Hot Off the Press: Court Dismisses "Fair and Legal Employment Act" Lawsuit

As you are already aware, we have been closely watching the progress of the lawsuits challenging the Fair and Legal Employment Act (“the Act”) as unconstitutional. On December 7, 2007, Judge Wake dismissed the lawsuit. He ruled that the plaintiffs were not the proper parties to challenge the Act’s license revocation proceedings because they had not shown there was a threat that those proceedings would be initiated against them, and because the named defendants—the Governor, the Attorney General, and the Director of the Department of Revenue—were not the proper defendants. The court’s ruling will allow the Act to take effect January 1, 2008, unless future legal action is successful.

Efforts are already under way to pursue legal action that will delay/prevent the Act from taking effect. In response to the court’s ruling, the Plaintiffs filed a new lawsuit challenging the Act. That lawsuit has named as defendants Arizona’s county attorneys, whom Judge Wake had stated were the appropriate defendants to such a challenge. In addition, the plaintiffs have added an anonymous plaintiff who will not comply with the Act and therefore faces an actual threat of enforcement proceedings. It is unclear at this time whether the plaintiffs will successfully obtain an injunction against enforcement of the portions of the Act related to E-Verify before January 1, 2008, when the county attorneys will begin enforcing the Act.

As you will recall, the following are the key elements of the Act:

  • Employers are prohibited from knowingly or intentionally employing unauthorized aliens.
  • An employer who knowingly or intentionally employs an unauthorized alien can have all licenses necessary for business operation to be suspended or revoked.
  • Employers are required to enroll in and use E-Verify.

Employers therefore should take the following precautions:

  • Review employee files to ensure that all I-9 documentation is complete and accurate.
  • Discharge any employees you know are not authorized to work in the United States. If there are employees for whom employment authorization is unclear, contact your employment attorney.
  • Consider your company’s circumstances. There are several “pros” and “cons” to enrolling now in E-Verify. For example, by signing the E-Verify Memorandum of Understanding (“MOU”), you must consent to inspection of your employment records by the Social Security Administration and the Department of Homeland Security. If your company is not planning to hire any new employees in the first week of January, you may be able to wait to see if the E-Verify requirements take effect before enrolling and entering into a MOU with the Government. On the other hand, if your company is planning a corporate shutdown for the week between Christmas and New Year’s Day, and you may need to make hiring decisions after the first of the New Year, you may prefer to enroll in E-Verify right now.
  • Contact your employment attorney to review your company’s employment authorization procedures.

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