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Federal Judge Stays No-Match Rules and Issuance of New Letters

    Client Alerts
  • September 07, 2007

On August 31, a federal District Court judge in San Francisco granted a temporary restraining order preventing the Department of Homeland Security’s (“DHS”) new “No-Match” letter rules from taking effect as scheduled on September 14.  The injunction resulted from a lawsuit filed by the AFL-CIO challenging the legality of the new DHS rules.  Under the rules, employers receiving a No-Match letter from the Social Security Administration would have up to 90 days to clear up the discrepancy, or face the need to terminate the employee.


The union argued that the new rules place an undue and unreasonable burden on both employers and employees.  The AFL-CIO contended that the SSN system is unreliable, resulting in mistakes and improperly issued No-Match letters.  They also introduced evidence demonstrating that many employees may have difficulty clearing up mistakes within the 90-day period set forth under the new rules.


The injunction runs through October 20, when a different federal District Court judge will decide whether to grant a longer temporary injunction pending trial.  The AFL-CIO clearly chose San Francisco for its challenge due to its reputation for labor-friendly federal judges.  This decision does not indicate that other judges or appellate courts would view the DHS rules with the same degree of concern.  The Justice Department will contend that the new rules are within DHS’s legislative authority.  However, until the injunction is lifted, the new regulations will not take effect, and SSN cannot issue additional No-Match letters.