Workplace Issues

Employer in Salas Petitions SCOTUS for Writ of Cert

It ain’t over until the fat lady sings, and when it comes to the California case of Salas v. Sierra Chemical [327 P.3d 797 (Cal. 2014)], she hasn’t even started warming up her pipes.

For any of the practical minded out there who thought the parties in Salas would be discussing the terms of a settlement agreement after the California Supreme Court resolved the Salas Dilemma in favor of undocumented workers, think again.  Instead of being quantified and resolved, the case that some refer to as undocumented worker Armageddon may be headed to the United States Supreme Court for review.

Sierra Chemical, the defendant employer in the Salas case, has filed a Petition for Writ of Certiorari asking SCOTUS to turn its collective eye on the California Court’s July 2014 opinion that reversed an earlier appellate court decision affirming summary judgment for Sierra Chemical. The appellate court had held that Salas’s discrimination claims under the California Fair Employment and Housing Act (FEHA), [Cal. Gov’t Code §12900 et seq.] were completely barred by the doctrines of after-acquired evidence and unclean hands, and that Senate Bill 1818 [Cal. Stats. 2002 ch. 1071]—which extends employment rights to all individuals regardless of immigration status—did not preclude these equitable defenses from being applied in the case.

In its decision reversing the appellate court, the California Supreme Court limited the preemptive reach of Federal immigration law and held that the Immigration Reform and Control Act (IRCA) does not generally preempt either FEHA or  Senate Bill No. 1818, except to the extent that those provisions permit a back pay award for any time after the employer discovers an employee’s ineligibility to work in the United States. The California high court also curtailed the doctrines of after-acquired evidence and unclean hands and held, again contrary to the lower court’s holdings, that these equitable defenses do not operate as a complete shield to an undocumented worker’s claims under the FEHA in and of themselves (although a worker’s undocumented status might affect the range of available remedies).

The ins and outs of the California Supreme Court’s pronouncement in Salas, quotes from the attorneys for the parties in the case, and some pointers for workers’ compensation attorneys practicing in California’s post-Salas ecosystem are detailed in an upcoming Emerging Issues Analysis that I’m authoring for the good people at LexisNexis. Please stay tuned for the full article.

But this cert petition is a SCOOP and I wanted to fill you in about it now, while it’s hot off the presses.

As you all may recall, both California courts that reviewed the trial court’s grant of summary judgment to Sierra Chemical talked about the SCOTUS decision in Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002). Hoffman held that an NLRB back pay award to an undocumented worker conflicted with the federal immigration policy embodied in the IRCA.

In its Petition for Writ of Cert, Sierra Chemical cuts straight to the heart of the Salas Dilemma asks SCOTUS to determine whether and to what extent a State law authorizing a “wrongful failure to hire” discrimination action by a person not legally entitled to work in the United States conflicts with and/or is an obstacle to federal immigration policy.

To support its position that SCOTUS should grant cert to resolve the conflict between the California opinion in Salas and the SCOTUS opinion in Hoffman, Sierra Chemical first argues that Hoffman is dispositive of the preemption question because eliminating the employment of undocumented aliens is a central precept of federal immigration policy. Sierra Chemical’s brief then outlines the documentation that all individuals must possess to evidence authorization to work in the United States, as well as the penalties (including civil fines and criminal prosecution) that are imposed against unauthorized aliens and employers who attempt to subvert the employer verification system by tendering false documents or failing to discharge an individual upon discovery that he or she is unauthorized to work.

Sierra Chemical then takes a deep dive into the Hoffman decision and walks through the manner in which Hoffman identifies a so-called clear conflict between a back pay award to an undocumented employee and the Federal immigration policy’s core precept of denying employment to illegal aliens.

Sierra contends that the considerations which led to Hoffman’s holding should also apply to an award of other compensatory or punitive damages to an undocumented alien, because allowing such recovery would also conflict with and be an obstacle to IRCA’s goal of eliminating the employment of aliens ineligible to work in the United States. Sierra calls the California Supreme Court to task for its rationale in declining to apply Hoffman to the conflict/obstacle preemption issue by criticizing the lack of any explanation to show how an NLRB award of back pay to an undocumented worker conflicts with and is an obstacle to federal immigration policy while an award to an undocumented worker in a private discrimination action does not.

Sierra Chemical then trots out that oft important (and oft ignored) provision in the United States Constitution called the Supremacy Clause, which in this case would place federal immigration law above the Golden State’s long-standing policy against discrimination in all its invidious forms. Noting the California Supreme Court’s conflict preemption analysis which found that ICRA did not generally preempt SB 1818 because compliance with both federal and state laws was not impossible, as well as the California obstacle preemption analysis which found that permitting undocumented workers to recover compensatory and punitive damages was not an obstacle to IRCA’s goal of eliminating employment of unauthorized reasons, Sierra demonstrates that the California Court’s analysis is largely an identical adoption of the Hoffman dissent.

Sierra Chemical then discounts the California Supreme Court’s rationale for its decision not to apply Hoffman in the Salas case. In its opinion, the California Supreme Court distinguishes Hoffman as addressing a federal agency’s authority to award a remedy for a violation of federal law rather than addressing federal preemption of a State law. The California Court also distinguishes California’s FEHA from the NRLA on grounds that FEHA’s remedial scheme depends heavily on private causes of action (which include compensatory damage awards for lost pay) whereas the NLRA remedial scheme does not.  Sierra’s Petition for Writ of Cert takes the position that the procedural differences between Salas and Hoffman are immaterial to the significance of a conflict that SCOTUS has already held exists between a back pay award and IRCA, and argues that the presumption against the preemption of state law that exists in California Supreme Court’s Salas opinion is rebuttable by the SCOTUS holding in Hoffman.

Sierra Chemical finally argues that the California Supreme Court’s position about the inapplicability of Hoffman avoids the central question of whether an award of damages to an undocumented alien can occur in light of existing Federal immigration policy. Sierra Chemical posits that the California Court’s discussion about the difference in the NLRA and FEHA remedial schemes in reality side-steps the central issue in Salas of whether an award of compensatory damages to an undocumented worker conflicts with federal immigration policy. Sierra Chemical notes the California Supreme Court’s failure to cite any empirical data to support the concerns it expresses about the impact of limiting private discrimination actions, especially in view of the Department of Fair Employment and Housing’s power to investigate and prosecute claims of unemployment discrimination. According to Sierra Chemical, the reality that nondiscrimination enforcement depends on private actions does not mean that all claims must be adjudicated that way in order for the system to function.

In conclusion, Sierra Chemical states:

“The California Supreme Court’s decision avoids this Court’s holding in Hoffman through immaterial procedural distinctions and an adoption of the preemption analysis of Hoffman’s dissent. The result is the promulgation of a rule that authorizes the prosecution of a wrongful failure to hire discrimination action by persons who are not legally entitled to work in the United States. Allowing an undocumented alien to prosecute an action seeking compensatory damages for a job that he or she could not legally hold is both an absurdity and inconsistent with federal immigration policy. Court should grant cert to resolve the conflict b/t the California Supreme Court’s decision and Hoffman and federal immigration policy.”

So, do you think the parties in Salas will finally talk settlement once the United States Supreme Court has its say one way or the other?  My crystal ball tells me that this one is headed for trial.

A Note from the Author

Karen Yotis

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Karen C. Yotis, J.D.
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