In Salas v. Sierra Chemical Co., ___ Cal.4th ___  (June 26, 2014), the California Supreme Court reversed the order of the San Joaquin County Superior Court (Judge Humphreys) and subsequent affirmation of the appellate court granting defendant’s motion for summary judgment.

Plaintiff was a seasonal employee who sued defendant employer under the California Fair Employment and Housing Act (“FEHA”) for failure to accommodate his disability and for refusing to hire him in retaliation for having filed a workers’ compensation claim.  During litigation, defendant learned of evidence that plaintiff had used another man’s Social Security number to gain employment and, therefore, moved for summary judgment on the grounds of after-acquired evidence and unclean hands. In essence, defendant argued that plaintiff could not maintain his claims because he had obtained his employment through fraud and was not eligible to work in the United States .  The trial court denied the motion and defendant sought a writ of mandate from the appellate court, which was issued.  Accordingly, the trial court vacated its earlier order denying defendant’s motion and entered a new order granting the motion.  Plaintiff appealed but the appellate court concluded that plaintiff’s claims were, indeed, barred. Specifically, the appellate court reasoned that plaintiff’s claims were barred by the doctrine of after-acquired evidence because he had misrepresented to defendant his eligibility under federal law to work in the United States.  Furthermore, plaintiff’s claims were barred by the doctrine of unclean hands because he had falsely used another person’s Social Security number in seeking employment with defendant, and was therefore disqualified under federal law from working in the United States. Plaintiff appealed again.

The California Supreme Court reversed. After granting plaintiff’s petition for review, the court asked both parties for supplemental briefing on whether federal immigration law preempts California’s Senate Bill No. 1818, an issue the parties had not raised before.  That state law declares:  “All protections, rights and remedies available under state law, except any reinstatement remedy prohibited by federal law, are available to all individuals regardless of immigration status who have applied for employment, or who are or who have been employed, in this state.” (emphasis added). The court subsequently determined that Senate Bill No. 1818 is not preempted by federal immigration law except to the extent it authorizes an award of lost pay damages for any period after the employer’s discovery of an employee’s ineligibility to work in the United States.

The Supreme Court then went on to address whether the doctrines of after-acquired evidence and unclean hands are complete defenses to plaintiff’s claims.  They are not, the court held, although they do affect the availability of remedies in that they bar an award of lost pay damages for any period of time after an employer’s discovery of the employee’s ineligibility under federal law to work in the United States.  Indeed, FEHA generally will not permit a plaintiff to recover damages incurred after the employer learned of facts that would have resulted in lawful termination, and a trial court may consider unclean hands in fashioning an equitable remedy.