Status of No-Match Litigation

July 8, 2009

Department of Homeland Security Rescinds No-Match Rule

The Department of Homeland Security (DHS) issued a press release rescinding the No-Match Regulations issued in 2007.  DHS indicated that it would be proposing a new regulation rescinding the 2007 No-Match Rule, which was blocked by court order shortly after issuance and has never taken effect.  That rule established procedures that employers could follow if they receive SSA No-Match letters or notices from DHS that call into question work eligibility information provided by employees. These notices most often inform an employer many months or even a year later that an employee's name and Social Security Number provided for a W-2 earnings report do not match SSA records-often due to typographical errors or unreported name changes.  It is our expectation that the government will seek a stay of the current no-match litigation while it rescinds the rule.

As a reminder, under current law the receipt of a no-match letter by an employer does not provide just cause to terminate employees. 

 

June 16, 2008

UPDATE:  COURT UPHOLDS REINSTATEMENT AND BACK PAY FOR WORKERS UNJUSTLY TERMINATED AS A RESULT OF NO-MATCH LETTERS

In an important decision for all workers, the Ninth Circuit upheld an arbitration award which ordered reinstatement and back pay to workers terminated for not providing an employer with additional documentation after the employer received Social Security Administration no-match letters for the workers.  The Court concluded that, based on the limited scope of the constructive knowledge doctrine in the immigration context, the general deference owed to an arbitrator’s decision and the narrowness of the public policy exception to that deference, the arbitration award did not violate immigration public policy.

In 2003, Aramark Facility Services (“Aramark”) received SSA no-match letters, which do not contain immigration information and which are sent only to inform workers that the SSA is unable to properly credit their earnings.  After giving the workers only a short time to provide additional documentation proving work authorization, Aramark terminated 33 employees.  The workers’ union, Service Employees International Union, Local 1877, took the matter to arbitration.  Finding no “convincing information” that the workers lacked proper work authorization, the arbitrator ordered reinstatement and back pay for the employees.  Aramark appealed based on the public policy exception to the deference owed to arbitration decisions and the district court vacated the arbitrator’s award.  The Ninth Circuit today reversed the lower court’s decision and remanded with instructions to confirm the arbitration award.

The Court faced the question, “whether the arbitrator’s award would have forced Aramark to reinstate and provide back-pay to undocumented workers where Aramark had ‘constructive knowledge’ that they were undocumented.”  The Court reaffirmed that the constructive knowledge doctrine should be applied narrowly in immigration circumstances and that a finding of constructive knowledge that a worker is undocumented requires “positive information.”  The Court found that Aramark provided no evidence regarding the employees’ immigration status, other than the no-match letters and that the employees did not provide additional documentation within a few days.  Thus, the Court concluded that the employer failed to establish constructive knowledge of any immigration violations by the workers, including failure to “demonstrate that any of the workers actually were unauthorized to work.”  Echoing the arbitrator’s finding that the employer had no “convincing information” that the employees were undocumented, the Court concluded that public policy was not violated by an award of reinstatement and back pay for the workers.  The Court also reaffirmed the deference owed to an arbitrator’s factual findings, even when considering whether the arbitrator’s award violates public policy.

This is the first decision by a court addressing the SSA no-match letter and its significance for workers and their job security.  The Court reaffirmed that, as no-match letters are not based on immigration information, employers cannot rely upon them as an indicator that a worker is undocumented.  This decision also highlights the importance of union protection in the work place.  The arbitrator found that the terminations were unjust under the Union and the employer’s collective bargaining agreement.   The Ninth Circuit supported this conclusion and the workers have prevailed in winning back the jobs that had been unjustly taken from them.

 

Judge grants preliminary injunction to stop implementation of the Department of Homeland Security’s no-match regulation.

On October 10, 2007, United States District Judge Charles R. Breyer granted Plaintiffs’ motion for a preliminary injunction prohibiting the Department of Homeland Security (“DHS”) from implementing or enforcing its recent regulation regarding the Social Security Administration’s “no-match” letters. The Judge found that Plaintiffs demonstrated that implementation of the regulation would result in termination of lawfully employed workers, causing “irreparable harm to innocent workers and employers.” The Judge also found that Plaintiffs raised serious questions about the validity of the regulation itself and the process by which DHS promulgated the rule. Today’s ruling does not prohibit the Social Security Administration from sending out no-match letters but it does stop the agency’s plans to include DHS letters detailing the regulation with the no-match letters.

Our clients and Plaintiffs, San Francisco Central Labor Council, the San Francisco Building Trades Council, and the Alameda County Central Labor Council, along with the AFL-CIO, filed declarations highlighting the harm to members of their affiliated unions if the DHS rule went into effect. The Judge agreed, finding that Plaintiffs presented “uncontroverted evidence” that some union members would no doubt loose their jobs, despite the fact that they are authorized to work, because they are unable to resolve discrepancies in 90 days, as required by the DHS rule. UFCW, UFCW Local 5, UNITE HERE, UNITE HERE Local 2 as well as business groups, including the San Francisco Chamber of Commerce and the Chamber of Commerce of the United States of America, intervened in this lawsuit to challenge the DHS regulation. The government will undoubtedly appeal today’s decision, and a determination on the merits of the lawsuit remains, but this is certainly a victory for all workers, union and non-union alike.

 

Temporary Order Stops Implementation of Anti-Worker Social Security No Match Letters Regulations of the Department of Homeland Security

Federal Judge Maxine Chesney signed a Temporary Restraining Order restraining implementation of new regulations from the Department of Homeland Security concerning Social Security “no-match” letters. She has scheduled a hearing on a Preliminary Injunction for October 1st, so the new regulations cannot be implemented before that date.

The regulations are detailed instructions to employers who receive letters from the Social Security Administration saying that employee names do not match their social security numbers. These “no match” letters are nothing new --- people often forget to notify the SSA when they get married and change their name, or employers make bureaucratic mistakes entering this information, or the SSA is just disclosing its own sloppy record-keeping. What is new are these regulations, which would give an employer and employee 90 days to clarify and correct any such errors --- in the absence of clarification and correction, the employee may end up fired, and the employer may end up being investigated and/or indicted.

The challenge to the regulations has been mounted by the AFL CIO, the ACLU, as well as the San Francisco Central Labor Council, the San Francisco Building Trades Council, and the Alameda County Central Labor Council. All these groups have joined in trying to stop these draconian measures from being used to threaten workers with termination and deportation.

Legal Developments