A New York federal judge has refused to dismiss a putative class action alleging that Northwestern Mutual Life Insurance Company engaged in alienage discrimination when it rejected a Mexican-born applicant for an internship position because he was neither a U.S. citizen nor a legal permanent resident, even though he was legally authorized to work in the United States.

In July 2014, Ruben Juarez filed a lawsuit in U.S. District Court for the Southern District of New York, individually and on behalf of similarly situated plaintiffs, alleging that he applied for a position at Northwestern Mutual and was rejected pursuant to a policy that denies employment to all persons who are not U.S. citizens or legal permanent residents. District Judge Katherine Forrest found that Juarez had adequately alleged that the insurer had violated 42 U.S.C. § 1981, as amended by the Civil Rights Act of 1991, which bars discrimination based on race or alienage in the creation and enforcement of contracts. Juarez alleged that a Northwestern Mutual recruiter had expressed strong interest in hiring him until she realized that he was neither a U.S. citizen nor a permanent resident. Northwestern Mutual argued that the case should be dismissed because it hired legal permanent residents, which was evidence that it did not discriminate against Juarez because he lacked U.S. citizenship.

Judge Forrest denied Northwestern Mutual’s motion to dismiss, allowing the lawsuit to proceed. The judge noted that the “policy alleged in the Complaint—essentially, ‘Legal aliens without green cards need not apply’—on its face discriminates against a subclass of lawfully present aliens.”

Employers should take two lessons from this decision. First, employers should avoid policies or practices that discriminate against job applicants based on their alienage. Second, employers should be aware that policies that place a blanket prohibition on employing a group of applicants are potential grounds for litigation and should be carefully considered before they are implemented.