California Supreme Court Limits Recovery For Employees Who Misrepresent Their Immigration Status

On June 26, 2014, the California Supreme Court handed down Salas v. Sierra Chemical, a case at the intersection of employment and immigration law. Salas, a former employee of Sierra Chemical, filed suit alleging disability discrimination and wrongful termination. Prior to trial, Salas notified the court that he would assert a Fifth Amendment privilege to any questions regarding his immigration status. This apparently alerted Sierra Chemical, which investigated and discovered that Salas had wrongfully used someone else's Social Security Number when applying for the job. Sierra then moved for summary judgment. The trial court initially denied the motion only to be reversed by a writ issued by the Court of Appeal. On remand, the trial court granted the motion for summary judgment, and the Court of Appeal affirmed.

The Supreme Court was called upon to determine whether plaintiff's claims under the California Fair Employment and Housing Act ("FEHA") were barred by the doctrines of after-acquired evidence and unclean hands, and whether California Senate Bill No. 1818, which states that "[f]or purposes of enforcing state labor, employment, civil rights, and employee housing laws, a person's immigration status is irrelevant to the issue of liability," statutorily preempted those common law defenses. The Supreme Court also asked the parties to submit briefing on whether federal immigration law, which forbids the knowing employment of any unauthorized worker, preempted state law on this issue.

The Court first held that federal immigration law preempted Senate Bill 1818 only in part. Citing the U.S. Supreme Court's recent decision in Arizona v. U.S., 132 S. Ct. 2492 (2012), the Court held that federal law did not "preempt the field" – that is, supersede any and all state laws relating to immigrants. Instead, federal law only preempts state laws that conflict with a federal law or create an obstacle to achieving its objectives. Federal statutes expressly forbid an employer from employing anyone whom it knows is unauthorized to work in this country; doing so would subject an employer to civil and criminal sanctions. Thus, federal law preempts an award of lost wages that would have accrued after the employer discovered that the employee was unauthorized. However, since federal law does not forbid an employer from unknowingly employing an authorized worker, any preexisting lost wage claim remains valid.

The Supreme Court reversed the Court of Appeal's...