Federal Court Upholds Arizona's Immigration Law

Amid the ongoing national debate about immigration reform, states and municipalities throughout the U.S. have passed their own laws aimed at combating illegal immigration and punishing businesses that benefit from it. When these bills and ordinances began making headlines in 2006, most immigration attorneys suspected they would not survive a pre-emption challenge. Regulating the flow of people across national borders has always been the province of the federal government.

Following that logic, the first of these statutes to be challenged in federal court--Hazleton, Pa.'s Illegal Immigration Relief Act--was summarily struck from the books in July 2007. But the Federal District Court in Arizona dealt businesses a surprise in February when it upheld the Legal Arizona Workers Act, a statute similar to Hazleton's, which imposes tough sanctions on employers who hire illegal workers.

"It's clearly unconstitutional," says Sidney Lachter, a Tucson, Ariz.-based immigration attorney who represents business owners in the state. "The judge missed it--immigration is beyond the jurisdiction of Arizona or any state."

Many employers agree, but for now the Arizona law stands, and its victory in court marks the beginning of a new chapter in the national battle for the future of immigration reform.

Arizona Crackdown
The Legal Arizona Workers Act seeks to crack down on illegal workers in two ways. It requires all employers in the state to enroll in the federal government's E-Verify program--an electronic database through which employers can verify the eligibility of workers--and it imposes drastic penalties against any employer that intentionally employs an illegal alien. The penalty for a first offense is a 10-day revocation of the employer's license to do business. Following a second offense, the state permanently revokes the business license.

When the act passed in July 2007, a coalition of business owners, contractors, associations, and the state and national chambers of commerce immediately challenged it, arguing that the federal Immigration Reform and Control Act of 1986 pre-empted it and that as a practical matter, it would have serious adverse consequences for businesses in the state.

Large employers in particular are concerned about how the law will affect them. For instance, it's unclear whether the license-revocation provision applies to the whole business, or to the single location at which the employment of an illegal immigrant occurred.

"It leaves large employers at the mercy of the store managers who do the hiring," Lachter points out. "It appears that a McDonald's franchisor who owns multiple locations would be put completely out of business if one store manager hires two unauthorized workers."

Employers also argued that the law leaves open the possibility that the hiring of an illegal worker outside the state could be the basis for the revocation of an Arizona business license.

The District Court rejected those arguments. It noted that while states cannot regulate immigration, they can regulate employment and the licensing of businesses. It found that the Legal Arizona Workers Act did just that. "The Act does not determine who should or should not be admitted into the country, and the conditions under which a legal entrant may remain," the court wrote. "Aliens do not gain, lose or change their status ... when they are processed through E-Verify. The Act's E-Verify requirement is therefore a regulation of employment, not immigration."

Employers have a serious quarrel with that reading of the statute. "In a broad context, the Hazleton and Arizona laws are trying to accomplish the same thing in the same manner," says Elena Park, a member of Cozen O'Connor who represented the parties who successfully challenged the Hazleton ordinance. "The laws punish employers and add burdens not contemplated by federal law."

The plaintiffs now will take that argument to the 9th Circuit. But the 9th Circuit rebuffed their initial request Feb. 28, denying an emergency injunction to stay enforcement of the law pending the appeal. So Arizona officials began enforcing the law on March 1.

Comply or Defy
Given the draconian sanctions the law imposes, Arizona businesses are now scrambling to get into compliance with the statute--with considerable trepidation.

Many employers are particularly troubled by the requirement that they use the E-Verify program, which, similar to the Social Security no-match system, often delivers unreliable results. Despite the publicity the Legal Arizona Worker Act has received, by the end of February, fewer than 20,000 employers in Arizona had registered for E-Verify.

"It's not at all uncommon for people to show up as illegal when they're not," Park says. "Employers are forced to crack down in reliance on information that may not be accurate."

Indeed, the shortcomings of the E-Verify program recently led Illinois to enact a statute forbidding employers to use it until its accuracy is improved. That law too is being challenged in court. In the meantime, a company operating nationwide is stuck in a true catch-22--required by law to use the system in one state, banned by law from using it in another.

While employers wait for the federal government to deal with the conflicting state regulations and develop more reliable systems for verifying worker eligibility, they can take some comfort in the fact that as long as they continue to carefully maintain compliance with existing federal regulations, they should be in the clear.
"If employers follow the federal law to an absolute 't' they should by extension be in compliance with the state laws," Park says.

Adele Nicholas

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