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LABOR & EMPLOYMENT LAW — 9/24/07

Chamber of Commerce files motion to join suit challenging DHS's "no-match" regulation

CCH note. In light of the American Federation of Labor and Congress of Industrial Organizations, the American Civil Liberties Union, the National Immigration Law Center and the Central Labor Council of Alameda County, along with other local labor movement s (plaintiffs), statement of non-opposition to their motion, and the Department of Homeland Security, US Immigration and Customs Enforcement and Social Security Administration s (defendants) similar statement of non-opposition, on September 11, 2007, District Judge Susan Y. Illston granted the proposed plaintiff-intervenors motion to intervene in the lawsuit. The plaintiff-intervenors include: (1) the US Chamber of Commerce; (2) the San Francisco Chamber of Commerce; (3) the Golden Gate Restaurant Association; (4) the National Roofing Contractors Association; (5) the American Nursery & Landscape Association; (6) the International Franchise Association; and (7) the United Fresh Produce Association. The original motion to intervene, which was scheduled for September 14, 2007, was vacated.

On September 7, 2007, the US Chamber of Commerce asked to intervene in a lawsuit initially filed on August 29 by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the American Civil Liberties Union (ACLU), the National Immigration Law Center (NILC) and the Central Labor Council of Alameda County, along with other local labor movements (groups), challenging the legality of the Department of Homeland Security's (DHS) "no-match" regulation. The groups seek to permanently enjoin DHS from implementing or otherwise giving effect to the regulation.

Background. The regulation, which amends 8 CFR Part 274a, describes the legal obligations of employers under the Immigration Reform and Control Act of 1986 (IRCA) when receiving a "no-match" letter from the Social Security Administration (SSA) or a "notice of suspect documents" letter from US Immigration and Customs Enforcement (ICE), DHS's, largest investigative arm. The regulation also describes "safe-harbor" procedures that employers can follow in response to receiving such letters and thereby be certain that DHS will not use the letter as any part of an allegation that the employer had constructive knowledge that the employee referred to in the letter was an alien not authorized to work in the United States. While DHS does not have access to the list of employers that receive "no-match" letters from the SSA, DHS will send guidance letters to employers concerning their obligations under the regulation concurrently with the SSA's "no-match" letters. If an employer does not comply with the "no-match" regulation, DHS can use that non-compliance as evidence of constructive knowledge and impute liability on the part of the employer.

Chamber's suit. "The Chamber is intervening in this challenge primarily because DHS did not comply with the requirements of the Regulatory Flexibility Act when it concluded the new regulation would impose no 'new or additional costs' on employers. This is clearly wrong," said Robin Conrad, executive vice president for the Chamber's National Litigation Center. The Regulatory Flexibility Act require federal agencies to consider the impact of their regulatory actions on small businesses. "At the very minimum, employers would have to expend significant amounts of time and effort simply to understand the regulation and to train their human resource professionals on how to handle 'no-match' letters when they are received." According to the Chamber's complaint, the "no-match" regulation will have a "significant economic impact" on small businness operations, easily exceeding 100 million per annum.

The Chamber's lawsuit also alleges that the DHS exceeded its statutory authority and failed to comply with the Administrative Procedures Act when issuing the regulation. From the business perspective, explained the Chamber, if left unchallenged, the regulation would create considerable compliance costs, particularly in light of the fact that the DHS estimates that 140,000 letters would be sent to employers identifying multiple names including almost nine million mismatches. Further, employers cannot simply ignore this regulation because doing so would expose them to claims that the employer knowingly hired undocumented workers.

In addition to the Chamber, the other groups seeking to join as intevenors are: (1) the San Francisco Chamber of Commerce; (2) the Golden Gate Restaurant Association; (3) the National Roofing Contractors Association; (4) the American Nursery & Landscape Association; (5) the International Franchise Association; and (6) the United Fresh Produce Association. The district court is expected to hear arguments on the motion to intervene on September 14.

Current status. Late August 31, US District Judge Maxine M. Chesney in the Northern District Court of California issued an order temporarily blocking DHS from implementing its "no-match" regulation, including mailing or otherwise sending to employers SSA "no-match" letter packets that include DHS guidance letters concerning the regulation. Those packets were scheduled to mail to approximately 140,000 employers beginning on September 4. Judge Chesney wrote in her order that the federal government would suffer significantly less harm by a delay in the implementation of the regulation pending consideration of the groups' claims. The temporary restraining order blocking the September 14 effective date of the regulation is scheduled to remain in effect until October 1, when US District Court Judge Charles Breyer will next consider whether to grant a preliminary injunction that would block the regulation from coming out altogether until a full trial on the groups' lawsuit against the government is held.

The US Chamber of Commerce is the county's largest business federation, representing more than 3 million businesses and organizations of every size, sector and region.

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

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