Undocumented Foreign Workers May Recover Unpaid Wages under FLSA Despite Hoffman: Eleventh Circuit

Practical Law Legal Update 5-525-0265 (Approx. 4 pages)

Undocumented Foreign Workers May Recover Unpaid Wages under FLSA Despite Hoffman: Eleventh Circuit

by PLC Labor & Employment

Key Litigated Issues

The key litigated issue in Lamonica v. Safe Hurricane Shutters, Inc. was whether the US Supreme Court's decision in Hoffman Plastic Compounds, Inc. v. NLRB that the NLRB cannot award backpay to undocumented foreign workers terminated for union activity in violation of the NLRA prevents undocumented aliens from recovering unpaid wages under the FLSA.

Background

Mario Feliciano and Augustin Milan brought suit to recover unpaid overtime wages under the FLSA resulting from their prior work installing hurricane shutters for Safe Hurricane Shutters, Inc. The jury found in the plaintiffs' favor against all defendants, Safe Hurricane Shutters, its president and CEO, and two of its directors, and awarded damages to both plaintiffs. The district court also awarded the plaintiffs liquidated damages in an amount equal to their actual damages, totalling $41,698.76 for Feliciano and $2,625 for Milan.

Safe Hurricane Shutters and the two defendant directors filed a renewed motion for judgment as a matter of law and alternative motion for new trial, and a motion to alter or amend the judgment. The district court denied both motions and those defendants appealed both the judgment and the district court's order denying their post-trial motions.

Outcome

On March 6, 2013, the US Court of Appeals for the Eleventh Circuit issued an opinion affirming the district court's judgment and its denial of the defendants' post-trial motions.

The defendants argued that the district court should have granted their motion for judgment as a matter of law based on the doctrine of in pari delicto, which prevents a plaintiff who has participated in wrongdoing from recovering damages resulting from the wrongdoing. The defendants argued that:

Milan should be barred from recovering damages under the FLSA because he was an undocumented alien who was not authorized to work in the US.
Milan should also be barred because he applied to work at Safe Hurricane Shutters using a false social security number (SSN).
Both plaintiffs should be barred from recovering under the FLSA because they failed to accurately report the income they earned from Safe Hurricane Shutters to the Internal Revenue Service (IRS).

According to the Eleventh Circuit's decision in Patel v. Quality Inn S., undocumented aliens are "employees" under the FLSA and are therefore entitled to recover unpaid wages. The defendants argued that the US Supreme Court effectively overruled Quality Inn in Hoffman. The Eleventh Circuit disagreed, finding Quality Inn remained good law despite Hoffman because:

The US Supreme Court's decision in Hoffman merely limited the remedies available to undocumented aliens under the NLRA; it did not disturb the Court's prior holding that undocumented aliens are "employees" under the NLRA.
The NLRA grants the NLRB broad discretion to devise remedies to effectuate the NLRA's policies, subject to judicial review, and Hoffman was an exercise of that judicial authority. The FLSA, however, does not grant any court or administrative body discretion to fashion appropriate remedies under the FLSA itself.
The undocumented aliens in Hoffman sought backpay for time they would have worked had the employer not committed an unfair labor practice (ULP), but did not actually work because of the ULP. The US Supreme Court found that awarding backpay in those circumstances would trivialize federal immigration laws and condone and encourage future violations. By contrast, the plaintiffs in this case (as is true for plaintiffs under the FLSA in general) sought payment for work they had actually performed. In these cases, the immigration law violation has already occurred and awarding damages does not condone the violation or continue it. In fact, the Eleventh Circuit maintained that even after Hoffman, by reducing the incentive to hire these workers, the FLSA's coverage of undocumented aliens helps discourage illegal immigration.

Since Hoffman was not clearly on point, the Eleventh Circuit found it was still bound to follow Quality Inn and affirm Milan's award despite his presumed undocumented status.

The Eleventh Circuit also found that the in pari delicto doctrine did not apply to prevent either:

Milan from recovering under the FLSA because he used a false SSN to obtain his job.
Both plaintiffs from recovering under the FLSA because they failed to report their income to the IRS.

The doctrine requires the plaintiff to be an active, voluntary participant in the unlawful activity that is the subject of the suit, not merely related to the suit. Because the plaintiffs did not participate in the defendants' decision to not pay them overtime under the FLSA, the doctrine did not apply.

The Eleventh Circuit also addressed various evidentiary issues and jury instruction-related claims the defendants raised on appeal, and upheld the district court's decisions in all respects.

Practical Implications

The Eleventh Circuit's decision in Lamonica v. Safe Hurricane Shutters, Inc. is consistent with the DOL's position that Hoffman has no impact on undocumented workers' wage claims under the FLSA. Employers in the Eleventh Circuit should be aware that undocumented workers may still file FLSA claims and receive unpaid wages, and employers in general should be aware that the DOL will continue to enforce both the FLSA and the Migrant and Seasonal Agricultural Worker Protection Act regardless of a worker's immigration status.

For more information on the FLSA generally, see Wage and Hour Law: Overview.

Undocumented Foreign Workers May Recover Unpaid Wages under FLSA Despite Hoffman: Eleventh Circuit | Practical Law