J. PAUL OETKEN, District Judge:
Plaintiff Rudy Colon, individually and on behalf of others similarly situated, alleges that Defendants violated the Fair Labor Standards Act ("FLSA") and New York Labor Law ("NYLL") by, among other things, failing to pay employees in accordance with minimum wage and overtime laws. On July 2, 2013, 2013 WL 3328223, the Court granted in part Plaintiffs' Motion for Conditional Certification of a Collective Action under FLSA and ordered the parties to submit a revised Notice of Pendency.
Plaintiffs believe that some potential members of the FLSA collective action may be undocumented workers. While the parties were drafting a Notice of Pendency, the Second Circuit issued a decision limiting the discretion of the National Labor Relations Board ("NLRB" or "Board") to award certain damages to undocumented workers under a different law: the
For the reasons that follow, this Court holds that undocumented workers continue to be eligible to recover unpaid minimum wage and overtime wages under FLSA. Accordingly, the Court approves a Notice of Pendency including Plaintiffs' latest proposed language,
This is a tale of two labor laws and the divergent paths that they have taken in light of shifting immigration policy. In FLSA actions, such as this case, the courts have traditionally permitted undocumented workers to recover unpaid minimum wage and overtime pay for work that has already been performed ("retrospective backpay"). In contrast, in NLRA actions the courts have not permitted undocumented workers to recover post-termination backpay for work that was not actually performed, but that would have been performed but for an employer action — such as retaliatory termination of an employee — that violated statutorily prescribed labor rights. The two statutes provide distinctive rights and remedies. Despite employers' repeated attempts to import the NLRA's limitations into FLSA cases, courts have consistently and overwhelmingly distinguished NLRA precedents from FLSA doctrine. Defendants now argue that Palma, the Second Circuit's latest NLRA decision, represents a "sea change" in the established practice. (Dkt. No. 36 at 2.)
Defendants' position is first considered in light of the text, legislative history, and agency interpretation of FLSA.
In evaluating the proper scope of FLSA's protections, the plain text of the statute is a critical starting point. The statute provides, without exception, that "[a]ny employer who violates the [minimum wage or overtime] provisions ... shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation ... and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b); see also Patel v. Quality Inn S., 846 F.2d 700, 705 (11th Cir.1988) (quoting § 216(b) to argue that "[n]othing in the act purports to limit the remedy available to any of the workers it covers").
The term "employee" is broadly defined as "any individual employed by an employer." 29 U.S.C. § 203(e)(1). FLSA provides several exceptions to this definition, but undocumented workers are not among the exceptions. Given FLSA's broad definition and express exceptions, the Supreme Court has articulated skepticism toward finding additional exceptions by implication:
Powell v. U.S. Cartridge Co., 339 U.S. 497, 516-17, 70 S.Ct. 755, 94 L.Ed. 1017 (1950) (internal citations omitted); see also Citicorp Indus. Credit, Inc. v. Brock, 483 U.S. 27, 27-28, 107 S.Ct. 2694, 97 L.Ed.2d 23 (1987) ("Detailed and particular FLSA exemptions cannot be enlarged by implication...."); Patel, 846 F.2d at 702-03 (citing additional Supreme Court precedents). Contemporary courts, including those ruling after Palma, have continued to conclude that "FLSA's sweeping definitions of `employer' and `employee' unambiguously encompass unauthorized aliens." Lucas v. Jerusalem Cafe, LLC, 721 F.3d 927, 934 (8th Cir. July 29, 2013).
This plain reading of FLSA is supported when FLSA is read in pari materia with the Immigration Reform and Control Act of 1986 (IRCA), Pub. L. No. 99-603, 100 Stat. 3445. IRCA does not textually repeal FLSA's protection of undocumented workers but rather presumes that FLSA will apply to such workers. "In section 111(d) [of IRCA] Congress specifically authorized the appropriation of additional funds for increased FLSA enforcement on behalf of undocumented aliens.... This provision would make little sense if Congress had intended the IRCA to repeal the FLSA's coverage of undocumented aliens."
The legislative history of both FLSA and IRCA support the plain reading that FLSA encompasses undocumented workers. FLSA was part of social legislation "[p]assed in the depths of the Great Depression... to ensure a `fair day's pay for a fair day's work.'" Stein v. Guardsmark, LLC, 12 Civ. 4739(JPO), 2013 WL 3809463 at *1 (S.D.N.Y. July 23, 2013) (citing S.Rep. No. 884-2475 at 2 (1937); 81 Cong. Rec. 4983 (1937)). "It requires covered employers to pay their employees a statutorily prescribed minimum wage and prohibits employers from requiring their employees to work more than forty hours per week unless the employees are compensated at one and one half times their regular hourly rate." Patel, 846 F.2d at 702 (citing 29 U.S.C. §§ 206, 207(a)(1)). One court cited Senator Black's statement during floor debates that FLSA's "definition of employee ... is the broadest definition that has ever been included in any one act." Id. at 702 (citing 81 Cong. Rec. 7656-57 (1937)).
Additionally, "IRCA's legislative history strongly suggests that Congress believed that undocumented aliens would continue to be protected by the FLSA." Id. at 704.
H.R.Rep. No. 99-682(11), at 8-9, 1986 U.S.C.C.A.N. 5757, 5758 (1986); see also H.R.Rep. No. 99-682(I) (1986), at 58 ("It is not the intention of the Committee that the employer sanctions provisions of the bill be used to undermine or diminish in any way labor protections in existing law...."). The Eighth Circuit cited this Report in a post-Palma decision noting that "[w]hen Congress passed the IRCA, at least the authors of this report expected the FLSA would continue to protect unauthorized aliens from substandard working conditions and wages." Lucas, 721 F.3d at 937. Thus, the legislative histories of both FLSA and IRCA support the textual interpretation described above.
The DOL, the agency charged with interpreting and implementing FLSA, has understood FLSA to apply to undocumented workers. See Lucas, 721 F.3d at 935-36 ("The Department of Labor's position that the FLSA applies to aliens without employment authorization is longstanding and consistent."). "To the extent there is any statutory ambiguity" regarding FLSA's coverage, the DOL's "position is persuasive and merits Skidmore deference."
Lucas, 721 F.3d at 936 (internal quotations omitted). To the extent that any statutory ambiguity remains regarding FLSA, courts should defer to the Secretary of Labor's "specialized experience and broader investigations and information." Id. at 936 (quoting Skidmore, 323 U.S. at 139, 65 S.Ct. 161).
The statutory text, legislative history, and DOL interpretations described above support the conclusion that FLSA protects
The Court begins by placing NLRA cases, FLSA cases, and immigration law developments into historical context. Next, the Court examines potential bases for maintaining this distinction.
In three NLRA cases, Sure-Tan, Hoffman, and Palma, the Supreme Court and Second Circuit have curtailed the NLRB's remedial discretion based on tension between the NLRA and national immigration policy.
When the NLRA and FLSA were enacted in the 1930s, the Great Depression, rather than immigration concerns, drove workplace policy. In later decades, however, immigration policy would weigh upon the interpretation of these labor laws. In 1984, the Supreme Court considered the NLRA remedies available to undocumented workers in Sure-Tan, Inc. v. N.L.R.B., 467 U.S. 883, 104 S.Ct. 2803, 81 L.Ed.2d 732 (1984). The Court ruled that awarding post-termination backpay to undocumented workers under the NLRA impermissibly conflicted with the immigration objectives of the Immigration and Naturalization Act ("INA"). The backpay award thus exceeded the NLRB's remedial authority. Id. at 903, 104 S.Ct. 2803 ("In devising remedies for unfair labor practices, the Board is obliged to take into account ... the objective of deterring unauthorized immigration....").
Two years after Sure-Tan, Congress passed IRCA, amending the INA and clarifying an immigration policy focused on employment as "the magnet that attracts aliens here illegally." H.R.Rep. No. 99-682(I), at 46, 1986 U.S.C.C.A.N. 5649, 5650 (1986). The Supreme Court has never considered IRCA's possible impact on FLSA damages — the question in this case. However, soon after IRCA's passage, two courts of appeals applied FLSA to undocumented workers despite the concerns articulated in Sure-Tan. See Patel, 846 F.2d 700 (distinguishing Sure-Tan and reconciling FLSA with IRCA); In re Reyes, 814 F.2d 168 (5th Cir.1987) (precluding discovery into immigration status as irrelevant to FLSA).
The Supreme Court then considered IRCA's impact on the NLRA in Hoffman Plastic Compounds, Inc. v. N.L.R.B., 535 U.S. 137, 122 S.Ct. 1275, 152 L.Ed.2d 271 (2002). Hoffman involved an undocumented worker who was hired, in violation of IRCA, after submitting false documents, and was later fired, in violation of the NLRA, for labor-organizing activities. The Supreme Court held that the NLRB lacks discretion to "award[] reinstatement with backpay to employees who ... committed serious criminal acts," including the fraudulent violation of IRCA committed by the employee in Hoffman. Id. at 143, 122 S.Ct. 1275. However, lower courts did not interpret Hoffman as applying to FLSA cases; courts continued to award backpay to undocumented workers under FLSA, but not under the NLRA. See, e.g., Madeira v. Affordable Hous. Found., 469 F.3d 219, 243 & n. 23 (2d Cir.2006) (listing "courts [that] have concluded, even after Hoffman Plastic, that IRCA does not preclude... FLSA awards."); Solis v. SCA Rest. Corp., 938 F.Supp.2d 380, 400-01,
The Second Circuit thus decided Palma against a backdrop of nearly universal differentiation between NLRA and FLSA cases. Palma did not upset the settled reading of FLSA. To the contrary, the facts of Palma lie within Hoffman's rationale for restricting post-termination backpay:
Hoffman, 535 U.S. at 148, 122 S.Ct. 1275.
Accordingly, Palma has not unsettled the post-Hoffman consensus: district and circuit courts continue to recognize that FLSA, in contrast to the NLRA, permits undocumented workers to recover backpay. See Lucas v. Jerusalem Cafe, LLC, 721 F.3d 927 (8th Cir. July 29, 2013) (distinguishing FLSA cases from NLRA cases without addressing Palma); Alcoser v. A Spice Route Inc., 12 Civ. 2106(HB), 2013 WL 5309496, at *1 (S.D.N.Y. Sept. 19, 2013) (distinguishing Palma because "multiple courts have concluded that backpay awards under the FLSA stand on starkly different footing"); Marquez v. Erenler, Inc., 12 Civ. 8580(ALC)(MHD), 2013 WL 5348457, at *1 (S.D.N.Y. Sept. 20, 2013) (noting that Palma, like Hoffman, "addressed only back pay for terminated employees under the [NLRA]"). This motion, therefore, must be decided in light of the continuing consensus, which distinguishes
One basis for distinguishing NLRA cases from FLSA cases is the difference between the statutes' remedial schemes. When unfair labor practices occur in violation of the NLRA, the NLRB, an administrative body specially tasked with the enforcement of that Act, exercises "especially broad discretion in choosing an appropriate remedy." Hoffman, 535 U.S. at 153, 122 S.Ct. 1275. Section 10(c) of the NLRA states that upon finding an employer violation, the NLRB should issue "an order requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this subchapter." 29 U.S.C. § 160(c). The Sure-Tan Court noted that:
467 U.S. at 900, 104 S.Ct. 2803; see also id. at 898-99, 104 S.Ct. 2803 ("The Court has repeatedly interpreted this statutory command as vesting in the Board the primary responsibility and broad discretion to devise remedies that effectuate the policies of the Act, subject only to limited judicial review."); N.L.R.B. v. Domsey Trading Corp., 636 F.3d 33, 36 (2d Cir.2011) (noting that "the Board enjoys broad discretion in fashioning remedies under the NLRA").
In NLRA cases, courts have exercised limited review to bring the Board's otherwise broad remedial discretion in line with federal immigration policy. See Hoffman, 535 U.S. at 149, 122 S.Ct. 1275 (holding that an award to an undocumented worker "lies beyond the bounds of the Board's remedial discretion"). The Sure-Tan Court recognized that the NLRA protected undocumented workers as "employees," but vacated a remedial order due to "statutory limits placed by Congress on the Board's remedial authority." Sure-Tan, 467 U.S. at 905 n. 13, 104 S.Ct. 2803. As the Second Circuit later recognized, "in Hoffman Plastic, the policy conflict [between the NLRA and IRCA] ... reduces to a concern about remedies." Madeira v. Affordable Hous. Found., 469 F.3d 219, 242 (2d Cir.2006).
In contrast to the NLRA, which grants the NLRB broad remedial discretion, FLSA provides statutorily defined damages, leaving courts without discretion to refashion remedies in light of shifting immigration policy. The Eleventh Circuit recently affirmed this basis for distinguishing between FLSA and the NLRA:
Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299, 1307 (11th Cir.2013)
In addition to the textual differences, the remedial schemes differ in the number of alternative remedies that exist in addition to backpay. Hoffman was informed by the fact that, apart from backpay, the NLRA provides many alternative remedies which are not available under FLSA. The Hoffman Court proscribed the award of post-termination backpay to undocumented workers but emphasized the availability and adequacy of alternative remedies under the NLRA. Observing that the NLRB "has already imposed other significant sanctions against the employer," the Court stressed that "[l]ack of authority to award backpay does not mean that the employer gets off scot-free."
A second basis for distinguishing the NLRA from FLSA is that NLRA doctrine is controlled by a statute-specific line of cases limiting the NLRB's remedial discretion where organizing activity dovetails with "serious illegal conduct." Hoffman, 535 U.S. at 143, 122 S.Ct. 1275. These cases have no FLSA equivalents, partly because FLSA remedies are non-discretionary, and partly because the statutes regulate fundamentally different activities. The NLRA regulates labor organizing — a field of activity in which employee dissatisfaction is collectively expressed, often through civil disobedience.
Since the 1930s, the Supreme Court has regulated the fault line dividing the "collective power" protected by the NLRA from unlawful and unprotected forms of organizing. In N.L.R.B. v. Fansteel Metallurgical Corp., the Court considered a sit-down strike in which employees were criminally prosecuted after they seized and occupied work premises in violation of local laws. 306 U.S. 240, 59 S.Ct. 490, 83 L.Ed. 627 (1939). In language repeated in Hoffman, the Fansteel Court vacated the NLRB's reinstatement remedy:
Fansteel, 306 U.S. at 255, 59 S.Ct. 490, quoted in Hoffman, 535 U.S. at 143, 122 S.Ct. 1275.
Three years later, the Court extended Fansteel by vacating the NLRB's reinstatement and backpay award for "five employees whose strike on shipboard had amounted to a [revolt and] mutiny in violation of federal law." Hoffman, 535 U.S. at 143, 122 S.Ct. 1275 (discussing Southern S.S. Co. v. N.L.R.B., 316 U.S. 31, 62 S.Ct. 886, 86 L.Ed. 1246 (1942)). The Fansteel doctrine was further extended to restrict NLRB remedies, particularly reinstatement and post-termination backpay, where employees "engaged in serious misconduct... such as threatening to kill a supervisor or stealing from an employer." Hoffman, 535 U.S. at 146, 122 S.Ct. 1275 (internal quotations and citations omitted). This line of cases curtailed the NLRB's discretion to provide remedies that would reward and promote unlawful forms of organized protest. Id. at 146-47, 122 S.Ct. 1275.
The Hoffman Court placed its decision squarely within this line of cases. Because "[u]nder the IRCA regime, it is impossible for an undocumented alien to obtain employment in the United States without some party directly contravening explicit congressional policies," the Court concluded that Hoffman "is controlled by the Southern S.S. Co. line of cases." Id. at 146, 148, 122 S.Ct. 1275. FLSA contains no analog to Fansteel or Southern S.S. Co and is therefore distinguishable. Since the 1930s, courts have expressed discomfort with including illegal activity within the ambit of the NLRA's broad protections, but they have expressed no similar concern with enforcing FLSA's minimum wage and overtime protections.
A third basis for distinguishing FLSA from the NLRA lies in the distinction between the retrospective backpay sought under FLSA and the post-termination backpay awarded under the NLRA. This simple difference explains why NLRA
The Second Circuit has explained why FLSA is different:
Madeira v. Affordable Hous. Found., 469 F.3d 219, 243 (2d Cir.2006). In Madeira, the Second Circuit constructed "a spectrum of remedies potentially available to undocumented workers" to determine which remedies impermissibly conflicted with IRCA. Id. at 242. On that spectrum, FLSA backpay was found to be the least likely to conflict with IRCA when awarded to undocumented workers.
The Second Circuit later distinguished Palma from Madeira, but did not disturb Madeira's characterization of FLSA backpay as an unproblematic remedy. See Palma, 723 F.3d at 184 ("IRCA's focus is on violations of the immigration laws, not on workplace safety."). In fact, "[m]any courts have stated that the holding in Hoffman is limited to precluding relief for work not yet performed, as opposed to work already performed." Solis v. SCA Rest. Corp., 938 F.Supp.2d 380, 400 (E.D.N.Y.2013) (cataloging such cases); e.g. Solis v. Cindy's Total Care, Inc., 10 Civ. 7242(PAE), 2011 WL 6013844, at *2 (S.D.N.Y. Dec. 2, 2011) ("[I]n Hoffman, the backpay award ... pertained only to a period of time following the subject employees' termination. In the present case, by contrast, the [FLSA] backpay award sought by the Secretary is exclusively for work that was performed."); Zeng Liu v. Donna Karan Int'l, Inc., 00 Civ. 4221(WK), 207 F.Supp.2d 191, 192 (S.D.N.Y.2002) ("Courts have distinguished between awards of post-termination back pay for work not actually performed and awards of unpaid wages pursuant to [FLSA].") (formatting altered). Post-Palma, the Eighth Circuit cited Madeira rather than Palma when considering the validity of undocumented workers' FLSA
Finally, the three preceding bases for distinguishing the NLRA from FLSA are further supported by an analysis of the statutes' different effects on immigration policy. Several courts have observed that awarding FLSA backpay to undocumented workers supports the policy goals expressed in IRCA. The Eighth Circuit recently described the alignment of the two statutes:
Lucas, 721 F.3d at 936. The Eleventh Circuit recently reaffirmed a pre-Hoffman precedent that explains the economic incentives behind this harmonious arrangement:
Patel v. Quality Inn S., 846 F.2d 700, 704 (11th Cir.1988); see also Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299, 1306 (11th Cir.2013) ("Hoffman is not clearly on point and therefore did not overrule Quality Inn."). District courts awarding retrospective backpay under FLSA have echoed that logic. Flores v. Amigon, 233 F.Supp.2d 462, 464 (E.D.N.Y. 2002) ("[E]nforcing the FLSA's provisions requiring employers to pay proper wages to undocumented aliens when the work has been performed actually furthers the goal of the IRCA.... If employers know that they ... will also be required to pay them at the same rates ... there are virtually no incentives left for an employer to hire an undocumented alien in the first instance."); Solis v. Cindy's Total Care, 2011 WL 6013844, at *3 ("[W]here illegal workers are able to vindicate the right to overtime pay conferred by the FLSA, there is no ... perverse incentive.").
The cost-benefit analysis weighs more heavily in favor of providing remedies for undocumented workers under FLSA than under the NLRA.
On the benefits side of the equation, the underpayment of undocumented workers represents a concrete benefit to employers that begins to accrue immediately once the worker is hired. In contrast, the employer incentive for hiring undocumented workers based on the denial of future post-termination backpay under the NLRA is far more attenuated. The incentive under the NLRA must be discounted by the likelihood that an employee would engage in protected labor activities, be terminated as a result, and fail to mitigate.
Taken together, the historical divergence of NLRA and FLSA doctrines and the bases for that divergence strongly suggest that NLRA doctrine does not alter the statutory interpretation of FLSA undertaken above. The statutory analysis of FLSA and a review of the relevant precedents support the conclusion that, despite recent developments under the NLRA, undocumented workers are still entitled to retrospective backpay under FLSA.
The holding that FLSA protects undocumented workers controls the outcome of the parties' disputes over the Notice of Pendency and the scope of discovery.
Based on the foregoing analysis, the Court approves the following proposed language from the Plaintiffs' August 14, 2013 submission:
(Dkt. No. 40 at 2 (formatting and punctuation altered).) This statement accurately reflects FLSA's coverage of employees regardless of immigration status. FLSA also mandates liquidated damages, "a reasonable attorney's fee ..., and costs" in the same provision that provides for backpay.
Additionally, Defendants note that some plaintiffs, including the named plaintiff, may allege retaliation and seek reinstatement with post-termination backpay and other relief. These claims lie outside the collective action; accordingly, they have no effect on the Notice of Pendency and need not be addressed at this time.
Finally, the Court considers the issue of discovery. Defendants seek discovery into the immigration status of potential plaintiffs in the collective action.
For the foregoing reasons, Defendants' discovery request is hereby DENIED; and Plaintiffs' proposed language contained in Section II.A for use in the Notice of Pendency is hereby APPROVED.
The Clerk of the Court is directed to terminate the motions at docket numbers 39 and 40.
SO ORDERED.
Pub. L. No. 99-603, § 111(d), 100 Stat. 3357, 3381 (1986).