HOFFMAN PLASTIC COMPOUNDS V. NLRB: AN INVITATION TO EXPLOIT

IV. WHETHER HOFFMAN PLASTIC COMPOUNDS, INC.APPLIES TO OTHER WORKER PROTECTION LAWS

A. The FLSA

The FLSA requires that employers pay employees a minimum wage and one-and-a-half times the employee’s regular hourly rate for hours in excess of 40 per week. Congress intended FLSA remedies to deter violations as well as to compensate employees for underpaid work and consequently, depending on the violation involved, provide both “liquidated damages” and criminal penalties. In contrast, Congress intended NLRA remedies to redress the employee’s harm, rather than to deter employer misconduct. Consequently, the NLRB may not award punitive damages for an NLRA violation. Further, FLSA damages compensate workers for work they may have already performed. Conversely, the NLRA back pay puts the worker in the financial position in which he would have been but for the unlawful discharge, thus paying him for work that he did not actually perform.

The Supreme Court has never addressed whether the FLSA applies to undocumented workers. The Eleventh Circuit Court of Appeals considered this issue in 1988, two years after the IRCA’s passage, in Patel v. Quality Inn South. In Patel, an undocumented worker sued his employer for violating the FLSA minimum wage and overtime provisions, as well as for unpaid wages, liquidated damages, and attorneys’ fees. The court began its analysis by determining that undocumented workers were “employees” within the FLSA’s meaning. The court noted that the FLSA defined “employee” broadly. It looked to the FLSA’s specific “employee” exceptions and determined that the absence of a specific exclusion implied that the statute included undocumented workers as “employees.” The court supported this determination by relying on the Supreme Court’s analysis of “employee” under the NLRA in Sure-Tan, Inc., noting that this reliance was appropriate because the FLSA and the NLRA “similarly define the term ‘employee.’”

The court then considered the IRCA’s effect on undocumented workers’ rights under the FLSA and determined that “coverage of undocumented aliens is fully consistent with the IRCA and the policies behind it.” Using reasoning very similar to that which Justice Breyer later used in his dissenting opinion in Hoffman Plastic Compounds, Inc., the court noted that Congress intended the IRCA to deter the employment of undocumented workers and that “[i]f the FLSA did not cover undocumented aliens, employers would have an incentive to hire them.” The court quoted the House Education and Labor Committee, which said that it did “not intend that any provision of this Act would limit the powers of State or Federal labor standards agencies such as the . . . Wage and Hour Division of the Department of Labor.” The court also supported its argument that the IRCA and the FLSA did not conflict by referring to an IRCA provision that appropriated funds for FLSA enforcement by the Department of Labor.

Then, the court distinguished the remedies available under the FLSA and under the NLRA. The court noted that although courts appropriately refer to the NLRA when interpreting an employer’s liability under the FLSA, courts should not do so when considering remedies. Under the NLRA, the NLRB remedies unlawful discharges by providing back pay, which merely puts the worker in the financial position in which he would have been absent the NLRA violation. Thus, in Sure-Tan, Inc., the Supreme Court considered the legality of the workers’ presence during the back pay period because they had left the country, and back pay would have compensated them for work not performed during a period that they were not legally present. Conversely, the worker in Patel sought “to recover unpaid minimum wages and overtime for work already performed.” Therefore, the employer’s reliance on Sure-Tan, Inc. was misplaced when determining the availability of remedies under the FLSA.

Courts that have considered whether the FLSA protects undocumented workers have typically analyzed the issue by relying on Patel: similarly analogizing the inclusion of undocumented workers as “employees” under the NLRA but distinguishing the Acts on the basis of their remedial schemes. These courts have also determined that awarding damages under the FLSA does not conflict with the IRCA because awarding damages removes an incentive that employers would otherwise have to violate the IRCA.

Hoffman Plastic Compounds, Inc. is unlikely to affect the ability of undocumented workers to recover FLSA remedies for unpaid wages. The United States District Court for the Northern District of California addressed whether Hoffman Plastic Compounds, Inc. would bar a plaintiff from recovering unpaid wages under the FLSA in August 2002, in Singh v. Jutla. Singh involved an undocumented worker whose employer induced him to come to the United States by offering him work, tuition for education, and other benefits, but not wages. Relying on Patel, the court held that the FLSA applies to undocumented workers. The court then distinguished Hoffman Plastic Compounds, Inc. The court determined that the Supreme Court’s first rationale, that back pay would compensate an employee for work he could not legally do, did not apply because an employee claiming unpaid wages was seeking compensation for work that he had already completed.

The court then noted that, unlike the employer in Hoffman Plastic Compounds, Inc., the employer in Singh was a knowing employer. The court determined that the Supreme Court’s second rationale, that a court would contradict immigration policy by rewarding an IRCA violator with a back pay award, would not apply because the employee in Singh had not violated the IRCA. Further, the court determined that the argument that compensation for unpaid wages would unjustly enrich an employee was unavailable in the context of a FLSA claim for unpaid wages, because the employer had already benefited from the employee’s work. Finally, the court noted that the Supreme Court addressed a very specific remedy in Hoffman Plastic Compounds, Inc. The court said that the Supreme Court did not hold in Hoffman Plastic Compounds, Inc. that the NLRB was precluded from granting every form of relief. Instead, the Supreme Court had determined that back pay was an unavailable remedy and stressed that the employer was liable for his labor law misconduct. Thus, the court in Singh held that undocumented workers were entitled to legal remedies for unpaid wages under the FLSA.

The Supreme Court’s denial of any meaningful award in Hoffman Plastic Compounds, Inc. was merely a function of the lack of other effective awards available to remedy a violation of NLRA section 8(a)(3). However, courts have more flexibility in fashioning relief under the FLSA than the NLRB does under the NLRA. For example, where an employer discharges an employee in retaliation for his assertion of rights under the FLSA, a court has the option of awarding “front pay” if reinstatement is not possible.

In the first year following the Supreme Court’s ruling, several lower courts have addressed whether Hoffman Plastic Compounds, Inc. precludes damages under the FLSA, and they have followed the reasoning that the United States District Court for the Northern District of California used inSingh and that the Eleventh Circuit Court of Appeals used in Patel. These courts have distinguished Hoffman Plastic Compounds, Inc. on the basis of the different nature of remedies available under the NLRA and under the FLSA. The Department of Labor, the federal agency authorized to enforce the FLSA, agrees with these courts that Hoffman Plastic Compounds, Inc. does not affect FLSA protection for undocumented workers. Thus, Hoffman Plastic Compounds, Inc. will probably not affect the availability of FLSA remedies to undocumented workers.

B. Title VII

Title VII prohibits discrimination in employment on the basis of “race, color, religion, sex, or national origin.” Courts have very wide discretion in fashioning relief under Title VII. A court may order equitable or monetary relief that places the parties in the position that they would have occupied absent the violation of the Act or order such “affirmative action as may be appropriate.” Relief may include back pay for the period after an unlawful discharge or monetary damages where instatement or reinstatement is not feasible. Finally, the Civil Rights Act of 1991 allows a court to award punitive monetary damages under Title VII in certain circumstances.