Hoffman Plastic Compounds v. NLRB and Backpay Awards to Undocumented Aliens

Hoffman Plastic Compounds v. NLRB and Backpay Awards to Undocumented Aliens

Order Code RS21186
April 3, 2002
CRS Report for Congress
Received through the CRS Web
Hoffman Plastic Compounds v. NLRB and
Backpay Awards to Undocumented Aliens
name redacted
Legislative Attorney
American Law Division
Summary
This report discusses the U.S. Supreme Court’s decision in Hoffman Plastic
Compounds v. NLRB, a case involving whether backpay may be awarded to an
undocumented alien because his employer violated the National Labor Relations Act.
The report reviews the relevant facts of the case and discusses both the majority and
dissenting opinions. The Court’s conclusion that federal immigration policy restricts the
National Labor Relations Board from awarding backpay to an undocumented alien could
result in legislation. This report will be updated in accordance with such legislative
activity.
The question of whether backpay may be awarded to an undocumented alien because
his employer violated the National Labor Relations Act (NLRA) has been considered by
the U.S. Supreme Court. In Hoffman Plastic Compounds v. NLRB, the Court concluded
that federal immigration policy restricts the National Labor Relations Board (NLRB or
“the Board”), the federal agency that administers the NLRA, from awarding backpay to
an undocumented alien who has never been legally authorized to work in the United
States.1 This report will review the relevant facts of the case and discuss the Court’s
analysis.
Background
Jose Castro was terminated by Hoffman after he and several other employees
distributed union authorization cards to co-workers. The NLRB concluded that Hoffman
violated the NLRA by discharging known union supporters.2 Hoffman was ordered to
1 Hoffman Plastic Compounds v. NLRB, No. 00-1595, 2002 WL 459438 (U.S. Mar. 27, 2002).
The majority opinion was written by Chief Justice Rehnquist and joined by Justices O’Connor,
Scalia, Kennedy, and Thomas.
2 Section 8(a)(3) of the NLRA, 29 U.S.C. § 158(a)(3), prohibits discrimination “in regard to hire
or tenure of employment or any term or condition of employment to encourage or discourage
(continued...)
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cease and desist from further violations of the NLRA, to post a detailed notice to its
employees regarding the order, and to offer reinstatement and backpay to the terminated
employees.3
During a subsequent compliance hearing before an administrative law judge (ALJ)
to determine the amount of backpay owed to each employee, Castro admitted to using a
friend’s birth certificate to obtain employment with Hoffman. Castro was born in Mexico
and had never been legally admitted to the United States. Based on Castro’s testimony,
the ALJ concluded that the NLRB was precluded from awarding reinstatement or backpay
to Castro. The ALJ maintained that such relief would be contrary to the Court’s holding
in Sure-Tan v. NLRB, a prior case involving undocumented workers, and the Immigration
Reform and Control Act of 1986 (IRCA).4 The IRCA makes it unlawful for employers
to knowingly hire undocumented workers or for employees to use fraudulent documents
to establish employment eligibility.
Although the NLRB supported the ALJ’s determination that reinstatement was
inappropriate, it disagreed with the ALJ’s conclusion about the availability of backpay.5
The NLRB maintained that “the most effective way to accommodate and further
immigration policies embodied in [the IRCA] is to provide the protections and remedies
of the [NLRA] to undocumented workers in the same manner as to other employees.”6
The NLRB determined that Castro was entitled to $66,951 of backpay, including interest.
The backpay amount was calculated from the date of Castro’s termination to the date
Hoffman first learned of Castro’s undocumented status.
Hoffman filed a petition for review of the NLRB’s order with the U.S. Court of
Appeals for the D.C. Circuit. A panel of the court denied the petition. After rehearing the
case en banc, the D.C. Circuit again denied the petition for review and enforced the
Board’s order. Certiorari was granted by the Supreme Court on September 25, 2001.7
NLRB Discretion to Fashion Remedies for Violations of the NLRA
Although the Court has recognized the NLRB’s broad discretion to select and fashion
remedies for violations of the NLRA, it has set aside awards of reinstatement or backpay
to employees found guilty of serious illegal conduct in connection with their employment.8
For example, in Southern S.S. Co. v. NLRB, the Court set aside an award of reinstatement
and backpay to employees whose strike on a ship amounted to a mutiny in violation of
2 (...continued)
membership in any labor organization.”
3 Hoffman, 2002 WL at *3.
4 Id.
5 Hoffman, 2002 WL at *3. See also Hoffman Plastic Compounds v. NLRB, 237 F.3d 639, 641
(D.C. Cir. 2001).
6 Hoffman Plastic Compounds, 326 N.L.R.B. 1060 (1998).
7 122 S.Ct. 23 (2001).
8 Hoffman, 2002 WL at *4.

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federal law.9 The Southern S.S. Court concluded that the NLRB “has not been
commissioned to effectuate the policies of the Labor Relations Act so single-mindedly that
it may wholly ignore other and equally important [c]ongressional objectives.”10 In
Hoffman, the Court noted that “[s]ince Southern S.S. Co., we have accordingly never
deferred to the Board’s remedial preferences where such preferences potentially trench
upon federal statutes and policies unrelated to the NLRA.”11
Following Southern S.S., the Court maintained that allowing the NLRB to award
backpay to undocumented aliens would “unduly trench upon explicit statutory prohibitions
critical to federal immigration policy, as expressed in [the] IRCA.”12 Under the IRCA, an
undocumented alien cannot obtain employment in the United States without the employer
or the employee contravening explicit congressional policies. The Court observed:
The Board asks that we overlook this fact and allow it to award backpay to an
illegal alien for years of work not performed, for wages that could not lawfully
have been earned, and for a job obtained in the first instance by a criminal fraud.
We find, however, that awarding backpay to illegal aliens runs counter to
policies underlying [the] IRCA, policies the Board has no authority to enforce
or administer.13
Moreover, the Court noted that an award of backpay to undocumented aliens would
condone prior violations of the immigration laws and encourage future violations.14
The NLRB argued that an award of backpay to Castro is permissible because it
“reasonably accommodates” the IRCA and is not inconsistent with it.15 The NLRB
contended that because the backpay period ended on the date Hoffman learned of Castro’s
illegal status, Hoffman could have theoretically employed Castro during the backpay
period without violating the IRCA.16 Further, the NLRB argued that the IRCA does not
explicitly render violators ineligible for backpay awards flowing from employment secured
by the misuse of documents.
The Court rejected the NLRB’s arguments. The Court recognized the IRCA as
reflecting Congress’ interest in making it criminally punishable for an alien to obtain
employment with false documents. An award of backpay would suggest a contrary
interest; that Congress intended for an alien to remain in the United States illegally and to
continue to work illegally. The Court concluded that the NLRB’s position subverted
9 316 U.S. 31 (1942).
10 Southern S.S. Co., 316 U.S. at 47.
11 Hoffman, 2002 WL at *5.
12 Hoffman, 2002 WL at *9.
13 Hoffman, 2002 WL at *8.
14 Hoffman, 2002 WL at *9.
15 Hoffman, 2002 WL at *8.
16 Id.

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rather than accommodated the IRCA by recognizing employer misconduct, but discounting
the misconduct of illegal alien employees.17
Dissent
The dissenting justices concluded that the NLRB’s limited backpay order did not
interfere with the implementation of immigration policy.18 The dissent maintained that the
general purpose of the IRCA’s employment prohibition is “to diminish the attractive force
of employment, which . . . pulls illegal immigrants towards the United States.”19 By
restricting the availability of backpay to an undocumented alien, the Court was actually
increasing the force of employment. The dissent reasoned that because the cost of initial
labor law violations involving undocumented aliens was low, an employer’s incentive to
find and hire such individuals increased. The dissent observed: “in the absence of the
backpay weapon, employers could conclude that they can violate the labor laws at least
once with impunity.”20
The dissent also suggested that the Court improperly substituted its own independent
view of the matter for that of the NLRB. Because the NLRB’s position appeared to be
a reasonable one, the dissent maintained that the Court was required to respect and uphold
it.21
Legislation
Legislation that would allow undocumented aliens to receive backpay awards could
be forthcoming. Following the Court’s decision, Senator Edward M. Kennedy is reported
to have expressed an interest in pursuing legislation to undue the holding.22
17 Id.
18 Hoffman, 2002 WL at *10. The dissenting opinion was written by Justice Breyer and joined by
Justices Stevens, Souter, and Ginsburg.
19 Hoffman, 2002 WL at *11.
20 Hoffman, 2002 WL at *10.
21 Hoffman, 2002 WL at *14 (citing Chevron U.S.A. Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984). The dissent noted that the NLRB reached its conclusion after careful
consideration of both labor and immigration law.
22 See Charles Lane, Court Denies Back Pay to Fired Illegal Immigrants, Wash. Post, Mar. 28,
2002, at A13.

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