Produce dealer Farm Fresh Company Target One, LLC was found guilty of interfering with its employees’ right to organize a union at the workplace. Specifically, the Company discharged four workers due to their union activities. As part of its remedy, the National Labor Relations Board required the Company to rehire the workers unconditionally, but the Company wanted to conduct an E-Verify check prior to rehiring them to ensure they were eligible to work in the United States. Since Arizona law requires the use of E-Verify, the federal district court in Arizona found the Board’s unconditional rehire requirement unlawful.
After winning the E-Verify issue, the Company filed an application with the court for litigation expenses under the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1)(A), which permits awards to small businesses prevailing in litigation brought by or against the U.S. if the government’s position was not “substantially justified.” In a rare move, the court ordered the Board to reimburse the Company more than $55,000 in attorneys’ fees because those fees were incurred as a result of the Board’s unjustified demand that the court order reinstatement without verifying the workers’ eligibility to work in the U.S.