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Workers' Compensation

The Salas Dilemma -- Full Frontal Assault on Workers’ Rights vs. Equitable Defenses to Illegal Conduct

You be the judge in this controversial case involving what some call undocumented worker Armageddon

Karen C. Yotis, Esq., a Feature Resident Columnist for the LexisNexis Workers’ Compensation eNewsletter, provides insights into workplace issues and the nuts and bolts of the workers’ comp world.

While elite hotshot crews were fighting California wildfires, battle lines were being drawn over molten issues between workers and employers as they wait for the California Supreme Court to determine whether the state’s long-standing policy against discrimination in all its invidious forms will cause the equally important public interest in not rewarding illegal conduct to go up in smoke. The force driving this do-or-die confrontation is Salas vs. Sierra Chemical Co., 76 Cal. Comp. Cases 768, 129 Cal.Rptr.3d 263, 2011 Cal. App. LEXIS 1033, a case that has for the moment left Senate Bill No. 1818, the Fair Employment and Housing Act, (Gov. Code, § 12900 et seq) and even the foundational precepts underlying the summary judgment standard burning like scorched earth in a summertime drought.


Since the matters at stake in Salas are so superheated, we’d like to try a new legal exercise with our discussion of the case—something to inspire our readers to get a little more fired up. It’s called YOU BE THE JUDGE. To participate, follow these easy steps. First, review our pithy summary of the facts and issues in the Salas case. As you read, consider the various sides of the arguments that have added kindling to the litigation blaze. Then, make your own findings by selecting from the array of response options throughout this article. Ready?

○  Ok, let’s do this
○  I don’t have time for this kind of nonsense
○  Why should I care
○  What’s in this for me


The facts, which are not only contested, but strategically highlighted by the parties to support their particular views of the case, are difficult to parse.  

It all begins like this . . . Vicente Salas worked for Sierra Chemical as a seasonal employee. The employer typically laid Salas off during seasonal staff reductions in mid-December and consistently called him back to work in early March. Three years into the employment relationship, Salas hurt his back at work, returned to work on restricted duty, and eventually released to full duty. Salas was again placed on restricted duty after he reinjured his back two months later. Salas filed a workers’ compensation claim against Sierra Chemical after his second back injury. During the next seasonal layoff Salas saw a different doctor (that his workers’ compensation lawyers selected) who declared Salas fit for full duty. Salas then went to work for a different company while Sierra Chemical’s seasonal layoff was pending.  

Here’s where the fork in the factual road begins to emerge . . . In May, Sierra Chemical sent a recall letter to Salas; the letter also asked him to bring a copy of his doctor’s release stating he had been returned to full duty.

According to Sierra Chemical, Salas called his foreman after getting the letter and told him he could not come back to work because he did not have a medical release, but expected to get one when he saw his doctor again in June. Salas did not tell the foreman about the work release from the doctor he had seen in January. Again according to Sierra Chemical, the foreman agreed to keep the job open until Salas got his release, but he never heard back from Salas.

According to Salas, the foreman contacted Salas in early Spring to return to work. When the foreman asked if Salas was 100% recovered, Salas said he was not completely healed, to which the foreman replied that allowing Salas to return to work would violate Sierra Chemical’s policies.  Again according to Salas, he spoke to the foreman a second time after Salas got the recall letter. The foreman said he wanted Salas to work with them but that he should not show up for work if his back was not 100%.

Neither Salas nor Sierra Chemical ever discussed any restrictions under which Salas could work, and Salas did not ever return to work at Sierra Chemical. In August, while Salas was still working for the other employer, he filed a complaint against Sierra Chemical for disability discrimination in violation of FEHA and wrongful termination, which Salas later amended to denial of employment in violation of public policy. Salas alleged that Sierra Chemical did not make reasonable accommodation for his disability and did not engage in an interactive process to determine a reasonable accommodation. Salas also alleged that Sierra Chemical denied him employment to punish him for filing a claim for workers’ compensation benefits and to intimidate and deter Salas and others like him from bringing claims.

Here are the facts that have everyone screaming Santiago! .  .  . Before Salas’s case against Sierra Chemical went to trial, Salas filed a motion in limine which stated that he would assert his Fifth Amendment rights if asked about his immigration status and which requested an order to have those questions asked when the jury was outside of the courtroom. Sierra Chemical then conducted an investigation which discovered that the social security number listed on the social security card, resident alien card, Department of Homeland Security employment eligibility verification (I-9) forms, and State of California employee’s withholding allowance certificate (W-4) forms that Salas had presented from 2003 through 2009 was registered to a person in North Carolina who was not named Vicente Salas. According to Salas, he had told his foreman at Sierra Chemical that he and several other employees had received letters from the SSA stating that its records showed that their names did not match the Social Security numbers they were using, and that the foreman reassured Salas not to worry because Sierra Chemical would not fire him over those discrepancies. Again according to Salas, he did know about several undocumented immigrants who worked at Sierra Chemical and he did not know of any instance in which Sierra Chemical had ever fired someone for not having work authorization.


○  This statement of facts tells both parties’ side of the story; I get the picture
○  Hmmmmm, the employer had better wash its own hands before asserting those equitable defenses everyone is talking about
○  Hmmmmm, the employee was working for someone else the entire time he is claiming he wasn’t completely healed, and may just be playing the legal system for all those compensatory and punitive damages


Armed with a social security number that it characterized as counterfeit, Sierra Chemical moved for summary judgment claiming that the doctrine of after-acquired evidence barred Salas’s claims because he used the false credentials to get his job with the company and because the company would not have hired him had it known he was using a social security number registered in another person’s name. Sierra Chemical also claimed that the doctrine of unclean hands barred Salas’s claims because his misrepresentation about his ineligibility to work in the United States and fraudulent use of someone else’s social security number amounted to inequitable conduct that directly related to Salas’s causes of action. Sierra Chemical also asserted unclean hands because Salas’s misrepresentation about not being released to full duty directly related to his claim of failure to accommodate because there would have been no need to provide reasonable accommodation (or engage in the interactive process) had Salas told the truth about his own physician releasing him to full duty. In addition, Sierra Chemical argued that this misrepresentation estopped Salas from pursuing his claims, that he suffered no damages from being ineligible to work in the United States, and that his denial of employment claim was not a legally cognizable cause of action. Sierra Chemical supported its motion with affidavits from the North Carolina individual in whose name the social security number was registered, and from the company’s president who outlined Sierra Chemical’s policy of not hiring anyone prohibited by federal immigration law from working in the United States.  

Salas opposed the motion by arguing that any misrepresentation about the social security number was irrelevant because the employer was liable for disability discrimination in any event under FEHA. In addition, Salas argued that the North Carolina resident’s statements were unsupported conclusions, and that Salas’s sworn statements to the contrary created a triable issue of fact. Salas also argued that his employer offered no evidence that he submitted a fraudulent social security number to secure employment with the company. Salas presented his own affidavit, which detailed the letter he had received from the SSA stating that his name and social security number did not match, the subsequent conversations with his foreman telling Salas not to worry about the discrepancies, Salas’s personal knowledge about fellow employees who had admitted their undocumented status at work, as well as his lack of knowledge about his employer ever discharging any worker over a discrepancy about a social security number or for any other immigration-related issue.

At first, the trial court found various triable issues of fact and denied summary judgment. Sierra Chemical executed an end run around that decision by seeking a writ of mandate and prohibition for reversal of the trial court’s decision. The trial court vacated its original order and entered judgment for Sierra Chemical after the appellate court issued an alternative writ directing the trial court to grant the employer’s requested relief or show cause why that relief shouldn’t be granted.


Because Sierra Chemical did not defend its summary judgment based upon Salas’s alleged misrepresentations relating to the undisputed fact of his full medical release months before Sierra Chemical first called him back to work, the appellate court refused to address any issues relating to this aspect of the case. Instead, the court affirmed summary judgment for Sierra Chemical based upon Salas’s alleged misrepresentations over the hotly contested facts surrounding the two conversations between Salas and his foreman, and the debatable facts surrounding Sierra Chemical’s hiring policies (and practices) with respect to undocumented workers. The appellate court held that Salas’s claims were completely barred by the doctrines of after-acquired evidence and unclean hands, and that Senate Bill 1818—which extends employment rights to all individuals regardless of immigration status—did not preclude these equitable defenses from being applied in the case. The appellate court also held that Senate Bill 1818 did not entitle Salas to recover backpay for Sierra Chemical’s allegedly discriminatory failure to hire him, regardless of whether unclean hands or after-acquired evidence would otherwise preclude him from bringing claims tied to the failure to hire.


○  Numerous issues of material fact precluded the entry of summary judgment in this case
○  The appellate court got it right; this is an employment case, not an immigration case
○  Nothing in the record demonstrated that Salas was unauthorized to work in the United States
○  Salas’s immigration status is irrelevant in light of SB 1818
○  The essential workers’ compensation protections at issue in this appeal are properly before the California Supreme Court
○  Whatever the California Supreme Court eventually decides, this case will wind its way back to the trial court, where Sierra Chemical will file (and win) another summary judgment motion on the misrepresentations surrounding the undisputed fact of Salas’s full medical release


Salas’s Petition for Review, the parties’ back and forth briefs in response and reply, and six amicus briefs filed on behalf of a host of interested parties focus on the issues of after-acquired evidence, unclean hands, the intent and proper application of Senate Bill 1818 as it relates to federal immigration law, and the summary judgment standard. The arguments sit on a wide ranging continuum. On the farthest spot on one side are the National Employment Law Project, the National Immigration Law Center, and the Impact Fund asserting that the appellate court’s decision leaves an entire class of California workers without judicial recourse of any kind. Occupying the position farthest to the other side is the Employers Group, which downplayed predictions of undocumented worker Armageddon by recapping the 15 years of precedent that has allowed unclean hands and after-acquired evidence to serve as a complete or partial defense to an employee’s wrongful discharge claim. This amicus brief even goes one step further to argue for expansion of these equitable defenses.

Salas has asked the California Supreme Court to review these issues:

1. Whether the lower court properly applied the unclean hands and after-acquired evidence doctrines to deny Salas any legal recourse for Sierra Chemical’s discriminatory actions?

2. Whether the lower court correctly interpreted the legislature’s intent in enacting SB 1818, which extends all protections to state employees, regardless of their immigration status?

3. Whether the lower court erred in affirming summary judgment in spite of the existence of numerous significant disputes of material fact?

4. Whether the trial court properly sustained Sierra Chemical’s defenses of unclean hands and equitable estoppel based on the allegation that Salas misrepresented whether his doctor had cleared him to return to work?

After Acquired Evidence and Unclean Hands

In his Petition for Review, Salas argues that the lower court’s extreme and unreasonable application of the after-acquired evidence and unclean hands doctrines defeat FEHA’s civil rights protections, a result which Salas asserts is squarely at odds with United States Supreme Court precedent. Referring to the balance struck by the Supreme Court in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995), between giving full effect to the societal condemnation of invidious bias embodied in the ADA’s civil rights protections and the legitimate interests of an employer in light of an employee’s misconduct discovered post-termination, Salas asserts that California courts have since applied McKennon only to limit the remedies available to a FEHA victim of employment discrimination who is discovered to have engaged in conduct that would have resulted in his termination. Salas further asserts that the lower court’s decision affirming Sierra Chemical’s summary judgment extended those cases that misapply McKennon in the wrong direction by allowing after-acquired evidence or unclean hands to extinguish any claim in its entirety, so long as it could somehow be “tied to” a termination claim. According to Salas, any case where a worker’s immigration status might (with our without a valid basis) be called into question threatens to seriously derail California civil rights protections by creating a specter of countless meritorious claims being dismissed outright, or, perhaps worse, not being brought all.

Using a toned-down approach to counter Salas’s hyperbole, Sierra Chemical opened its response by calling Salas to task for attempting to transform the application of basic equitable principles to his damage claim into a major assault on workers’ rights.  The employer characterizes the assertions about the derailment of California civil rights protections as just one of Salas’s many exaggerations. Sierra Chemical also relies on the Camp, 35 Cal.App.4th 620, 1995 Cal. App. LEXIS 497, and Murillo, 65 Cal.App.4th 833, 1998 Cal. App. LEXIS 651 cases (which Salas discredits as misconstruing McKennon) to establish that the after acquired evidence and unclean hands doctrines bar any claim based on acts not occurring during employment where the employee’s misrepresentation goes to the heart of the employment relationship and relates directly to the wrongful discharge claim.


○  Since Salas was not lawfully qualified for his job, he cannot be heard to complain that he improperly lost it
○  The rule barring an applicant who misrepresents a governmentally-imposed requirement and thereby exposes his employer to risk and potential liability is based on over 15 years of sound and consistently-applied jurisprudence that was born out of a due regard for both the strong public policy against discrimination that animates the FEHA as well as a due regard for the rights of an employer
○  This case is about an employer trying to dodge any responsibility for its civil rights violations based on its opportune discovery during litigation of purported information about Salas that could not possibly have been a factor in its decisions to discriminate against him

Senate Bill 1818

In his Petition for Review, Salas also argues that the lower court’s opinion interprets SB 1818—the landmark remedial statute enacted in response to the US Supreme Court’s adverse decision in Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, in a manner that threatens to undo existing protections for all workers regardless of their immigration status and that is inconsistent with both the statute’s plain language as well as the Legislature’s express intent. Salas argues against what he depicts as the lower court’s reading into SB 1818’s “declaratory of existing law” language a legislative intent to leave all contrary law untouched, including the decisions misconstruing the McKennon case. Instead, Salas asserts that the Legislature was simply indicating that nothing in SB 1818 was meant to disturb the existing legal framework established for protecting workers who had been unlawfully treated. According to Salas, in enacting SB 1818 the California Legislature plainly sought to eliminate distinctions between California workers based on their immigration status for purposes of state law protections and could not have intended to engage in the idle act of drafting a statute that left in place contrary case law that defeated its very purpose.

In response, Sierra Chemical argues that SB 1818 has no bearing on its argument that Salas’s misrepresentations about possessing a social security number preclude him from maintaining his claims. Underscoring the rationale for requiring employers to gather and report social security numbers as an aid to the enforcement of tax and immigration laws, Sierra Chemical argues against Salas’s attempt to transform an argument about a valid social security number being a necessary condition of employment under federal law into an attack on his immigration status. Using the broader term ‘employee’ rather than the narrower (and more politically charged) term ‘undocumented worker,’ Sierra Chemical argues that that an unbiased reading of the legislative history and case law when SB 1818 was enacted precludes an employee who misrepresents federally required job qualifications from maintaining a claim for wrongful termination or failure to hire, and takes care to emphasize that this rule applies regardless of immigration status.


○  The lower court’s decision not only permits inquiry into Salas’s immigration status, but makes the result of that inquiry the basis for denying him the equal rights promised to him by SB 1818
○  The lower court erred in reading SB 1818 out of existence by its very own terms; after all, what is the point of barring inquiries into a worker’s immigration status if employers can delve into topics that serve as proxies for immigration status, such as Social Security numbers
○  Where SB 1818 reads “All protections, rights, and remedies,” it means all protections, rights, and remedies; it does not mean some or none
○  Where SB 1818 reads “a person’s immigration status is irrelevant,” it means that a person’s immigration status is irrelevant; it does not mean that immigration status is irrelevant unless and until the worker is accused of misrepresenting his eligibility to work
○  Senate Bill 1818 does not preclude application of the after-acquired evidence and unclean hands doctrines in this case because the rule that prohibits an employee who misrepresents a job qualification imposed by the federal government from maintaining a claim for wrongful termination or failure to hire applies regardless of immigration status
○  Where federal law prohibits reinstatement, California law also prohibits back pay

Summary Judgment Standard and Disputed Issues of Fact

In his Petition for Review, Salas’s last argument asserts that the lower court’s decision seriously misapplies well-established summary judgment standards that cannot be followed without creating confusion in the lower courts over applicable burdens of proof. In asserting that Sierra failed to meet its burden of proof as the moving party and that the appellate court failed to draw reasonable inferences in favor of the non-moving party, Salas argues specifically that Sierra failed to prove that the social security number Salas used was not his and that material fact questions remained about whether Sierra would have hired or recalled Salas had it known that he was using another person’s social security number. Salas also argues specifically that whether he made intentional misrepresentations was a fact question for the jury, and that it was error to infer his lack of employment authorization from the purported discrepancy regarding his social security number.

In response, Sierra Chemical chides Salas for presenting an apocalyptic portrait that predicts the downfall of the summary judgment process throughout California and argues that appellate court got it right with respect to its ruling on the shifting burdens of proof that required Salas to produce evidence that the social security number was his after the employer produced evidence that the social security number belonged to another person. Sierra Chemical also chides Salas for not raising a triable issue of fact by simply declaring under penalty of perjury that the social security number did in fact belong to him. In short, Sierra Chemical takes the position that the lower court’s purported procedural errors do not support the negative systemic consequences that Salas asserts as a ground for review. Sierra Chemical also points out that Salas’s affidavit evidence was inadmissible and irrelevant to the unclean hands defense, and that the controlling issue in the case is whether Salas had his own social security number entitling him to work, and not his immigration status.


○  Issues of fact preclude summary judgment here; after all, the SSA does make mistakes
○  Issues of fact preclude summary judgment here; that alien registration card may have provided Salas with the right to work in the United States
○  Issues of fact preclude summary judgment here; let the jury decide who is telling the truth about that letter Salas got from the SSA and what the supervisor and/or Sierra Chemical did or didn’t say or do about it
○  Issues of fact preclude summary judgment here; let the jury decide if Sierra Chemical’s policy of not hiring illegal workers is just a bunch of hooey
○  No disputed facts exist here; Salas misrepresented that the doctor he selected had returned him to full duty months before Sierra Chemical called him back to work and cannot maintain a claim for wrongful termination or failure to hire
○  No disputed facts exist here; an employee who misrepresents a federally required job qualification cannot maintain a claim for wrongful termination or failure to hire, regardless of his immigration status
○  The integrity that Salas demonstrated by notifying Sierra Chemical about the potential problem regarding a discrepancy with his social security number creates a fact issue about whether Salas made intentional misrepresentations
○  All Salas had to do to raise a triable issue of fact was submit a declaration that the social security number in the North Carolina resident’s name belonged to him
○  Salas’s knowledge about undocumented aliens working at Sierra Chemical does not establish that the employer had the same knowledge
○  Salas’s lack of knowledge about Sierra Chemical ever firing an employee for being undocumented does not establish that the employer did not have a settled policy of refusing to hire applicants who submit false social security numbers


The competing principles at war in this case have ignited a firestorm because the decision that’s eventually rendered won’t affect only workers like Vicente Salas or companies like Sierra Chemical, it affects all of us.

If allowed to stand, the holding could conceivably free employers to engage in a whole range of illegal conduct against undocumented workers without fear of being held accountable. As the California Applicants’ Attorney Association points out in its amicus brief:

“ . . . [E]mployers could ask job applicants whether they have previously filed a workers’ compensation claim, and refuse to hire them if they admit to having done so. They could refuse to hire a qualified worker because she is pregnant or bound to a wheelchair. They could fire workers who complain about unsafe job conditions. They could fire a worker the moment that worker sustains an on-the-job injury or files a workers’ compensation claim for an on-the-job injury. In each of these cases, the employer could claim that the worker’s discrimination is ‘tied to’ a failure to hire or wrongful termination claim. And, although each worker in these hypothetical examples would have sustained real injury as a consequence of the employer’s discriminatory conduct, that injury would not have been a consequence of the kind of ‘pervasive’ discriminatory conduct that remains actionable under the lower court’s holding.”

Likewise, reversal of the lower court’s incendiary opinion could also bestow upon a person who resides in this country illegally legal remedies that are not available to United States citizens or legal residents. As Sierra Chemical pointedly inquires in its omnibus reply to the amicus curiae briefs, will limiting recovery for a wrongful failure to hire to FEHA-specific remedies like cease and desist orders and administrative fines result in the apocalyptic destruction of workers’ rights that Salas and his amici portend?  Is it good public policy to permit a private litigant not legally qualified for employment to bring an action that in effect rewards him for misrepresentation with the right to sue for pay for work not performed, for emotional distress, and for punitive damages? Does our society’s anti-discrimination policy trump the equally important public interest in not rewarding illegal conduct? 

Such are the issues that the California Supreme Court will be grappling with as it attempts to resolve the conflict between these competing policy interests.  But in the meantime, as we wait for what will probably be the decision of the summer . . .


○  Affirmed
○  Reversed and remanded for further proceedings

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