Update: Court Hearing on Arizona Employer Sanctions Law
November 2007

On November 14, U.S. District Court Judge Neil Wake heard oral argument for more than three hours in Arizona Contractors’ Association, Inc. et al v. Napolitano et al, 2:07-cv-01355-NVW, the much-discussed lawsuits that challenge the constitutionality of the Legal Arizona Workers Act, A.R.S §23-211 et. seq. also known as Arizona’s “employer sanctions” law. The lawsuits seek to stop the law’s effective date of January 1. As you probably know, this Act requires employers to enroll in and use the federal government’s E-Verify program, which has historically been voluntary. Employers who are found to knowingly employ unauthorized workers will be subject to suspension and revocation of business licenses. The November 14 hearing served as the trial for the case at this stage.

Right to Sue

During the hearing, Judge Wake focused on whether the case is ready for court review or whether it is premature for him to rule because the plaintiffs have not yet suffered any injury. The plaintiffs assert the lawsuit is proper because they will suffer injury due to the threat of enforcement proceedings, the requirement that they consent to federal searches to use the E-Verify program required by the law, and the implementation costs to employers of enrolling in the E-Verify program as required under the Act. The State argues the question is nonetheless improper for court action at this time because any alleged injury is speculative or not established in the record.

Constitutional Challenges

The parties also addressed the substantive constitutional challenges to the Act. Among the key points was one of plaintiff’s arguments that the Act conflicted with federal regulations because the E-Verify program may not be used to verify work authorization more than three days after the employee is hired, but the Act may be read to apply to employees who were hired prior to the date the Act goes into effect. Judge Wake stated he had never heard that interpretation of the Act before. The State could not confirm or deny whether that interpretation of the Act would be used when the Act goes into effect--further concern about the confusion and vastly different interpretations employers will be subjected to when the Act takes effect.

More to come

Judge Wake has publicly stated that he intends to rule before the Act goes into effect January 1, and has acknowledged the parties’ request to allow enough time for a possible appeal of the court’s ruling. We will keep you posted as the case proceeds. Lewis and Roca lawyers are experienced in representing employers facing government investigations, and are ready to assist you with your questions about this law.

This Client Alert has been prepared by Lewis and Roca LLP for informational purposes only and is not legal advice. Readers should seek professional legal advice on matters involving these issues.

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