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LABOR & EMPLOYMENT LAW — 6/27/08

No-match letters do not automatically mean employees are undocumented

Without addressing the legality of the Department of Homeland Security's (DHS) no-match regulation, which the agency has been barred from implementing since October 2007, the Ninth Circuit Court of Appeals affirmed an arbitration award that found no "convincing information" of immigration violations and required a facilities management company to reinstate with backpay 33 janitors who were discharged by the company when they failed to resolve the mismatch identified in the no-match letter the company received from SSA or provide evidence of having applied for new Social Security numbers (SSN) in accordance with the company's policy. To help improve the accuracy of the wage reporting process, the SSA sends out no-match letters when the combination of name and social security number submitted for an employee fails to match the SSA's database. (Aramark Facility Servs v SEIU Local 1877, 9thCir, 91 EPD ¶43,227)

After receiving letters from SSA indicating that the SSN's of 48 of its employees (who provided janitorial services at the Staples Center) did not match the SSA's database, the company issued a notice to the janitors and gave them three days to return to with new social security cards or with letters from SSA stating they were in the process of obtaining a new SSN. Thirty-three janitors did not timely comply with the company's instructions and were discharged. The fired workers were told by the company they would be rehired if they supplied the required documentation. The Service Employees International Union filed a grievance on behalf of the fired janitors, contending their discharged breached the applicable collective bargaining agreement by firing them without just cause. The arbitrator ruled in favor of the SIEU, awarding the janitors backpay and reinstatement, finding no "convincing information" that any of the fired janitors were undocumented. Aside from the company not really knowing why the janitors failed to provide the additional documentation, the arbitrator found that they could have had "valid" work eligibility by virtue of the fact that at the time of their hire, they had: (1) properly completed the I-9 Forms; and (2) provided the company with facially valid documents establishing their identity and eligibility to work in the United States. Moreover, the company was not notified by any federal agency that its workers were suspected of being undocumented.

A district court reversed the arbitrator, reasoning that because the janitors failed to indicate they were beginning the process of correcting the mismatch, the company had "constructive notice" they were ineligible to work in the United States.

Affirming the arbitrator, the Ninth Circuit held that the letters themselves – and the "extremely short time" (three days) Aramark gave to the janitors to correct the mismatches, which they failed to do – were simply not probative enough of their immigration status to indicate that public policy (i.e., the Immigration Reform and Control Act of 1986) would be violated if they were reinstated and given backpay. Reviewing constructive knowledge in IRCA narrowly pursuant to its precedent, the circuit court found that the "no-match" letters themselves could not have put the company on constructive notice that any particular employee mentioned was undocumented. The Ninth Circuit confirmed that the main purpose of no-match letters is not immigration-related, but rather to indicate to workers that their earnings are not being properly credited. An "SSN discrepancy does not automatically mean that an employee is undocumented or lacks proper work authorization," wrote the circuit court. Aside from immigration status, no-match letters could be generated for many reasons, confirmed the circuit, "including typographical errors, name changes, compound last names prevalent in immigrant communities, and inaccurate or incomplete employer records."

Even DHS's no-match regulation (adopted after the company received the letter at issue and currently subject to a preliminary injunction) "would not treat the no-match letter by itself as creating constructive knowledge of an immigration violation." The regulation defines "constructive knowledge" as looking further to "the totality of the circumstances" and whether the employer took reasonable steps after receiving the no-match letter, wrote the circuit court.

For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.

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