Recent Developments from Around the States

Plaintiff Arcenio Sanango, an undocumented alien, sustained serious injuries while working as a laborer on a construction project. Sanango brought a claim under Labor Law ' 2 40(1) against 200 East 16th Street Housing Corporation (“200 East”), the owner of the work site, which, in turn, brought a third-party action for indemnification against Tower Building Restoration, Inc. (“Tower”), the contractor who had been his direct employer. This appeal was taken by 200 East and Tower after a judgment that, based on a jury verdict, awarded Sanango both pain and suffering in the amount of $2,452,000 and a recovery for lost earnings in the amount of $96,000. The award for recovery of lost wages was based on evidence presented to the jury, over objection, regarding the wages Sanango would have been able to earn in the United States had he not sustained his injuries.

While the New York Supreme Court, Appellate Division for the First Department agreed with the lower court's grant of both pain and suffering damages and lost earnings, without regard to Sanango's immigration status, it held that federal policy under the IRCA required that Sanango's lost earnings be calculated based on the wages he might have been able to earn in his country of origin as opposed to those he might have earned unlawfully in the United States. In making this determination, the court cited the United States Supreme Court's decision in Hoffman Plastic Compounds v. NLRB, 535 U.S. 137 (2002) for the proposition that the National Labor Relations Board (NLRB) had no discretion to award back pay to an undocumented alien as a remedy for terminating his employment in violation of the National Labor Relations Act (NLRA). The court found that the Hoffman Court had based its decision on the premise that awarding back pay to illegal immigrant workers would work to trivialize the immigration laws and both condone and encourage IRCA violations. Acknowledging that Hoffman had involved IRCA's relationship with federal labor law, while this case turned on IRCA's relationship with state tort law, the court stated that Hoffman would nonetheless have “critical implications for this case, since an award of damages herein based on the United States wages plaintiff might have earned unlawfully, but for his injury, would 'unduly trench upon' IRCA's federal immigration policy in substantially the same manner as did the NLRB backpay award in Hoffman.” The court found that, as in Hoffman, an award of lost earnings to an undocumented alien based on what he/she would have earned if lawfully working in the United States would effectively compensate that alien for his/her continued illegal status as if he/she was never apprehended, thus undermining federal policies under the IRCA. Likewise, the court stated that “if even a coequal federal statute, such as the NLRA, must, under some circumstances, give way to IRCA, as Hoffman holds, it follows that a state law — which, by virtue of the Supremacy Clause (U.S. Const., Art VI, ' 2) is subordinate to any federal policy — must give way to IRCA, as well.”

In making its determination, the court recognized that prior New York state case law holding it permissible for the administrator of an undocumented alien's estate to recover wages the decedent might have earned in the United States was no longer valid (citing Public Adm'r of Bronx County v. Equitable Life Assur. Socy. of U.S., 192 A.D.2d 325 (1993). The court thus found that “[s]ince a state law that so 'frustrate[s] the accomplishment of a federal objective' is preempted by virtue of the Supremacy Clause, it follows ineluctably from Hoffman that New York law, to the extent it would permit plaintiff to recover the wages he would have earned illegally in the United States, is preempted by IRCA” (quoting Geier v. American Honda Motor Co., 529 U.S. 861, 873 (2000).

Concluding that under Hoffman's analysis it would be a subversion of federal immigration law to allow Sonango to recover lost United States wages he might have unlawfully earned had he not been injured, the court went on to say that it was “unaware . . . of any federal policy that would be offended by awarding an undocumented alien damages for lost earnings based on the prevailing wage in the alien's country of origin.” Therefore, while vacating the lower court's existing lost earning's award, the court remanded the case for a new trial in order to allow plaintiff to prove wages that he would have been able to earn in his home country but for his injuries. The court affirmed the lower court's award for past and future pain and suffering.

NEW YORK

NY Courts Say Grant of Lost Wages to Illegal Workers Based on Prevailing Foreign Wage Is Consistent with Federal Policy

A New York appeals court panel has held that calculating lost wages owed undocumented aliens based on prevailing wage rates in their home countries is consistent with federal policy under the Immigration Reform and Control Act (IRCA). Sanango v. 200 E. 16th St. Housing Corp, 2004 WL 2984888 (N.Y.A.D. 1 Dept.).

Plaintiff Arcenio Sanango, an undocumented alien, sustained serious injuries while working as a laborer on a construction project. Sanango brought a claim under Labor Law ' 2 40(1) against 200 East 16th Street Housing Corporation (“200 East”), the owner of the work site, which, in turn, brought a third-party action for indemnification against Tower Building Restoration, Inc. (“Tower”), the contractor who had been his direct employer. This appeal was taken by 200 East and Tower after a judgment that, based on a jury verdict, awarded Sanango both pain and suffering in the amount of $2,452,000 and a recovery for lost earnings in the amount of $96,000. The award for recovery of lost wages was based on evidence presented to the jury, over objection, regarding the wages Sanango would have been able to earn in the United States had he not sustained his injuries.

While the New York Supreme Court, Appellate Division for the First Department agreed with the lower court's grant of both pain and suffering damages and lost earnings, without regard to Sanango's immigration status, it held that federal policy under the IRCA required that Sanango's lost earnings be calculated based on the wages he might have been able to earn in his country of origin as opposed to those he might have earned unlawfully in the United States. In making this determination, the court cited the United States Supreme Court's decision in Hoffman Plastic Compounds v. NLRB , 535 U.S. 137 (2002) for the proposition that the National Labor Relations Board (NLRB) had no discretion to award back pay to an undocumented alien as a remedy for terminating his employment in violation of the National Labor Relations Act (NLRA). The court found that the Hoffman Court had based its decision on the premise that awarding back pay to illegal immigrant workers would work to trivialize the immigration laws and both condone and encourage IRCA violations. Acknowledging that Hoffman had involved IRCA's relationship with federal labor law, while this case turned on IRCA's relationship with state tort law, the court stated that Hoffman would nonetheless have “critical implications for this case, since an award of damages herein based on the United States wages plaintiff might have earned unlawfully, but for his injury, would 'unduly trench upon' IRCA's federal immigration policy in substantially the same manner as did the NLRB backpay award in Hoffman.” The court found that, as in Hoffman, an award of lost earnings to an undocumented alien based on what he/she would have earned if lawfully working in the United States would effectively compensate that alien for his/her continued illegal status as if he/she was never apprehended, thus undermining federal policies under the IRCA. Likewise, the court stated that “if even a coequal federal statute, such as the NLRA, must, under some circumstances, give way to IRCA, as Hoffman holds, it follows that a state law — which, by virtue of the Supremacy Clause (U.S. Const., Art VI, ' 2) is subordinate to any federal policy — must give way to IRCA, as well.”

In making its determination, the court recognized that prior New York state case law holding it permissible for the administrator of an undocumented alien's estate to recover wages the decedent might have earned in the United States was no longer valid (citing Public Adm'r of Bronx County v. Equitable Life Assur. Socy. of U.S. , 192 A.D.2d 325 (1993). The court thus found that “[s]ince a state law that so 'frustrate[s] the accomplishment of a federal objective' is preempted by virtue of the Supremacy Clause, it follows ineluctably from Hoffman that New York law, to the extent it would permit plaintiff to recover the wages he would have earned illegally in the United States, is preempted by IRCA” (quoting Geier v. American Honda Motor Co. , 529 U.S. 861, 873 (2000).

Concluding that under Hoffman's analysis it would be a subversion of federal immigration law to allow Sonango to recover lost United States wages he might have unlawfully earned had he not been injured, the court went on to say that it was “unaware . . . of any federal policy that would be offended by awarding an undocumented alien damages for lost earnings based on the prevailing wage in the alien's country of origin.” Therefore, while vacating the lower court's existing lost earning's award, the court remanded the case for a new trial in order to allow plaintiff to prove wages that he would have been able to earn in his home country but for his injuries. The court affirmed the lower court's award for past and future pain and suffering.