s Oil Inc., promised him a job, an education and an eventual business partnership. Instead, he found himself sleeping on the floor of his uncle’s home and working twelve hours a day, seven days a week, without pay, at the company’s gas stations. When Singh asked his uncle for money to send home to a sick relative, his uncle fired him. He then filed a wage claim under the Fair Labor Standards Act (“FLSA”), won $70,000 and agreed with his uncle on a $40,000 settlement. That, however, was only the beginning. Hours later, Singh’s uncle called an immigration officer and reported that Singh was illegal. Singh was arrested the following day and detained for 14 months.

Singh then sued his former employer claiming that his uncle’s reporting to the INS was retaliation for the FLSA suit and seeking damages and an injunction prohibiting similar retaliation by employers. The uncle filed a motion to dismiss Singh’s claim, arguing that the decision in Hoffman precluded any recovery. The court, however, rejected this argument, noting that Hoffman does not hold that an undocumented worker is barred from recovering wages for work actually performed (as opposed to work that would have been performed but unlawful termination, as in Hoffman), nor does it preclude other traditional remedies. Singh v. Jutla & C.D. & R. Oil, Inc., 214 F. Supp. 2d 1056 (N.D. Cal. 2002). The court noted that in dealing with claims by undocumented workers, courts must balance competing economic incentives: If the FLSA does not cover illegal workers, employers have an incentive to hire them and run the risk of sanctions under the Immigration Reform and Control Act; if the FLSA does cover illegal workers, it provides a marginal incentive for those workers to come to the United States. The court found that the “balance tips sharply in favor of permitting this cause of action” to go forward.

And go forward it did. In late December 2003, Singh’s case reached a federal jury. The jury found that his former employer violated the FLSA by reporting Singh for filing his wage claim and ordered the employer to pay $200,000.00 in compensatory and punitive damages.

The lesson from Singh is clear: An employer must not engage in any type of retaliation against workers who pursue their legal rights, regardless of whether the employer believes it can get away with the action because the worker is undocumented.