Rock and a Hard Place: Placing Injured Undocumented Worker on Unpaid Leave May Be Retaliatory Discharge

In a divided decision, the Supreme Court of Minnesota held that an injured undocumented worker had raised a genuine issue of material fact as to whether an employer had discharged him—and whether that discharge was motivated by the worker’s action of seeking workers’ compensation benefits—where the employer placed the worker on unpaid leave until the worker could show that his return to employment would not violate federal immigration law [Sanchez v. Dahlke Trailer Sales, 2017 Minn. LEXIS 372 (June 28, 2017)]. The Court also specifically found that federal immigration law does not preempt an undocumented worker’s claim for retaliatory discharge under Minn. Stat. § 176.82, subd. 1 (2016).


Following a work-related injury, Sanchez sought legal counsel to assist in filing a workers’ compensation claim. Sanchez would later testify that when he told a part-owner and service manager of the business that he had done so, the manager responded that he hated lawyers and that “the bridge” between Sanchez and the manager had been broken. During a deposition regarding the workers’ compensation claim, attorneys representing the employer asked Sanchez if Sanchez was authorized to work in the United States. Sanchez indicated that he was not. Turning to the service manager, who was present at the deposition, Sanchez said, “Douglas, you know that.”

One week later, Sanchez and the business owners signed a letter in which Sanchez acknowledged that the social security documentation he had provided was defective and that once Sanchez had provided the employer with “legitimate paperwork,” he could return to work.

Sanchez then sued the employer, alleging that he had been discharged in retaliation for seeking workers’ compensation benefits. The trial court granted the employer’s motion for summary judgment, finding that the unpaid leave was based upon Sanchez’s immigration status—not his workers’ compensation claim. The court of appeals reversed, finding that genuine issues of material fact existed and that summary judgment was not proper. The employer appealed, contending that placing Sanchez on unpaid leave until he could provide legitimate work documents did not qualify as a discharge.

“Discharge” Not Defined

Writing for the majority of the Supreme Court, Justice Chutich noted that the workers’ compensation statute did not define “discharge,” that the employer’s actual intent was central to the issue of whether there had been a discharge, and that the employer could not avoid a retaliation charge “by simply attaching a different label to what is in reality a discharge” [2017 Minn. LEXIS 372].

Justice Chutich continued that, taking the facts in the light most favorable to Sanchez, there was reason to doubt whether the employer ever intended to rehire Sanchez, regardless of his change in work status. Sanchez asserted that the employer was not actually motivated by his immigration status because the employer had known for several years that Sanchez was undocumented. Sanchez contended as well that the employer’s attorney deliberately asked about Sanchez’s immigration status—despite its limited legal relevance to the workers’ compensation claim—to furnish the employer with a nondiscriminatory reason to terminate Sanchez’s employment. If the employer’s motivation to put Sanchez on leave was retaliatory, it implied that the employer intended for the leave to be permanent. Justice Chutich said that in the end, the question of whether the employer intended Sanchez’s unpaid leave to be permanent was a factual dispute, to be resolved by a factfinder. Thus, Sanchez raised a genuine issue of material fact as to whether he was discharged.

Issue of Fact Also as to Relation of Discharge to Filing the Claim

In his deposition, Sanchez testified that, after he retained a lawyer for his workers’ compensation case, part-owner and service manager Smithers said he hated lawyers and that their “bridge” was “broken.” Again, while the employer asserted that in placing Sanchez on leave it was motivated only by its discovery that Sanchez did not have legal authorization to work in the United States, Sanchez testified that the employer had been aware of his immigration status for years. Justice Chutich indicated that, viewed in the light most favorable to Sanchez, the evidence in the record raised a genuine issue of material fact regarding the employer’s motivation for placing Sanchez on unpaid leave.

Did Antiretaliation Statute Require the Employer to Violate IRCA?

Finally, the employer contended that if the workers’ compensation antiretaliation statute required it to continue to employ Sanchez even after becoming aware of his immigration status, then the statute required exactly what the IRCA prohibits: knowingly employing an undocumented worker. Justice Chutich said the employer’s argument rested on a flawed premise, however. The workers’ compensation antiretaliation statute does not require that the employer continue to employ an employee after becoming aware that he is undocumented. Rather, it prohibited the employer from discharging an employee because he sought workers’ compensation benefits. Contrary to the employer’s contention, the retaliatory discharge provision did not require employment, but instead focused on a particular motivation: the employer is liable only if it discharged the employee “for seeking workers’ compensation benefits.”

Citing an earlier decision, Correa v. Waymouth Farms, Inc., 664 N.W.2d 324 (Minn. 2003), Justice Chutich said that since IRCA’s aim is to discourage employment of undocumented workers, removing labor protections would undermine that goal by making the employment of undocumented workers cost-effective. Justice Chutich indicated, therefore, that the workers’ compensation antiretaliation statute did not conflict with the IRCA, either by prohibiting conduct that the IRCA requires or by standing as an obstacle to the aims of Congress.

Dissent: No Discharge

Justice Anderson, joined by Justices Gildea and Straus, dissented. Justice Anderson noted that for the employer to allow an undocumented worker to return to work would make it liable for civil and criminal sanctions under federal immigration laws. The employer’s action in putting Sanchez on leave did not constitute a discharge. Justice Anderson added granting Sanchez a remedy for the employer’s compliance with federal law stood as an obstacle to the accomplishment and execution of federal immigration law. The justice would, therefore, conclude that federal law preempts Minnesota’s antiretaliation provision.

Commentary: Is the Employer Really Between a Rock and a Hard Place?

In his dissent, Justice Anderson offers a strong argument that the employer found itself between a rock and a hard place [my words, not his], that allowing Sanchez to return to work would have subjected it to federal immigration violations and yet, the majority’s decision means its only alternative was to violate Minnesota’s antiretaliation statute. Isn’t this, however, exactly the location (i.e., between the rock and the hard place) for which the employer had bargained?

Sanchez alleged that his managers knew for most of his employment that he was not authorized to work in the United States. He testified that people at his employer began to ask him about his “legal situation” about two years after he was hired. He described several instances in which managers made statements about his undocumented status. Sanchez also alleged that the employer received annual notices from the Social Security Administration, stating that the social security number that Sanchez provided did not match his name.

An employer can’t have it both ways. To the extent that Sanchez’s version of the facts is true—and for the purposes of the summary judgment motion, that’s exactly what is required—his employer knew its predicament, but was satisfied with moving forward with the illegal employment as long as it suited its purposes. I may be reading too much between the lines here, but I think the majority bristled when it heard about the question, offered by the employer’s attorneys at the deposition, inquiring about Sanchez’s immigration status. It will be interesting to see—should the matter go to trial—if a jury believes Sanchez.

My final two cents: the currently broken immigration laws appear to suit many employers. Perhaps that is why crafting a true solution to our immigration problem is so difficult. For all too many, the status quo is just fine and dandy.

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