Forthcoming: May states enact legislation to prevent the employment of unauthorized workers? Or are work authorization laws preempted by federal law?

Matthew C. Arentsen

In Chamber of Commerce v. Edmondson, decided in February 2010, the Tenth Circuit responded to these questions by invalidating two sections, while upholding one section of the Oklahoma Taxpayer and Citizen Protection Act (“Oklahoma Act”). The Oklahoma Act’s purpose is to regulate illegal immigration. The Tenth Circuit held that Section 7(C) was expressly preempted by the Immigration Reform and Control Act (“IRCA”) and that Section 9 was impliedly preempted by IRCA. IRCA, enacted by Congress in 1986, prohibits the employment of illegal aliens. The Tenth Circuit, however, reversed the district court and found that Section 7(B) was not impliedly preempted by IRCA because mandating E-Verify, an internet-based work authorization program, did not stand as obstacle to Congress’s goals in enacting IRCA.

The plaintiffs, various chambers of commerce and trade associations, brought suit challenging three sections of the Oklahoma Act. Section 7(B) requires employers to use E-Verify to verify the employment eligibility of their employees. Section 7(C) subjects an employer to civil penalties and fines for discharging an eligible worker while retaining an unauthorized worker. Section 9 requires employers to verify the work authorization of independent contractors or withhold taxes from the independent contractor.

The Supremacy Clause states that the Constitution and the laws of the United States “shall be the supreme Law of the Land[,] . . . any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” Courts interpret this clause as meaning federal law preempts contrary state law. Furthermore, federal preemption can be either express or implied. Express preemption exists when Congress explicitly delineates the extent to which federal law preempts state laws. Some federal statutes, however, exempt state laws that would otherwise be expressly preempted by way of a savings clause. Nevertheless, in Geier v. American Honda Motor Co., the Supreme Court held that the existence of a savings clause does not bar the working of implied preemption principles. One type of implied preemption is conflict preemption, which occurs when a state law would make it impossible to comply with both the state and federal law or where state law stands as an obstacle to accomplishing the objectives of Congress in enacting the federal law.

The Tenth Circuit found that Section 7(C) was expressly preempted by IRCA, because Section 7(C) imposes sanctions for employing illegal aliens and IRCA preempts “any State law imposing civil or criminal sanctions . . . upon those who employ . . . unauthorized aliens.” The Tenth Circuit concluded, although not expressly preempted, Section 9 was impliedly preempted because IRCA does not require employers to verify the work authorization of independent contractors, whereas the Oklahoma Act requires this additional verification. This additional burden on employers, the Court opined, stood as an obstacle to Congress’s goals for IRCA. With regard to Section 7(B), two of the three judges held that the Oklahoma legislature mandating the use of E-Verify did not stand as an obstacle to accomplishing the goals of IRCA, and therefore was not impliedly preempted. Although not all the judges agreed with this result, they were unanimous in their criticism of the Ninth Circuit’s reasoning in arriving at the same result in Chicanos Por La Causa v. Napolitano. According to the Tenth Circuit, the Ninth Cicuit’s implied preemption analysis was largely based on its initial conclusion that the Arizona immigration law fell within the savings clause of IRCA. According to the Tenth Circuit, the Ninth Circuit’s approach was “problematic because it implies that the presence of an express preemption provision precludes the possibility of implied preemption,” which stands contrary to Geier and accepted implied preemption principles.

In Edmondson, by remaining faithful to Congress’s intent  in enacting IRCA, the Tenth Circuit reached a correct and informed holding that demonstrated a superior approach to immigration and employment. With IRCA, Congress sought to balance three goals: preventing unauthorized workers, preventing employment discrimination, and preventing undue disruption of business. The Tenth Circuit carefully considered each of these goals in arriving at the Edmondson decision.

The Tenth Circuit more accurately and faithfully applied the principles of implied preemption than the Ninth Circuit in Chicanos Por La Causa. By incorrectly overemphasizing the existence of a savings clause the Ninth Circuit’s approach stands in opposition to Geier. Furthermore, greater reliance on express preemption and less on implied preemption would grant states more power to regulate immigration and employment. Yet, greater state power could be detrimental to accomplishing the goals of IRCA, namely preventing employment discrimination and undue burden on employers. Finally, greater reliance on express preemption will make it necessary for Congress to draft more exact express preemption provisions if it desires the federal statute to preempt state law. This increased emphasis on positive law making, however, may be particularly burdensome and unrealistic. 

For further analysis of Edmondson, including a detailed history of immigration and employment verification laws and extensive analysis of why state laws mandating the use of E-Verify are not impliedly preempted, see Matthew C. Arentsen, Chamber of Commerce v. Edmondson: An Informed Approach to Federal Preemption, 88 Denv. U. L. Rev. ____ (2011).