Judge orders Department of Labor to release wage reports

A federal judge has ordered the Delaware Department of Labor to hand over employee information from 15 companies requested by a previous federal subpoena.

In the order signed April 13 by Colm Connolly, chief judge for U.S. District Court for the District of Delaware, he ruled in favor of the subpoena issued April 2025 by Homeland Security Investigations, a branch of U.S. Immigration and Customs Enforcement that operates under the Department of Homeland Security.

In the subpoena, agents sought third- and fourth-quarter wage reports from 15 businesses already filed with the Delaware Department of Labor as part of a federal investigation to verify eligible employees and “substantiate certain leads about businesses alleged to employ unauthorized aliens,” according to a DHS agent quoted in court records.

In the memorandum opinion filed the same day as Connelly’s order, it states wage reports are used to verify employee eligibility, which is then used to determine employee benefits such as Medicaid, unemployment compensation and other programs. Federal law requires businesses hire only eligible employees, which the subpoena seeks to prove.

The Department of Labor ignored the federal subpoena, records state, and neither DOL Secretary LaKresha Moultrie nor her staff responded to a later request for information sent by certified mail.

DOL, however, agreed to briefings on the matter, which were completed by November 2025, prompting Connolly to write, "Based on the government's willingness to agree to such a schedule, I concluded that there was no urgency for DHS to enforce the subpoena.”

DOL argued that the subpoena exceeds DHS’s authority, citing case law that prevents a blanket John Doe subpoena where targets of a general investigation are unknown.

Connolly wrote that the subpoena in question is not a John Doe subpoena, so DOL’s argument does not apply.

“The targets of DHS’s investigation – 15 Delaware businesses – are not only known here; they are specifically identified in the subpoena,” the opinion states. None of the businesses are identified in open court records.

According to the opinion, DOL does not appear to dispute the requested wage reports are relevant to a worksite enforcement investigation, but faults the government with providing no evidence that the subpoenas were based on tips.

The opinion states, however, that an agency may seek information on mere suspicion of a violation, and an agency is more like a grand jury, which can investigate on mere suspicion that the law is being violated.

DOL also argued the subpoena is burdensome because it is asking for 30 unemployment compensation wage reports that will “interfere with the efficient administration of [Delaware’s unemployment compensation] program.”

DOL says that disclosing those records would have a chilling effect on employers filing quarterly wage reports, records state, and could risk the solvency of Delaware’s unemployment insurance trust fund. DOL adds wage reports must remain confidential to protect the system.

Connolly wrote that DOL’s novel theory fails on many fronts.

In particular, he writes that DOL does not explain how the 30 wage reports would have become public had DOL had simply complied with the subpoena.

“The only reason the public knows about the subpoena in question and that DHS intends to use the wage reports covered by the subpoena to conduct worksite enforcement investigations is because [DOL] refused to comply with the subpoena and forced the government to file this action,” the opinion states.

Connolly writes that DOL is asking him to believe that “so many Delaware employers will violate federal and state law to prevent DHS from obtaining wage reports that the solvency of Delaware’s UI trust fund will be put at risk,” and the opinion refers to state actuarial measures meant to cover benefits for a year out of the trust fund.

Finally, Connolly addresses DOL’s claim that DHS is pursuing an intense agenda of immigration enforcement. 

“This is a political argument, not a legal one. And this court is not the proper ‘forum in which to air [DOL’s] generalized grievances about the conduct of government,’” he writes. “It would be wholly inappropriate for me to consider this line of argument, and I decline to do so.”

Delaware appeals court order 

Gov. Matt Meyer announced April 21 that the State of Delaware and the Delaware Department of Justice will appeal the federal court decision. 

“This is not a time to stand down but to step up for the most vulnerable in our community and to protect businesses and workers in our state. This is not about public safety. It is about turning worker information into a data pipeline for ICE. It is un-American, and Delaware will have no part in it. Because the moment workers fear their information will be used against them, the whole system breaks down. In Delaware, we protect workers. We don’t set traps,” Meyer said in a statement announcing the appeal.  

Meyer also said in the statement that he would go as far as the law allows to fight federal overreach and unlawful enforcement, but in answer to a question April 22 on whether he is prepared to take the case to the Supreme Court, Meyer said he first wants to win the next hearing.

“This is about protecting workers’ rights. Making sure the security of information that Delaware business and small businesses provide to our state government and they have confidence in knowing that,” he said.