Court Distinguishes Alien Status from Race

A federal appellate court recently rejected the national origin discrimination claim brought by a bank employee who assisted her husband, an undocumented alien, in opening a bank account. According to the Seventh Circuit Court of Appeals, any discrimination that led to the employee’s firing was not based on her husband’s race or national origin but instead on his status as an undocumented alien. Cortezano v. Salin Bank & Trust Company, No. 11-1631, Seventh Circuit Court of Appeals (May 21, 2012).

Factual Background

Kristi Cortezano was employed by Salin Bank & Trust Company as a sales manager. Her husband, Javier Cortezano, was a Mexican citizen living illegally in the United States. Javier did not have a social security number and, thus, was unable to open a banking account for his new business. After her husband obtained an individual tax identification number, Cortezano named him a joint owner on her account at Salin Bank and helped him open personal and business accounts.

In late 2007, Javier returned to Mexico to try to obtain U.S. citizenship. Cortezano requested vacation time to attend proceedings in Mexico to help Javier. In connection with this request, she revealed Javier’s alien status to her supervisor, Stacy Novotny. In response, Novotny notified the bank’s security officer, Mike Hubbs. Worried that the arrangement would violate bank fraud laws, Hubbs scheduled a meeting during which he expressed his concern to Cortezano that her husband must have used fraudulent documents to open his accounts.

Hubbs later emailed several Salin Bank supervisors to notify them that Javier used false identification to open his accounts. Hubbs prepared an internal Suspicious Activity Report, which “harped on the fact that Javier was an ‘illegal alien’.” In February, Cortezano refused to attend a meeting because Salin Bank would not allow her attorney to attend. That afternoon, the bank terminated her employment for refusing to participate in the meeting.

Cortezano filed suit against Salin Bank alleging employment discrimination under Title VII of the Civil Rights Act. The trial judge granted the bank’s motion for summary judgment and Cortezano appealed this decision.

Legal Analysis

Cortezano alleges that Salin Bank discriminated against her because of her marriage to a Mexican citizen whose residence in the United States was unauthorized. The Seventh Circuit first noted that it had not decided whether discrimination based on the race or national origin of a person’s spouse or partner falls within the protections of Title VII. Even assuming that it does, the court found, Cortezano’s claim fails. According to the Seventh Circuit, the “claim falls short because it is based on Javier’s alienage,” which is not protected by Title VII.

The Seventh Circuit noted that Novotny first called Hubbs when she learned Javier was undocumented and that Hubbs’ report stressed that fact. Moreover, the court found that the report barely noted that Javier was Mexican. The “coup de grâce,” according to the court, was that Hubbs reported his findings to U.S. Immigration and Customs Enforcement after Cortezano was fired. The court concluded that “it is beyond dispute that Salin Bank’s actions were motivated by the fact that Javier’s presence in the United States was unauthorized.”

The Seventh Circuit also noted several reasons the bank may have been concerned with Cortezano’s assistance to Javier in opening accounts. The court found that Salin Bank might have wanted to avoid holding accounts for unauthorized aliens. “It would hardly advance the bank’s business to be known as a resource for such aliens,” the court noted. Finally the court observed that the U.S. Supreme Court has ruled that the term “national origin” includes “the country from which you or your forebears came” but not one’s immigrant status. Thus, the Seventh Circuit affirmed the lower court’s ruling, holding that “[a]ny discrimination suffered by [Cortezano] was not the result of her marriage to a Mexican, but rather the result of her marriage to an unauthorized alien.”

Practical Impact

According to Danuta Panich, a shareholder in Ogletree Deakins’ Indianapolis office: “While making employment decisions based on an individual’s unauthorized presence in the United States is permissible, there is often a fine line between illegal immigration status and national origin. The employer in this case successfully walked that line because of precision in thinking and documentation. Employment actions based on a worker’s documentation should focus on the narrow immigration issue presented and avoid references to the individual’s country of origin or ancestry.”

Panich added: “Employers should also recognize that ‘alienage’ really focuses on status as an undocumented worker. Foreign individuals who are present in the United States legally are also ‘aliens,’ but most courts have concluded they are protected against discrimination under Title VII’s sister statute: 42 U.S.C. Section 1981. Thus, had Mr. Cortezano been legally admitted to the United States, the outcome might well have been different.”

Finally, Panich noted, employers should not consider this decision as approving blanket discharges of employees whose spouses happen to be undocumented. The status of a spouse is usually irrelevant. Ordinarily, employment decisions should focus on the workplace conduct of the employee. In this case, there happened to be a connection between the spouse’s status and the employee’s job duties.

Note: This article was published in the May/June 2012 issue of the Employment Law Authority.

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