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Aramark Facility Services v. Service Employees International Union, Local 1877

Court of Appeals for the Ninth Circuit
184 L.R.R.M. (BNA) 2396, 530 F.3d 817, 2008 D.A.R. 8926 (2008)
ELI5:

Rule of Law:

An employer does not have constructive knowledge of an employee's unauthorized immigration status based solely on a Social Security 'no-match' letter and the employee's failure to resolve the discrepancy within an unreasonably short time frame. Therefore, an arbitration award ordering reinstatement and back-pay for such employees does not violate the public policy against knowingly employing undocumented workers.


Facts:

  • Aramark Facility Services received 'no-match' letters from the Social Security Administration (SSA) indicating that information reported for 48 of its employees at the Staples Center did not match the SSA’s database.
  • Each of the affected employees had previously provided facially valid documents and properly completed a federal Form I-9 at the time they were hired.
  • Aramark instructed the 48 employees that they had three working days to provide either a new social security card or a verification form from the SSA showing a new card was being processed.
  • The employees' union, SEIU Local 1877, requested an extension to the three-day deadline, but Aramark denied the request.
  • Aramark terminated the 33 employees who did not provide the requested documentation within the specified timeframe, which amounted to between seven and ten days after notification.
  • Aramark told the terminated workers they would be rehired if they later supplied the required documentation.

Procedural Posture:

  • SEIU filed a grievance against Aramark under their collective bargaining agreement, alleging the terminations were without just cause.
  • The dispute was submitted to binding arbitration, where the arbitrator ruled in favor of SEIU, ordering reinstatement and back-pay for the fired workers.
  • Aramark filed a complaint in the U.S. District Court to vacate the arbitration award on public policy grounds.
  • SEIU filed a counterclaim to confirm the award.
  • On cross-motions for summary judgment, the district court granted judgment for Aramark, vacating the award because it found the award violated public policy.
  • SEIU, as the appellant, appealed the district court's decision to the U.S. Court of Appeals for the Ninth Circuit.

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Issue:

Does an arbitration award that orders the reinstatement and back-pay for employees who were fired for failing to resolve a Social Security 'no-match' letter within a few days violate the clear public policy against an employer knowingly employing undocumented workers under the Immigration Reform and Control Act (IRCA)?


Opinions:

Majority - Hall, Circuit Judge

No. The arbitration award does not violate public policy because Aramark did not have the requisite 'constructive knowledge' that its employees were undocumented, and therefore an order to reinstate them would not force Aramark to violate immigration law. The court's reasoning is twofold. First, courts must afford extreme deference to an arbitrator's factual findings, and the arbitrator here found no 'convincing information' that any of the fired workers were undocumented. Second, 'constructive knowledge' under the Immigration Reform and Control Act (IRCA) must be narrowly construed and requires 'positive information' of a worker’s status. An SSA no-match letter is not positive information, as the SSA itself states it is not a statement about immigration status and can result from numerous clerical errors. Furthermore, the employees' failure to comply with Aramark's 'extremely demanding' and unreasonably short three-day deadline is not sufficiently probative of their immigration status to establish constructive knowledge.



Analysis:

This decision significantly clarifies the narrow scope of the 'constructive knowledge' doctrine under IRCA, establishing that an SSA no-match letter alone is insufficient to trigger an employer's liability for knowingly employing undocumented workers. The ruling reinforces the high legal standard for vacating an arbitration award on public policy grounds, emphasizing judicial deference to arbitral fact-finding. This precedent protects employees from precipitous termination based on administrative discrepancies and guides employers to adopt more reasonable procedures for addressing no-match letters, thereby balancing immigration compliance with labor rights and anti-discrimination principles.

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