Employers Need to be Careful Not to Assume an Employee is Undocumented in Addressing SSA "No Match" Letters

July 11, 2008
The U.S. Ninth Circuit Court of Appeals recently examined an employer’s reasonableness in terminating employees who appeared on a Social Security Administration (SSA) "No Match" letter and who were unable to provide adequate documentation to cure the issue within a short time. Aramark Facility Services v. SEIU, Case No. 06-56662 (9th Cir. June 16, 2008).

Although the case involved the validity of an arbitration award against the employer, the central issue involved whether, as a matter of public policy, Aramark acted reasonably in terminating employees based on their inability to provide employment eligibility documentation to cure their mismatched social security numbers. In the end, the Ninth Circuit found that Aramark’s action in terminating the employees was unwarranted under the circumstances as the company did not have adequate information establishing that the employees were undocumented and thus ineligible to work.

Aramark’s Response to the SSA "No Match" Letter and Subsequent Terminations of Affected Employees

Aramark is a large corporation that has operations nationwide. Among those operations, Aramark employs a number of workers in the facility management of the Staples Center in Los Angeles. In April 2003, Aramark received a "No Match" letter from the SSA which indicated that 48 employees at Staples Center had social security numbers which did not match those in the SSA’s database. As a result, Aramark mailed letters to the affected employees giving them three days to correct the discrepancy and provide either a new social security card or a verification form indicating that a new social security card was processed.

Within this short time span, 33 of the 48 employees did not timely comply with the request for corrected documentation and their employment was terminated by Aramark. Aramark suspected that those who did not comply were unable to provide proper documentation. However, this suspicion was never formally confirmed.

The employees’ union, Service Employees International Union Local 1877 ("SEIU"), filed a grievance against Aramark pursuant to their collective bargaining agreement alleging that the employees were terminated without proper cause. The grievance was submitted to binding arbitration. The arbitrator agreed with the union and ruled that Aramark had inappropriately terminated the employees without adequate cause. The employees were awarded back pay and reinstatement.

The Ninth Circuit Rules that Aramark’s Receipt of the "No Match" Letter Did Not Establish Constructive Notice that the Affected Employees Were Ineligible to Work and Had Violated Immigration Laws

Following the adverse arbitration decision, Aramark asked the federal court to vacate the arbitration award based on public policy considerations. The Court agreed with Aramark and vacated the arbitration award. The union appealed and argued that the arbitrator’s decision should be upheld. The Court of Appeals reversed the lower court’s decision and reinstated the arbitrator’s decision because it found that Aramark’s actions in terminating the employees under the circumstances were not justified.

In reviewing the case, the Court noted that Aramark did not have constructive notice of any immigration law violation merely by receipt of the "No Match" letter. Furthermore, the company could not establish that it would have been penalized for immigration law violations had it not terminated those employees who were unable to provide the requested documentation.

The Court noted that the "No Match" letter on its own did not establish that any employee was undocumented or lacked proper work authorization. While a social security number mismatch may be the result of misuse by undocumented workers, it could also result from typographical errors, name changes, mismatches with compound family names prevalent in immigrant communities, or inaccurate/incomplete employer records. The Court pointed out that neither the SSA nor the Internal Revenue Service (IRS) requires that a worker’s documentation be verified following the receipt of a "No Match" letter. Even the U.S. Department of Justice’s Office of Special Counsel of Immigration-Related Practices indicates that employers should not use "No Match" letters alone to justify taking adverse employment actions against employees.

Furthermore, the Court noted that the short turnaround time imposed by Aramark (three days) to cure the social security number issue was unreasonable. In essence, assuming that the employee received the letter the day after the postmarked date, the employee only had two days to contact SSA to correct the social security number discrepancy and then report this back to Aramark. The Court compared this short time span to the 90 day "safe harbor" period that is a part of the Department of Homeland Security’s proposed regulations drafted to protect employers from prosecution following receipt of SSA "No Match" letters.

As a result of these issues, the Court noted that Aramark’s actions appeared hasty and unwarranted under the circumstances and not compelled under federal immigration laws. As a result, the Court ruled that there was no public policy consideration requiring the arbitration award to be vacated.

Conclusion - Be Cautious on Receiving SSA "No Match" Letters and Taking Action Against Affected Employees

Some may view the result of the Aramark case as putting employers in a "Catch-22" with no real recourse to address possible immigration violations following receipt of a SSA "No Match" letter. This is not necessarily the case. The key issue from the Aramark case is that employers should not hastily jump to conclusions regarding the immigration status of employees based solely on receipt of a "No Match" letter.

Employers should advise affected employees following receipt of a "No Match" letter and provide them an adequate amount of time to address the mismatch and respond back accordingly if the issue can be resolved. In Aramark, three days was not an adequate amount of time for employees to address the issue. It is probably more appropriate to provide an employee with at least 30 days to cure a mismatched social security number.

If an employee after adequate time is still unable to correct the mismatched social security number or provide an adequate reason for the failure to do so, a better foundation may exist for the conclusion that an employee is not authorized to work. At this point, an employer would be more likely justified in concluding that an employee lacks proper work authorization, thus justifying termination.

On a similar note, the Department of Homeland Security has issued proposed regulations that seek to impose strict "safe harbor" timelines for employers to respond properly to a "No Match" letter and verify an employee’s proper work authorization. These regulations were scheduled become effective in October 2007. A preliminary injunction was issued by a federal court to prevent enforcement of the regulations for the time being. Stay tuned to the Personnel File for further updates on this issue.

This article was written by Gage C. Dungy, an attorney with the labor and employment law firm of Liebert Cassidy Whitmore (LCW). Mr. Dungy is an Associate in the Fresno office and can be reached at (559) 256-7800 or at gdungy@lcwlegal.com. For more information regarding the information above or our firm please visit our website at www.lcwlegal.com, or contact one of our offices below.

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