United States District Court, D. Arizona
NEIL V. WAKE, District Judge.
Before the Court is the question whether unauthorized workers with claims for unpaid wages and overtime are precluded from recovering liquidated damages under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b). There is weight on both sides of the question, but the statutory interpretation tips in favor of recovery. The parties requested a pre-trial ruling to the extent possible. Plaintiff was previously granted summary judgment of liability for single damages, as Defendants did not present any evidence to rebut Plaintiff's motion. Defendants are not represented by counsel. A trial on damages remains, and the parties have consented to a bench trial before a Magistrate Judge after this ruling.
I. Unauthorized Workers May Recover Unpaid and Underpaid Wages Under FLSA.
Under 29 U.S.C. § 216(b),
Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.
Although § 216(b) mandates that employers who violate § 206 or § 207 "shall be liable" to affected employees in certain amounts, § 260 grants courts some discretion to determine whether to award any amount of liquidated damages up to the amount specified in § 216 based upon certain criteria.
Most courts that have addressed the issue have concluded that an employer who violates § 206 or § 207 is liable to an unauthorized worker in the amount of unpaid minimum wages and/or unpaid overtime compensation for work actually and already performed. See Lucas v. Jerusalem Cafe, LLC, 721 F.3d 927, 933 (8th Cir. 2013); Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299, 1307-08 (11th Cir. 2013); Mariche v. Phoenix Oil, No. CV-13-00550-PHX-NVW, 2014 WL 2467964, at *4 (D. Ariz. June 3, 2014). To reach that conclusion, the courts have found that an unauthorized worker's recovery under FLSA is not precluded by Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 140, 151 (2002).
In Hoffman, the Supreme Court held that the National Labor Relations Board's broad discretion to select and fashion remedies for violations of the National Labor Relations Act ("NLRA") must yield when its chosen remedy "would unduly trench upon explicit statutory prohibitions critical to federal immigration policy, as expressed in [the Immigration Reform and Control Act of 1986 ("IRCA")]." Id. at 140, 151. The Court found that IRCA made battling the employment of unauthorized aliens central to the policy of immigration law. Id. at 147. Further,
Under the ICRA regime, it is impossible for an undocumented alien to obtain employment in the United States without some party directly contravening explicit congressional policies. Either the undocumented alien tenders fraudulent identification, which subverts the cornerstone of ICRA's enforcement mechanism, or the employer knowingly hires the undocumented alien in direct contradiction of its IRCA obligations. The Board asks that we overlook this fact and allow it to award backpay to an illegal alien for years of work not performed, for wages that could not lawfully have been earned, and for a job obtained in the first instance by a criminal fraud. We find, however, that awarding backpay to illegal aliens runs counter to policies underlying IRCA, policies the Board has no authority to enforce or administer. Therefore, as we have consistently held in like circumstances, the award lies beyond the bounds of the Board's remedial discretion.
Hoffman, 535 U.S. at 148-49.
Thus, the question in Hoffman was not whether the NLRA's definition of "employee" excluded unauthorized aliens, but whether the National Labor Relations Board's remedial power extended to awarding back pay to an unauthorized alien for work not performed. Lucas, 721 F.3d at 935. Hoffman limited the Board's discretion because of "the strong policies underlying IRCA and the Board's limited power to construe statutes outside of its authority, " but it did not address a federal court's power to balance IRCA against another statute if the two statutes conflict. Rivera v. NIBCO, Inc., 364 F.3d 1057, 1068 (9th Cir. 2004). Nevertheless, lower courts remain cautious of Hoffman 's opposition to awarding backpay "for years of work not performed, for wages that could not lawfully have been earned, and for a job obtained in the first instance by a criminal fraud." See Solis v. SCA Rest. Corp., 938 F.Supp.2d 380, 400 (E.D.N.Y. 2013) (courts have found Hoffman "limited to precluding relief for work not yet performed, as opposed to work already performed").
Some courts have reconciled the FLSA and IRCA. Requiring an employer to pay his unauthorized workers minimum wages prescribed by the FLSA for work already performed does not condone or continue an immigration law violation that has already occurred; it merely ensures that the employer does not take advantage of the immigration law violation. Madeira v. Affordable Hous. Found., Inc., 469 F.3d 219, 243 (2d Cir. 2006); Lucas, 721 F.3d at 935 (8th Circuit); Lamonica, 711 F.3d at 1308 (11th Circuit). "The IRCA and FLSA together promote dignified employment conditions for those working in this country, regardless of immigration status, while firmly discouraging the employment of individuals who lack work authorization." Lucas, 721 F.3d at 936. Holding employers liable both for violation of federal immigration law and for violation of federal employment law offsets "what is perhaps the most attractive feature of unauthorized workers-their willingness to work for less than the minimum wage." Id. (internal quotation marks, citation, and alteration omitted). FLSA's coverage of unauthorized workers reduces the incentive to hire such workers and discourages illegal immigration, consistent with the purposes of the IRCA. Lamonica, 711 F.3d at 1307.
Other courts have acknowledged that the economic incentives underlying federal labor and immigration policy are in tension. "Indeed, every remedy extended to undocumented workers under the federal labor laws provides a marginal incentive for those workers to come to the United States. It is just as true, however, that every remedy denied to undocumented workers provides a marginal incentive for employers to hire those workers." Singh v. Jutla & C.D. & R's Oil, Inc., 214 F.Supp.2d 1056, 1062 (N.D. Calif. 2002); accord Jin-Ming Lin v. Chinatown Restaurant Corp., 771 F.Supp.2d 185, 189 (D. Mass. 2011) (finding "the mirror-image arguments end up canceling each other out"). In Singh, finding it necessary to "sensibly balance competing considerations, " the district court found that national labor and immigration policy was most appropriately balanced by permitting an unauthorized worker's FLSA claim to go forward. 214 F.Supp.2d at 1062.
But in Jin-Ming Lin, the district court concluded that "[a]djudication of an FLSA cause of action does not call upon the court to make a discretionary policy- or interest-balancing assessment" because courts do not have discretion to deny the award of FLSA damages when they have been proved. 771 F.Supp.2d at 190. If a plaintiff proves a FLSA violation, he is entitled to an FLSA remedy, notwithstanding any interference with immigration policy. Id. "Any remedy for an incompatibility between federal labor and immigration ...