Court Opinion

ID: 4680215
Source: CourtListenerOpinion
Date Created: 2021-04-22 20:00:39.212706+00
Date Added: 2024-06-11T09:12:20.198922
License: Public Domain

RECOMMENDED FOR PUBLICATION
                                Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                       File Name: 21a0090p.06

                   UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT

 RICARDO TORRES,                                             ┐
                                    Plaintiff-Appellee,      │
                                                             │
                                                              >        No. 20-5492
        v.                                                   │
                                                             │
                                                             │
 PRECISION INDUSTRIES, INC.,                                 │
                                Defendant-Appellant.         │
                                                             ┘

                         Appeal from the United States District Court
                       for the Western District of Tennessee at Jackson.
                   No. 1:16-cv-01319—S. Thomas Anderson, District Judge.

                               Decided and Filed: April 22, 2021

               Before: GRIFFIN, KETHLEDGE, and THAPAR, Circuit Judges.

                                      _________________

                                            COUNSEL

ON BRIEF: James L. Holt, Jr., Paula J. Jackson, JACKSON, SHIELDS, YESIER, HOLT,
OWEN & BRYANT, Memphis, Tennessee, for Appellant. Steve Wilson, THE STEVE
WILSON FIRM, Memphis, Tennessee, Bryce Ashby, DONATI LAW, PLLC, Memphis,
Tennessee, for Appellee. Marisa Díaz, Christopher Ho, LEGAL AID AT WORK, San
Francisco, California, for Amici Curiae.

                                      _________________

                                             OPINION
                                      _________________

       PER CURIAM.        Federal law makes it illegal to employ undocumented aliens, but
Tennessee’s workers’ compensation law still protects them. So if a Tennessee company fires an
undocumented employee for filing a workers’ compensation claim, the employee can sue for
damages. Because of the federal law, the company cannot be required to pay lost wages that the
 No. 20-5492                     Torres v. Precision Indus., Inc.                           Page 2

alien was not allowed to earn. But it’s still on the hook for wages the employee could have
lawfully received, as well as for other damages unrelated to the employee’s immigration status.

        Ricardo Torres obtained authorization to work in the United States several months after
he was fired for filing a workers’ compensation claim. The district court appropriately awarded
him backpay for the period in which he was authorized to work, plus non-economic and punitive
damages.    But the court mistakenly included two extra months’ wages in the backpay
calculation. We reduce the damage award accordingly and affirm.

                                                 I.

        Ricardo Torres worked for Precision Industries from January 2011 until he was fired in
September 2012. He was not legally authorized to work in the United States during this period,
but he obtained work authorization about five months later. Precision did not learn of Torres’s
unauthorized status until this litigation. (Torres had listed a fake Social Security number on a tax
form when he started the job.)

        In May 2012, Torres injured his back at work. He reported the injury to Precision’s
safety manager, Cheri Norwood, who scheduled a doctor’s appointment for later that day.
A week later, Torres returned to work—but the pain got worse. Norwood did not schedule a new
doctor’s appointment, so Torres scheduled his own and presented Precision with the doctor’s
bill.

        Precision wouldn’t pay, so Torres hired a lawyer to pursue a workers’ compensation
claim. When the lawyer contacted Precision, Norwood said that Torres’s claim was closed and
ended the call.    Immediately after, Norwood and Torres’s supervisor, Craig Momberger,
confronted Torres. Torres recorded the conversation. On the recording, Norwood threatened to
“knock the hell out of” Torres. And in a profanity-laced diatribe, Momberger added:

        I don’t even get why the f---ing lawyer’s involved. Why? You trying to do
        something? . . . You think that we have to pay for that[?] . . . I’m going to show
        you a lot of g-ddamn loyalty if that’s the way you f---ing do things[.] . . . When
        Terry [Hedrick] finds out about this s---, you’re in a world of hurt.
 No. 20-5492                    Torres v. Precision Indus., Inc.                         Page 3

       After the conversation, Momberger called Terry Hedrick, the company’s president and
owner. Momberger said that Torres’s actions “had strong implications against the company” and
recommended that Hedrick fire Torres. Hedrick agreed, and Momberger fired Torres right
afterwards.    Hedrick didn’t know that Torres had hired an attorney to pursue a workers’
compensation claim.

       Torres sued. He claims Precision violated Tennessee law by firing him in retaliation for
making a workers’ compensation claim.

       The district court conducted a bench trial. After Torres presented his evidence, Precision
moved for judgment on partial findings, contending that Torres was not entitled to recover
backpay or non-economic damages. The district court granted the motion. It held that the
Immigration Reform and Control Act of 1986 precluded Torres’s state law retaliation claim.

       We reversed. We held the district court erred by deciding the preemption question
without first deciding whether Precision was liable and if so, what damages were available under
Tennessee law. On remand, the district court found Precision liable for retaliatory discharge and
held that federal law did not preempt a damage award. The court awarded Torres backpay,
compensatory damages for emotional distress, and punitive damages. Precision appealed.

                                               II.

       We first review the district court’s liability determination. Precision argues that the
evidence does not support the conclusion that it wrongfully terminated Torres under Tennessee
law. We disagree.

       Tennessee’s common law expressly prohibits employers from firing employees for filing
workers’ compensation claims. See Williams v. City of Burns, 465 S.W.3d 96, 108–09 (Tenn.
2015); Clanton v. Cain-Sloan Co., 677 S.W.2d 441, 444–45 (Tenn. 1984). To make a claim for
retaliatory discharge, a former employee must show that his application for workers’
compensation benefits was a “substantial motivating factor” in the employer’s decision to end
the employment relationship. Sasser v. Averitt Exp., Inc., 839 S.W.2d 422, 426 (Tenn. Ct. App.
 No. 20-5492                      Torres v. Precision Indus., Inc.                         Page 4

1992). The district court did not err in concluding that Torres’s workers’ compensation claim
was a substantial motivating factor in Precision’s decision to fire him.

        Start with the court’s factual conclusion that Momberger acted with retaliatory animus
toward Torres.    For one thing, the animus is apparent from the audio recording of their
conversation. On the recording, Momberger asked Torres: “Why’d you go to a lawyer? You
think we have to pay for that?” And he followed up with a threat: “When Terry [Hedrick] finds
out about this sh--, you’re in a world of hurt.” Then he called Hedrick and recommended that
Torres be fired. From this evidence, the district court reasonably concluded that Momberger was
“very angry that Torres had gotten an attorney and initiated legal proceedings.” R. 84, Pg. ID
1381.

        And Torres had a stable work history with Precision until this incident.            Indeed,
Momberger had given him universally high marks on his only performance evaluation. But not
one hour after learning that Torres hired a lawyer, Momberger had him fired. The district court
found this “swift change in attitude” marked by Momberger’s tirade to be further evidence that
Torres’s workers’ compensation claim was a substantial factor in his termination.

        To be sure, Hedrick and Momberger testified that they fired Torres for non-retaliatory
reasons. But the district court doubted the credibility of these explanations, in part because their
stated reasons for firing Torres had changed substantially over time. See Sasser, 839 S.W.2d at
427.    Credibility determinations—especially when made with the benefit of in-person
testimony—receive strong deference on appellate review. Anderson v. City of Bessemer City,
470 U.S. 564, 575 (1985). We see no reason to disturb them here, and nothing else in the record
suggests that the district court clearly erred in weighing the evidence.

        Nor did the district court commit legal error by imputing Momberger’s retaliatory animus
to Precision—even though the company’s ultimate decisionmaker, Terry Hedrick, was unaware
of Torres’s protected activity. After his conversation with Torres, Momberger immediately
called Hedrick and recommended that Torres be fired. And Hedrick accepted Momberger’s
recommendation without further investigation.
 No. 20-5492                         Torres v. Precision Indus., Inc.                     Page 5

       Still, Precision argues that it cannot be liable for Momberger’s actions because Tennessee
law does not define an employer to include the employer’s agents. This argument lacks merit.
Tennessee courts routinely hold corporations liable for wrongful discharge based on their agents’
retaliatory animus. See, e.g., Sasser, 839 S.W.2d at 428; Newcomb v. Kohler Co., 222 S.W.3d
368, 389–95 (Tenn. Ct. App. 2006). Thus, the district court did not err by relying on agency
principles to establish causation.

                                                   III.

       Having concluded that the district court did not err in its liability determination, we now
consider whether federal law preempts the damages award. Although the Immigration Reform
and Control Act of 1986 preempts backpay awards for lost wages that an alien was not entitled to
receive, it does not preempt backpay for wages that the alien would have lawfully earned. Nor
does it preempt compensatory and punitive damage awards unrelated to an employee’s
immigration status. Thus, we affirm most of the district court’s damages award. But because
that award includes two months of backpay for a time in which Torres was unauthorized to work
in the United States, we reduce the award accordingly.

                                                   A.

       As in any preemption case, we deal here with an apparent conflict between two separate
employment-law-related regulatory regimes, one state and one federal. Our analysis begins with
a summary of each.

       Tennessee provides a cause of action for retaliatory discharge when an employer fires an
employee for filing a workers’ compensation claim. See supra, Part II; Clanton, 677 S.W.2d at
444–45.    Successful plaintiffs may obtain a variety of remedies, including reinstatement,
backpay, damages for emotional distress, and punitive damages. See, e.g., Hodges v. S.C. Toof
& Co., 833 S.W.2d 896, 899–902 (Tenn. 1992). Because Tennessee’s workers’ compensation
statute defines an “employee” as “every person . . . whether lawfully or unlawfully employed,”
Tennessee courts—including in litigation involving these parties—have reasoned that the statute
allows claims by individuals unauthorized to work in the United States. See Tenn. Code. Ann.
 No. 20-5492                     Torres v. Precision Indus., Inc.                          Page 6

§ 50-6-102(12)(A); Torres v. Precision Indus., 2014 WL 3827820, at *5–10 (Tenn. Ct. App.
Aug. 5, 2014).

       Tennessee’s worker’s compensation law is in some tension with the federal Immigration
Reform and Control Act of 1986. IRCA, as it is commonly known, prohibits employers from
knowingly hiring or continuing to employ unauthorized aliens. 8 U.S.C. § 1324(a). So if an
employer discovers that one of its employees is not authorized to work in the country, IRCA
“compel[s]” it to discharge the employee “upon discovery of the worker’s undocumented status.”
Hoffman, 535 U.S. at 148 (citing § 1324a(a)(2)). Employers who do not comply are subject to
civil and criminal penalties. See 8 U.S.C § 1324a(e)(4)–(5), (f)(1). IRCA also provides for
criminal prosecutions of those who use fraud, perjury, and related misconduct to obtain
employment, though it does not generally make it a crime for aliens to seek or engage in
unauthorized work. Id. §§ 1324a(b)(5), (d)(2)(F)–(G), 1324c(a); 18 U.S.C. § 1546(b); Arizona v.
United States, 567 U.S. 387, 404 (2012).
                                                B.

       “[S]tate laws that interfere with, or are contrary to [federal law] are invalid.” Wis. Pub.
Intervenor v. Mortier, 501 U.S. 597, 604 (1991) (internal quotation marks omitted). Federal law
may preempt state law expressly or implicitly. McDaniel v. Upsher-Smith Labs, Inc., 893 F.3d
941, 944 (6th Cir. 2018). Because the district court did not address express preemption and the
parties do not press the issue on appeal, we address only implied preemption.

       Implied preemption has two types, field and conflict. Fulgenzi v. PLIVA, Inc., 711 F.3d
578, 583–84 (6th Cir. 2013). The former applies when federal law is so “pervasive” in one
particular field that it exclusively occupies that field. In re Schafer, 689 F.3d 601, 614 (6th Cir.
2012). The latter applies when federal and state laws conflict in a way that would make
compliance with both impossible, or when the state laws “interfere[] with the operation of the
federal program.” Chamber of Com. of U.S. v. Whiting, 563 U.S. 582, 604 (2011). Whether a
federal law preempts state law is a legal question we review de novo. McDaniel, 893 F.3d at
944.
 No. 20-5492                     Torres v. Precision Indus., Inc.                        Page 7

                                                C.

       Field Preemption. “States are precluded from regulating conduct in a field that Congress,
acting within its proper authority, has determined must be regulated by its exclusive
governance.” Arizona, 567 U.S. at 399. That determination “can be inferred from a framework
of regulation so pervasive that Congress left no room for the States to supplement it or where
there is a federal interest so dominant that the federal system will be assumed to preclude
enforcement of state laws on the same subject.” Id. (internal quotation marks and ellipses
omitted). Because preemption can trammel upon state sovereignty, courts apply a “strong
presumption” against implied preemption in fields that States traditionally regulate. Merrick v.
Diageo Americas Supply, Inc., 805 F.3d 685, 694 (6th Cir. 2015). In our view, two factors
counsel against a finding of field preemption here.

       First, Congress expressly considered preemption when it enacted IRCA. It preempted
state laws imposing sanctions on employers for employing unauthorized aliens. See 8 U.S.C.
§ 1324a(h)(2). Because this preemption provision defines the statute’s preemptive reach, this
“implies that matters beyond that reach are not pre-empted.” Cipollone v. Liggett Grp., Inc., 505
U.S. 504, 517 (1992).

       Second, defining the scope of the relevant “field” matters. True, “Congress enacted
IRCA as a comprehensive framework for ‘combating the employment of illegal aliens.’”
Arizona, 567 U.S. at 404 (quoting Hoffman, 535 U.S. at 147). And it is beyond debate that the
Federal government “has significant power to regulate immigration.” Id. at 416. But a statute’s
“comprehensiveness, without a concomitant congressional indication of intention to preempt, is
insufficient to preclude state law.” Downhour v. Somani, 85 F.3d 261, 268 (6th Cir. 1996).
IRCA says nothing and regulates nothing with respect to what causes of action individuals may
bring or what remedies individuals may seek against employers.

       “States possess broad authority under their police powers to regulate the employment
relationship to protect workers within the State.” DeCanas v. Bica, 424 U.S. 351, 356 (1976),
superseded by statute on other grounds as recognized in Arizona, 567 U.S. at 404; see also Fort
Halifax Packing Co. v. Coyne, 482 U.S. 1, 21 (1987) (“[E]stablishment of labor standards falls
 No. 20-5492                     Torres v. Precision Indus., Inc.                          Page 8

within the traditional police power of the State.”); Metro. Life Ins. Co. v. Massachusetts,
471 U.S. 724, 756 (1985) (similar). IRCA creates a scheme designed to halt the hiring and
continued employment of unauthorized aliens. But this does not mean Congress has occupied
the entire field of employment regulation, including causes of action arising out of an
individual’s employment, authorized or not.

                                                D.

       Conflict Preemption. There are two types of conflict preemption: impossibility and
obstacle. McDaniel, 893 F.3d at 944. The first occurs when it is impossible to comply with both
federal and state regulations. Fednav, Ltd. v. Chester, 547 F.3d 607, 623 (6th Cir. 2008). The
second occurs when the state law is “an obstacle to the accomplishment and execution of” the
federal scheme. Id. (citation omitted); Whiting, 563 U.S. at 604. In other words, if the state law
would cause the federal law’s “operation [to] be frustrated and its provisions [to] be refused their
natural effect,” the state law “must yield to the regulation of Congress.” Chrysler Grp. LLC v.
Fox Hills Motor Sales, Inc., 776 F.3d 411, 424 (6th Cir. 2015) (internal quotation marks and
alterations omitted).
                                                 1.

       The Supreme Court’s Hoffman decision is the focal point of our conflict analysis. That
case shares several similarities with this one. An unauthorized employee tendered a fraudulent
document to obtain employment with the employer. 535 U.S. at 141. The employer later fired
him for engaging in protected activity (there, actions protected by the National Labor Relations
Act), and the National Labor Relations Board entered an order requiring the employer to remedy
this violation by paying the unauthorized employee backpay. Id. at 141–42. The Court vacated
the order, concluding “that awarding backpay to illegal aliens runs counter to policies underlying
IRCA.” Id. at 149.

       Its reasoning was simple. Under IRCA, it is “impossible” for an unauthorized alien to
obtain employment “without some party directly contravening explicit congressional policies.”
Id. at 148. That is, “[e]ither the undocumented alien tenders fraudulent identification, which
subverts the cornerstone of IRCA’s enforcement mechanism, or the employer knowingly hires
 No. 20-5492                      Torres v. Precision Indus., Inc.                          Page 9

the undocumented alien in direct contradiction of its IRCA obligations.” Id. An award of
backpay, in either case, “trivializes” IRCA.      Id. at 150.    Not only that, it “condones and
encourages future violations”—unauthorized aliens would have an incentive to remain in the
United States, avoid apprehension by immigration officials, and violate IRCA again by seeking
future employment with a different employer in order to comply with mitigation-of-damages
requirements. Id. at 150–51. In sum, an “award of backpay to illegal aliens would unduly trench
upon explicit statutory prohibitions critical to federal immigration policy.” Id. at 151.

       So too here.      IRCA prohibits both the hiring and continued employment of an
unauthorized alien.    As in Hoffman, the desired backpay remedy stems from an illegal
employment arrangement. An award of backpay for unauthorized work, then, subverts the
statute by forcing an employer to pay lost wages that the alien was not entitled to receive in the
first place. Id. at 149–50. We follow the Supreme Court’s explicit “no-backpay” dictate to not
“overlook this fact and allow [a court] to award backpay to an illegal alien for [months] of work
not performed, for wages that could not lawfully have been earned.” Id. at 148–49.

       But that doesn’t mean IRCA preempts the entirety of Torres’s backpay award.
Hoffman’s concern about requiring an employer to pay a backpay remedy to an employee
ineligible to earn wages disappears when the employee becomes eligible to work. That’s exactly
what happened here: Torres obtained authorization to work in the United States in February
2013, just a few months after Precision terminated his employment.            Once this happened,
Hoffman’s fear that awarding backpay would condone and encourage future violations fell away.
Torres was entitled to work (and did); he could remain in the United States legally (and did); and
he could mitigate damages without “triggering new IRCA violations” (and did). 535 U.S. at
150–51; cf. Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 903 (1984) (“[I]n computing backpay, the
employees must be deemed ‘unavailable’ for work (and the accrual of backpay therefore tolled)
during any period when they were not lawfully entitled to be present and employed in the United
States.”). In short, paying Torres backpay after he became authorized to work does not conflict
with IRCA.
 No. 20-5492                          Torres v. Precision Indus., Inc.                                  Page 10

           Precision’s counterargument is unavailing.1 Precision contends that awarding Torres
backpay even for the period he was authorized to work runs counter to Hoffman because
“discounting the misconduct of illegal alien employees . . . subverts [IRCA].” Appellant Br. 46
(quoting Hoffman, 535 U.S. at 149–50). Precision argues that since Torres gave a fraudulent
Social Security number on his tax form, any compensation for lost wages would discount
Torres’s misconduct and thus contravene IRCA.

           We do not read Hoffman so broadly. The passage that Precision relies on comes in
response to a specific argument raised by the respondent in that case. The National Labor
Relations Board argued that IRCA should not preempt backpay if the employer was unaware that
the employee lacked work authorization. In rejecting that argument, the Supreme Court found
“no reason to think that Congress . . . intended to permit backpay where but for an employer’s
unfair labor practices, an alien-employee would have remained in the United States illegally, and
continued to work illegally, all the while successfully evading apprehension by immigration
authorities.” Hoffman, 535 U.S. at 149. In other words, the “misconduct” that concerned the
Court was the continued effort by an unauthorized worker to seek unlawful employment and to
evade detection by immigration authorities.                See also id. at 150 (“[A]warding backpay
. . . condones and encourages future violations.” (emphasis added)). But after Torres received
work authorization in February 2013, there was no longer a threat of future IRCA violations.
Thus, a backpay award running from February 2013 onward does not conflict with the federal
statute.

           1
         Precision also says damages are unavailable under Tennessee’s doctrine of unclean hands, because Torres
provided Precision with a fraudulent Social Security number on a tax form. Precision argues that allowing Torres to
recover any damage award “circumvents Tennessee’s strong public policies regarding the unlawful fraudulent
conduct of illegal aliens.” Appellant Br. 39.
        The district court considered Precision’s unclean hands argument forfeited. See King v. Taylor, 694 F.3d
650, 659 (6th Cir. 2012) (reviewing district court ruling on forfeiture for abuse of discretion). We agree.
          In any event, Tennessee has made the choice to allow unauthorized workers to recover damages for
wrongful termination. See Tenn. Code. Ann. § 50-6-102(12)(A); Torres, 2014 WL 3827820, at *5–10. And
legislatures, not courts, get to make those policy choices. Since Congress chose not to displace Tennessee’s
choice—except as to backpay—we must honor it.
 No. 20-5492                     Torres v. Precision Indus., Inc.                        Page 11

                                                2.

       With these principles in mind, we affirm the majority of Torres’s backpay award. In its
order, the district court indicated that it awarded backpay only for the period in which Torres was
authorized to work. But the backpay award also includes a short period in which Torres
remained unauthorized. Thus, we modify the damage award to exclude backpay that accrued
during that time. See Petition of U.S. Steel Corp., 479 F.2d 489, 501 (6th Cir. 1973); 5 Am. Jur.
2d Appellate Review § 728 (Feb. 2021 Update) (“An appellate court has the power to increase or
decrease an award of damages made by a trial judge, when the record is complete.”).

       In determining the backpay award, the district court started with Torres’s uncontested
assertion that he would have earned $89,440 had he remained employed with Precision.
But that figure included wages that Torres would have earned in December 2012 and January
2013—after his workers’ compensation physician released him for work, but before he was
legally authorized to work in the country. Since IRCA preempts backpay damages for these two
months, we subtract two months’ wages from the backpay award. Based on Torres’s annual
income at Precision, two months of pay equates to $4,160. Thus, Torres may recover $85,280 in
lost wages ($89,440 - $4,160), less his mitigating wages of $43,731.58, which amounts to a total
backpay award of $41,548.42.
                                                3.

       Remaining, then, is the district court’s award of non-economic and punitive damages.
The district court awarded Torres $1,000 in compensatory damages for emotional distress.
In granting this award, the district court credited Torres’s testimony that “he felt stressed,
depressed, and frustrated . . . due to the nature of his termination and his interactions with Ms.
Norwood and Mr. Momberger.” R. 84, Pg. ID 1399. The district court also awarded Torres
$50,000 in punitive damages. It found Momberger and Norwood’s conduct to be “intentional
and malicious” and identified a need to deter employers from engaging in similar conduct. Id.

       The district court did not base these damages on anything relating to Torres’s
immigration status. Although IRCA broadly regulates immigration, it does not prohibit all
damages arising under the States’ various employment laws. Indeed, Hoffman spoke only to
 No. 20-5492                    Torres v. Precision Indus., Inc.                        Page 12

backpay and expressly noted that other remedies remained available to the Board. See Hoffman,
535 U.S. at 152 (“Lack of authority to award backpay does not mean that the employer gets off
scot-free.”).

        Torres’s non-backpay damages flow directly from Precision’s illegal act under Tennessee
law, and they do not require Precision to violate IRCA by paying “wages that could not lawfully
have been earned.” Hoffman, 535 U.S. at 149. Thus, awarding compensatory and punitive
damages does not interfere with IRCA’s regulation of employment and Hoffman’s preclusion of
backpay for unauthorized workers. So these damages may stand.

                                             * * *

        In sum, we hold that IRCA and Hoffman preclude Torres from recovering backpay for
the period in which he was an unauthorized alien employee. But IRCA and Hoffman do not
preclude backpay for the period after Torres obtained work authorization. Nor do they preclude
compensatory and punitive damages that are unrelated to Torres’s immigration status. Thus, we
affirm the district court’s judgment as to liability. But we reduce the damages award by $4,160.