Termination of Employees Based on "No-Match" Letters Found Improper
In Aramark Facility Services v. Service Employees International Union Local, 1877, the Ninth Circuit affirmed an arbitrator’s decision awarding 33 employees back-pay and reinstatement after they were terminated from their employment for failing to correct “no-match” letters received by their employer from the Social Security Administration (“SSA”). Specifically, in early 2003, Aramark Facility Services (“Aramark”) received “no-match” letters from the SSA for thousands of its employees, including 48 employees in Southern California. In response to these “no-match” letters for the 48 employees, Aramark sent the employees a letter stating they had three days to correct the discrepancy with the SSA or produce documentation that they had applied for a new social security card. Out of the 48 employees, only 15 met the three day deadline. The other 33 employees were terminated from their employment and told they would be rehired if they subsequently provided the requested documentation. The union filed a grievance on behalf of the 33 employees, claiming Aramark had violated the collective bargaining agreement by terminating their employment without just cause. Aramark argued that it was simply complying with federal law that prohibits an employer from knowingly employing undocumented workers. After completing several days of arbitration, the arbitrator concluded that there was no “convincing information” presented to demonstrate any of the 33 employees were undocumented workers and therefore awarded the workers back-pay and reinstatement. Aramark appealed the arbitrator’s ruling to the United States District Court, which reversed the arbitration award on the grounds that the arbitrator’s award of reinstatement and back pay required Aramark to violate federal immigration laws. Thereafter, the union appealed to the Ninth Circuit.
On appeal, the Ninth Circuit determined two issues: (1) whether there was an explicit, well-defined public policy at issue; and (2) whether the public policy required the award ordered by the arbitrator to be changed. In response to the first question, the Court agreed that there was a well defined public policy set forth in the Immigration Reform and Control Act (“IRCA”) against the employment of undocumented workers. However, in response to the second question, the Court determined that this public policy did not require the reversal of the arbitrator’s award as there was no “constructive knowledge” that the employees were undocumented workers. The Court emphasized that for purposes of immigration law, “constructive knowledge” must be narrowly construed to only include “positive information” that would lead a reasonable person to learn about a certain condition. Neither the “no-match letter” nor the employees’ lack of response thereto within the three days provided was sufficient to justify “constructive knowledge” of their undocumented status. In fact, both the SSA and the Department of Homeland Security (“DHS”) have specifically stated that a no-match letter, alone, does not rise to the level of “constructive knowledge” that an employee is undocumented. Furthermore, the Court determined that the three day turnaround time provided to the 33 employees in which to respond to the no-match letters was simply too onerous and that the employees’ failure to respond within such a short time frame could have been the result of multiple factors other than their alleged undocumented status, including the inability to get to a SSA office within the three days due to work or family obligations. The Court noted that the three day deadline was significantly more accelerated than even the DHS’s 90-day deadline, set forth in the DHS’s proposed safe harbor regulations regarding an employer’s receipt of no-match letters (these proposed regulations have not yet taken effect). Based upon this information provided to the arbitrator and the Court’s inability to disrupt the arbitrator’s factual findings, the Court affirmed the arbitrator’s award. In its conclusion the Court did note that “though it seems reasonable to suspect that some of the fired workers were undocumented, the law did not permit the district court to rely on this suspicion in vacating the arbitration award.”
Due to the current uncertainty in this area of the law regarding how to treat “no-match” letters, employers should consult with legal counsel before taking any action against employees who are the subject of “no-match” letters.