Yesterday, U.S. District Judge Neil V. Wake dismissed a lawsuit brought by various business and civic groups challenging the Arizona Legal Workers Act (the “Act”).   The Act, which went into effect on January 1, 2008, gives Arizona Superior Courts the power to suspend or revoke business licenses of employers who knowingly or intentionally employ unauthorized workers.  In his 37-page decision dismissing the lawsuit, Judge Wake said that the Act does not violate employers’ due process rights or improperly infringe on the federal government’s authority to regulate illegal immigration.  Judge Wake said that federal immigration law specifically allows states to regulate business licensing.

Judge Wake rejected the plaintiffs’ arguments regarding the constitutionality of the Act.  Among other things, Judge Wake found that: (1) no employer may be sanctioned without a full evidentiary hearing in the Superior Court of Arizona; (2) the State has the burden to prove that the employer knowingly or intentionally employed an unauthorized alien; (3) the Superior Court has full evidence-taking, fact-finding, and discretionary authority on all issues of liability;(4) the Superior Court cannot find that an employee is unauthorized to work absent a federal determination to that effect; and (5) the financial burden on employers to participate in the E-Verify program is minimal and does not constitute an undue burden.

Notably, Judge Wake did not decide whether the Act applies to all workers or only those hired after December 31, 2007.  That issue, according to Judge Wake, will have to be decided through future litigation.  Judge Wake did make it clear, however, that the Act does not apply to employees who work outside of the state of Arizona.

The plaintiffs have indicated that they will appeal Judge Wake’s decision to the Ninth Circuit Court of Appeals, possibly consolidating it with an appeal from an earlier lawsuit Judge Wake dismissed in December 2007.  Judge Wake dismissed that lawsuit, which was also brought by the same coalition of business and non-profit organizations, because the plaintiffs failed to sue the 15 Arizona county attorneys responsible for enforcing the Act.

As discussed in previous Ogletree Deakins E-Alerts, Arizona employers must take immediate steps to ensure that they are in compliance with the Act. If they have not already done so, Arizona employers should immediately:

  • Enroll in the E-Verify program. Employers may register to participate in the E-Verify program at At the time of registration, employers must accept an electronic Memorandum of Understanding (MOU) which requires the employer to make several promises to both the Department of Homeland Security (DHS) and the Social Security Administration (SSA).
  • Create written policies to be followed by personnel submitting queries through the E-Verify program. Aside from the mandatory training from DHS and SSA, written policies for employee use of the E-Verify system should be developed to emphasize the importance of the following:

    * The E-Verify program is to be used to verify program new hires only after I-9s have been completed, not to pre-screen applicants or “re-verify” the employment eligibility of current employees.

    * Adverse employment actions are not permitted when the E-Verify responds to a query with a tentative non-confirmation. Employees are allowed the opportunity to address issues that may have caused a tentative non-confirmation to occur.

    * Conversely, if a confirmation of employment eligibility is received before the new hire’s start date, the employer may not accelerate the new hire’s start date or otherwise alter the previously agreed-upon terms and conditions of employment.

  • Audit I-9 documents, policies and procedures. Auditing I-9 paperwork will assist employers to identify any potential issues and help ensure compliance with the Act.

Ogletree Deakins previously prepared and distributed written materials explaining the specific requirements of the Act, as well as instructions on how to enroll in the E-Verify program. If you would like to receive a copy of those materials, or would like further assistance on compliance with the Act, contact Kerry Martin at (602) 778-3715, Scott Blaney at (602) 778-3705 or Erica Rocush at (520) 575-7443. If you have other immigration-related questions, please contact Jay Ruby in our Immigration Practice Group, or contact our Client Services Department at 866-287-2576 or via e-mail at

Note: This article was published in the February 8, 2008 issue of the Arizona eAuthority.

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