Supreme Court Upholds Arizona's E-Verify Law And Penalties For Employing Unauthorized Aliens

Supreme Court Upholds Arizona’s E-Verify Law And Penalties For Employing Unauthorized Aliens

On May 26, 2011, in Chamber of Commerce of the United States v. Whiting, the United States Supreme Court upheld an Arizona immigration law which requires Arizona employers to use the federal E-Verify system to confirm that employees are authorized to work in the United States and penalizes them for knowingly and intentionally employing individuals who are not authorized to work in the United States. The Arizona law had been challenged by a group of business organizations, including the United States Chamber of Commerce, that argued that the Arizona law was expressly or impliedly preempted by the federal Immigration Reform and Control Act of 1986 (“IRCA”) and, therefore, was invalid.

IRCA was enacted by Congress in 1986 to regulate the employment in the United States of individuals who are not authorized to work here and requires employers to complete and retain a Form I-9 for each employee. Specifically, IRCA requires that employers review documents establishing an employee’s eligibility for employment in the United States and verify through a Form I-9 for each employee that the employee is not an unauthorized alien. In 1996, Congress attempted to improve the I-9 verification process by creating the E-Verify system, an internet-based system on which employers may verify their employees’ work authorization status. Under federal law, absent certain circumstances, employers are not required to participate in the E-Verify program. Employers that violate IRCA’s provisions may be subject to civil and criminal penalties. In addition to imposing such penalties, IRCA also restricts the ability of states to combat the employment of unauthorized employees. Specifically, IRCA expressly preempts “any state or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ . . . unauthorized aliens.”

In 2007, Arizona enacted the Legal Arizona Workers Act of 2007, which allows Arizona courts to suspend or revoke the licenses necessary to do business in the state if an employer knowingly or intentionally employs an unauthorized alien. The law also requires Arizona employers to verify the authorized status of their employees by using the E-Verify system.

Less than one month after the Arizona law was enacted, a group of business and civil rights organizations brought suit alleging that the penalties of suspension and revocation of an employer’s business license were expressly and impliedly preempted by IRCA and that the provision requiring the use of the E-Verify system was impliedly preempted by IRCA. The district court rejected the challenge, and the Ninth Circuit Court of Appeals affirmed.

The Supreme Court affirmed the Ninth Circuit’s decision that federal immigration law does not preempt the challenged provisions of Arizona law. The Court held that Arizona’s law was not preempted because it “purports to impose sanctions through licensing laws” and thus “falls well within the confines of the authority Congress chose to leave to the States and therefore is not expressly preempted.” The Court also held the Arizona law was not impliedly preempted by federal law, noting it closely tracks IRCA. Finally, the Court held that federal law does not preempt Arizona’s requirement that employers use the E-Verify system, reasoning that while Congress made use of the system voluntary on a federal level, it did not express an intent to prohibit states from mandating such use.

The impact of the Supreme Court’s decision in Whiting likely will extend beyond Arizona. The Court’s decision in Whiting makes clear that states are free to impose civil and criminal sanctions “through licensing or similar laws” for the employment of individuals who are unauthorized to work in the United States. Several states (including Colorado, Mississippi, Missouri, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia) have already enacted laws similar to the Arizona law at issue in Whiting, and the Court’s ruling in Whiting may encourage more states to do the same. Accordingly, employers must be familiar, and ensure compliance, with state specific immigration laws in all of the states in which they operate.