In Chamber of Commerce of the United States of America v. Whiting, (— S.Ct. —-, U.S., May 26, 2011), the United States Supreme Court considered whether federal law preempts an Arizona law that authorizes, or in some cases mandates, the suspension or revocation of the licenses of employers who “knowingly or intentionally employ unauthorized aliens” and requires employers in Arizona to utilize a federal electronic verification system to confirm that their employees are legally authorized workers. The Supreme Court held that the Arizona law is not preempted by federal law.
The federal Immigration Reform and Control Act (“IRCA”) “makes it ‘unlawful for a person or other entity . . . to hire, or to recruit or refer for a fee, for employment in the United States an alien knowing the alien is an unauthorized alien.'” An “unauthorized alien” is defined by the IRCA as “an alien who is not ‘lawfully admitted for permanent residence’ or not otherwise authorized by the Attorney General to be employed in the United States.” The IRCA requires employers to review documents that establish eligibility for employment such as a United States passport, alien registration card, resident alien card, or a combination of other documents such as a social security card and a driver’s license. The employer must attest on a Department of Homeland Security Form I-9 that he or she “has verified that the individual is not an unauthorized alien by reviewing these documents.” An employer that violates the IRCA may be subject to criminal and civil sanctions. The IRCA “expressly preempts ‘any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee, unauthorized aliens.'”
Congress created the E-Verify program in 1996 as part of the Illegal Immigration Reform and Immigrant Responsibility Act (“IIRIRA”). “E-Verify ‘is an internet-based system that allows an employer to verify an employee’s work authorization status.'” An employer uses information provided by the employee to submit a request on E-Verify to receive a confirmation of the employee’s authorization to work. The Secretary of Homeland Security is prohibited by IIRIRA “‘from requir[ing] any person or . . . entity’ outside the Federal Government ‘to participate in’ the E-Verify program.” An employer who uses the E-Verify system receives the benefit of “‘a rebuttable presumption’ that it has not violated IRCA’s unauthorized alien employment prohibition.”
Arizona passed the Legal Arizona Workers Act of 2007, which “allows Arizona courts to suspend or revoke the licenses necessary to do business in the State if any employer knowingly or intentionally employs an unauthorized alien.” If there is a complaint “that an employer has hired an unauthorized alien, the attorney general or the county attorney first verifies the employee’s work authorization with the Federal Government pursuant to 8 U. S. C. §1373(c).” Pursuant to section 1373(c), “the Federal Government ‘shall respond to an inquiry by a’ State ‘seeking to verify or ascertain the citizenship or immigration status of any individual . . . by providing the requested verification or status information.'” Pursuant to the Arizona law, a state, county, or local official may not attempt “to independently make a final determination on whether an alien is authorized to work in the United States.” If an inquiry shows “that a worker is an unauthorized alien, the attorney general or the county attorney must notify United States Immigration and Customs Enforcement officials, notify local law enforcement, and bring an action against the employer.”
Employers who are prosecuted by the State of Arizona have an affirmative defense if they complied in good faith with the federal I–9 process. The first time an employer violates the law, the employer must terminate the employment of all unauthorized aliens and then file quarterly reports on new hires for a period of 3 to 5 years, depending upon the type of violation. A second violation requires the permanent revocation of the employer’s business licenses.
The Arizona law provides “‘every employer, after hiring an employee, shall verify the employment eligibility of the employee’ by using E-Verify.” The use of E-Verify “creates a rebuttable presumption that an employer did not knowingly employ an unauthorized alien.”
The Chamber of Commerce of the United States and various civil rights organizations and businesses (collectively, “Chamber”) filed a lawsuit in federal court asserting the Arizona law is preempted by federal immigration law. The district court held the law was not preempted. The United States Court of Appeals for the Ninth Circuit affirmed the decision of the district court.
Supreme Court Decision
The Supreme Court held federal law does not expressly preempt the Arizona law. The IRCA contains an express preemption clause, which preempts “any State or local law imposing civil or criminal sanctions” on persons “who employ, or recruit or refer for a fee for employment, unauthorized aliens.” However, this same clause of the IRCA expressly preserves the right of states and local governments to impose criminal or civil sanctions “through licensing and similar laws.” The Court stated, “The Arizona law, on its face purports to impose sanctions through licensing laws.”
The Arizona law defines the term “license” as “any agency permit, certificate, approval, registration, charter or similar form of authorization that is required by law and that is issued by any agency for the purpose of operating a business in the State.” The Court found this definition “largely parrots” the definition of that term in the federal Administrative Procedures Act. The Arizona law also includes within its definition of “license” documents such as certificates of partnership, articles of incorporation, and grants of authority to transact business in Arizona. This provision of the Arizona law also has counterparts in the Administrative Procedures Act. The Court held “Arizona’s licensing law falls well within the confines of the authority Congress chose to leave to the States and therefore is not expressly preempted.”
The Chamber also asserted federal law impliedly preempts Arizona’s law “because it conflicts with federal law.” The Chamber argued that “Congress ‘intended the federal system to be exclusive,’ and that any state system therefore necessarily conflicts with federal law.” The Court rejected the Chamber’s implied preemption argument finding that the Arizona law “simply implements the sanctions that Congress expressly allowed Arizona to pursue through licensing laws.” Given this express permission, “it stands to reason that Congress did not intend to prevent the State from using appropriate tools to exercise that authority.”
The Court noted that the Arizona law closely tracks the IRCA and only allows a state court to consider the federal government’s decision when deciding the status of an employee as an unauthorized alien. Therefore, “there can by definition be no conflict between state and federal law as to worker authorization, either at the investigatory or adjudicatory stage.” The Arizona law and federal law both prohibit the same offense, “‘knowingly’ employing an unauthorized alien” and both provide the same affirmative defense for good faith compliance.
The Court rejected the Chamber’s argument that “employers will err on the side of discrimination rather than risk the ‘business death penalty’ by ‘hiring unauthorized workers.'” The IRCA has its own anti-discrimination provisions and the Arizona law does not displace those protections. Both federal and Arizona anti-discrimination laws provide “strong incentive not to discriminate.” The Court opined, “The most rational path for employers is to obey the law—both the law barring the employment of unauthorized aliens and the law prohibiting discrimination—and there is no reason to suppose that Arizona employers will choose not to do so.”
The Chamber also argued the Arizona law’s requirement that employers utilize the E-Verify system is impliedly preempted by federal law. The Court found that although the IIRIRA specifically prohibits the Secretary of Homeland Security from requiring any person or entity outside the federal government from using E-Verify, the IIRIRA does not prohibit a state from requiring an employer to use the E-Verify system. The Court held that “Arizona’s use of E-Verify does not conflict with the federal scheme.” Accordingly, the Supreme Court held that Arizona’s law is not expressly or impliedly preempted by federal law.
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