Monday, June 29, 2009

A Hoffman Exception?

NLRB The Ninth Circuit recently enforced an NLRB order approving a settlement that required an employer to pay liquidated damages to undocumented workers fired in violation of the NLRA--notwithstanding Hoffman Plastic's prohibition against NLRA backpay awards to undocumented workers. In NLRB v. C&C Roofing Supply, the NLRB issued a complaint alleging, among other things, that the employer unlawfully terminated 20 workers.  The parties entered into a settlement in which the employer agreed to reinstate the fired workers and pay them liquidated damages.  Later, the employer said that it had evidence that many of the workers were undocumented and refused to comply with the agreement.   There was no real issue with reinstatement; if the employer can show the workers were undocumented, it can't reinstate them without violated IRCA, the federal immigration law.  More interesting was the liquidated damages question.

The court, agreeing with the Board, held that liquidated damages were different from backpay because the former damages were not predicated on a worker's ability to gain lawful employment; thus, liquidated damages pose no conflict with IRCA, as was the case in Hoffman.  In short, according to the court:

Unlike reinstatement and backpay, liquidated damages do not pose an irreconcilable conflict with ICRA, because they are not predicated on an employee’s availability for work. Rather, they are based on the company’s assessment that paying these sums was preferable to further litigation.

C&C can adhere to the terms of its bargained-for agreement without violating federal or state immigration laws. The Board has a procedure for just this situation: upon receiving proper proof of a person’s unauthorized status, the Board will absolve C&C of the obligation to rehire that person, in accordance the Board’s obligation to take into account the requirements of federal immigration law. See Sure-Tan, 467 U.S. at 902-03. Although C&C therefore cannot be ordered to reinstate workers who may not lawfully be employed in the United States, it must still comply with the Settlement in all other respects, including the requirements that it cease further NLRA violations and that it pay the liquidated sums to which it agreed. Having agreed to these sums and waived its opportunity to dispute the amounts owed to each individual, C&C cannot now escape the existing regulatory process for the settlement’s enforcement.

The court also rejected a silly Laurel Baye-like argument that the Board improperly delegated to the General Counsel the responsibility to seek enforcement in federal appellate court.  As the court noted, the Board did this originally in 1955--not in the 2007 memo delegating other responsibilities on the eve of the Board losing all but two members.

-JH

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