By: Thomas H. Welby Thomas H. Welby Published: July 2006

Safety Policy: Top New York Court: Undocumented Aliens Not Barred from Recovering Lost Wages

Our last installment discussed the importance of, and techniques for, safety training for, the construction workforce that today includes large numbers of immigrants and workers for whom English is not their first language. The importance of effective safety training is underscored by a controversial recent decision by the Court of Appeals in Albany, which holds that undocumented aliens suffering personal injuries on the job are not barred (on account of their immigration status) from recovering damages in the nature of lost earnings.

Reported under the title of Balbuena v. IDR Realty LLC are two cases: that of Balbuena (in which the First Department in Manhattan had narrowed a lower-court holding, and restricted the alien’s lost earnings claims to what he might earn in his home country) and the Majlinger decision (from the Second Department in Brooklyn, which had reversed a trial-court decision which had forbidden the recovery of any lost wages). Balbuena, a Mexican, entered the United States unlawfully, and fell from a ramp while pushing a wheelbarrow on a construction site. He alleged that his injuries rendered him unable to work.

Majlinger, a Pole who overstayed his travel visa, was standing on a scaffold installing siding on the exterior of a building, when the scaffold collapsed, causing his injuries. Neither of these plaintiffs was authorized to work in the United States.

In Majlinger, the trial court granted summary judgment for the defendants, based on Hoffman Plastic Compounds, Inc. v. NLRB, a 2002 decision by the U.S. Supreme Court that held that an undocumented alien, who provided fraudulent papers to obtain employment, could not be awarded back pay for work not performed as a result of an employer’s unfair labor practice. The Appellate Division, Second Department, reversed, holding that New York tort law is not pre-empted by federal immigration law, because neither federal statutes nor the Hoffman decision prohibit an undocumented alien from recovering lost wages in a personal injury action.

In Balbuena, the trial court’s initial holding was essentially like that of the Appellate Division, Second Department, in Majlinger, but the Appellate Division, First Department, modified, to the extent of dismissing Balbuena’s claim for lost earnings, to the extent it sought damages based on wages he might have earned in the United States.

Having accepted appeals in both cases in order to resolve the conflict, the Court of Appeals recounted how Congress (after many years of essentially ducking the issue of unauthorized employment) had incorporated into the Immigration Reform and Control Act of 1986 (“IRCA”) employer sanctions but — although criminalizing the presentation of false documents to establish lawful status — otherwise did not make it a crime for undocumented aliens to be employed without authorization.

The Court of Appeals then discussed various types of “federal pre-emption,” or circumstances in which federal laws will take precedence over inconsistent state laws.

“Express” pre-emption clearly did not apply, as IRCA contained no statement that it intended to pre-empt all legislation by the states regarding workplace safety and the right of employees to recover lost wages. The defendants had argued for “field pre-emption,” or a finding that the expansiveness of the Congressional scheme left no room for state legislation. “Certainly IRCA and related statutes thoroughly occupy the spectrum of immigration laws. But there is nothing in those provisions indicating that Congress meant to affect state regulation of occupational health and safety, or the types of damages that may be recovered in a civil action arising from those laws.

The Balbuena opinions (both the majority and the dissent) therefore focused on the closer question of whether “conflict pre-emption” might apply, or whether an award for lost wages would conflict with or erode the objectives of IRCA sufficiently to surmount the general presumption against pre-emption.

The discussion of pre-emption in these cases led inevitably to the scope of the U.S. Supreme Court decision in Hoffman. The majority in the Court of Appeals (the vote was 5 judges in favor of permitting undocumented aliens to recover lost wages, and 2 against) stressed that the Hoffman decision had relied largely on the alien’s commission of a crime, in tendering false documentation to obtain legal work authorization status. By way of distinction, neither Balbuena nor Majlinger had committed any crime (although their employers may have done so, by failing to verify their employment eligibility).

Although the defendants in Majlinger pointed out that they were not the plaintiff’s employer, but merely the owners of the property, contractors or their agents (a distinction the dissenters found significant) the majority pointed out that Labor Law §§ 240(1) and 241(6) impose nondelegable safety duties, and that it would be impermissible to allow defendants to avoid paying damages on the ground that it was the employer who had violated IRCA.

Perhaps the most compelling argument by the majority was that Congress had “expressly indicated that IRCA was not intended to undermine existing statutory labor protections.” Limiting lost wages claims by undocumented aliens would, moreover, lessen employers’ incentive to comply with the Labor Law, and indeed make it more financially attractive to hire undocumented aliens.

In rejoinder to the dissent’s view that it was “unseemly” in effect to permit parties to recover on the basis of illegal transactions, the majority stated that what they found “unseemly” was the notion that rewarding employers who fail to verify employees’ authorization to work in the United States, as required by IRCA, while at the same time denying relief to a worker injured as a result of a workplace violation of state labor laws.

This last remark suggests what is missing in the dissent: a frank recognition of the astounding ineffectiveness of IRCA (and its rarely-enforced employer sanctions) to curb the explosion in the number of unauthorized aliens employed in the United States. That defect notwithstanding, the dissent in Balbuena does make points that are not readily refuted.

Perhaps the strongest point of the dissent is that, however the same might be rationalized, the lost wages in question are undeniably the fruit of unlawful employment, and the courts have no business in aiding the purposes of illegal transactions. “The courts,” argued the dissent, “show insufficient respect for themselves and for the law when they help a party to benefit from illegal activity.”

The majority decision, while authorizing a jury to “consider immigration status as one factor in its determination of the damages” disapproved the First Department’s holding in Balbuena as would have limited lost wages to what the plaintiff could earn in his home country. The dissent, not unreasonably, equates this with telling juries that “a violation of the law is only as important as you want it to be” and that “the plaintiff’s damages depend on his chances of getting caught; the more likely he is to evade the authorities, the more damages you may award.”

The dissent also argues compellingly in reminding us that plaintiffs are required by law to mitigate their damages, which in the case of workplace injuries means working (if only in less strenuous activities) as one’s physical condition allows. As the plaintiff who fails to mitigate will suffer a reduction in damages, the dissent rightly asks:

Is a plaintiff in a case like these . . . required to mitigate by seeking alternative illegal employment? May he avoid a reduction in his damages by declaring that he has decided, belatedly, not to seek any job for which he may not lawfully be hired? It is surely unfair to defendants to hold that lost illegal wages may be recovered, but that only legal wages may be considered in mitigation; yet it also seems intolerable to hold that the law will punish a plaintiff for failing to violate the law.

Although the dissent argued that its foregoing rationale obviated the necessity to reach the pre-emption issue (and the scope of Hoffman) the dissenters would nevertheless hold that Hoffman should control, and that the distinction offered by the majority (i.e., that the injured plaintiffs, unlike the undocumented alien in Hoffman, had not committed a crime) was unpersuasive. Although there are instances, the dissenters allowed, in which a case in which a lesser offender is suing a greater one may qualify for an exception to the general rule that lawsuits based on illegal transactions will not be countenanced, the correct inquiry is not whether the plaintiffs before the court committed a crime, but whether awarding them lost earnings undermines IRCA’s policy that undocumented aliens may not be employed in the United States.

Hoffman, the dissenters in Balbuena pointed out, had specifically referred to both of the possible ways in which an undocumented alien can obtain employment:

Either the undocumented alien tenders fraudulent identification . . . or the employer knowingly hires the undocumented alien in direct contradiction of its IRCA obligations.

Accordingly, the dissenters concluded, permitting the plaintiffs to recover lost earnings “stands as an obstacle to the accomplishment of the full purposes and objectives of Congress” as expressed in IRCA, and New York’s labor laws (to the extent that they permit such an outcome) are pre-empted.

The majority and dissenting opinions in Balbuena underscore the courts’ difficulties in doing justice to injured workers, while striving to maintain some respect for laws that are not being enforced, and (it appears) are not going to be enforced, by and large, anytime soon. From your perspective, as a construction industry employer, even if you never directly employ undocumented workers, it’s entirely possible that your subcontractors can and do. Since injuries to undocumented aliens can result in liability to your business, a project-wide effort to effectively ensure that safety lessons are learned is essential.

Thomas H. Welby is a licensed professional engineer, as well as an attorney and managing partner of Welby, Brady & Greenblatt, LLP, a construction law firm with its main office in White Plains. Articles in this series are for general guidance only, and should not be relied upon as providing all information necessary for compliance with OSHA and other legal requirements. 

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