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When Torts, Immigration Law Collide—
The New York Court of Appeals Weighs In

By John F. Parker and Russell A. Witten

The issue of illegal immigration in the United States remains prominent and contentious. Indeed, pending legislation in Congress, nationwide protests by illegal immigrants and their supporters, and a torrent of media coverage are constant reminders. Against this backdrop, the New York Court of Appeals recently ruled on the issue of whether illegal immigrant workers may pursue claims for lost wages due to personal injury in light of the United States Supreme Court’s decision in Hoffman Plastic Compounds v. NLRB, 535 U.S. 137 (2002) holding that the Immigration Reform and Control Act of 1986 (“IRCA”) (8 U.S.C. §1324a et seq.) precluded the National Labor Relations Board from awarding back pay to an undocumented alien as a remedy for the termination of his employment in violation of the National Labor Relations Act.1

On February 21, 2006, in companion cases, (Balbuena v. IDR Realty L.L.C. and Majlinger v. Cassino Contracting Corp), the Court of Appeals held that illegal immigrants could pursue claims for lost wages.2 The Court decided that the IRCA did not preclude plaintiffs’ claims. Precluding lost wage claims would condone employers’ illegal conduct in contravention of the purpose of the IRCA and promote unsafe work environments. Unlike the plaintiffs in Hoffman, there was no evidence that plaintiffs here tendered false documentation in violation of the IRCA. In addition, unlike the plaintiffs in Hoffman, mitigation of damages was an insignificant issue because the plaintiffs here suffered serious physical injuries that limited their ability to work. Finally, while allowing lost wage claims by illegal immigrants, the Court noted that a jury could consider the worker’s immigration status as one factor in its determination of damages.

The Court ruled that defendants did not overcome the presumption against federal preemption of state law. Express preemption applies when Congress explicitly declares that a federal law is intended to supersede state law. Implied preemption occurs under two circumstances: (1) field preemption, and (2) conflict preemption. Field preemption occurs if a federal law thoroughly occupies a legislative field so that Congress left no room for state law to supplement it. Conflict preemption is found where the state law stands as an obstacle to the accomplishment of a Congressional purpose.

The Court examined the IRCA and found that it does not contain language that expressly preempts state laws regarding recovery for personal injuries. Indeed, the Act expressly preempts only state civil or criminal sanctions on employers who hire illegal immigrants. Similarly, field preemption was inapplicable because the IRCA does not indicate that Congress intended to occupy the field of workplace health and safety. In fact, the legislative history of the IRCA indicates that it was not intended to undermine or diminish existing state labor protections.

Although finding it a more difficult question, the Court also found that conflict preemption did not apply because an award of lost wages to an illegal immigrant would not conflict or erode the objectives of the IRCA. States generally have broad authority under their police powers to regulate employment relationships and protect workers located within the state. There is nothing in New York’s labor laws or in relevant decisions negating the conclusion that the state’s labor laws apply to all workers regardless of immigration status. Limiting lost wage claims by illegal immigrants would reduce employers’ incentive to comply with the labor laws and maintain safe workplaces. Reducing employers’ consequences for noncompliance would encourage the hiring of illegal immigrants in direct contravention to the express purposes of the IRCA.

The Court distinguished the factual situations involved in Majlinger and Balbuena from Hoffman. In Hoffman, the illegal immigrant committed a criminal act by supplying fraudulent papers to his employer. There were no such allegations in Majlinger and Balbuena. Additionally, mitigation of damages by further illegally obtained employment was not an issue in Majlinger and Balbuena because unlike the plaintiff in Hoffman, Majlinger and Balbuena alleged serious permanent injuries that impede their ability to be employed.

Although the Court recognized that an illegal immigrant workers’ presence in the United States is impermissible under federal immigration law, it held that this violation was insufficient to deny relief to which illegal immigrants were otherwise entitled. Recoveries have been denied to parties due to illegal activity; however, unlike the construction work at issue here, these situations involve cases in which the work performed itself was illegal. Neither the IRCA nor any other law makes it unlawful to be an illegal immigrant worker, except when the immigrant obtained employment through fraudulent documentation.

Finally, the Court noted that a jury could consider a plaintiff’s immigration status as one factor in its determination of damages. The illegal immigrant could produce evidence that he was in the process of obtaining the necessary documents to work in this country legally. In opposition, the defendant could demonstrate that a future wage award is unwarranted because the illegal immigrant has not sought work authorization or has sought it but been denied.

In reaching its conclusion, the New York Court of Appeals has joined New Hampshire’s highest court in allowing lost wage claims by illegal immigrants. As similar cases work their way through state court systems, a clearer picture will begin to emerge nationally on the state of the law in this area. Given the current focus of national attention on illegal immigration, federal or state legislative action may be forthcoming. Regardless, global economic forces and the sheer number of illegal immigrants in the United States mandate that this and similar issues will continue to confront legal professionals, insurers, legislators, and employers.

Notes
1 The award of back pay was for wages from the period following termination; i.e., wages not actually earned by the worker.
2 Gorgonio Balbuena v IDR Realty LLC, 2006 NY Slip Op 01248 (2006).

ABOUT THE AUTHORS

John F. Parker is a Partner and Russell A. Witten an Associate at Mound Cotton Wollan & Greengrass. They can be reached at 212-804-4200 or by e-mail at jparker@moundcotton.com and rwitten@moundcotton.com.

riskVue | The webzine for risk management professionals
August 2006