Court Sanctions Minnesota Employer For NOT Violating Federal Immigration Law

Believe it or not, the Minnesota Supreme Court recently explained that a Minnesota employer may be required to knowingly violate federal immigration law by employing an undocumented worker in order to avoid liability under state workers’ compensation laws.

Dahlke Trailer Sales had employed Anibal Sanchez as a shop body assistant for nearly eight years when Sanchez sustained a work-related injury in September 2013. During a subsequent deposition relating to his claim for workers’ compensation benefits, Sanchez admitted that he was not legally authorized to work in the United States, which he also confirmed to Dahlke management shortly thereafter.

In response, Dahlke gave Sanchez a letter confirming that the company was placing him on an unpaid leave of absence but that he could return to work as soon as he provided “legitimate paperwork showing that [he could] legally work in the United States.”

Torn Between Two Statutes

Sanchez then sued Dahlke, alleging the company violated the Minnesota’s workers’ compensation anti-retaliation statute, which prohibits employers from discharging, threatening discharge, or intentionally obstructing benefits in retaliation for an employee’s pursuit of a workers’ compensation claim.

During the lawsuit, Sanchez testified that his employer knew that he was an undocumented worker long before he sought workers’ compensation benefits so why did they all of a sudden place him on leave?  The company disputed any prior knowledge and argued that by placing Sanchez on leave, they were simply complying with federal law prohibiting employers from knowingly employing undocumented workers. The company also pointed out that Sanchez testified he understood he could return to work as soon as he was legally authorized to work in the United States and therefore, he had not been permanently discharged. Agreeing with the company’s evidence and arguments, the trial court dismissed the case.

On appeal, the Minnesota Court of Appeals reversed the trial court’s decision, sending the case back to the trial court for a jury to determine whether Dahlke’s real motive for placing Sanchez on leave was because of his pursuit of workers’ compensation benefits.

This time, it was the company’s turn to appeal, arguing before the Minnesota Supreme Court that Sanchez’s claims failed as a matter of law for two reasons. First, federal immigration law required the company to take the actions it did, thereby conflicting with and preempting the state anti-retaliation law. Second, because Sanchez was not permanently discharged but rather, placed on an indefinite leave of absence from which he could return when he was authorized to work, he did not suffer an adverse employment action protected under the state law. In short, federal required that they suspend him but that’s all they did.

Not Violating Federal Law Violated State Law

In a closely divided decision, the Minnesota Supreme Court sided with Sanchez, reasoning that a jury should decide whether Dahlke acted with actual intent to permanently end his employment when placing him on leave.  The court determined that federal immigration law did not preempt the state anti-retaliation statute because it is possible under normal circumstances for an employer to comply with both laws at once. In other words, the employer could properly determine to suspend an employee who was not legally authorized to work; they simply cannot do it as a form of retaliation.  The case was therefore remanded for trial consistent with this ruling.

Three justices of the seven justices signed a strongly worded dissent noting that the company had a clear duty to cease actively employing Sanchez upon learning “without any room for doubt” that he was not authorized to work in the United States, or risk incurring civil fines and criminal penalties under federal immigration law. Thus, federal law does preempt the state anti-retaliation law in this case, and such preemption should have served as a basis for Sanchez’s lawsuit to be dismissed.

The dissent also concluded that Sanchez’s leave of absence was not tantamount to a permanent discharge since he “was permitted to return to work with Dahlke when he met the most basic of conditions: legal eligibility to work.”

Bottom Line

It seems that this decision was all about motive. If in fact the company knew that Sanchez was not legally able to work in the US (as Sanchez asserted) but waited to take action until he filed for workers compensation benefits, a judge or jury could perhaps find that the action was based on the filing of the claim, not on Sanchez’s immigration  status.  Therefore, by placing him on indefinite leave only after he filed for workers comp benefits they might in fact be interfering with his receipt of those benefits.

Accordingly, Minnesota employers should be mindful not to turn a “blind eye” to an employee’s legal work status until circumstances make it impossible for the employer to ignore such facts any longer.