Defense Digest

Limitation On Illegal Aliens' Entitlement To Recovery Of Lost Wages In Civil Lawsuits

In Hoffman Plastic Compounds v. National Labor Relations Board, 535 U.S. 137 (2002), the Supreme Court of the United States made it clear that under the Immigration Reform and Control Act of 1986 (IRCA), an illegal alien is not entitled to receive back pay for a job he was never entitled to have in the first place. In Hoffman an employer appealed a decision by the National Labor Relations Board (NLRB), which awarded back pay to an undocumented alien employee who was not legally authorized to work in the United States. The NLRB had based the award on a finding that the employer unlawfully terminated the alien for union activity. The Supreme Court said that the fact the employee had been wrongfully terminated was irrelevant to the analysis.

Based on Hoffman, courts in New York State have reversed their previous holdings, which specifically allowed lost wage claims to stand, even when brought by illegal aliens. Courts in New York State now specifically limit such claims to wages that would have been earned in the plaintiff's home country. See Sanango v. 200 East 16th Street Housing Corporation, 788 N.Y.S. 2d 314 (Supreme Court of New York, Appellate Division, First Apartment 2004), and Balbuena v. IDR Realty LLC, 787 N.Y.S. 2d 35, Supreme Court of New York, Appellate Division, First Apartment 2004). The New York cases were both personal injury matters.

Courts in other states have concurred. For example, see, Veliz v. Rental Serv. Corp., 313 F. Supp. 2d 1317, 1334-1337 (MD Fla, 2003), and Rosa v. Partners In Progress, 868 A.2d 994 (Supreme Court of New Hampshire 2005). Note, however, that the New Hampshire decision allows for a lost wage claim to be based on earnings in the United States if the plaintiff can show that the employer knew or should have known that he was illegal. It is not clear that this interpretation would be upheld by the United States Supreme Court.

In New Jersey, the Appellate Division has recently denied a Law Against Discrimination (LAD) claim for back pay based on Hoffman. See Crespo v. Evergo Corp., 366 N.J. Super. (App. Div. 2004). In Crespo, the employer terminated an employee when she attempted to return to work following maternity leave. Citing Hoffman, the court denied the claim in its entirety, finding that the employer's wrongful acts did not change the analysis. Although New Jersey courts have not specifically addressed the lost wage claim issue in a personal injury case, it seems clear that such claims would be limited by the New Jersey courts to, at most, what the plaintiff could prove he would have earned in his home country.

Note that Hoffman does not preclude an illegal alien from pursuing other causes of action, such as pain and suffering, medical bills, and permanency of injury. In the discrimination context, an illegal alien can still maintain an action for harassment or retaliation. And at least one court has allowed a claim for future lost earnings when the plaintiff's work status became legal during the course of the litigation. Note, too, that a number of state courts have held that, even after Hoffman, illegal aliens are still entitled to worker's compensation benefits. The worker's compensation issue has not yet been brought before the United States Supreme Court, and it is difficult to predict how the Court would rule on this.

Clearly, it is now more important than ever to determine through discovery a plaintiff's work status in this country. Remember that simply because a foreign national is in the United States legally, it does not necessarily mean he is entitled to work here. Neither a tourist visa nor a student visa authorizes a foreign national to work in the United States. Remember, also, that visas, including work visas, expire. If a plaintiff cannot show that he was entitled to the job he was working on at the time of his injury, he should not be allowed to pursue a claim for lost wages.

*Howard is an associate in our Roseland, NJ office and can be reached at (973) 618-4106 or hmyerowitz@mdwcg.com.