June 17, 2008 "No Match" Letters Alone Are Insufficient Evidence Of Ineligibility to Work

Summary

On Monday, the Ninth Circuit Court of Appeals issued a decision about the purpose of "no match" letters issued by the Social Security Administration ("SSA") and whether an employer's receipt of a SSA "no match" letter is sufficient to put an employer on notice of an employee's undocumented status. The Court noted that SSA "no match" letters are not immigration-related, but intended to notify workers that their earnings are not being properly credited to their social security accounts. As such, receiving a "no match" letter is insufficient by itself to put an employer on notice that a particular worker may be unauthorized to work in the United States.

Details

In Aramark Facility Services v. Service Employees International Union, Local 1877 [click here to view this decision], Aramark received a SSA "no match" letter advising that the information reported for 48 of its employees did not match the SSA's database.  Based on this letter, the company suspected immigration violations and told the affected employees that they had three days to correct the mismatches by either providing a new social security card or by proving that they had begun the process of applying for a new card.  Aramark denied the request by the employees' union for additional time to take these steps and ultimately terminated 33 employees who did not timely respond.

The union filed a grievance contending that Aramark violated its collective bargaining agreement by firing the workers without "just cause."  The matter was arbitrated and resolved in favor of the union because there was no "convincing information" that any of the terminated workers were undocumented.  Aramark appealed this decision to the district court on the ground that SSA letter, along with the terminated employees' failure to indicate that they were beginning the process of correcting the mismatch, was sufficient to put Aramark on notice that the employees were ineligible to work.  The district court agreed and determined that the arbitrator's award of reinstatement and back pay to the employees offended public policy because it would require Aramark to violate the immigration laws.

The Ninth Circuit reversed the district court's decision, reinstating the arbitrator's award in favor of the employees.  The Court acknowledged the strong public policy against the knowing employment of undocumented workers but stressed that this interest must be balanced with the equally strong policy prohibiting discrimination against citizens and authorized aliens. 

The Court noted that the SSA, IRS and the Department of Homeland Security have all issued guidance indicating that a social security number discrepancy alone does not automatically mean that an employee lacks proper work authorization.  Indeed, the SSA and IRS expressly advise employers that a "no match" letter does not make any statement about immigration status and is not a basis, in and of itself, to take any adverse action against the employee.  In short, the "no match" letters received by Aramark were not intended to make a statement about the affected employees' immigration status and, without more, did not provide Aramark with notice of any immigration violations.

In addition, the Court rejected the company's argument that an employee's failure to promptly correct the mismatch weighed in favor of finding that the employer was on legal notice of the employee's undocumented status.   The Court noted that the time extended by Aramark for its employees to reverify their social security numbers was extremely short – much shorter than the 90 days envisioned by the proposed federal safe harbor regulations.  As such, it was likely that many of the affected employees could not meet the initial deadline and simply stopped trying. 

Finally, the Court acknowledged that without evidence that the workers were actually unauthorized, the company would not violate the law if it reinstated them.  Accordingly, the public policy prohibiting the knowing employment of undocumented workers did not preclude enforcement of the arbitrator's award in this case.

What This Means

Each year, the SSA issues thousands of "no-match" letters to employers.  This decision instructs employers that these letters do not constitute notice of an employee's ineligibility to work in the United States.  In response to such letters, employers should take reasonable steps to resolve the mismatch, including drafting and implementing a uniform policy which gives employees an adequate opportunity to correct any discrepancies.  For example, the proposed regulations instruct employers to inform employees of the date on which the "no match" letter is received and to advise employees that they must resolve the discrepancy with the SSA within 90 days of the date the employer received the written notice.  In the proposed regulations, the Department of Homeland Security indicates that it will determine whether an employer is on notice that an employee is unauthorized based a “totality of the circumstances” analysis, and the Department will not infer knowledge of unauthorized status if the employer has complied with the safe harbor provisions in the proposed regulations.

Finally, the Aramark decision only deals with so-called "constructive knowledge" of an employee's unauthorized status, or situations in which an employer's knowledge will be presumed. The decision does not diminish an employer's obligation to take appropriate action when it has actual knowledge of an employee's ineligibility to work (separate and apart from a SSA "no match" letter). An employer that has actual knowledge of an employee's unauthorized status violates federal law by continuing to employ that person.

This E-Update was authored by Jennifer Baumann and Fred Plevin.  For more information, please contact Ms. Baumann, Mr. Plevin, or any Paul Plevin attorney at (619) 237-5200.

Reminder:  California "Hands-Free" Law Takes Effect July 1, 2008

Beginning July 1, 2008, it will be unlawful to operate a motor vehicle in California while using a mobile phone unless it is in "hands-free" mode.  Although the monetary penalties for a violation of this law are not substantial, companies should take note that if an employee has an accident while operating a motor vehicle in violation of law, the company could be held liable for damages based on a theory that the employee's violation of the law constitutes "negligence per se."  Accordingly, employers should consider implementing appropriate policies, such as a policy against cell phone use while driving unless absolutely necessary, prohibiting cell phone use in violation of the law, and providing employees who must use cell phones with hands-free devices.

Save The Date For Upcoming PPSC Seminars

Working Together To Prevent Workplace Harassment
June 27, 2008
8:00 a.m. - 10:00 a.m.

Paul, Plevin, Sullivan & Connaughton has created a modern, interactive sexual harassment training program designed to provide supervisors with the tools they need to spot, address, and prevent harassment, discrimination, and retaliation in the workplace.  This training complies with California's mandatory training requirement and is designed to assist companies who do not have their own training program, or have recently hired or promoted supervisors who require training.

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Other Upcoming Seminars

Aug 28, 2008
Layoffs Without Lawsuits

Sept 25, 2008
Avoiding Wage and Hour Timebombs

October 30, 2008
Paul, Plevin's annual Employment Law Update for 2009

Be sure to visit www.paulplevin.com for more information as it becomes available.