Academic journal article Journal of Business and Entrepreneurship

Hoffman Plastic Compounds vs. National Labor Relations Board: Backpay Remedies and Undocumented Aliens

Academic journal article Journal of Business and Entrepreneurship

Hoffman Plastic Compounds vs. National Labor Relations Board: Backpay Remedies and Undocumented Aliens

Article excerpt


This article examines the decision of Hoffman Plastic Compounds v. National Labor Relations Board which determined whether undocumented workers are entitled to backpay remedies following an unfair labor practice. The Supreme Court concluded that the National Labor Relations Board overextended its authority and that undocumented workers are not entitled to backpay remedies. A brief historical background is provided as well as the decision's implications for other laws and regulations governing employee-management relations in small businesses.


Since the tragedy of 9/11, the media and, subsequently, federal government agencies have directed their attention to the issue of foreign nationals residing legally and illegally in the United States. According to the 2000 census, approximately 16,579,000 foreign nationals live in the United States (U.S. Bureau of the Census, 2002). An additional 8,705,000 aliens are either unauthorized (illegal) or otherwise unaccounted for (U.S. Bureau of the Census, 2001). It is these "unauthorized" or "undocumented" aliens who are the focus of this article. There is a paradox concerning these undocumented aliens, a paradox of which many American employers may not be aware. Even though an individual may not have legal authorization to live in the United States, once he or she crosses our border that individual is afforded, at least partially, protection under U.S. employment laws. Just how far such protection extends under the National Labor Relations Act (NLRA) was addressed by the Supreme Court on March 27, 2002 in its decision, Hoffman Plastic Compounds, Inc. v. National Labor Relations Board (NLRB).

A Supreme Court decision affecting the employment rights of illegal aliens is germane to America's small businesses because many such ventures may have unknowingly become covered under federal employment and labor laws. As small businesses succeed, they inevitably grow. Though such growth is the reward for successfully competing, or at least surviving, in the market place, it also exposes the entrepreneur to a new set of external threats. In this case, business expansion exposes the small business to a broad range of federal laws and regulations. This is of concern because the obligation to comply with federal laws governing employment practices is determined by the size of an employer's workforce. For example, a business with 14 or fewer employees does not come under the umbrella of Title VII of the Civil Rights Act of 1964, the federal law making it unlawful to discriminate in employment on the basis of race, color, religion, sex, or national origin (42 U.S.C. §2000e(b)). However, if an enterprise hires just one more employee then that organization's full compliance with Title VII is mandated. As a result of success and growth of enterprise, many small businesses unwittingly pass from an employment environment relatively free of government interference into one which is highly regulated. Table 1 provides the minimum size for coverage under specific employment laws. It should be noted that each of these laws affords protection to undocumented workers as well.

Undocumented workers, or illegal aliens if one prefers, are protected under most U.S. employment laws just like citizens and legal resident aliens. This is at the crux of this article and why small businesses and entrepreneurs should take note of the Supreme Court's Hoffman decision regarding an illegal alien's entitlement to backpay under the NLRA. The logic follows that if a Supreme Court decision affects an illegal alien's entitlement to backpay awards under one federal statute, it may also affect similar entitlements authorized under some of these other federal workplace laws (like those governing compensation, advancement opportunities, hiring, and terminations).

The purpose of this article is to provide a brief synopsis of the Supreme Courts' decision, as well as the circumstances that led to it. …

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