The National Labor Relations Board (NLRB) recently issued a decision interpreting the United States Supreme Court (“SCOTUS”) decision in Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002) as prohibiting the NLRB from awarding back pay to undocumented immigrants whose rights under the National Labor Relations Act (“NLRA”) were violated; even when their illegal status was known to the employer at the time of hiring. NLRB Chairwoman Wilma B. Liebman, and Members Mark Gaston Pearce and Brian Hayes issued the unanimous decision in Mezonos Maven Bakery, with Member Craig Becker having recused himself.

The case involved seven employees at a bakery who were not asked for documentation when they were hired, worked for up to eight years, and were fired after complaining as a group about the treatment that they were receiving. After settling the subsequent unfair labor practice charges, the issue arose as to whether the employees could be awarded back wages and benefits post Hoffman.

Chairman Liebman and Member Pearce agreed that Hoffman precludes an award of back pay but they warned of the policy implications of Hoffman. In what is being heralded as an unprecedented criticism of a SCOTUS decision by the NLRB, Liebman and Pearce outlined the varying implications Hoffman has on the NLRB’s ability to enforce the NLRA. They contended that removing the Board’s ability to award back wages encourages unscrupulous employment practices and prevents the employee from “being made whole.” Specifically, Liebman and Pearce explained that, “in addition to the obvious failure to make employee-victims whole[,] the Act’s enforcement is undermined, employees [documented and undocumented] are chilled in the exercise of their Section 7 rights, the workforce is fragmented, and a vital check on workplace abuses is removed.”

Liebman and Pearce were especially concerned that their ruling, required by Hoffman, gives violating employers a leg up on law abiding competitors by providing “a cost-free discharge guarantee—even where, as here, the employer is a knowing IRCA violator—the demand-side pull [for cheap labor] will be all the greater, directly contrary to Congress’[] purpose in enacting IRCA.”

Although Liebman and Pearce acknowledged that a first time employer-violator would be issued a cease and desist order and thereby “set the stage for contempt penalties should the employer reoffend,” their concern, and one shared by many, is that the damage will already be done. Those who complain will have been terminated, and others may refrain from exercising their rights out of fear of retaliation.

Despite your views on this decision, one thing is clear: it does little to impact the way most businesses function. The U.S. workforce is one of the most well-educated in the world and employees will generally file a complaint (only) when necessary and appropriate (some may argue that they will complain even in the absence of necessity or appropriateness). Thus, employers should continue to verify an employee’s work authorization because failure to do so, in addition to incurring liability for penalties under IRCA, may incur the wrath of the NLRB, which can be very creative in its punishment of violators. Should you be unlucky enough to violate the NLRA a second time, remember the old saying, “[h]ell hath no fury like a Board scorned” —or something like that.  

As the Board put it, going forward: “[w]e would be willing to consider in a future case any remedy within our statutory powers that would prevent an employer that discriminates against undocumented workers because of their protected activity from being unjustly enriched by its unlawful conduct.”