Alaskan and other Pacific Region employers should brace for potential fallout

In Chamber of Commerce v. Whiting, a case closely watched by businesses, state and local chambers of commerce, and immigration policymakers, the U.S. Supreme Court yesterday issued an opinion upholding an Arizona law that imposes sanctions for employing unauthorized aliens.

Background

Arizona passed a law by which businesses could have their licenses revoked if they were found to have intentionally or knowingly employed unauthorized (illegal) aliens. The law also mandated that employers use E-Verify, the Department of Homeland Security’s employment eligibility verification program, to check the employability status of each worker.

Business and civil rights organizations filed suit arguing that Arizona’s law was pre-empted by the Immigration Reform and Control Act of 1986 (IRCA) and the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). IRCA expressly pre-empts any state or local laws except licensing laws. Federal law provides that E-Verify is permissive (not mandatory).

The plaintiffs argued that Arizona’s law was pre-empted because it was more than simply a licensing statute. It reached business organization (incorporation and LLC formation), too. They also argued that it was pre-empted because it required state businesses to use E-Verify, thereby creating a conflict between state and federal law. Plaintiffs additionally contended that the law was impliedly pre-empted because it undermined the comprehensive scheme of immigration-related laws that Congress had enacted to regulate alien employment. The district court rejected all of these arguments and upheld the law. The U.S. Court of Appeals for the 9th Circuit affirmed.