Author: ILLEGAL IMMIGRATION & WORKER’S COMPENSATION W. Brian Mallow, Esq. DEFINING THE BORDERS IN GEORGIA AND TENNESSEE Phone: 229-436-4665 Email: email@example.com Immigration has been a hot button issue in both the federal and state political arenas over the last year. In the Fall of 2006, Congress passed a bill authorizing and partially funding the possible construction of a 700 mile fence along the Mexican border. On the state level, Georgia Governor Sonny Perdue signed Byron K. Lindberg, Esq. the Georgia Security and Immigration Compliance Act in April 2006, which requires residents seeking Phone: 615-313-9911 state or federal social welfare benefits to prove their legal status, and which prohibits employers from Email: firstname.lastname@example.org deducting as a business expense $600.00 or more in wages paid to any undocumented worker. Of course, immigration has also become a hot topic in the workers’ compensation arena, particularly since the United States Supreme Court issued its decision in Hoffman Plastic Compounds, Inc. v. National Labor Relations Board in 2002. In Georgia alone, the Court of Appeals has heard four cases involving an undocumented worker’s right to recover workers’ compensation benefits since 2004. While the Georgia courts have struggled to find a proper balance between the benevolent objectives of the Workers’ Compensation Act and Federal Immigration Policy, other states, such as Tennessee, have taken a far more expansive stance. Georgia Prior to the United States Supreme Court’s Hoffman decision in 2002, only one case had been decided by the Court of Appeals pertaining to illegal immigrants and workers’ compensation benefits. In Dynasty Sample Co. v. Beltran, 224 Ga. App. 90 (1996), the Court held that an illegal alien could not be denied workers’ compensation benefits solely on the basis of his intentionally misrepresenting his residency status. Beltran was injured while employed by Dynasty Sample Company and sought workers’ compensation benefits, which were initially paid. However, Dynasty terminated Beltran’s employment and denied his claim for weekly indemnity benefits upon learning that Beltran had intentionally misrepre- sented the fact that he was an illegal alien by presenting false documents at the time he applied for employment. Although Dynasty admitted that it could not deny benefits solely based on Beltran’s status as an illegal alien, it argued that it was entitled to deny benefits because the employment contract with Beltran was void or voidable based on his misrepresentations. The administrative law judge initially found that Beltran was entitled to weekly indemnity benefits as of his date of injury on equal protection grounds; however, the ALJ denied Beltran any income benefits after the date of his termination, finding that his status as an illegal alien was not a justifiable reason for his failing to return to otherwise available or suitable employment. The Appellate Division adopted the ALJ’s findings and award, but the superior court reversed, based on Georgia Electric Co. v. Rycroft, 259 Ga. 155 (1989), in which the Georgia Supreme Court adopted a three-part test for determining when fraud in the inducement of the employment contract is sufficient to bar an employee’s claim for benefits. Although Rycroft dealt specifically with misrepresentations regarding an employee’s preexisting physical condition, the Court of Appeals held that the Rycroft test was equally applicable to all cases involving fraud in the inducement of an employment contract. Nevertheless, it was held that the employment contract cannot be considered void or voidable unless the employer can demonstrate: (1) that the employee knowingly and willfully made a false representation at the time the employee applied for work; (2) that said false representation was relied on by the employer and was a substantial factor in its hiring decision; and (3) that there was a causal connection between the false representation and the injury for which the employee seeks benefits. The Court of Appeals affirmed the superior court, finding that Dynasty had failed to meet the third prong of the test — showing a causal connection between Beltran’s 1180 West Peachtree Street NW misrepresentation as to his citizenship and the injury that he suffered. In fact, the Court noted that it Atlantic Center Plaza would be all but impossible to meet that requirement. It is interesting to note that the ALJ’s finding that Suite 900 Beltran’s status as an illegal alien was not a justifiable reason for his failing to return to otherwise available Atlanta, Georgia 30309 and suitable employment was not addressed by the Court of Appeals until 10 years later in Martines v. Worley & Sons Constr., which is discussed below. Phone: 404-954-5000 Fax: 404-954-5020 Beltran seemed to settle the illegal alien issue, at least until the United States Supreme Court decided Web: www.hbss.net Hoffman Plastic Compounds, Inc. v. National Labor Relations Board, 535 US 137 (2002). In that case, the Supreme Court held that the National Labor Relations Board could not award back pay benefits to an illegal alien who had never been authorized to work in this country, reasoning that the award of back pay to an illegal alien would run counter to the policies underlying the Immigration Reform and Control Act, which prohibits the employment of illegal aliens in the United States. Two years later, in Wet Walls, Inc. v. Ledezma, 266 Ga. App. 685 (2004), the Georgia Court of Appeals addressed the interplay between the Georgia Workers’ Compensation Act and the Immigration Reform and Control Act (IRCA) in light of the Hoffman decision. Ledezma fractured his back and became partially paralyzed in 1989. The employer began paying him TTD benefits, but when Ledezma was subsequently incarcerated and deported from the United States, the employer suspended benefits. Notwithstanding his deportation, Ledezma filed a claim for resumption of his TTD benefits. The employer argued that requiring it to pay income benefits contravened the doctrine set forth in Hoffman, thereby suggesting that the IRCA preempted the Georgia Workers’ Compensation Act. Citing decisions from other states, the Court of Appeals held that there was no conflict between the IRCA and the Georgia Workers’ Compensation Act as would prohibit an illegal alien from receiving benefits. The employer also argued that it should be able to suspend benefits because, under the IRCA, it was incapable of offering Ledezma light duty employment because of his citizenship status. The Court of Appeals again dodged this issue by finding that Ledezma was totally disabled and that the employer’s ability to offer light duty was not relevant. Less than six months later, the Court of Appeals revisited the illegal alien issue in Continental Pet Technologies, Inc. v. Palacias, 269 Ga. App. 561 (2004). Palacias had been in the United States illegally for a number of years and had originally used fraudulent documents to secure her position with the employer. When she was injured on the job, the employer denied her claim for workers’ compensation benefits. Following a hearing, an ALJ determined that Palacias was injured in the course of her employment, and the ALJ directed the employer to pay workers’ compensation benefits. On appeal, the employer argued that because federal law made it unlawful to employ an illegal alien, any contract of employment between it and Palacias was void, and Palacias was never an “employee” for workers’ compensation purposes. In rejecting that argument, the Court of Appeals again analyzed the interplay between the IRCA and the Georgia Workers’ Compensation Act. Ultimately, the Court reaffirmed its holding in Ledezma, finding that federal immigration law did not preempt Georgia law on the question of whether or not an illegal alien may receive workers’ compensation benefits. In reaching that conclusion, the Court noted that “inasmuch as the goal of the IRCA is to reduce the incentives for employers to hire illegal aliens, that goal would be subverted by allowing employers to avoid workers’ compensation liability for work related injuries to those employees since such would provide employers with a financial incentive to hire illegal aliens.” The Court of Appeals went on to hold that the Georgia Workers’ Compensation Act’s definition of an employee — “every person in the service of another under any contract of hire or apprenticeship” — would necessarily include illegal aliens. The Court then rejected the employer’s argument that the fraud perpetrated by Palacias in using false papers to obtain her employment prevented her from recovering workers’ compensation benefits based on its previous holding in Beltran. Less than a month after issuing its decision in Palacias, the Court decided Earth First Grading v. Gutierrez 270 Ga. App. 328 (2004). Gutierrez was in the United States illegally, and he had presented fraudulent documents to Earth First when he was hired in 2000. A year later, Gutierrez injured his back on the job. The claim was accepted as compensable, and TTD benefits were commenced. Shortly thereafter, the Employer suspended benefits based on a full duty release from Gutierrez’s treating physician. Gutierrez later requested a hearing, seeking reinstatement of TTD and, claiming that he was still disabled. During discovery, the employer learned of Gutierrez’s illegal immigration status. The employer contended that Gutierrez’s undocumented status rendered him ineligible to receive TTD benefits based on a number of arguments, each of which was rejected by the Court of Appeals. Citing Ledezma and Palacias, the Court of Appeals rejected the employer’s argument that federal immigration law preempted the Georgia Workers’ Compensation Act, again noting that a contrary holding would reward employers for hiring illegal aliens. Likewise, the Court rejected the employer’s argument that an undocumented worker could not meet the definition of an “employee” under the Georgia Workers’ Compensation Act. Moreover, finding no causal connection between Gutierrez’s presentment of fraudulent documents and his work related injury, the court rejected the employer’s contention that Gutierrez’s claim was barred by O.C.G.A. § 34-9-17(a), which bars compensation for injuries due to an employee’s willful misconduct. Finally, the court rejected the employer’s most compelling argument – that an undocumented worker is analogous to an incarcerated person in that neither could meaningfully accept a job even if it were offered. It is well settled in Georgia that an injured employee’s TTD benefits may be suspended upon conviction and incarceration because any offer of employment that may have been tendered to the employee would be ineffectual since the employee could not meaningfully accept such offer. The Court, however, found that Gutierrez’s illegal immigration status did not render him unable to “meaningfully” accept employment “during the period at issue in this case.” Although Gutierrez was an illegal alien throughout the duration of his employment with the employer, the employer did not learn of Gutierrez’s immigration status until long after the period for which he sought TTD benefits. Under those circumstances, the court held that Gutierrez’s illegal immigration status did not render him unable to meaningfully accept employment “during the pertinent period.” For nearly a decade, the Georgia Court of Appeals had taken an employee-friendly approach to the issue over immigration status. On the surface, that trend held true with Gutierrez. However, in hindsight, the Court’s careful tailoring of its language in Gutierrez — using phrases such as “in this case,” “under these circumstances,” and “during the pertinent period” — was a hint that the Court was about to change course. In 2006, the Court of Appeals finally addressed the issue raised by the ALJ ten years earlier in Beltran and which had been argued and skirted around in nearly every case thereafter – that an employee’s status as an illegal alien is not a justifiable reason for failing to return to otherwise available and suitable employment. In Martinez v. Worley & Sons Construction, 278 Ga. App. 26 (2006), the right set of facts were finally before the Court. Martines had suffered a work-related injury to his left foot and was released by his physician to return to work with restrictions. The employer offered him a position as a delivery truck driver, a job falling within the restrictions set by his physician. Martines agreed to accept the job, and he reported to work. However, before allowing Martines to drive a company truck, the employer asked him to show a driver’s license and documentation that he was in the country legally. At that time, Martines revealed that he could not produce a Georgia driver’s license and that he could not obtain one because he had entered the United States illegally. The issue before the Court was whether the job offered to Martines was suitable to his capacity and whether Martines’ refusal of the work was justified. In holding that the job offered was suitable and that Martines’ refusal was not justified, the Court noted that an employee’s refusal to accept employment must relate, in some manner, to his physical capacity or his ability to perform the job. Examples of such include work that aggravates an employee’s injury, work that requires relocation, or work that the employee lacks the skills to perform. An employee is not, however, justified in refusing work due to personal choices unrelated to his work such as his desire to work a particular shift or to avoid non-union work. Martines had the physical ability and skill to operate a car, but it was his inability to acquire a Georgia driver’s license because of his illegal status that kept him from returning to work. Martines argued that equity should forbid the employer from raising his illegal residency status because the employer failed to verify his status at the time he was hired. The court rejected that argument, noting that “one who would have equity must do equity,” and when Martines completed his employment application, he provided the employer with a Social Security number that belonged to someone else. Evident in the ten year progression from Beltran to Martines is the Court’s struggle to balance two compelling policy interests. The Court has clearly recognized that an employee’s illegal immigration status alone does not bar him from receiving workers’ compensation benefits, as to hold otherwise would provide a financial incentive for employers to hire illegal aliens in contravention of federal immigration law. On the other hand, declaring illegal immigration status to be a basis for justified refusal of employment would allow an employee already receiving benefits to refuse any proffered employment solely based on his legal inability to perform the work. Tennessee The Tennessee Workers’ Compensation Act has a much broader definition of an “employee.” Specifically, Tenn. Code Ann. § 50-6-102 (10) (A) defines an employee as every person in the service of an employer “whether lawfully or unlawfully employed.” The Tennessee General Assembly, however, is considering two bills that would specifically exclude aliens from receiving any workers’ compensation benefits. One of those bills, House Bill 73, currently before the Employee Affairs subcommittee of the House Consumer and Employee Affairs Committee, would amend Tenn. Code Ann. § 50-6-106 to exclude aliens from coverage under the Workers’ Compensation Law unless such alien: was lawfully admitted for permanent residence at the time such services were performed; was lawfully present for the purposes of performing such services; or was permanently residing in the United States under color of law at the time services were performed. The amendment also would require any decision to deny benefits under the subdivision to be based on a preponderance of the evidence. Nonetheless, as the state of the law currently stands, there is little doubt that undocumented alien workers are entitled to workers’ compensation benefits. In Silva v. Martin Lumber Co., 203 Tenn. LEXIS 1047 (2003), the Special Workers’ Compensation Appeals Panel confirmed that illegal aliens are not excluded from coverage in the Tennessee Workers’ Compensation Act. “It is well settled that the act extends benefits to employees regardless of the legality of their employment.” The employer also argued that Silva should be barred from recovering workers’ compensation benefits because he produced fraudulent documents concerning his eligibility to work in the United States at the time he was hired. The court rejected that argument, holding that when asserting the defense of fraud and misrepresentation, the employer must prove that the employee knowingly and willingly made a false representation as to his physical condition, that the employer’s reliance on that representation was a substantial factor in the hiring of the employee, and that there was a causal connection between the false representation and the injury. Silva’s misrepresentation of his citizenship status did not concern his physical condition, and there was no causal connection between his misrepre- sentation and his injury. Accordingly, the employer could not deny benefits on that basis. Earlier this year, in Fusner v. Coop Construction Co., LLC, 211 S.W. 3d 686 (2007), the Supreme Court of Tennessee held that non-resident foreign nationals can be considered dependents and receive death benefits under the Tennessee Workers’ Compensation Act. In fact, the Tennessee General Assembly has specifically provided a mechanism by which alien dependents of employees may gain access to the Tennessee Judicial System to recover workers’ compensation death benefits through the consulate. An issue that has yet to be resolved by the Tennessee appellate courts is whether the statutory cap on permanent disability benefits could be applied to limit the availability of such benefits to undocumented workers. The standard for applying the statutory cap is whether the injured employee has made a “meaningful” return to work, which occurs when the employer has made a reasonable attempt to return the employee to work and the employee has made a reasonable attempt to return to work. One could argue that an employer cannot reasonably (or legally) offer to return an illegal alien to work and an injured illegal alien cannot reasonably refuse a job that he or she cannot legally hold. Similar arguments have been advanced and approved by Tennessee courts in connection with employees terminated for misconduct. In such cases, employers are not required to make offers of re-employment in order to avail themselves of the lower statutory cap set forth in Tenn. Code Ann. § 50-6-241. See Carter v. First Source Furniture Group, 92 S.W. 3d 367 (2003). Conclusion With an estimated 7 million undocumented workers currently in the United States labor force, most of whom are disproportionately employed in hazardous industries, such as construction, mining, and agriculture, we are sure to see more litigation in this area in the near future.