Nebraska Supreme Court Upholds Award of Workers’ Compensation Permanent Disability Benefits to Illegal Immigrant

This month, the Nebraska Supreme Court ruled that an illegal immigrant was protected by the Nebraska Workers’ Compensation Act and therefore entitled to recover permanent disability benefits despite his illegal work status. Moyera v. Quality Pork International, 2013 Neb. LEXIS 2 (2013).

The plaintiff, Ricardo Moyera, moved to Nebraska from Mexico and purchased residency papers in order to obtain employment under a false name. He secured employment at a meat processing plant in March of 2007. In August of 2008, he suffered a workplace injury when a forklift ran over his right foot, breaking several bones. Moyera’s physician diagnosed him with “reflex sympathetic dystrophy,” a painful nerve disorder, and a gait derangement causing pain in his hips and lower back. Moyera’s physician prescribed him a narcotic pain medication and directed him to walk with a cane.

The employer placed Moyera in a temporary light duty janitorial position and allowed him to elevate his foot above the waist as needed. In May of 2010, the employer’s insurance carrier notified the employer that it intended to terminate Moyera’s temporary partial disability benefits and commence paying permanent partial disability benefits. Shortly thereafter, the employer audited its employment files, determined that Moyera did not have proper immigration documents, and terminated his employment on May 28, 2010.

In August of 2010, Moyera’s physician concluded that Moyera had reached maximum medical improvement with a permanent 20% whole body impairment. He concluded that Moyera was incapable of performing anything but sedentary work. A rehabilitation consultant concluded that Moyera suffered a 100% loss of earning capacity due to his lack of transferrable skills to sedentary jobs in the Omaha labor market. Notably, Moyera did not speak English.

The Nebraska Workers’ Compensation Court also found that Moyera sustained a permanent total loss of earning power and awarded him future medical care for treatment of his injury. The court rejected the employer’s argument that Moyera was not entitled to the benefits because of his illegal residency status. The court reasoned that the Nebraska Workers’ Compensation Act defined “employee” to include “aliens” and did not distinguish between legal and illegal aliens. The review panel affirmed the court’s decision, and the employer appealed to the Nebraska Supreme Court.

In support of its appeal, the employer emphasized that Moyera had no plans to return to Mexico or become a legal resident of the United States. The employer argued that Moyera had no earning capacity to lose because he had no legal right to be employed in the United States. In support of its argument, the employer cited a Nebraska Supreme Court case holding that an unauthorized worker was not eligible to receive vocational rehabilitation benefits because it conflicted with the Nebraska Workers’ Compensation Act’s purpose of returning workers to “suitable” employment. Ortiz v. Cement Products, 270 Neb. 787, 708 N.W.2d 610 (2005). The employer argued that Moyera’s claim for permanent loss of earning power should also be barred – similar to a claim for vocational rehabilitation benefits – because the claim depended upon his ability to obtain lawful employment in the United States.

The Nebraska Supreme Court rejected the employer’s argument. The Court reasoned that, while an award of disability benefits was similar to an award of vocational rehabilitation benefits, it differed in that it was not conditioned upon legal eligibility for employment with the same employer or a new employer. Rather, the Court reasoned that it was conditioned on only two issues: (1) the employee’s inability to perform the work he was trained to perform, and (2) the absence of skills required to perform other available work within his physical limitations. The Court affirmed the lower court’s ruling that Moyera’s illegal resident status did not bar an award of permanent disability benefits.

The Nebraska Supreme Court also noted that its ruling was consistent with rulings of other state courts, which have reasoned that excluding undocumented workers from receiving disability benefits creates a financial incentive for employers to continue hiring them. The Court also reasoned that allowing employers to escape liability for work-related injuries of undocumented employees would give such employers an unfair advantage over competitors who follow the law.

The Nebraska Supreme Court’s ruling in Moyera reinforces a long-held policy of holding employers accountable for the costs of their employees’ work-related injuries. Employers should continue to verify their employees’ eligibility to work in the United States, but also be mindful of unauthorized workers’ rights under the Nebraska Workers’ Compensation Act.

Todd A. West

Read the Full Newsletter: Labor & Employment Law Alert January 23, 2013