When Castro's illegal resident status was discovered, the board determined that while the company could not reinstate him, thereby knowingly hiring an illegal alien and violating immigration law, the company did owe him wages.
In Hoffman Plastic Compounds Inc. v. National Labor Relations Board, the Court of Appeals for the District of Columbia agreed with the board and ordered back pay be awarded to Castro. Now the issue sits with the Supreme Court.
Attorneys for Hoffman argued Tuesday that workers are only entitled to actual loss. Undocumented workers are not legally eligible for work and thus have not been deprived of anything.
The board's attorneys said that if companies are exempted from giving back pay in the case of undocumented workers, there is an incentive to hire such workers. In an earlier case, Sure-Tan Inc. v. National Labor Relations Board, the Supreme Court had accepted extending labor protections to illegal immigrants both to prevent the creation of an employee subclass and deter companies from hiring undocumented individuals.
The Immigration Reform and Control Act of 1986, which forbids employers from knowingly hiring illegal immigrants, also is at issue. Attorneys for Hoffman said granting back pay to Castro contradicts the act.
The decision to award lost wages comes from their understanding of Congress' intended effects of the act, attorneys for the board said, which is to reduce illegal immigration.
Peter Olney, associate director at the Institute for Labor and Employment, a research and policy institute at the University of California, said the outcome of this case would not affect the flow of illegal immigrants.
"These people don't come here because of Supreme Court cases," he said. "Do we want our labor laws to be strong? That's the question that needs to be asked, not will this increase immigration."
The case could create two distinct classes in labor pools, he said — one protected by labor laws and one that is not. This would undermine the effectiveness of these laws, he said.
Warren Mar, a labor specialist at the Center for Labor Research and Education at UC Berkeley, agreed the outcome of this case would not change immigration to California and other states.
"We've made it much more difficult for Mexicans to cross the border in California, but it has not stopped the flow," Mar, a former union organizer with the AFL-CIO, said.
The issue of illegal immigration and workers' rights is especially personal in California, according to Mar.
"Nobody has family in this state that is 100 percent legal or 100 percent illegal. You may be legal, but your grandparents or aunt could be undocumented."
Mar said, "Had these workers not been trying to exert their rights, this would not be an issue in the Supreme Court or any court. As long as the employees are willing to work cheaply, everybody is happy with that."
Mexican labor is essential to the economies of California and other states, he said.
"It's ironic that we use them but keep them in this permanent second(-class) status," he said.
Raul Yzaguirre, president of the National Council of La Raza, said if the court overturned Hoffman it would be ignoring some existing precedents in labor and civil rights law that protect workers regardless of immigration status.
Such a decision, making the company not responsible for back pay, would "not only reward employers who skirt the law, it would give an unfair competitive advantage over those employers who obey the labor and immigration laws, particularly in industries that employ substantial numbers of immigrant workers."
The National Council of La Raza along with other human and employment rights organizations sent a brief supporting the board's decision.
Overturning Hoffman, Yzaguirre said, "poses significant dangers for law-abiding firms who may be undercut by unscrupulous employers who exploit undocumented workers."