Federal Judge Extends Temporary Injunction on Social Security No-Match Regulation

On October 10, 2007, the District Court for the Northern District of California granted a preliminary injunction blocking the implementation of the Department of Homeland Security (DHS) rule on Social Security no-match letters. Under the rule, DHS and the Social Security Administration (SSA) would immediately send no-match letters to 140,000 employers, notifying them of social security number discrepancies for up to 8 million employees. For further information on the rule, please click here to see our August 13, 2007 Immigration Alert.

The plaintiffs' motion requesting injunctive relief argued that the DHS rule contravenes the governing statute, is arbitrary and capricious under the Administrative Procedure Act, is an exercise of ulta vires authority by DHS and the SSA, and was promulgated in violation of the Regulatory Flexibility Act.

In his decision, United States District Judge Charles R. Breyer said that “the effects of the rule’s implementation will be severe,” and the expense to employers and the economy would be significant. He said the government did not follow proper procedures for issuing the new rule, and did so without conducting any survey examining the impact on businesses. Judge Breyer also noted that the DHS/SSA no-match letters would include lawfully employed individuals, and “would result in irreparable harm to innocent workers and employees.”

The injunction will remain in effect until the court makes a final decision on the rule. The government is almost certain to appeal the decision, but any final decision is unlikely to be made before the end of the year.

How This Affects You

The practical effect of the federal court injunction is to stop SSA from issuing the initial batch of 140,000 no-match letters. However, Morgan, Lewis and Bockius does not believe that the injunction should change how an employer responds to Social Security no-match letters or notification. The injunction does not mean that employers are free to ignore such letters pending the outcome of the litigation. In publishing the final regulation, the government has clearly announced its policy on Social Security no-match letters. The only question is whether that policy will have the force of law, as a regulation, or be implemented as a matter of executive branch and prosecutorial policy and discretion. Accordingly, the regulation reflects the government’s view on what steps taken by an employer will be viewed as a “reasonable” response to the notification of a Social Security number discrepancy. Employers that take steps that the government views as reasonable are less likely to face a charge of knowingly employing an unauthorized worker. Conversely, employers whose reactions to notification of a Social Security number discrepancy are not seen as reasonable by the government will presumably be at greater exposure to investigation and potential charges.

We will continue to monitor the process and will update you with any new information. If you have any questions about any of the issues raised in this Morgan Lewis Immigration Alert, please contact:

San Francisco
A. James Vázquez-Azpiri
415.442.1343
ajvazquez@morganlewis.com

Lance Nagel
415.442.1345
lnagel@morganlewis.com
 
Washington, D.C.
Eleanor Pelta
202.739.5050
epelta@morganlewis.com

Eric S. Bord
202.739.6040
ebord@morganlewis.com

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