Federal Court Holds Employer’s Attorney Can Be Sued For FLSA Retaliation Over Deportation Effort

In the first ruling of its type, the Ninth Circuit held that an employer’s attorney can be sued for retaliating against an employee who sued his client – by allegedly reporting the plaintiff to immigration authorities and arranging to have him taken into custody at his deposition. Employers and their counsel should take note of this decision because of the broad potential liability it recognized, as well as consider other recent legal developments concerning employment and immigration.

After Long-Running Lawsuit, Attorney Allegedly Contacts ICE

In Arias v. Raimondo, the plaintiff sued his employer in 2006, alleging wage and hour violations under California law. According to the allegations in this later lawsuit for retaliation, 10 weeks before the scheduled trial in 2011, the employer’s attorney contacted US Immigration and Customs Enforcement to have the plaintiff taken into custody at his upcoming deposition and  deported. The plaintiff subsequently learned of the contact with ICE. He alleged that he decided to settle, “due in substantial part to the threat of deportation." The plaintiff also alleged that his employer long knew of his undocumented status and took advantage of it. He further alleged that the employer’s attorney contacted ICE about plaintiffs in several other cases. 

FLSA Retaliation Claim Allowed

The plaintiff sued the employer’s attorney for retaliation under the FLSA, alleging that the attorney contacted ICE in retaliation for plaintiff suing his client.  In his defense, the attorney argued that because he was never the plaintiff’s actual employer, he could not be held liable for retaliation under the FLSA. The US District Court for the Eastern District of California agreed, dismissing the lawsuit. On appeal, the Ninth Circuit reversed, holding that the attorney could be sued for retaliation under the FLSA for his “underhanded plan” to derail the first lawsuit.

Section 15(a)(3) of the FLSA establishes a violation for “any person” to “discharge or in any other manner discriminate against an employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this Act, or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee." This protection is broad. Most federal courts have held that this provision protects an employee from retaliation for making an internal complaint to the employer. Written and verbal complaints also have been viewed as protected. The law also has been read to protect not only current employees, but also former employees from retaliation by a former employer.

Here, the Ninth Circuit held that the employer’s attorney could be sued for retaliation because the law prohibits “any person” – not just an actual employer – from retaliating.  Section 203(a) of the FLSA defines “person” as meaning any “individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons.”  The specific reference to “legal representative” among the persons barred from retaliating made the employer’s attorney subject to suit, according to the Ninth Circuit.  Moreover, Section 203(d) of the FLSA also defines “employer” to include “any person acting directly or indirectly in the interest of an employer in relation to an employee.”

The Ninth Circuit also made clear that the FLSA’s wage and retaliation provisions “are as different as chalk is from cheese,” with retaliation “a different animal altogether." Only an actual employer is liable for payment of wages. However, by its terms, the retaliation provision extends further, to include “non-actual employers” like the employer’s attorney. In fact, the Ninth Circuit commented that the attorney’s alleged “activity in this case on behalf of his clients illustrates the wisdom of this extension." At the same time, the Court recognized that an individual who never was an employee “does not fit anywhere in the FLSA,” and thus could not make any claim for wages or retaliation.

Implications of the Case, Other Considerations on Immigration

The decision in Arias is significant. It exposes non-employers to retaliation claims under the FLSA, if an individual engaged in activity protected by the FLSA and can make required showings.Indeed, the holding that an employer’s attorney – even though never the plaintiff’s employer – can be held liable for alleged retaliation is unprecedented. Although this decision did not attempt to define the precise limits of this potential liability, it calls into question exactly what other actions, including even legitimate actions in response to litigation or other claims, may give rise to a retaliation claim under FLSA.

In addition, from a liability standpoint, it bears emphasis that, here, the plaintiff’s immigration status most likely had no bearing on the merits of the case. Federal law prohibits an employer from employing anyone not legally authorized to work in the United States. It also requires the employer to obtain verification of employment authorization at the start of employment. While some federal cases limit an undocumented individual’s ability to recover certain damages (such as back pay for missed work that an undocumented individual legally would not have been able to work), courts and agencies traditionally have held an individual’s immigration status is irrelevant on claims for wages for work actually performed. Otherwise, an employer potentially would receive the benefit of free or undercompensated labor, which in turn might encourage employing undocumented workers in violation of the law.

California also has enacted other immigration-related provisions, which are particularly noteworthy in light of Arias. Labor Code section 1171.5(a) provides that all employment “protections, rights, and remedies available under state law, except any reinstatement remedy prohibited by federal law, are available to all individuals regardless of immigration status,” with Labor Code section 1171.5(b) making a person’s immigration status “irrelevant to the issue of liability” for purposes of “enforcing state labor and employment laws.”

Labor Code section 244(b) also provides that an employer engages in an “adverse action” in reporting or threatening to report the suspected citizenship or immigration status of an employee, former employee, or prospective employee (or the family member of one those individuals) because the employee, former employee, or prospective employee exercised a right under the Labor Code, Government Code, or Civil Code. And, Labor Code section 1019 prohibits several retaliatory “unfair immigration related practices,” including threatening to contact or contacting immigration authorities, using the federal E-Verify system to check the work authorization status of an individual at a time or in a manner not required by law, requiring more or different documents than federal law requires for verifying work authorization, or not honoring documents that “on their face reasonably appear to be genuine.” 

Finally, California expressly prohibits an employer’s attorney from doing what the employer cannot do directly. Since 2014, Business and Professions Code section 6103.7 prohibits a member of the California Bar from reporting, or threatening to report, “suspected immigration status of a witness or party to a civil or administrative action or his or her family member to a federal, state, or local agency because the witness or party exercises or has exercised a right related to his or her employment, broadly interpreted.”