On August 29, 2011, U.S. District Judge Sharon Blackburn temporarily enjoined the enforcement of Alabama’s recently enacted immigration law, House Bill 56 (HB 56), which was due to take effect September 1. The injunction will remain in effect until the court enters its ruling on the preliminary injunction or until September 29, whichever comes first. Judge Blackburn’s Order (pdf) states that the court will rule on the merits of the pending Motions for Preliminary Injunction no later than September 28.

The U.S. Department of Justice (DOJ) filed the lawsuit in the U.S. District Court (Northern District of Alabama) against the State of Alabama, alleging that HB 56 is preempted by federal law. The DOJ asked the court to find HB 56 invalid, null and void; and sought a preliminary and permanent injunction prohibiting its enforcement.

Two similar lawsuits, also seeking preliminary and permanent injunctions prohibiting enforcement of HB 56, were filed by religious and public interest entities. Those two cases have been consolidated with the DOJ lawsuit.

House Bill 56

On June 9, 2011, Alabama Governor Robert Bentley signed into law HB 56, a sweeping immigration law covering many topics including law enforcement, contract law, education, and employment. Of particular concern for employers are two provisions: sections 16 and 17.

Section 16 prohibits employers from deducting as business expenses wages or compensation paid to an unauthorized alien, and businesses that knowingly violate this provision can be liable for a penalty of 10 times the deduction claimed. Section 17 makes it a discriminatory practice for an employer to fail to hire a job applicant, or discharge an employee, who is either a U.S. citizen or authorized alien while retaining or hiring an individual the business knows, or reasonably should know, is an unauthorized alien. Employers violating section 17 can be subject to a civil suit, and the prevailing party may recover compensatory damages and reasonable attorneys’ fees.

None of the three lawsuits directly challenges the E-verify provisions of HB 56. However, the lawsuits filed by the religious and public interest entities do seek to have the law declared unconstitutional in its entirety.

The DOJ’s Complaint

The DOJ’s complaint alleges that the provisions of HB 56 are preempted by federal law and violate the Supremacy Clause of the U.S. Constitution. The Supremacy Clause, found in Article VI, Clause 2 of the Constitution, states that the “Constitution, and the Laws of the United States . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” The DOJ contends that “the federal government has preeminent authority to regulate immigrations matters” which is “derive[d] from the United States Constitution and numerous acts of Congress.” While the DOJ acknowledges that states may exercise their police power in a way that incidentally or indirectly affects aliens, the complaint asserts that states “may not establish [their] own immigration policy or enforce state laws in a manner that interferes with the federal immigration law.”

If HB 56 becomes law, the DOJ contends, “[i]t will conflict with longstanding federal law governing the registration and employment of aliens.” As the DOJ points out, the licensing savings clause of the Immigration Reform and Control Act of 1986 (IRCA), 8 U.S.C. § 1324a(h)(2), states that “[s]tate or local laws imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens” are specifically preempted by the IRCA. Accordingly, because HB 56 imposes sanctions on employers and potential employers of unauthorized aliens, and it is not a licensing or similar law, HB 56 is preempted. Moreover, the DOJ argues that the federal government has not ceded to the states its legislative and regulatory authority over immigration, noting that “Congress has further exercised its authority over immigration and the status of aliens.” Federal law, argues the DOJ, prohibits hiring, recruiting, or referring for a fee, unauthorized aliens, and the continued employment of unauthorized aliens once an employer discovers their unauthorized status.

Implications for Employers

In the meantime, employers should assume that the challenged provisions of HB 56 will go into effect no later than September 29, 2011. Because the E-Verify provisions, as noted above, have not been specifically challenged, employers should continue preparations to be enrolled in E-Verify by the statutory deadlines of January 1, 2012 (for employers who contract with or receive incentives or grants from the state) and April 1, 2012 (for all other employers). Regardless of whether the law is upheld or struck down, employers should continue to take steps to ensure they remain in compliance with federal immigration law. These steps include: (1) auditing current Form I-9's to correct any errors; (2) training personnel on properly completing Form I-9's; and (3) reviewing, revising, and developing policies for storing and retaining I-9 documents.

Because the unsuccessful parties may appeal the matter, complete and final resolution may be several months away. Thus, employers should consider seeking the advice of experienced employment and/or immigration law counsel to determine the best strategies and practices following the court's ruling.

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