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New Developments re Immigration Compliance
(E-Verify and Social Security No-Match Regulations)

On July 8, 2009, Secretary Janet Napolitano of the Department of Homeland Security (DHS) announced that DHS would implement rules proposed during the Bush administration requiring certain federal contractors and subcontractors to utilize the E-Verify in verifying the employment eligibility of new hires and certain current employees. In June 2008, President Bush issued an Executive Order requiring certain federal contractors and subcontractors to use the E-Verify electronic employment eligibility verification system. In 2008, various federal agencies proposed rules requiring these contractors to use E-Verify. Subsequently, legal challenges were filed by business groups who contended that the Executive Order and resulting rules violated the Illegal Immigration Reform and Immigrant Responsibility Act's apparent prohibition against requiring participation in the E-Verify program. While the lawsuit has been pending, implementation of the rules had been postponed until September 8, 2009. Despite the fact that the lawsuit is still pending, DHS stated that it would push ahead with full implementation of the federal contractor E-Verify rules, which will apply to federal solicitations and contract awards beginning on September 8, 2009.

Although the pending lawsuit challenging the E-Verify rules might still interfere with their implementation, federal contractors and subcontractors covered by the rule should be prepared to comply with the E-Verify requirements for new federal contracts awarded after September 8, 2009.

If the court permanently enjoins implementation of the rules, it would be up to Congress to amend the law so that E-Verify is made mandatory for federal contractors. It is also possible that Congress could require all employers (not only contractors) to use E-Verify to verify employment eligibility.

Secretary Napolitano also announced that DHS would rescind its proposed Social Security "No-Match" regulations, which would have created a "safe harbor" for employers that receive letters from the Social Security Administration (SSA) indicating that an employee's Social Security Number did not match the agency's records. To take advantage of the safe harbor, employers would have to take certain steps to resolve the discrepancy within a certain time period or risk liability. Soon after the "No-Match" regulations were issued in 2007, they were challenged in court, and an injunction was issued against their implementation. However, even in the absence of the proposed "No-Match" regulations, it could still be legally perilous for employers to ignore no-match letters from the SSA.

Increased Burden of Proof in Age Discrimination Cases

On June 18, 2009, in the case of Gross v. FBL Financial Services Group, Inc., the U.S. Supreme Court held that plaintiffs in age discrimination cases under the federal Age Discrimination in Employment Act (ADEA) must prove that, but for their age, their employer would not have taken adverse employment action against them. This differs from the standard that applies to race, sex, national origin and religious discrimination cases under Title VII. Under Title VII, a plaintiff need only show that their protected status was a motivating factor in their employer's decision to take adverse employment action. The effect of the Gross case is to make it more difficult for plaintiffs in federal age discrimination cases to prove their case. It is also possible that this heightened "but for" standard could also apply to claims under the Americans with Disabilities Act (ADA) and retaliation claims under Title VII. It is possible that Congress will amend the ADEA and other laws to make such claims subject to the "motivating factor" standard in Title VII discrimination cases.

Employers May Not Make Race-Based Decisions
to Avoid Possible Title VII Adverse Impact Claims Unless
There is a Strong Basis in Evidence of Disparate Impact Liability

On June 29, 2009, in the case of Ricci v. DeStefano, the U.S. Supreme Court held that when employers administer employee tests or other selection/promotion criteria, they must follow certain legal guidelines when reviewing the results of a facially neutral test or practice that appears to adversely and disproportionately impact a legally-protected class (such as racial minorities or women). An employer may no longer disregard the results of the test or practice, to the disadvantage of successful candidates who are outside the protected class (such as whites or males), for the purpose of avoiding a possible claim of disparate impact discrimination from members of the protected class, unless the employer can show a strong basis in evidence to believe that it would lose a claim for disparate impact discrimination. If the employer can show such a strong basis, the employer may be able to adopt an "affirmative action" type approach to protect members of the protected class. After the Ricci case, if an employer takes such action without having a strong basis in evidence to believe that it would be successfully sued for disparate impact discrimination, it could be sued for reverse discrimination. If an employer can show that its test or selection procedure is job related and consistent with business necessity, it should be able to avoid liability for disparate impact discrimination.

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