Sanchez et al. v. Eagle Alloy, Inc.: MI Court of Appeals Limits Workers' Compensation Recovery in Cases Involving Undocumented Workers

IMMIGRANTS & EMPLOYMENT

Immigrants' Employment Rights and Remedies

SANCHEZ ET AL. V. EAGLE ALLOY, INC.: MICHIGAN COURT OF APPEALS LIMITS WORKERS' COMPENSATION RECOVERY IN CASES INVOLVING UNDOCUMENTED WORKERS
Immigrants' Rights Update, Vol. 17, No. 1, February 21, 2003

The Michigan Court of Appeals has held that undocumented workers are covered by that state's workers' compensation law and are entitled to full medical benefits. However, the court also held that their right to wage loss benefits ends at the time that the employer "discovers" that they lack authorization to work.

The plaintiffs in the consolidated cases, David Sanchez and Alejandro Vazquez, presented the employer, Eagle Alloy, Inc. (a foundry), with false documentation of work authorization at the time they were hired. Sanchez was injured in 1998, when a machine closed on his hand, crushing and burning it between two heated plates. Vazquez was injured in Jan. 1999, when he lifted a heavy piece of metal at work and suffered a left acromioclavicular joint separation. Both workers were fired in the summer of 1999, after the employer received letters from the Social Security Administration (SSA), informing it that the workers' Social Security numbers were invalid.

The Michigan's Workers' Compensation Disability Act states that an employer is not liable for compensation for wage loss "for such periods of time that the employee is unable to obtain or perform work because of imprisonment or commission of a crime." Based on its reading of the U.S. Supreme Court's decision in Hoffman Plastic Compounds v. NLRB, 535 U.S. 137 (2002), the Michigan Court of Appeals determined that the workers' "admitted use of fake documents to obtain employment constituted 'commission of a crime' under the [workers' compensation] statute." It further held that when the employer "learned of plaintiffs' employment status and could not legally retain them as employees or find them other work, [the workers] became unable to obtain or perform work 'because of' the commission of a crime." Thus, the court upheld the magistrate's award of wage loss benefits to Sanchez up to "the date on which his employment status was discovered" and to Vazquez until the date "on which his illegal status was confirmed." (For a summary of the Hoffman decision, see "Supreme Court Bars Undocumented Worker from Receiving Back Pay Remedy for Unlawful Firing," Immigrants' Rights Update, Apr. 12, 2002, p. 10).

The court rejected the employer's argument that undocumented workers are not covered by the statute-and thus not even entitled to medical benefits-because they had entered into an "illegal contract."

This case highlights the importance of limiting employer inquiries into work authorization and of understanding how Social Security "no-match" letters can prompt such inquiries. Employers' "discovery" of employees' lack of work authorization deprives workers of a monetary remedy, as happened in this case. Also, the discovery may well encourage unscrupulous employers to fire undocumented workers after an injury to avoid workers' compensation liability. Further, Eagle Alloy was prompted to inquire into Sanchez's and Vazquez's work authorization because of SSA no-match letters it received. It is important for workers and advocates to understand that the letters do not always give the employer the right to question employees about their work authorization.

Advocates have convinced courts to limit discovery into plaintiffs' immigration status in several post-Hoffman employment cases. (For a discussion of some of those cases, see "Hoffman: Lower Courts Limit Impact of High Court's Decision Barring Undocumented Worker from Receiving Back Pay," Immigrants' Rights Update, May 30, 2002, p. 8, and "Courts Continue Rejecting Defendants' Post-Hoffman Inquiries Into Plaintiffs' Immigration Status," IRU, Oct. 21, 2002, p. 10.) For an explanation about and advocacy tips concerning SSA no-match letters, see "Information Packet for Immigrant Workers' Advocates," which can be downloaded from the "Immigrants and Employment" section of NILC's Web site at www.nilc.org/immsemplymnt/index.htm.

Sanchez et al. v. Eagle Alloy, Inc., __N.W.2d__, 2003 Mich. App. LEXIS 25 (Jan. 7, 2003).