In what the concurring judge and a member of the NLRB called a "somewhat peculiar" outcome, a divided D.C. Circuit recently held that undocumented workers are considered "employees" under the National Labor Relations Act (NLRA), even though it is unlawful for companies to employ such workers.

The dispute in Agri Processor Co., Inc. v. NLRB, - F.3d -, 2008 U.S. App. LEXIS 101 (D.C. Cir., Jan. 04, 2008), stemmed from a September 2005 election in which Company's employees voted to join the United Food and Commercial Workers Union. Following the election, the Company ran the employees' social security numbers through the Social Security Administration's online database and discovered that the majority of the numbers were either nonexistent or belonged to other persons. Concluding that the employees were most likely unauthorized workers, the Company refused to bargain with the Union, which prompted the union to file a unfair labor practice charge under sections 8(a)(1) and (5) of the NLRA. Subsequently, the NLRB's General Counsel issued a complaint against Agri Processor, a hearing was held, and the ALJ assigned to the matter sustained the charged violations and ordered the Company to bargain with the Union. The Company thereafter filed exceptions to the ALJ's decision.

A unanimous NLRB ultimately affirmed the ALJ's decision and ordered the Company to bargain with the Union. The Company petitioned the D.C. Circuit for review of the decision, arguing that, since the Immigration Reform and Control Act of 1986 (IRCA) made it illegal to employ undocumented workers, they could not be "employees" protected under the NLRA. The Company also argued that the undocumented workers could not belong to the same bargaining unit as the legal workers, and therefore the bargaining unit created by the NLRB was improper. The NLRB cross-petitioned for enforcement of its decision.

The D.C. Circuit sided with the NLRB and granted its cross-petition for enforcement. In addressing the Company's first argument, the court noted that the NLRA's definition of an employee was quite "expansive," containing "only a few limited exceptions." Further, in Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984), the Supreme Court held that the NLRA's definition of employee plainly included undocumented aliens, concluding that,

"[a]pplication of the NLRA [to illegal aliens] helps to assure that the wages and employment conditions of lawful residents are not adversely affected by the competition of illegal alien employees who are not subject to the standard terms of employment. If an employer realizes that there will be no advantage under the NLRA in preferring illegal aliens to legal resident workers, any incentive to hire such illegal aliens is correspondingly lessened." Id. at 893-94.

While Sure-Tan was decided prior to the enactment of the IRCA, the Agri Processor court found that nothing in the text of the IRCA either expressly or implicitly altered the NLRA's definition of "employee." The court further pointed to the legislative history of the IRCA, which clearly showed that the IRCA was not intended to limit the scope of the term "employee" in the NLRA.

The court further addressed Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002), in which the Supreme Court held that the IRCA barred the NLRB from awarding backpay to undocumented aliens. Agri Processors argued that Hoffman Plasticfurther supported that undocumented workers were not employees under the NLRA. The court rejected Agri Processors' argument, noting that the Hoffman Plastic Court only addressed the remedies that the NLRB may grant to undocumented workers under the NLRA, and did not hold that undocumented aliens were altogether unprotected under the NLRA.

With respect to the Company's second argument, the majority found that the Company failed to show that the interests of undocumented workers "as employees" differed in any way from those of legal workers. Although undocumented workers may ultimately be penalized for violating immigration laws, their wages, benefits, skills, duties, working conditions and supervisors were identical to those of the lawful workers.

Judge Kavanaugh dissented, arguing that the Supreme Court's holding Sure-Tan was tied to the then-existing immigration laws, which did not prohibit employment of illegal aliens. Once those laws changed, however, and it became illegal for undocumented workers to be employed, such workers no longer were "employees" under the NLRA. Judge Kavanaugh further disagreed with the majority's interpretation of Hoffman Plastic, contending that the case did not somehow reaffirm Sure-Tan, as he believed both the majority opinion and the NLRB implied. Rather, the Hoffman Court explicitly stated that it was not addressing the "employee" issue.

Agri Processor highlights gaps in our current immigration laws, and demonstrates the need for reform. That said, given the court's reasoning in Agri-Processor, and that Seventh, Ninth, Eleventh Circuits similarly have found thatSure-Tan continues to control after the passage of the IRCA, it is unlikely that such reform will happen in the courts. Rather, as the majority noted, "the company must make [its] argument to Congress." Accordingly, until the laws are reformed, employers should continue to ensure that they properly evaluate whether their workers are lawfully permitted to work in the United States.

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