In Lozano v. City of Hazelton, the Third Circuit Court of Appeals ruled that the Hazelton, Pennsylvania ordinances regarding illegal aliens were unconstitutional. The ordinances, which had been enjoined by a federal court before taking effect, were designed to keep illegal aliens out of the town by penalizing employers who employed them and landlords who rented to them. The court found that the ordinance conflicted with federal immigration laws and therefore violated the Supremacy Clause. The ordinances operated in part through the sanction of suspending the business license of any person or entity who hired a worker not authorized to work in the U.S.
The court explained that the Immigration Reform and Control Act of 1986 (“IRCA”), the federal law that first prohibited the employment of undocumented workers, was carefully designed to minimize the burdens imposed on both employers (who did not want to be involved in the enforcement of federal immigration laws) and on authorized workers, who might erroneously be perceived as illegal aliens and discriminated against. Accordingly, IRCA limited the types of complaints against employers that the government would investigate, the measures that employers would have to take to assure that workers are authorized to work in the U.S., and the workers to which it would apply (IRCA applies to employees only, not to independent contractors). Congress also included an anti-discrimination provision in IRCA to reduce the burden imposed on authorized workers.
The Hazleton ordinance conflicted with this balanced approach by focusing only on deterring the hiring of unauthorized alien workers. The ordinance would have created an additional, separate Hazleton-only scheme for deciding whether an employer has employed illegal aliens, with very few limitations on the situations that would trigger government action. The Hazleton ordinance also had fewer due process protections for employers accused of violations. The creation of any additional system at all was a problem, said the court, because if Hazleton could adopt an additional system, so could every state and local government in the country, leading to an unacceptable patchwork of laws.
The ordinance also conflicted with the voluntary E-Verify scheme created by Congress by making the use of E-Verify mandatory in some cases. The Court noted that, as of 2007, the E-Verify system had a high error rate for foreign-born work-authorized employees and foreign-born U.S. citizens because of problems with the data bases it was using.
In addition, unlike IRCA, the Hazleton ordinance did not address the potential for discrimination against work-authorized individuals that employers might refuse to hire because they were or appeared to be foreign-born. Under IRCA, potential sanctions for discrimination against such individuals are designed to be of the same magnitude as sanctions for knowingly employing unauthorized workers. The Hazleton ordinance would have upset this balance.
For now, the efforts of Hazleton and any other state and local governments within the jurisdiction of the Third Circuit (Delaware, Pennsylvania and New Jersey) to try to impose additional sanctions against employers who hire unauthorized workers will continue to be precluded by IRCA. On the other hand, federal courts in other jurisdictions have permitted similar state and local legislation to become effective. The conflict between the Circuits that has developed will require action by the U.S. Supreme Court to resolve the issue, and in June, the Supreme Court agreed to hear an appeal from a decision of the Ninth Circuit Court of Appeals that upheld an Arizona law requiring the use of E-Verify and imposing harsh sanctions on employers of illegal aliens.