Question 1. What is the Arizona law at issue in this case?

The Legal Arizona Workers Act of 2007 allows state courts to suspend or revoke the business licenses of Arizona employers that knowingly employ aliens not lawfully authorized to work. Ariz. Rev. Stat. Ann. §§23–211, 212, 212.01 (West Supp. 2010). The law also requires all employers in the state to use E-Verify to confirm that their employees are legally authorized to work. Ariz. Rev. Stat. Ann. § 23-214(A) (West Supp. 2010). When first enacted, the Arizona law contained no penalty for failure to comply with the E-Verify requirement. It was later amended to include penalties such as the loss of state-allocated economic development incentives, but because those penalties were not part of the statute when the lawsuit was initially filed, the U.S. Supreme Court did not address their interaction with federal law.

Question 2. What is the holding in the case?

The question presented was whether federal immigration law “preempts” or takes precedence over the Arizona law. Preemption is a doctrine rooted in the Supremacy clause of the U.S. Constitution. It has come to mean that a state or local law is preempted and invalidated when Congress has asserted its exclusive authority in an area or the law conflicts with federal legislation. See, e.g., De Canas v. Bica, 424 U.S. 351 (1976). For a more detailed discussion of preemption, see Sejal Zota, “Do State and Local Immigration Laws Violate Federal Law?” 74 Popular Government 22 (Spring/Summer 2009). In a 5-3 decision, the U.S. Supreme Court held that the Arizona law was not preempted by federal immigration law.

The Court held that the federal Immigration Reform and Control Act of 1986 (IRCA) specifically authorized the Arizona law. IRCA prohibits the knowing employment of unauthorized aliens and requires employers to take certain steps to verify an employee’s eligibility for employment. Pub. L. No. 99-603, 100 Stat. 3359 (1986) (employer sanctions provisions codified at 8 U.S.C. § 1324a to 1324c ). An “unauthorized alien” is defined as an alien who is not admitted for permanent residence or not otherwise authorized under federal law to work in the United States. 8 U. S. C. §1324a(h)(3) (2010). IRCA also guards against employment discrimination on the basis of citizenship or national origin. 8 U. S. C. §1324b(a) (2010). Employers that violate provisions of IRCA may be subjected to civil and criminal penalties.

IRCA also restricts the ability of States and localities to regulate the employment of unauthorized workers. The federal law expressly preempts “any State or local law 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.” 8 U. S. C. §1324a(h)(2) (2010). Under that provision, state laws that, for example, impose fines on the employers of unauthorized workers are expressly preempted and thus impermissible.

Until the Court’s decision in Whiting, it was unclear what laws, if any, were covered by the “other than through licensing and similar laws” exception. The Court concluded that while IRCA prohibits States from imposing “civil or criminal sanctions” on those who employ unauthorized aliens, it preserves state authority to impose sanctions “through licensing and similar laws.”  The court interpreted the term “licensing laws” broadly to cover laws—such as Arizona’s—that suspend or revoke the business licenses of in-state employers that employ unauthorized aliens. The court found that the Arizona law was therefore expressly authorized by IRCA.

Second, the Court found that the Arizona law did not otherwise conflict with IRCA or interfere with Congressional statutory intent. A state law may also be preempted by federal law if it is an obstacle to the accomplishment and the execution of the full purposes and objectives of Congress in enacting the federal legislation (referred to as implied preemption). See, e.g., Hines v. Davidowitz, 312 U.S. 52, 67 (1941). The U.S. Commerce of Chamber argued that, by imposing additional sanctions on employers who hire authorized aliens while not penalizing those who discriminate, Arizona’s law had disrupted Congress’s carefully balanced objectives of deterring unauthorized alien employment without overburdening employers and increasing discrimination against legal workers who look or sound foreign. The court found no conflict or interference because states are expressly allowed to supplement IRCA’s penalties through licensing laws, and because Arizona’s “law closely tracks IRCA’s provisions in all material respects.” Whiting, 563 U. S. ____, 2011 WL 2039365, at *12. In describing how the Arizona law is consistent with IRCA, the Court stressed that the Arizona law “uses the Federal Government’s own definition of “unauthorized alien,” it relies solely on the Federal Government’s own determination of who is an unauthorized alien, and it requires Arizona employers to use the Federal Government’s own system for checking employee status.” Id.

Third, the Court ruled that Arizona’s requirement that all employers participate in E-Verify was not preempted by federal law. E-Verify is a web-based pilot program that allows participating employers to verify the employment eligibility of their new employees electronically. It is structured as a voluntary program operated by the U.S. Department of Homeland Security in partnership with the Social Security Administration. The Department of Homeland Security encourages the use of E-Verify, but is prohibited by federal law from requiring employers to use it. Pub. L. No. 104-208, § 402(a), 110 Stat. 3009, 3656 (1996) (“the Attorney General may not require any person or other entity to participate in [E-Verify].”). The Court concluded that the federal law, however, did not limit state action—there was no indication that Congress intended to prevent the states from requiring participation in E-Verify. The Court further found no conflict between Arizona’s E-Verify requirement and federal law, as the only consequence of not using E-Verify is the same under both laws—an employer forfeits the rebuttable presumption that he did not knowingly employ an unauthorized alien.

Question 3. How does Chamber of Commerce of U.S. v. Whiting impact proposed laws in North Carolina that penalize the employment of unauthorized workers?

Bills similar to the Arizona law are pending in the North Carolina state legislature. Under Whiting, a North Carolina law regulating the employment of unauthorized aliens through criminal sanctions, fines, or other non-licensing sanctions would be expressly preempted by federal law and thus impermissible. State or local laws that prohibit the employment of unauthorized aliens through licensing provisions, however, are expressly authorized by IRCA. Thus, if North Carolina enacted such a law, it would be valid and should withstand legal challenge—particularly if, like the Arizona law, it adopted federal immigration definitions, relied on the federal government’s verification and determination of immigration status and work authorization, and was consistent with the material provisions of IRCA.

Question 4: How does Chamber of Commerce of U.S. v. Whiting impact proposed E-Verify laws in North Carolina?

The North Carolina General Statutes require all state agencies, departments, institutions, universities, and local education agencies to use E-Verify to check the work authorization for new employees. G.S. 126-7.1. North Carolina local governments, government contractors, and private employers are currently not required to use E-Verify, though they may voluntarily elect to do so. Pending bills in the North Carolina legislature would require some or all of these actors to participate in the program. Under Whiting, such E-Verify laws are not preempted by federal law and should withstand legal challenge.  

It is worth noting that in Arizona, employers faced no sanction for failure to comply with the E-Verify requirement. The Court noted this lack of penalty as support for finding no conflict between the state E-Verify requirement and federal law. It is unclear from the opinion whether this was a significant consideration for the Court and whether imposing a sanction, such as a fine, for failure to use E-Verify would create any conflict with the federal law.

Question 5. Does Chamber of Commerce of U.S. v. Whiting provide states and localities with authority to enact other types of laws related to immigration?

Chamber of Commerce of U.S. v. Whiting likely does not give states and local governments broad authority to adopt other types of laws related to immigration. The Court’s holding was based largely on a finding that federal immigration law expressly authorized the Arizona legislation. Other types of immigration-related laws that are expressly authorized by and consistent with federal law are therefore permissible. The Court’s reasoning was based also on a framing of the Arizona law as regulation of “in-state businesses through licensing laws,” which has never been considered “an area of dominant federal concern,” the Court explained. Whiting, 563 U. S. ____, 2011 WL 2039365, at *13.  States have historically possessed power to regulate employers within their borders, but not immigration itself, which is the exclusive domain of the federal government. For example, prior to the passage of IRCA in 1986, the U.S. Supreme Court found that a California state law assessing civil fines for the employment of unauthorized aliens was not preempted by federal immigration law. De Canas v. Bica, 424 U.S. 351, 354, 356 (1976) (recognizing that the “[p]ower to regulate immigration is unquestionably . . . a federal power,” but noting that the “States possess broad authority under their police powers to regulate the employment relationship to protect workers within the State.”).  Whiting, therefore, does not provide states and local governments with broad authority to enact immigration-related laws that are not expressly authorized by federal law or outside of the area of employment.

A number of states, including North Carolina, and localities across the United States have enacted English language laws. The content of these laws varies significantly. The resolution described above states only that English is the jurisdiction’s official language (as does North Carolina’s law). While stating the local government’s preference for English, the resolution does not require its use. Such nonrestrictive and non-regulatory measures are likely to withstand legal challenge.

The enactment of a local ordinance that requires the use of English and prohibits the use of foreign languages may not be authorized under North Carolina law, however. Moreover, such an ordinance may violate state and federal free speech laws. In fact, laws in the states of Alaska, Arizona, and Oklahoma that required government officials to use only English during the performance of all government activity have been struck down. These laws were found to violate the First Amendment rights of elected officials and public employees to communicate with their constituents and the public, and of non-English speaking people to access and participate in government.

Jurisdictions with English language policies must continue to comply with federal obligations under Title VI of the Civil Rights Act of 1964. Title VI prohibits recipients of federal funding from discriminating against people on the basis of national origin, an obligation that includes providing reasonable language assistance to populations with limited English proficiency. Agencies, programs, and services receiving federal funds that fail to comply with these language assistance requirements may violate Title VI. In 2002, for example, the North Carolina Department of Health and Human Services (NCDHHS) was found to be in violation of Title VI for such a failure. NCDHHS subsequently entered into a voluntary compliance agreement with the federal government. The agreement requires local agencies overseen by NCDHHS, including the county departments of social services and local health departments, to provide at no cost oral interpretation services to all limited English proficient clients and written translation of important materials in languages encountered on a regular basis.

Jurisdictions with English language policies must also continue to comply with other federal and state laws containing language requirements, such as federal voting laws.

The Department of Homeland Security encourages the use of E-Verify, but federal law prohibits the Department from requiring employers to use it. There are ongoing concerns about the accuracy of the program—that the system is vulnerable to identity fraud and falsely rejects many U.S. citizens and legal residents. Some state legislatures, including the North Carolina General Assembly, have mandated its use by certain employers. North Carolina requires all state agencies, departments, institutions, and universities to use E-Verify to check the work authorization for employees hired on or after January 1, 2007, and it requires local education agencies to use it for employees hired on or after March 1, 2007. North Carolina local governments are not required to use E-Verify, although they may voluntarily elect to do so.

May state and local governments legally require government contractors to use the program, or would such an action violate federal law? There is no explicit prohibition on doing so, but based on the few cases that have been decided in other states, such an ordinance may violate federal law depending upon how it is structured. There are no North Carolina cases that address this question. Here are two issues local governments should consider before enacting such an ordinance.

The first issue is determining whether an ordinance requiring the use of E-Verify (“E-Verify ordinance”) violates the Immigration Reform and Control Act of 1986 (IRCA), the federal law regulating the employment of aliens. While local governments generally have a right to determine contract terms, they must also comport with federal law in the area of immigration. IRCA sets out the process to verify work eligibility and expressly preempts “any state or local action that imposes criminal or civil sanctions (other than through licensing and similar laws)” on employers of unauthorized aliens. Therefore, any local law that regulates the employment of unauthorized aliens by imposing a criminal or civil sanction violates IRCA and may be struck down.

Whether an E-Verify ordinance violates IRCA depends, in part, on how the ordinance is enforced. For example, if the failure to use E-Verify results in a fine, the ordinance probably violates IRCA because a fine is clearly a civil sanction. If the failure to use E-Verify results in a loss of contract, the ordinance may also violate IRCA. In fact, a federal court in Oklahoma found that such an ordinance likely violates IRCA because a loss of contract is a civil sanction proscribed by the federal law.

IRCA contains an exception for “licensing and similar laws.” What types of laws are covered by this exception? The Ninth Circuit Court of Appeals found that an Arizona law suspending the business license of employers that employ unauthorized aliens falls within this exception and therefore does not violate IRCA. The Arizona law also requires all employers to use E-Verify, but provides no penalty for violation of the requirement.

The second issue is determining whether an E-Verify ordinance conflicts with the federal provision that makes participation in the E-Verify program voluntary. The Ninth Circuit Court of Appeals and a federal court in Missouri found no conflict. These courts reasoned that although E-Verify may not be made mandatory at the national level, there was no indication that Congress intended to prevent states from requiring the use of the program. A federal court in Pennsylvania, however, found such an ordinance conflicts with the federal law.

All we have are a few federal cases which, at times, provide conflicting guidance. These cases are not binding on local governments in North Carolina, but they demonstrate the potential legal risks depending on how an E-Verify ordinance is structured. Stay tuned though—more guidance may be in the works as the U.S. Supreme Court is considering reviewing the legality of Arizona E-Verify law.