This case concerns the applicability of Minn. Stat. § 176.82 (2016)—the Minnesota statute banning employers from taking retaliatory actions against employees who seek workers’ compensation benefits—and the interplay between this statute and a federal statute, Immigration Reform and Control Act (“IRCA”).
The Respondent, Anibal Sanchez (“Sanchez”), was an undocumented worker. After his tourist visa expired in 1998, he continued to live in Minnesota. Eventually, in early 2005, he started to work as a body shop assistant with Appellant, Dahlke Trailer Sales, Inc. (“Dahlke”). Sanchez further alleged that the managers at Dahlke knew that he was not authorized to work in the United States, but nonetheless continued to employ him.
Then, on September 23, 2013, Sanchez injured himself while operating a sandblaster at work. A few months after his injury, he retained counsel and filed a claim for workers’ compensation benefits. About a month after filing this claim, Sanchez appeared for a deposition and admitted that he was not authorized to work in the United States.
Shortly after Sanchez’s deposition, he and two-part owners of Dahlke signed a letter, in which Sanchez agreed that Dahlke would place him on an unpaid leave of absence. Once Sanchez produced “legitimate” paperwork showing that he can legally work in the United States, he could return to Dahlke as an employee.
Sanchez later sued Dahlke under Minn. Stat. § 176.82 in Minnesota state court alleging that Dahlke discharged him for seeking workers’ compensation benefits. Dahlke moved for summary judgment, and the district court granted the motion.
The Minnesota Court of Appeals reversed the district court’s decision and held that undocumented workers had protection under the anti-retaliatory statute. It also held that Sanchez raised a genuine issue of material fact on whether he established a prima facie case of retaliatory discharge.
The Minnesota Supreme Court, in a 4-3 vote, affirmed the decision by the Minnesota Court of Appeals. The Minnesota Supreme Court first analyzed whether Sanchez met his burden of proof under the anti-retaliatory statute. Employees must prove two prongs when alleging that their employers violated the anti-retaliatory statute: (1) employers “discharged” them within the statute’s meaning; and (2) employers did so in retaliation for them seeking workers’ compensation benefits.
Under the first prong, the Minnesota Supreme Court held that the workers’ compensation statute did not define “discharge.” See Minn. Stat. §§ 176.001–.862 (2016). To that end, it looked to the ordinary meaning of “discharge.” In short, the term’s ordinary meaning denotes “an aspect of permanence.” Moreover, in determining whether an employer discharged an employee, the employer’s actual intent is crucial in deciding whether a discharge occurred.
Here the Minnesota Supreme Court held that Sanchez raised a genuine issue of material fact on whether he was discharged. Given Sanchez’s past interactions with Dahlke’s managers about his immigration status, he alleged that Dahlke placing Sanchez on unpaid leave was not motivated by his immigration status. Moreover, the letter signed by all parties lacked mutual consideration, and thus may not be binding. Put another way, Dahlke still had the ultimate authority on whether to re-hire Sanchez, and was under no legal obligation to re-hire him.
Under the second prong, when viewing all facts in Sanchez’s favor, the Minnesota Supreme Court held that the evidence raised a genuine issue of material fact on Dahlke’s motivation for placing Sanchez on unpaid leave.
The Minnesota Supreme Court then addressed Dahlke’s second argument: it could not be held liable for complying with federal law, the IRCA. The IRCA prohibits employers from knowingly hiring undocumented workers, and from continuing to employ these workers when the employer knows they are undocumented. 8 U.S.C. § 1324a(a). Employers who employ undocumented workers subject themselves to civil and criminal sanctions.
Dahlke argued that the IRCA preempted the anti-retaliation statute under the Supremacy Clause of the United States Constitution. Mainly, it argued that if the anti-retaliation statute required that it continue to employ Sanchez, it would violate the IRCA by knowingly employing an undocumented worker. The Minnesota Supreme Court rejected this preemption argument, and held that the anti-retaliation statute did not require that Dahlke continue to employ Sanchez after it knew he was undocumented. Instead, the anti-retaliation statute banned Dahlke from discharging Sanchez because he sought workers’ compensation benefits.
Justice Anderson wrote a dissenting opinion, with Chief Justice Gildea and Justice Stras joining the dissent.
The core takeaway from this decision is how an employer may comply with the IRCA and anti-retaliation statute because there is no conflict—i.e., the IRCA does not preempt the anti-retaliation statute under the Supremacy Clause. The statutes serve different goals. The IRCA, in part, bans employers from knowingly employing unauthorized workers, while the anti-retaliation statute bans employers from firing employees because they seek workers’ compensation benefits. Employers further do not have an affirmative obligation under the anti-retaliation statute to continuously employ employees who are unauthorized to work in the United States.