EMPLOYMENT LAW CLAIMS OF UNDOCUMENTED WORKERS

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EMPLOYMENT LAW CLAIMS OF UNDOCUMENTED WORKERS

Michael T. Tusa, Jr.
SUTTON & ALKER, LLC
4080 Lonesome Road, Suite A
Mandeville, LA 70448
and
Vanessa Spinazola
The Pro Bono Project
615 Baronne Street, Suite 203
New Orleans, Louisiana 70113

1. THE WAGE CLAIMS OF UNDOCUMENTED WORKERS.
As part of the rebuilding after Hurricane Katrina Gulf Coast states have had an influx of undocumented workers. These workers, when paid, are often paid in cash or one worker is paid
by check and told to pay his co-workers. Because the use of such workers is a violation of the Immigration Reform and Control Act (8 U.S.C.A. § 1324, et seq.) there is often little
documentation maintained on hours worked and the wage payment arrangements.

(a) The Fair Labor Standards Act Does Provide A Remedy for Undocumented Workers.

There is a popular misconception that the wage and hour laws only apply to United States citizens. The provisions of the Fair Labor Standards Act (“FLSA”) however, apply to all workers
regardless of immigration or citizenship status. 29 U.S.C. § 201 et seq. To the extent that an employer believes it can commit “wage theft,” as it relates to undocumented workers, and suffer no consequences, this is not accurate.(1) As the court wrote in In Re Reyes, 814 F.2d 168, 170 (5th Cir. 1987):

[It] is well established that the protections of the Fair Labor Standards Act are applicable to citizens and aliens alike and whether the alien is documented or
undocumented is irrelevant.2

See also, Trejos v. Edita’s Bar & Restaurant, 2009 WL 749891 (E.D.N.Y. March 17, 2009); Flores v. Amignon, 233 F. Supp. 2d 462, 463 (E.D. NY 2002); David v. Signal International LLC, 257 FRD 114, 122-123 (E.D. La. 2009); and Castellanos-Contreras v. Decatur Hotels, 559 F.3d 332, 336 (5th Cir. 2009).

The rationale for this approach is quite simple. If the FLSA did not apply, unscrupulous employers would hire such workers, refuse to pay them after getting the benefits of their labor, and there would be no remedy.(3) As the court wrote in David, supra, at 123, “If the FLSA did not cover undocumented aliens, employers would have an incentive to hire them.” Lack of FLSA coverage would not only deprive the undocumented worker of wages, but would also set up an unfair competitive advantage for employers who do not pay workers.

The scope of protection under the FLSA is broad. Liability can exist for those who did not hire or retain the workers but whose role in a given project nevertheless makes them an “employer” under the FLSA.

(b) Joint Employment under the FLSA.

Under 29 U.S.C. § 203(d), the FLSA specifically defines an “employer” as:
…any person acting directly or indirectly in the interest of an employer in relation to an employee and includes a public agency, but does not include any labor organization (other than when acting as an employer) or anyone acting in the capacity of officer or agent of such labor organization.

This definition is broad and allows for there to be more than one employer at any given time.

Separate persons or entities that share control over an individual worker may be deemed joint employers under the FLSA. Schultz v. Capital International Security, Inc., 466 F.3d 298, 305 (4th Cir. 2006). According to U.S. Department of Labor regulations:

If the facts establish that the employee is employed jointly by two or more employers, i.e. that employment by one employer is not completely disassociated from employment by the other employer(s), all of the employee’s work for all of the joint employers during the workweek is considered as one employment.

29 C.F.R. §791.2(a).

Joint employers are responsible, both individually and jointly, for compliance with all of the applicable provisions of the FLSA. 29 C.F.R. §791.2(a). On this basis, a General Contractor
may be the joint employer of undocumented workers hired or retained by a subcontractor. Mendoza v. Essential Quality, 2010 WL 768704 (E.D. La. 2010). Indeed, if the subcontractor
has gross annual revenues of less than $500,000, the subcontractor may not be able to meet the definition of “employer” under the FLSA, leaving the General Contractor as the sole employer
under the FLSA. 29 U.S. C. § 203(s)(1).

Federal regulations set forth a three-part, non-exclusive framework for determining when a joint employment relationship will be considered to exist:

1. Where there is an arrangement between the employers to share the employee’s services, as for example to interchange employees;
2. Where one employer is acting directly or indirectly in the interest of the other employer(s) in relation to the employee; and
3. Where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer.

29 C. F.R. § 791.2(b).

Courts do not rigidly or mechanically apply the above test. Rather, “the joint employment inquiry must take into account the real economic relationship between the employer who uses and benefits from the services of workers and the party that hires or assigns the workers to that employment.” Schultz v. Capital International Security, Inc., 466 F.3d 298, 305 (4th Cir. 2006). The ultimate determination of joint employment must be based on “the circumstances of the whole activity.” Id.; see also Cooke v. Jaspers, 2010 WL 918342 (S.D. Tex. March 10, 2010).

In analyzing the totality of the circumstances, Courts will often look to the same factors that determine whether a putative employee is an independent contractor or an employee. In particular courts will examine the degree of control over the worker, degree of supervision over the worker, power to determine rate of pay, ownership of the facilities where work is performed, preparation of payroll, and the right to hire, fire or modify the conditions of work. See Chao v. Westside Drywall, Inc., 2010 WL 1727288 (D. Or. May 13, 2010); Antenor v. D&S Farms, 88 F3d. 925, 933 (11th Cir. 1996).

(c) The Louisiana Wage Payment Act Is Also Applicable to Undocumented Workers.

The Louisiana Wage Payment Act, La. R.S. 23:631, requires employers to pay final wages to employees at the next pay day or within 15 days whichever is shorter. It provides the possibility of penalties, attorney’s fees and costs when an employer fails to timely pay an employee. In a case of wage theft, where undocumented workers are not paid at all, the statutory penalties can be significant.

In Agusiegbe v. Petroleum Associates of Lafayette, Inc., 486 So.2d 314, 315 (La. App. 3rd Cir. 1986), the plaintiff claimed to have been an American citizen but was in fact not a citizen. He sued for wages owed, the employer sought to defend by claiming the Louisiana Wage Payment statute was inapplicable to him because he was not a citizen. Id. The court cited the language of the statute, disagreed with the employer, and concluded that an undocumented worker had the right to sue under the Louisiana statute. Id. In particular, La. R.S. 23:631(A) provides, in part, that:

Upon discharge or resignation of any laborer or other employee of any kind
whatever, it shall be the duty of the person employing such laborer or other
employee to pay the amount then due…

(emphasis added) The court found this language to be significant and to support a claim by an undocumented worker. See also, Baca v. Brother’s Fried Chicken, 2009 WL 1349783 (E.D. La. May 13, 2009).

(d) Is the Undocumented Worker An Employee Or An Independent Contractor?

For obvious reasons, most undocumented workers are not hired as employees but are
classified by those that hire them as independent contractors. The companies do not ask for
Form I-9’s to be completed and when they pay they either pay in cash or write a check to one of
the workers to cash and distribute among all of the workers.

However, when the undocumented worker files suit for the monies owed, he will likely sue under the FLSA and LWPA and allege that he was an “employee”. The FLSA has its own test for determining employee status. In particular, the principal factors are: (1) the employer’s right to control the work; (2) the worker’s opportunity to influence his profit or loss depending on managerial skill; (3) the worker’s investment in equipment and materials; (4) whether the service requires special skills; and (5) the degree of permanence of the working relationship.(4) See Reich v. Circle C Investments, Inc., 998 F.2d 324 (5th Cir. 1993); Mendoza v. Essential Quality Construction, Inc., 2010 WL 768704 (E.D. La. 2010). These factors are generally viewed in this circuit under the rubric of the “economic reality” test. Weisel v. Singapore Joint Venture, Inc., 602 F.2d 1185, 1189 (5th Cir. 1979); Cromwell v. Driftwood Electrical, 2009 WL 3254467 (5th Cir. Dec. 4, 2009). In other words, if the individual’s only job is with this company, the economic reality is that he is an “employee” under the FLSA.

Cromwell , is one of the latest pronouncements on employee status under the FLSA. In Cromwell, plaintiffs were retained to repair telephone lines/cables after Hurricane Katrina. 2009 WL 3254467 at *58. The two plaintiffs (not undocumented workers) provided their own trucks and tools and their own vehicle insurance. Id. at *59. Plaintiffs worked 12 hour days, 13 days on and one day off. Id. at *58. While not prohibited from other employment, “as a practical matter the work schedule established by [Defendants] precluded significant extra work.” Id.at *61.Defendants classified plaintiffs as independent contractors. Id. at 58.

The court focused on the economic reality of the situation, in particular, the hours worked, and held that plaintiffs were employees of defendants. Id. at 60-61. The same rationale will often apply to undocumented workers who are working long hours performing labor intensive work.

(f) Can the Undocumented Worker Recover Workers Compensation Benefits?

In Bollinger Shipyards, Inc. v. Director, Office of Workers Compensation, 604 F.3d 864 (5th Cir. April 22, 2010), the court dealt with a petition for review of an award from the Benefits Review Board, under the Longshore and Harbor Workers Act (“LHWCA”), to an undocumented worker injured on the job (Jorge Rodriguez). In its petition, Bollinger admitted that Mr. Rodriguez was injured on the job but argued that Mr. Rodriguez should be denied LHWCA benefits because of his undocumented status and because he used a false Social Security number to obtain employment. The Benefits Review Board’s ruling was consistent with court decisions in Hernandez v. M/V Rajaan, 841 F.2d 582, amended after rehearing, 848 F.2d 498 (5th Cir. 1988) and Rivera v. United Masonry, Inc., 948 F.2d 774 (D.C. Cir. 1991).

The court noted that Bollinger compares awarding benefits to Mr. Rodriguez to “awarding benefits to a pirate or a Mafioso” and “awarding benefits to a drug dealer.” (p. 871). Calling Bollinger’s language histrionic and “melodramatic,” the court reviewed the language of the LHWCA and upheld the award of the Benefits Board. In reaching its conclusion the court noted that the language of the LHWCA does not distinguish between citizens and non-citizens. The court rejected Bollinger’s argument that the LHWCA must be interpreted in light of the Immigration Reform and Control Act (“IRCA”) and provides a detailed analysis in that regard.5 (pp. 874-875) Other courts have also held that IRCA does not preempt state workers compensation laws when claims are made by undocumented workers. See, CORREA v. Waymouth Farms, Inc., 664 N.W. 2d 324, 329 (Minn. 2003); Madiera v. Affordable Housing Foundation, Inc., 469 F.3d 219 (2nd Cir. 2006).

The same rationale has been applied under Louisiana Workers Compensation laws. In Rodriguez v. Integrity Contracting, 2010 WL 1779980 (La. App. 3rd Cir. May 5, 2010), an undocumented worker brought a claim for workers compensation benefits against a subcontractor and a statutory employer. The court, citing the language of the state workers compensation statute, awarded benefits.

(g) Protective Orders And Discovery Related to Claims of Undocumented Workers.

A common ancillary issue which arises in the context of undocumented workers filing a suit for wages or benefits is the scope of discovery related to their immigration status. In particular, some companies will seek to discourage plaintiffs from proceeding by delving into their immigration status.(6) However, the case law is overwhelmingly opposed to such discovery. See, Rivera v. NIBCO, 364 F.3d 1057 (9th Cir. 2004); David v. Signal International, LLC, 257 F.R.D. 114 (E.D. La. 2009); Villareal v. El Chile, Inc., 2010 WL 725557 (N.D. Ill. March 1, 2010); Montoya v. S.C.C.P. Painting Contractors, Inc., 530 F. Supp. 2d 746, 749 (D. Md. 2008).

In Reyes, supra at *6, the Fifth Circuit went so far as to issue “a writ of mandamus directing the district court to withdraw a discovery order requiring plaintiffs in an FLSA case to answer questions regarding whether they were undocumented workers.” Reyes, supra, at *6. However, in most cases, what happens is the plaintiffs are granted a protective order prohibiting inquiry into their immigration status. David, Villareal, This will also generally cover related discovery items like social security numbers. See, Rengifo v. Erevos Enterprises, Inc., 2007 WL 894376 *5 (S.D. NY 2007); Galaviz-Zamora v. Brady Farms, Inc., 230 F.R.D. 449 (W.D. Mich. 2005); Baca, supra.(7)

(h) Are There Any Limits on the Rights of Undocumented Workers Under Employment Laws?

In Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 122 S. Ct. 1275, 169 LRRM 2769, 152 L. Ed. 2d 271 (2002), the court held that the IRCA prohibited the NLRB from awarding back pay to an undocumented worker who had used a false birth certificate to obtain employment. The court reached this decision in the context of longstanding rulings setting aside NLRB awards to employees who have been “found guilty of serious illegal conduct in connection with their employment.”

Consistent with Hoffman, other courts have also barred recovery of wages where the undocumented worker used false documentation to gain employment. See, Ambrosi v. 1085 Park Ave., LLC, 2008 WL 4386751 (S.D.N.Y. September 25, 2008); Logue v. Wildflower Estate Developers, Inc., 818 NY S.2d 546, 550 (App. Div. 2006).

In a similar vein, the court in Rodriguez v. Bollinger Gulf Repair, 985 So.2d 305 (La. App. 4th Cir. 2008) held that an undocumented worker who filed a lawsuit under a false name had his lawsuit properly dismissed.

CONCLUSION
At a time when immigration issues are a hot political topic, it is important to know how the employment laws apply to undocumented workers. Such knowledge will help employers avoid liability and help workers protect their legal rights.