In Salas v. Sierra Chemical Co., the California Court of Appeal held that evidence of employee or job applicant wrongdoing discovered after an allegedly discriminatory termination or refusal to hire that would have caused the employer to terminate the employee or to refuse to hire the employee can be a complete defense to claims for alleged wrongful termination, to claims for alleged discriminatory refusal to hire, and to claims for alleged failure to reasonably accommodate an alleged disability.
Vicente Salas began working for Sierra Chemical in 2003 as a seasonal production line worker. After being laid off and recalled to work several times during his first three years of work there, Salas sustained a back injury in 2006 and filed a workers’ compensation claim. After his supervisor allegedly told him he would have to be “100% healed” before being allowed to return to work, Salas filed suit "alleging disability discrimination in violation of the Fair Employment and Housing Act (FEHA) and denial of employment in violation of public policy."During the litigation, Sierra Chemical discovered the social security number Salas repeatedly provided to Sierra Chemical belonged to a resident of North Carolina and not to Salas. Based on evidence showing Salas not only used a social security number that did not belong to him but also submitted to Sierra Chemical a counterfeit social security card and on evidence showing Sierra Chemical would not have hired Salas to begin with had Sierra Chemical known of Salas' misrepresentations and would have terminated Salas' employment if Sierra Chemical had learned of those things while Salas was employed by Sierra Chemical, Sierra Chemical moved for summary judgment contending that the after-acquired-evidence doctrine and the unclean hands doctrine barred Salas' claims as a matter of law. The trial court ultimately granted that motion.
On appeal, the Court of Appeal affirmed. The court explained "[t]he after-acquired-evidence doctrine operates as a complete or partial defense where, after an allegedly discriminatory termination or refusal to hire, the employer discovers employee or applicant wrongdoing that would have resulted in the challenged termination or refusal to hire." The court held Salas did not effectively rebut Sierra Chemical's showing it would not have hired Salas to begin with and would have terminated Salas' employment if Sierra Chemical had discovered Salas' use of a social security number that did not belong to him in order to obtain and maintain his employment by Sierra Chemical. The court held, also, that the same facts also gave rise to a defense based on the unclean hands doctrine, which "demands that a plaintiff act fairly in the matters for which he seeks a remedy. He must come into court with clean hands, and keep them clean, or he will be denied relief, regardless of the merits of this claim."
Notably, in so holding, the court expressly rejected Salas' contention that Senate Bill 1818, enacted in 2002, precluded application of the after-acquired-evidence doctrine and the unclean hands doctrine. Senate Bill 1818, which is codified at Labor Code 1171.5 and elsewhere, states, among other things, 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." Salas argued Senate Bill 1818 "must allow him to recover backpay for the allegedly discriminatory failure to hire regardless of whether the after-acquired-evidence or unclean hands doctrines would otherwise preclude him from bringing claims tied to the failure to hire." The court rejected this argument and explained that application of the after-acquired-evidence doctrine and the unclean hands doctrine to Salas' case based on Salas' misrepresentation of his immigration status would not frustrate the purpose of Senate Bill 1818 because it would still allow "undocumented immigrants to bring a wide variety of claims against their employers as long as these claims are not tied to the wrongful discharge or failure to hire" a person who was not eligible for employment in the United States to begin with.
This case serves as an important reminder that misrepresentations by employees or by unsuccessful job applicants can prove to be an effective defense to claims for wrongful termination and for claims for or related to a refusal to hire if the employer can effectively show it would not have hired the person to begin with or would have terminated the person had the employer known the true facts. In this case, the employer's defense was based in part on its ability to establish it had a policy that precluded the hiring of an applicant prohibited from working in the United States and a policy that precluded the hiring of applicants who submit false information or false documents. We think one of the best ways for an employer to make such showings is to have in place lawful written policies to that effect and to follow those policies consistently.
