On February 18, 2011, the U.S. Court of Appeals for the Second Circuit issued its opinion in NLRB v. Domsey Trading Corporation, Docket Nos. 10-3356, 08-5165, 08-4845 (2d Cir. Feb. 18, 2011), reversing a decision of the National Labor Relations Board ("NLRB") and remanding the proceeding for discovery into the immigration status of employees who might otherwise be eligible for backpay awards.

Domsey Trading arose out of a strike in January 1990. Several Domsey workers filed a complaint with the NLRB claiming that the company had committed unfair labor practices. After the strike was settled, the NLRB upheld the workers' complaint and ordered reinstatement of the complaining workers with backpay. Thereafter, the NLRB issued a Compliance Specification and Notice of Hearing before an administrative law judge ("ALJ") to determine the backpay due to the striking workers. At the time, Domsey raised the issue of the immigration status of the workers and claimed that the undocumented ones would not be eligible for backpay. The ALJ rejected Domsey's request for discovery into this issue based on the U.S. Supreme Court's decision in Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984). The ALJ interpreted Sure-Tan as requiring backpay regardless of the workers' immigration status.

The Domsey Trading NLRB proceeding was still pending when the Supreme Court decided Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002), and held that undocumented aliens are not entitled to backpay under the National Labor Relations Act ("NLRA"). On September 30, 2007, more than five years after the Hoffman decision, the NLRB issued a supplemental decision that precluded a backpay award to those workers who had admitted that they were undocumented during the backpay period but refused to grant Domsey the discovery it sought into the immigration status of the remaining complainants. After remand, the ALJ also issued a supplemental decision affirming the backpay awards to several employees and refusing Domsey's continued request for discovery into the complainants' immigration status.

In a decision sharply critical of the NLRB, the Second Circuit found that the NLRB abused its discretion by failing to remand this proceeding for discovery into the claimants' immigration status consistent with the Supreme Court's decision in Hoffman. According to the Second Circuit, "it is now clear that undocumented immigrants are ineligible for backpay under the NLRA and, therefore, that immigration status is relevant to the question of backpay eligibility." Domsey Trading, slip op. at 9.