In last week’s Employment Law Commentary Update on the Department of Homeland Security’s new regulation regarding Social Security No-Match letters (see ELC Update, October 2007; Social Security No-Match Letters: Mass Firings or No Big Deal? (Homeland Security’s New Regulation Enjoined for Now, September 2007), we indicated that a hearing on whether to continue the temporary injunction of the regulation took place on Monday, October 1, 2007 in San Francisco federal court. Yesterday, Judge Charles R. Breyer made his final ruling and issued a preliminary injunction preventing the government from enforcing the No-Match regulation.

In granting the motion filed by a consortium of labor unions and business groups, Judge Breyer found that the balance of harms tips sharply in their favor as there is "no doubt that the effects of the rule’s implementation will be severe." Judge Breyer recognized that the regulation would not only have "massive ramifications" on how employers treat No-Match letters and impose a significant economic burden on employers, but there would be a "strong likelihood" that it could lead to firings of employees who are actually authorized to work. Furthermore, the plaintiffs’ claims raised serious issues including, but not limited to: whether the DHS rule conflicts with the statute, whether the rule is arbitrary and capricious, and whether the DHS and SSA exceeded their statutory authority.

Unless the government successfully appeals the ruling to the Ninth Circuit Court of Appeals, the preliminary injunction will remain in effect until the lawsuit goes to trial next year. Pursuant to the Court’s order, the parties must meet and confer on the form of the injunction and submit a proposed order by Friday, October 12, 2007.

As the Court acknowledged, nothing in this preliminary injunction precludes the Social Security Agency from following its normal procedures and sending out No-Match letters without DHS guidance letters, as the agency has been doing for over a decade.

We will send out another update as more developments undoubtedly will occur.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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