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Eleventh Circuit Holds that Undocumented Workers Can Recover Back Pay for FLSA Overtime and Minimum Wage Violations

Posted in 11th Circuit, FLSA, Legislation, Title VII

On Wednesday, March 6, 2013, a panel from the Eleventh Circuit Court of Appeals (covering Alabama, Georgia and Florida) held in Lamonica v. Safe Hurricane Shutters, Inc. found that undocumented – i.e. illegal – workers are not barred from recovering lost wages from their employers for violations of the overtime and minimum wage provisions of the federal Fair Labor Standards Act (“FLSA”). This holding ruling was not unprecedented, as the Eleventh Circuit upheld FLSA back pay awards to illegal workers in its 1988 decision in Patel v. Quality Inn South.   This decision is noteworthy, however, as it was reached after the United States Supreme Court’s 2002 decision in Hoffman Plastic Compounds v. NLRB, a case addressing back pay remedies for illegal workers under the National Labor Relations Act (“NLRA”).   In Hoffman, the Court held that although undocumented workers fall under the definition of “employee” under the NLRA, the remedies available to undocumented workers, including back pay, could be limited because of their status.  The Court found that the policy interests underlying the Immigration Reform and Control Act (“IRCA”) gave courts the authority to reject the award of back pay to illegal workers who were terminated in violation of the NLRA.

The impact of the Hoffman decision extended beyond NLRA cases.  Indeed, in the wake of Hoffman, the EEOC determined that it could no longer seek back pay (and reinstatement) awards for undocumented workers with claims under Title VII and federal discrimination statutes.  The EEOC also rescinded its 1999 guidance titled “Remedies Available to Undocumented Workers Under Federal Employment Discrimination Laws” because it relied on pre-Hoffman NLRA cases supporting the rights of undocumented workers to seek back pay damages.

Any argument that the Hoffman decision put an end to back pay awards for FLSA violations against illegal workers was resoundingly dismissed by the Eleventh Circuit in Lamonica.  Although the Lamonica court agreed that the definitions of “employee” under the FLSA and NLRA are generally the same, the court pointed out that the NLRA and FLSA are markedly different in terms of the nature of the back pay remedies available.  The key distinction is that back pay awards under the NLRA are for work not performed by the employee because of statutory violations whereas back pay in FLSA cases is for work already performed.   According to Hoffman, awarding back pay to an undocumented worker for being deprived of a job in violation of the NLRA would run undermine IRCA, the central purpose of which is to combat the employment of illegal aliens.  In contrast, the back pay remedy under the FLSA is meant to compensate employees for work already done, not work they were not permitted to do.  Therefore, reasoned the Lamonica court, compensating undocumented workers for work already (yet illegally) performed is not inconsistent with the purposes of IRCA.

The Eleventh Circuit’s reasoning in Lamonica is not bulletproof.  It seems that rewarding illegal workers with statutorily-enforced guarantees of minimum wages and overtime creates an incentive for undocumented individuals to seek employment —  if they are able to secure employment, they know they are guaranteed to be paid for the work they perform.  Would not such an incentive run afoul of the purposes of IRCA?  Regardless of the soundness of the Lamonica court’s logic, employers should know that at least for now, they will not be able to avoid liability under the FLSA simply because the workers seeking to enforce their rights were never authorized to work in the first place.

Over time, the use (mandated or otherwise) of E-Verify and other methods of checking the approved status of applicants should reduce the number of illegal workers who might seek to pursue the FLSA back pay rights.  In the meantime, however, employers in Florida, Georgia and Alabama should be wary that their potential exposure from hiring undocumented workers is not limited to the civil and criminal penalties provided under IRCA.