Monday, July 9, 2012

Salas, FEHA and the Supreme Court

If there's one topic that generates as much, if not more, debate in workers' compensation than the Affordable Care Act (ACA), it's undocumented workers.

In this morning's WorkCompCentral news, legal editor Sherri Okamoto reviews national trends and issues concerning various claims that have been made by undocumented workers involving either workers' compensation or other employment disability or discrimination scenarios in light of a pending California Supreme Court case, Salas v. Sierra Chemical.

Salas involves a worker's claim for violation of the Fair Employment and Housing Act (FEHA) premised on his employer's refusal to re-hire him and offer him modified work after he suffered an industrial injury. Sierra Chemical defended its action on the basis that Vicente Salas had originally obtained his job by using a false Social Security number to establish his eligibility to work in the United States.

The biggest trap that employers fall into in California FEHA cases is not failure to re-hire or discrimination, but the failure to engage in the "interactive process" - a statutorily mandated process whereby the employer's obligation is to take various steps along with the employee prior to making any employment or re-hiring decision.

Under FEHA, the big no-no is NOT failure to rehire, but the failure to EXPLORE re-hiring in a formal process that includes participation of the employee.

This, I think is a very significant distinction as you will see.

In the Salas case at the trial level, summary judgment was granted in favor of Sierra, and the 3rd District Court of Appeal unanimously affirmed, concluding that Salas "cannot be heard to complain that he was not hired" since he "was not lawfully qualified for the job."

The facts of Salas are summarized in the 3rd DCA opinion:

Sierra Chemical manufactures, packages, and distributes chemicals primarily used for water treatment. Demand for Sierra Chemical's products rises in the spring and summer due to the increased use of swimming pools, and declines during the fall and winter. Because of this, the company employs a number of seasonal production line workers.

In May 2003, Sierra Chemical hired Salas to work on its production line, filling containers with various chemicals. Salas provided the company with a resident alien card and a Social Security card. After Salas signed a Department of Homeland Security employment eligibility verification form (I-9 form), on which he wrote the Social Security number, Sierra Chemical's general manager used the resident alien card as verification of Salas's identity and eligibility to work in the United States. Salas also signed State of California employee's withholding allowance certificate (W-4 form), which included the same Social Security number. Salas also printed this number on his employment application and signed the application verifying the truth of the information contained therein and acknowledging that any false statements would be grounds for dismissal.

In October 2003, Salas was laid off as part of Sierra Chemical's annual reduction in production line staff. He was recalled to work in March 2004, laid off in December 2004, and again recalled to work in March 2005. When Salas was rehired in 2004, he provided Sierra Chemical with the same resident alien card and Social Security card used to secure his initial employment. He also filled out and signed I-9 and W-4 forms, both of which included the same Social Security number. By December 2005, Salas had accrued enough seniority to avoid being laid off that year.

In March 2006, Salas injured his back while stacking crates at the last stage of the production line. He reported the injury to Leo Huizar, the production manager, and went to Dameron Hospital Occupational Health Services (Dameron Hospital) for treatment. The next day, Salas returned to work with the following restrictions: "1) no lifting over 10-15 pounds, 2) no prolonged sitting, 3) no prolonged standing or walking, and 4) limited bending, twisting or stooping at the waist." Sierra Chemical accommodated these restrictions by allowing Salas to sweep the work area, rinse empty containers, and perform other production line duties that did not require 34*34lifting crates. When Salas provided Huizar with a doctor's release in June 2006, he was returned to full duty.

In August 2006, Salas again injured his back while stacking crates at the end of the production line. He returned to Dameron Hospital for treatment and was placed on the same work restrictions. Following this injury, Salas brought a workers' compensation claim against Sierra Chemical and its insurance carrier, State Compensation Insurance Fund. In December 2006, Salas was again laid off as part of Sierra Chemical's annual reduction in production line staff.

In May 2007, Salas received a letter informing him that Sierra Chemical was recalling employees who were laid off the previous year. The letter instructed Salas to contact Huizar to "make arrangements to return to work" and also stated: "Bring a copy of your doctor's release stating that you have been released to return to full duty." According to Huizar, Salas contacted him after receiving this letter and stated that he could not return to work because he had not received a medical release, but that he expected to receive such a release following his doctor's appointment in June. Huizar agreed to hold the job open until Salas received the release, but never heard back from Salas.

However, according to Salas, Huizar contacted him in March 2007. When Salas said that he wanted to return to work, Huizar asked whether he was "100% recovered" from his back injury. Salas informed Huizar that he was "not completely healed," to which Huizar responded that allowing him to return to work would violate Sierra Chemical's policies. After receiving the recall letter in May 2007, Salas again talked to Huizar, who said that "he wanted [Salas] to work with them but only if [he] was fine, a hundred percent well with [his] back. If not, then [he] should not show up to work." Salas did not return to work.

Salas sued Sierra Chemical, alleging among other causes of action disability discrimination in violation of FEHA by failure to make reasonable accommodation for his disability and failing to engage in an interactive process to determine such a reasonable accommodation.

The California Supreme Court accepted review of the 3rd DCA decision in November and briefing by the parties is underway.

Attorneys representing Salas told Okamoto that a "majority trend" in the federal courts and state courts of last resort has been "by and large to preserve the rights and remedies available to undocumented workers."

The biggest controlling case is a U.S. Supreme Court ruling from 10 years ago called Hoffman Plastic Compounds Inc. v. National Labor Relations Board which limited the remedies to undocumented workers under National Labor Relations Act. Since then the courts have distinguished Hoffman on the basis of facts and other legal elements related to the specific law under which an immigrant is seeking a remedy.

Indeed, it appears that the real basis for the granting of any relief to an undocumented worker under any particular employment law, workers' compensation included, is what remedy is being sought by the worker.

One of the attorneys that represented Hoffman Plastics before the Supreme Court was Ryan D. McCortney of Sheppard, Mullen, Richter & Hampton.

The remedy being sought "is the key to Hoffman Plastics," McCortney told Okamoto. "If the remedy is reinstatement and lost earnings, post-termination, then Hoffman Plastics should bar that case," he explained. "If the remedy is something else, like wages for work already performed, then Hoffman is not going to bar that."

The 3rd DCA in Salas went through a very detailed, thorough analysis in upholding the trial court's grant of summary judgment in favor of Sierra Chemical. But I think the 3rd DCA's analysis is flawed and that flaw is evident by the court's characterization of the case as "a refusal to hire case."

And this is why the California Supreme Court has taken the matter up.

Because the Salas case is really about FEHA and failure to engage in the interactive process - the single biggest legal fear any California employer could face.

In the "good old days" FEHA was not a concern in workers' compensation cases because vocational rehabilitation essentially fulfilled the requirements of an "interactive process." The elimination of vocational rehabilitation as a benefit in 2004 opened the door for unwitting employers who failed to recognize the liability of such a simple, yet mandatory, legal requirement.

The Salas case is an important case for California because the remedy being sought would not be reinstatement to work, though that is one of the potential remedies under FEHA. No, the remedy would be the penalty provision of FEHA, punitive damages, that has nothing to do with future wages or other employment dependent damages.

I think the public policy of most of the United States, as reflected in various court opinions through out the nation and California, is that an undocumented worker may not get relief where the remedy is based on wages or benefits that would not be available had the worker's true status been known, but that remedies not determined by actual employment status are available.

The simple theory supporting this position is that an undocumented worker should not be rewarded for working illegally, and the employer should not be rewarded for hiring illegally. The line gets drawn at the point where undocumented status becomes known to the employer. If the employee can not legally work then return to work laws necessitate rejection of the employee. But the portion of the law that mandates formal procedures that are designed to keep employees informed, and employers honest, do apply.

And if the employer knows of the employee's true status, and maintains an employment relationship with the employee, then the employer will have the book thrown at it.

FEHA requires some process to determine ability to return to work; that process must be followed and that position has been upheld over and over again in California courts regardless of the employment status of the complaining worker.

I suspect the Supreme Court will follow this line of reasoning.

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