Labor & Employment Law

City ordinance penalizing employers who hire undocumented immigrants is preempted.

The 3rd Circuit today struck down Hazleton, Pennsylvania's ordinance that penalizes employers who hire undocumented immigrants.

Lozano v. City of Hazleton (3rd Cir 09/09/2010).

The City's Illegal Immigration Relief Act Ordinance (IIRAO) provides, among other things, that the City may suspend the business license of any employer who employs a worker who is not authorized to work in the United States. Affirming the trial court, the 3rd Circuit held that this portion of the ordinance is preempted.

IIRAO?s employment provisions require businesses to submit affidavits affirming that they do not utilize the services of unlawful workers; incentivize, and in certain circumstances mandate, the use of E-Verify; create procedures for adjudicating independently of federal law whether a business has employed an unauthorized alien; and penalize a business for doing so by suspending its business license.

Although the court gave the City the benefit of a presumption against federal preemption, it found that IIRAO was preempted by the federal Immigration Reform and Control Act (IRCA) and related statutes.

(1) IRCA does not expressly preempt IIRAO's provision for suspending business licenses because IRCA has a savings clause for licensing laws.

(2) IIRAO is "conflict preempted," not because compliance with both IRCA and IRRAO is impossible, but because IRRAO's "employment provisions stand as an obstacle to the accomplishment and execution of federal law." This is because IRRAO interferes with Congress' "careful balance among its competing policy objectives of effectively deterring employment of unauthorized aliens, minimizing the resulting burden on employers, and protecting authorized aliens and citizens perceived as 'foreign' from discrimination." Specifically, IIRAO (a) "significantly increases employer burden by creating a separate and independent adjudicative system for determining whether an employer is guilty of employing unauthorized aliens," (b) "contravenes congressional objectives by altering the employment verification scheme created by IRCA," (c) "increases the burden on interstate employers by failing to provide safe harbor for those who use the I-9 process," (d) "coerces employers to verify the work authorization of independent contractors, even though Congress purposely excluded independent contractors from IRCA?s verification requirements," and (e) fails to "balance its sanctions with anti-discrimination protections."

[Ed. Note: Arizona's Legal Arizona Workers Act allows the superior courts of Arizona to suspend or revoke the business licenses of employers who knowingly or intentionally hire unauthorized aliens. The 9th Circuit upheld this statute against claims of preemption. The US Supreme Court granted certiorari, and oral argument is scheduled for December 8, 2010. Chamber of Commerce of the United States v. Whiting.]

Full post as published by Ross' Employment Law Blog on September 09, 2010 (boomark / email).