Benefits, Employment Law

Minnesota Court Recognizes Workers’ Comp Retaliation Suit Filed by Undocumented Worker

On June 28, 2017, the Minnesota Supreme Court held that an undocumented worker asserted a valid retaliation claim after he was placed on unpaid leave for seeking workers’ compensation benefits.

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Background

In 2005, Dahlke Trailer Sales hired “Tony” after he presented a false Social Security number. Although Dahlke later discovered Tony’s undocumented status, he remained employed.

In September 2013, Tony was injured at work. After he returned to work, he hired a lawyer to advise him through the workers’ comp process. Tony’s manager found out about the lawyer, said he hated lawyers, and stated, “The bridge between us is broken.”

Dahlke then asked Tony to confirm his undocumented status. After he confirmed his status, Dahlke placed him on unpaid leave until he could obtain legitimate work authorization. Tony sued Dahlke for retaliatory discharge.

Minnesota’s workers’ comp law prohibits employers from retaliating against employees for filing a claim. Federal immigration law, however, prohibits employers from knowingly employing undocumented workers.

The district court balanced the competing laws and dismissed Tony’s claim because Dahlke was merely following federal law by placing him on unpaid leave. The court of appeals reversed, finding there was a dispute over whether Tony was fired because of his immigration status or for filing a workers’ comp claim. Dahlke appealed, focusing on three issues:

  1. Whether it “discharged” Tony by placing him on unpaid leave;
  2. If he was discharged, whether it was because he sought workers’ comp benefits; and
  3. Whether federal immigration law preempted his state workers’ comp claim.

Was Tony Discharged?

In a 4-3 spilt, the Minnesota Supreme Court held there was a genuine dispute over whether Tony was “discharged” under Minnesota’s workers’ comp law. The court focused on Dahlke’s intent to rehire him, reasoning that if the motivation behind placing him on leave was to effectively terminate him, then he was discharged under the statute.

Citing a letter Tony signed, Dahlke argued that it intended to allow him to return to work after obtaining legal work authorization. But the court noted that the employer had known for years that Tony was undocumented and questioned why it asked him to confirm that fact just after he filed his claim. Thus, the court sent the case back to a lower court to determine whether Dahlke intended his leave to be permanent.

Was Tony Discharged for Seeking Benefits?

A retaliation claim requires that an employee be treated adversely because of his pursuit of benefits. Dahlke argued that its only motivation for placing Tony on leave was to comply with federal immigration law. The court questioned that claim, citing the manager’s comments and the timing of the inquiry into Tony’s immigration status. Thus, the court directed the lower court to inquire into the employer’s true motivation.

Does Federal Law Preempt the Workers’ Comp Statute?

Finally, the court analyzed whether federal immigration law, which prohibits employers from knowingly employing undocumented workers, precluded liability under state law. Dahlke argued that if it complied with the workers’ comp law by retaining Tony, it would violate federal law by knowingly employing him.

The court held that federal law did not preempt the workers’ comp law because it was possible for Dahlke to comply with both laws. The workers’ comp statute did not require the employer to employ Tony. Instead, it prohibited Dahlke from discharging him because of his workers’ comp claim. Thus, Dahlke would not have violated federal law by terminating him because of his immigration status. Because there was a dispute over Dahlke’s motivation, Tony’s claim was not clearly preempted.

The court concluded by citing policies supporting its decision. Despite a strong dissent, the majority found that enforcing labor laws such as the workers’ comp retaliation statute furthers federal immigration law’s purpose of discouraging employers from hiring unauthorized workers.

If Dahlke was not required to comply with the antiretaliation statute for unauthorized workers, it could continue to hire unauthorized workers and discharge them at no cost if they were injured on the job. That would encourage the employment of undocumented workers to save on costs.

Rather, the court concluded that requiring employers to comply with the antiretaliation law for unauthorized workers would discourage the hiring of such workers in the first place, thus furthering federal immigration law’s purpose. Sanchez v. Dahlke Trailer Sales, Inc., No. A15-1183, 2017 Minn. LEXIS 372 (Minn., June 28, 2017).

What We Can Learn from This Case

While employers do not have an affirmative duty to employ undocumented workers, companies seeking to discharge an unauthorized worker must make clear that their intent to do so is based solely on the worker’s unauthorized status, not a retaliatory reason.

Brandon Wheeler, a contributor to Minnesota Employment Law Letter, can be reached at bwheeler@felhaber.com.

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