California Court of Appeal Holds Undocumented Workers Cannot Pursue Discrimination and Retaliation Employment Claims

In Salas v. Sierra Chemical Co., the California Court of Appeal held that an employee not authorized to work in the United States could not pursue discrimination and retaliation employment claims. The court reasoned that the undocumented worker had no recourse for alleged losses tied to an employment position for which he was not lawfully qualified. In addition, the court found that it would be inequitable to provide the plaintiff with any relief in light of his misconduct in the form of misrepresenting to his employer his ability to lawfully work in the United States.

Background

The employer, Sierra Chemical Company, hired and rehired the plaintiff on several occasions. In each instance, the plaintiff provided a resident alien card and a completed I-9 with his Social Security number. When the employer did not rehire the plaintiff after he took time off as a result of a workplace injury, he asserted claims for failure to hire based upon his disability and in retaliation for a filing a prior workers’ compensation claim. The employer sought dismissal of the lawsuit based upon its discovery that the plaintiff obtained employment using a Social Security number belonging to another person. The trial court dismissed the plaintiff’s lawsuit because the worker was not eligible to work in the United States.

Court of Appeal Decision

The California Court of Appeal ruled that the employee could not pursue his lawsuit based upon both the “after-acquired evidence” and “unclean hands” doctrines. The after-acquired evidence doctrine operates as a defense to termination and refusal to hire cases where the employer discovers wrongdoing that would have resulted in the challenged termination or refusal to hire. Because the plaintiff misrepresented a job qualification imposed by the federal government — possessing a valid Social Security number — the plaintiff did not possess the necessary qualifications for the position. As a result, the court determined he had no recourse for an allegedly wrongful failure to hire.

The doctrine of “unclean hands” requires that a plaintiff not act in bad faith or unfairly in connection with the matter in controversy. The doctrine can act as a complete defense depending upon the nature of the misconduct. The court concluded that the plaintiff acted in bad faith by knowingly using another person’s Social Security number, which could have exposed the employer to penalties for providing false information to the federal government. Because the wrongful act went to the Irvine Las Vegas Los Angeles San Francisco paynefears.com 2 heart of the employment relationship and related directly to his claims, his lawsuit also was barred by the doctrine of unclean hands.

The court of appeal rejected the plaintiff’s argument that his undocumented status did not preclude his employment claims based upon California Senate Bill 1818 (“SB 1818”), which provides that immigration status is irrelevant to rights under state employment laws, except with regard to the issue of any order of reinstatement prohibited by federal law. The California legislature enacted SB 1818, effective January 1, 2003, in an effort to reduce the impact of a United States Supreme Court decision that limited the remedies available to individuals not authorized to work in the United States. The court of appeal explained that SB 1818 did not provided undocumented workers with greater rights by exempting them from the after-acquired evidence and unclean hands doctrines.

Practical Implications for Employers

Salas does not provide employers with blanket immunity against lawsuits brought by undocumented workers. Certain claims based upon alleged misconduct occurring during the employment relationship, such as sexual harassment, remain actionable. However, Salas is an employer-friendly decision that provides for the potential of a complete defense for wrongful termination and refusal to hire cases where the employer later learns of an employee’s status as an undocumented worker. It is important to note that to rely upon Salas, an employer must demonstrate that it did not know of the workers’ illegal status at the time of the hiring and has a policy of not continuing to employ undocumented workers. This underscores the importance of diligently documenting eligibility for employment, which includes strict compliance with all I-9 requirements.