January 24, 2012
In 2007, the State of Arizona enacted the Legal Arizona Workers Act, Ariz. Rev. Stat. §§ 23-211 to -216, which imposed what were at the time the nation’s toughest sanctions against employers that knowingly hired undocumented workers. The Act provided that an Arizona business caught in more than one such violation would lose its license to operate. In addition, the Act required all employers to check the legal status of their new hires using the federal E-Verify program. A federal court challenge to the new law was unsuccessful at the district court level, and, on March 1, 2008, Arizona’s county prosecutors became authorized to prosecute employers for violations of the Act. On May 1, 2008, Arizona’s governor signed legislation amending the Act to provide additional safeguards for employers who made good-faith efforts to comply with the law.
In the meantime, the federal court challenge to the Act worked its way up to the Court of Appeals for the Ninth Circuit, which affirmed the district court’s order upholding the Act. Chicanos por la Causa, Inc. v. Napolitano, 558 F.3d 856 (9th Cir. 2009). Ultimately, the case reached the U.S. Supreme Court, and, on May 26, 2011, the Court upheld the Act in a 5-3 decision, U.S. Chamber of Commerce. v. Whiting, 131 S. Ct. 1968 (2011). First, the Court determined that the provision of the Act allowing suspension and revocation of business licenses fell within the federal Immigration Reform and Control Act’s (“IRCA”) savings clause for licensing laws and that, therefore, the provision was not expressly preempted by the federal law. The Court noted that the Arizona law did no more than impose licensing conditions on businesses operating within the state. Although the IRCA prohibits states from imposing civil or criminal sanctions on those who employ unauthorized aliens, it expressly preserves state authority to impose sanctions through licensing and similar laws. Next, the Court held that the provision was not impliedly preempted by the IRCA, as the regulation of in-state businesses through licensing laws does not involve uniquely federal areas of interest and the operation of the Arizona law does not interfere with the operation of a federal program. Finally, concerning the Arizona law’s E-Verify requirement, the Court held that the requirement was not preempted, either expressly or impliedly, by any provision of federal law. Although the federal Illegal Immigration Reform and Immigrant Responsibility Act of 1996 made the E-Verify program voluntary at the national level, it expressed no intent to prevent the states from mandating participation in the program, and Arizona’s use of the program did not conflict with the federal scheme.