By Jane Salem, staff attorney, Nashville

Can undocumented injured workers collect increased permanent partial disability benefits in Tennessee under section 50-6-207(3)(B)?

A Special Workers’ Compensation Panel of the Tennessee Supreme Court considered that question at oral arguments on November 19.

Employee Salvador Sandoval asked the Panel to strike as unconstitutional the provision within the statute that precludes his recovery of increased benefits based on his immigration status.

Sandoval and his employer, Mark Williamson, d/b/a Tennessee Steel Structures, settled the case regarding his entitlement to permanent partial disability benefits. After the initial compensation period expired, Sandoval filed a petition seeking increased benefits under section 50-6-207(3).

Generally speaking, injured employees who don’t return to work after the initial compensation period are entitled to increased benefits based first on not returning to work. The benefits may be enhanced further depending on their age, education and their county’s unemployment rate. However, subdivision 50-6-2017(3)(F) bars increased benefits for people prohibited from working in the United States under federal immigration law.

At the trial court level, the parties agreed that, if not for section 50-6-207(3)(F), Sandoval would be entitled to approximately $12,000 in additional benefits.

Judge Joshua Davis Baker, of the Court of Workers’ Compensation Claims in Nashville, held that he had no authority to rule on the facial constitutionality of the statutory provision. So Sandoval asked the appellate court to decide.

Attorney Donald Byrd, representing Sandoval, cited a Panel decision from 2016, Martinez v. Lawhon. The Supreme Court Special Panel in that case found a similarly-worded provision within section 50-6-241 unconstitutional on the basis of federal preemption.

Martinez, however, involved the application of section 50-6-421 to a worker injured before the Workers’ Compensation Reform Act took effect. Byrd, of the Higgins firm in Nashville, said the provision for post July 1, 2014 cases is likewise unconstitutional and asked the panel to merely “bring the new law in line with Martinez.”

“The provision at issue in this case — that’s subsection 207(3)(F) — just like the previous law, explicitly ties additional workers’ compensation benefits to ‘an employee’s ability to work in the United States under federal immigration law,’” Byrd said.

He contended the provision incentivizes employers to hire undocumented workers because, should the workers become injured, the employers will never be liable for increased benefits, as they might for employees legally working in the U.S. Martinez called this a “perverse incentive.”

Byrd said, tongue in cheek, “Your honors will be shocked to know that sometimes employers hire them and then magically discover that they’re undocumented when it comes time to pay those benefits.”

Assistant attorney general Alex Rieger of Nashville, defending the law’s constitutionality, disagreed regarding this claimed incentive.

“The statute does not parse out whether or not a return to work is based on profound disability, or whether or not a failure to return to work is based on immigration status. Because at the end of the day, IRCA [the federal Immigration Reform and Control Act] says, regardless of whether or not they could return to work or are too disabled to return to work, they cannot be because it is illegal under our federal laws to do so.”

Byrd argued that the doctrine of field preemption controls, meaning here that immigration is solely controlled by federal laws. Rieger disagreed.

“I’ll ask the Court to imagine if the statute did not exist—if the statute were held to be preemptive,” Rieger said. “In every case, unauthorized workers would have an advantage to legal ones. If an unauthorized worker were injured, they would automatically receive a greater award because employers could not legally return them to work. That would, I believe, penalize employers, with a higher workers’ compensation award for hiring an unauthorized alien.”

Further, the post- and pre-Reform Act versions of the challenged provision aren’t identical.

Rieger noted that the previous version of the law contained a preamble stating an intention to discourage the hiring of illegal workers. The new law doesn’t have that language. Further, the old law contained a penalty provision for employers that wasn’t included in the Reform Act.

Attorney Michael Haynie, of Manier & Herod in Nashville, represented Tennessee Steel Structures and its carrier. He pointed out another difference: “Under the new law, an employee is capped at one times the impairment rating, regardless of whether they return to work for the pre-injury employer or any other employer. Under the old law, it was just returning to work for the pre-injury employer.”

Haynie argued that considering the employment law remedies available to undocumented workers requires a “delicate balance.” For example, in Hoffman Plastic Compounds v. NLRB, the U.S. Supreme Court held that, by definition, some remedies, such as backpay, cannot be appropriate for undocumented workers because they were never eligible to legally earn these wages.

“The appellant attempts to distinguish the Hoffman holding by saying that, ‘workers’ comp is just a substitute for traditional tort law,’” Haynie said. “But what the appellant overlooks is that permanent partial disability benefits are intended to serve as a substitute for lost wages.”

As an aside, Rieger and Haynie were also counsel of record in Martinez.

The Panel deciding the case is Justice Cornelia Clark, Senior Judge Robert E. Lee Davies and Special Judge William B. Acree.