Supreme Court Upholds Mandatory E-Verify Required by Arizona

This morning, the Supreme Court upheld a controversial Arizona law which requires employers operating in the state – as part of its business licensing law – to comply with the federal 1986 Immigration Reform and Control Act and to utilize the federal E-Verify program to confirm the eligibility of employees to legally work in the United States. Chamber of Commerce of the United States v. Whiting, No. 09-115 (2011). The Chamber of Commerce and civil rights groups had united to oppose the Arizona law, which they contended violated Congressional supremacy to govern immigration and was both explicitly and implicitly preempted. However, the District Court, the Ninth Circuit and the Supreme Court each concluded that the ICRA had left an explicit exception for states to regulate the hiring of immigrants through business licensing laws and that the Arizona statute paralleled the federal statute in its requirements in order to avoid any conflict with federal law.

Prior to the 1986 passage of the IRCA, the Supreme Court had held that immigration control was a federal power, but the states still had the authority under their sovereign policing powers to prohibit the knowing employment of individuals not entitled to reside or work in their state. However, the IRCA explicitly preempts states from imposing any civil or criminal sanctions upon employers for hiring unauthorized aliens, except through licensing and other similar laws. 8 U. S. C. §1324a(h)(2). The "Legal Arizona Workers Act provides that the licenses of state employers that knowingly or intentionally employ unauthorized aliens may be, and in certain circumstances must be, suspended or revoked. The law also requires that all Arizona employers use a federal electronic verification system [i.e., E- verify] to confirm that the workers they employ are legally authorized workers."

The challenged Arizona statute required the state attorney general or county attorney, upon receipt of a complaint, to verify with the federal government the work eligibility status of the challenged employee. Only the federal government could determine work eligibility, not local government. In addition, every employer is required to utilize e-verify upon hiring a new employee. Further, good faith compliance with the I-9 requirements of the IRCA and the e-verify system create an affirmative defense for the employer. Once unauthorized aliens are identified, the statute requires the local government to notify ICE or local police and to bring an enforcement action against the employer. The first violation of the statute can result in a suspension of the employer's business license, an order to terminate all unauthorized aliens, and quarterly reporting requirements. A second violation can lead to revocation of the employer's business license.

The Court easily dismissed the argument that the Arizona statute was not a licensing scheme and that the federal exemption was limited to licensing of migrant workers. The Court also rejected the argument that the Arizona statute conflicted with the federal IRCA because the Arizona statute incorporated IRCA definitions and standards and explicitly provided that determinations of work authorization were to be made exclusively by the federal government. Only when the federal government confirms that the individual is an unauthorized alien can the state government prove its burden that the individual is not authorized to work in Arizona. Finally, the Court rejected the argument that the state law upset the balance struck by the IRCA to avoid over-burdening employers and discouraging employment discrimination. The Arizona law did not impose any material additional burdens on employers and state law already prohibited national origin discrimination.

In 1996, Congress authorized the creation of the pilot e-verify program, but precluded making it mandatory outside the federal government. (However, federal contractors are required to utilize it pursuant to a 2008 Executive Order). Employers who verify the employment eligibility of newly hired employees establish a rebuttable presumption that they have complied with the IRCA. There is no provision in the 1996 enabling statute precluding states from making mandatory the use of e-verify. Indeed, when the 2008 Executive Order was challenged by government contractors and the Chamber of Commerce, the federal government pointed out that its use was already mandatory in Arizona and a few other states. Since that time, the federal government has expanded the e-verify program and encouraged its use. Indeed, the United States, in its amicus brief, disputed that the e-verify system could not handle the use by all employers in all 50 states. The United States also disputed any challenge to the accuracy of the e-verify system.

IRCA expressly reserves to the States the authority to impose sanctions on employers hiring unauthorized workers, through licensing and similar laws. In exercising that authority, Arizona has taken the route least likely to cause tension with federal law. It uses the Federal Government's own definition of "unauthorized alien," it relies solely on the Federal Government's own determination of who is an unauthorized alien, and it requires Arizona employers to use the Federal Government's own system for checking employee status. If even this gives rise to impermissible conflicts with federal law, then there really s no way for the State to implement licensing sanctions, contrary to the express terms of the savings clause.

In light of this decision, it can be expected that additional states will adopt their own version of the Arizona statute. This decision does not resolve the additional challenges to other provisions of Arizona's immigration control laws which are still working their way through the courts.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney

Ohio Appeals Court Lowers $46.5M Damage Award to $10.5M In Retaliatory Discharge Case

Last Thursday, the Cuyahoga County Court of Appeals ruled that Ohio's Tort Reform Act required the reduction of $43M in punitive damages to no more than $7M (which was twice the amount of compensatory damages awarded by the jury) in a retaliatory discharge case brought under the Ohio Civil Rights Act. Luri v. Republic Servs., Inc., 2011-Ohio-2389. In that case, the plaintiff general manager alleged that his employer manufactured a reason to fire him in April 2007 in violation of Ohio Revised Code § 4112.02(I) after he refused to fire the company's three oldest employees in November 2006. He had protested that one of the older employees had strong performance evaluations and could sue the company for age and disability discrimination. In addition, the plaintiff presented evidence that the defendants had altered and/or fabricated evidence to support its illegal termination decision and then refused to waive his non-competition agreement after firing him.

The Court held that the trial court did not abuse its discretion in refusing to bifurcate the trial (between liability and damages) because the evidence that proved liability was also relevant to the defendant's bad faith, justifying punitive damages. In particular, evidence that the defendants had manufactured evidence proved not only guilty intent in the termination decision, but also bad faith. The Court refused to find an error in the jury instructions because the defendants had failed to ask in the jury interrogatories or instructions for the economic and non-economic damages to be separately specified. In addition to the $3.5M in compensatory damages awarded by the jury, the trial court also awarded over $1M in attorney fees and prejudgment interest. However, the Court of Appeals found that the Tort Reform Act at Ohio Revised Code § 2315.21(D) limited the punitive damages to twice the amount of compensatory damages and those damages should be imposed collectively, rather than per plaintiff. Otherwise, the amount of the $43M punitive damage award did not shock the Court's conscience or constitute a violation of due process under the circumstances.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Rejects Two Qualified Immunity Defenses Raised in Southern District of Ohio

As a general rule, government employees are immune under federal law from civil damages for acts conducted in the course of their employment because of a qualified immunity. However, that qualified immunity can be lost if the government official or employee engages in conduct which violates clearly established law. Today, the Sixth Circuit released two opinions which affirmed the denial of qualified immunity to two different employers from Southern Ohio because their alleged actions violated clearly established federal law. In the first decision, the employer fired a police officer after his wife distributed letters which were critical of city government. Sigler v. City of Englewood, No. 09-4223 (6^th Cir. 5/20/11). In the second decision, the Court rejected qualified immunity for school officials who failed to act upon student complaints of sexual harassment by fellow students and found that there was no collateral estoppel or res judicata from the disciplinary appeal hearings held to review the five-day suspension of the complaining female student. Evans v. Board of Education of Southwestern City School District, No. 10-4011 (5/23/11).

According to the Sigler opinion, the wife of the plaintiff police officer distributed a letter which was critical of his city government employer. He says that he never saw or heard about the letter until after she distributed it, but he did not inform his employer about the letter even after he found out. An internal affairs investigation was conducted. When initially asked about it, the plaintiff says he asked the investigating officer for a copy of it, but the officer said the plaintiff denied ever having read it. The plaintiff later admitted to having read it after his wife mailed it. The officer recommended that the plaintiff be terminated because he falsely denied having read the letter, was aware of who circulated the letter and never informed his employer about the letter, thus making him a participant. The officer contended that this violated departmental rules against dishonesty and withholding information. The City Manager accepted and acted upon the recommendation. The plaintiff then filed suit contending that he was terminated in retaliation for his marriage to the woman who distributed the letter pursuant to her First Amendment rights.

The district court denied the city's motion for qualified immunity on the grounds that retaliating against an employee because of the actions of the spouse clearly violates established First Amendment law. The Sixth Circuit affirmed and rejected the City's attempt to get the City Manager dismissed as a defendant:

Defendants finally argue that Sigler's alleged constitutional right should be construed more narrowly in determining whether it is "clearly established law." Defendants characterize the right as "whether a reasonable officer or official, standing in place of City Manager Smith or Chief Brownfield, would conclude that his actions violated Keith Sigler's First Amendment intimate association rights when Keith Sigler was terminated for violating the [City's] lawful rules and regulations." Phrasing it this way turns the qualified-immunity analysis upside down. When deciding whether a constitutional right is "clearly established law," one assumes that the right the plaintiff invokes was actually violated. Qualified immunity then excuses that violation if the right was not "clearly established law" such that the defendant should have known of it. The right Sigler invokes is the right not to be terminated in retaliation for his marital association. Assuming that Sigler was so retaliated against, defendants are only entitled to qualified immunity if it was not clearly established that such retaliation is unconstitutional. Defendants' characterization assumes away any retaliatory motive, which is Sigler's whole complaint, and instead assumes as true their purported motive for Sigler's termination. The court does not decide qualified immunity in so backwards a way.

The Court of Appeals also rejected the argument that there was not enough evidence of a factual dispute to submit the case to a jury:

The district court also implicitly held that the defendants might not be able to prove that they would have terminated Sigler even if he had not been married to Susan. The court dismissed the defendants' only evidence on this point—Smith's declaration that he would still have terminated Sigler—by stating that "[t]his, of course, is mere supposition." While abbreviated, both determinations indicate that the district court concluded that there was enough in the record to get to the jury on the questions of whether the marriage caused the termination and whether Sigler would not have been terminated if, other things being the same, he had not been married to Susan. For purposes of this interlocutory appeal, we must make the same assumptions. The alternative would be to read into the district court's holding a legal determination that Smith could be liable regardless of the extent to which Sigler's being married caused the termination. It is hard to read the court's analysis that way. We therefore lack jurisdiction to consider Smith's arguments to the extent that they challenge the factual assumptions of the district court regarding causation.

However, the Court agreed that there was insufficient evidence that the Chief of Police was sufficiently involved in the termination decision merely because he authorized the internal investigation and was aware of the City Manager's planned conduct.

In Evans, the female students complained repeatedly that they were being sexually harassed by two male students. However, no action was taken by the School. Among other things, there was an incident in the back of a school bus which put one of the plaintiffs in tears, which got the attention of a teacher, who sent the student to the Principal's office. After taking her statement, the Principal then suspended both her and the male student for five days, and called the police about the male student. The female student appealed the suspension, which was upheld because there was insufficient evidence that she resisted his advances. The following year, additional incidents occurred with another male student and the female student was repeatedly teased for having loose morals.

The School argued that the Principal was entitled to qualified immunity because collateral estoppels and res judicata attached to the appeals hearing of the female student's suspension and precluded her from later suing under § 1983 because of those incidents. However, the District Court and the Court of Appeals rejected that argument because the school appeal hearing did not address the same legal issue, could not consider the same relief and did not consider the broader course of conduct at issue in the § 1983 action (which covered the span of a few years).

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Court Rejects Public Policy Wrongful Discharge Claim for Lack of Clarity About Employer’s Alleged Legal Violation

Last week, the Ohio Court of Appeals affirmed the dismissal of a wrongful discharge claim brought by a terminated paramedic who alleged that he was fired for opposing the mistreatment of a patient in violation of Ohio public policy. Strodtbeck v. Lake Hosp. Sys., Inc., 2011-Ohio-2327. He questioned the medical treatment of a patient and took a picture of the alleged mistreatment with his cell phone camera and later showed the picture to the nurse manager and human resources while sharing his concerns. The employer chose to focus on his failure to obtain written consent from the patient before taking the picture instead of his complaint and terminated his employment. The Court found that the plaintiff had failed to identify any clear public policy, statute or other law which applied to his actions or which the hospital violated in terminating his employment. Thus, he had failed to satisfy the "clarity" element of a claim for wrongful discharge in violation of public policy.

In moving for summary judgment, the hospital had pointed out that the plaintiff did not have explicit permission from management to take the picture, failed to obtain written consent from the patient (as required by HIPAA practices), used his personal cell phone during working hours and failed to use the hospital's Polaroid camera in the ER to document his concerns. More importantly, the plaintiff failed to identify any specific public policy which the hospital violated in terminating his employment. Among other things, he failed to identify any required standard of medical care that would cover the amount of tape used to attach a catheter to a patient's leg or reporting possible patient abuse or maltreatment in a hospital setting.

The plaintiff argued that his situation was analogous to other situations where courts have found violations of public policy. However, the court refused to accept analogous situation as sufficient to satisfy the "clarity" element of a public policy wrongful discharge claim. Accordingly, the Court rejected the plaintiff's attempt to analogize his situation to one where an employee is fired for consulting with an attorney. Similarly, the court rejected the argument that his situation was analogous to firing an employee for cooperating with a criminal investigation of the employer because there was never any criminal investigation in this case and the plaintiff never alleged that the alleged mistreatment of the patient was criminal. Likewise, the plaintiff could not analogize to a situation where the employee was fired to testifying against the employer because there was never any legal or administrative proceeding in this case. Finally, the court refused to recognize an applicable public policy from the nursing home patient's bill of rights because the patient was in a hospital, not a nursing home, and there is a statutory remedy in nursing home abuse situations.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Rejects Race Discrimination Claim of Plaintiff Discharged for False Expense Report

On Friday, the Sixth Circuit Court of Appeals affirmed the dismissal of a race discrimination case by the federal district court in Columbus. David Carson v. Patterson Companies, No. 09-4559 (6^th Cir. 2011). The plaintiff had been fired for falsifying his expense report by obtaining reimbursement for an expense that was direct billed by the supplier. Although the plaintiff claimed that he had earlier informed the company of a problem with the supplier's website and had never spent the funds, the Court concluded that the plaintiff failed to show that the employer's refusal to accept his explanation was a pretext to hide discriminatory animus.

According to the Court's decision, the plaintiff was hired in March 2007. Some of his business expenses were directly billed to the employer and others were billed to his corporate credit card. In December 2007, he attempted to purchase some supplies from a supplier's website and those supplies were supposed to be billed directly to the employer. However, when the website would not cooperate with a direct-bill arrangement, he had the expenses put directly on his corporate credit card. Although these expenses never appeared on his corporate credit card invoice, he still submitted a reimbursement request for these expenses and was reimbursed by the employer for those expenses. His practice was to keep a separate account for reimbursed expenses and he noticed that he still had leftover funds after paying his credit card bill. He assumed that he had never been charged for certain expenses that he had put on the credit card. He claims to have told his supervisor and let the matter go when he was allegedly told not to worry about it.

Of course, the discrepancy was later discovered in February 2008. The supervisor emailed the plaintiff for an explanation and received a response three days later only that the plaintiff was looking into it. A meeting was scheduled for the following Monday. The plaintiff explained that he had sought reimbursement for the direct-billed expenses because he thought his credit card had been charged and asked for more time to investigate. Convinced that the plaintiff had attempted to steal from the employer by falsifying an expense report, the supervisor fired him the following week. Again, the plaintiff failed to explain the discrepancy and only offered to return the disputed funds.

The plaintiff filed suit for race discrimination in his termination and compensation and the employer counterclaimed for the $757 that plaintiff had improperly been reimbursed. The district court granted summary judgment against the plaintiff. On appeal, the plaintiff argued that he was pursuing a mixed-motive theory of discrimination, but the Sixth Circuit found that he had failed to pursue that legal theory by arguing it explicitly below or raising it in his complaint.

The plaintiff argued that he was treated differently than white employees who had submitted incorrect expense reports. However, the Sixth Circuit found these employees not to be similarly situated because (1) they reported to a different supervisor; (2) had technical errors on their reports rather than seeking reimbursement for incorrect amounts or (3) corrected their mistakes (of charging personal expenses on their credit cards) immediately before they were actually reimbursed by the employer. In contrast, the plaintiff waited two months after he had been reimbursed and 13 days after being asked to explain the incorrect reimbursement request and never returned the money. The Court rejected the plaintiff's speculation that the supervisor was not the actual decisionmaker because there was no evidence on the record that he consulted anyone before terminating the plaintiff.

Although the plaintiff claimed that he had raised the issue with his supervisor when he received the credit card bill and realized that he had been reimbursed for more than the charges, he did not remind his supervisor of his when confronted in February, offer an explanation (about the malfunctioning website) or return the money. Accordingly, there was insufficient evidence of a disputed issue of material fact for a jury to consider if the case went to trial.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.