While a recent decision by the Ninth Circuit applies to Western states, it should serve as a signal for employers across the country to examine and update their recruiting and hiring policies.

The split ruling by a three-judge panel in Purushothaman Rajaram v. Meta Platforms, Inc. fka Facebook, Inc., held that a Reconstruction-era civil rights statute, known as Section 1981, allows American workers to accuse employers in federal court of favoring noncitizens. Meta now faces a proposed class-action lawsuit that was originally thrown out in 2022 when a U.S. magistrate concluded U.S. citizens are not a protected class under Section 1981.

The ruling opens a new pathway for citizenship bias claims. However, it splits from a Fifth Circuit ruling that found the opposite. The Fifth Circuit is the only other federal court to rule on the issue. The conflict between the circuit courts increases the likelihood the U.S Supreme Court will eventually address the issue.

Section 1981 Explained

Rajaram, a software engineer and naturalized U.S. citizen from India, has applied for several positions at Meta, Facebook’s parent company, over the course of several years. He’s been turned down each time and filed a lawsuit alleging that Meta favors H-1B workers over U.S. citizens because it can allegedly pay them less. The H-1B program permits businesses to hire qualified noncitizens for specialty occupations regardless of whether or not the employer can find qualified U.S. Citizen workers. There is no pre-requisite recruitment requirement to participate in the H-1B program.

Section 1981 was originally enacted as § 1 of the Civil Rights Act of 1866, a post-Civil War legislative effort to ensure newly freed slaves received the same rights as other citizens. It states, “[a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts . . . as is enjoyed by white citizens.”

Section 1981 has traditionally been used in race-based claims of discrimination, but the Ninth Circuit ruled it prohibits hiring-based discrimination on account of a person’s U.S. citizenship.

“If some noncitizens have a greater right to make contracts than ‘white citizens,’ then it is not true that ‘[a]ll persons’ have the ‘same right’ to make contracts as ‘white citizens.’ That is precisely what the literal text of the statute prohibits,” the panel concluded.

Discrimination will be Hard to Prove, but National Employers Should Pay Attention

The ruling creates another pathway for citizenship bias claims in federal court. Allegations of citizenship discrimination by U.S. citizens are normally pursued with the U.S. Department of Justice’s Office of the Chief Administrative Hearing Officer.

The ruling is unlikely to set off a flood of lawsuits claiming discrimination because such bias is very difficult to prove. There are protections built into the program to protect U.S. workers, including a requirement that companies hiring H-1B workers pay a prevailing wage.

One of the biggest myths in the business immigration arena is that the only reason why employers hire foreign workers is because they are “cheap labor.” This could not be further from the truth. The fact is that it is far more expensive to hire a noncitizen under the H-1B program than it is to hire a U.S. citizen. Businesses that sponsor H-1B workers usually incur thousands of dollars in legal and government fees for each worker for a temporary visa lasting only three years.

Still, national employers that hire noncitizens can still face bias claims under other statutes, including Title VII and the Immigration Reform and Control Act.

Avoiding Nationality Discrimination in the Hiring Process

It is dangerously easy to engage in employment/hiring discrimination during the hiring process. There is very specific phraseology that must be used by employers to solicit the information needed to verify employment authorization.

This is because “U.S. Workers” are protected from employment discrimination based on national origin and citizenship, as well as other Title 7 grounds. This is tricky when recruiting workers in the United States. Employers need to determine an applicant’s immigration status during the hiring process WITHOUT potential liability for discrimination.

Remember: “Look at the facts, not at the faces!”

What you CANNOT ask an employment candidate:
● Are you a U.S. Citizen?
● What country are you from?
● Do you have a “green card”?
● Do you have a social security card?
● If you’re not a USC, what visa do you hold?

Recommended Phraseology to determine work authorization:

“Do you currently have unrestricted work authorization for the United States, or would you require sponsorship for a working visa?”

__ I have unrestricted work authorization now and would NOT require sponsorship
__ I have work authorization now but would need sponsorship in the future
__ I would require sponsorship for a working visa

Employers should review their recruiting and hiring practices to ensure that they have consistent standards and practices in place throughout the entire hiring/onboarding process. Applicants should only be disqualified for non-discriminatory legitimate business reasons which are documented. They should double check the language used in their advertisements and applications. Employers should document their decision making throughout the process.

The Immigration Practice Group at Harris Beach is monitoring this court decision and related matters.