In Incalza v. Fendi North America, Inc., Ninth Circuit Court of Appeals held that a retailer could not use the Immigration Reform and Control Act (IRCA) to defend its unjust firing of a manager under California law because it had options other than firing the employee for being an undocumented worker. The court said the IRCA justification was merely pretext for an unlawful termination and confirmed a jury award of $1.08 million.

Incalza, an Italian citizen, worked for Fendi in both its New York City and Beverly Hills stores for 13 years on visas obtained and renewed with the assistance of Fendi. When Incalza's visa ultimately expired, Fendi fired Incalza telling him that nothing could be done about his visa problems. Incalza asked to take a leave of absence because he was about to marry a U.S. citizen and thus would be eligible for a green card. The company refused.

The court held that it was possible for Fendi to obey federal law because there were lawful remedies short of discharge. Looking to the legislative history and congressional intent for IRCA, the court explained that IRCA does not require employers to fire workers who are unauthorized, but permits employers to suspend or grant unpaid leave while an employee corrects the problem with his documentation.

This case underscores the fact that the legality of an employees' immigration status does not automatically justify termination and alternative remedies need to be considered.