The California Court of Appeal affirmed the rule that after discovery of undocumented worker status by an employer, the workers are entitled to most of the legal rights and remedies provided to employees by state and federal laws. This includes wage and hour laws.
Juan Luis Lepe, Virgilio Flores-Juarez, and Berna Vargas filed a lawsuit against their former employer, Luft Enterprises, a California Corporation, doing business as Inn-Decor and Otmar Luft, alleging unpaid overtime wages, failure to provide meal and rest periods, and other Labor Code violations and unfair business practices
The Company manufactures furniture for businesses such as restaurants and casinos. Plaintiffs worked 10 or more hours per day without an afternoon or second meal break. The Company failed to pay overtime wages or provide meal and rest periods. Prior to May 2010, defendants were aware that plaintiffs were not authorized to work in the United States due to their immigration status. This was the agreed upon claim period in this case.
The trial court entered judgment in favor of plaintiffs in the total amount of $140,016 (Lepe – $59,776; Flores-Juarez -$59,776; and Vargas – $20,464) and against all defendants jointly and severally. Plaintiffs were also awarded their attorney’s fees and costs.
Defendants appealed and challenge the judgment, contending (1) they may not be compelled, as a matter of law, to pay past wages allegedly due because plaintiffs were not legally authorized to work in the United States; (2) there is insufficient evidence that defendants issued inaccurate wage statements; (3) the trial court erroneously granted plaintiffs’ attorney’s fees motion; and (4) the trial court abused its discretion in awarding certain costs.
The Court of Appeal found merit in defendants’ challenge to the award of costs but otherwise affirmed in the unpublished case of Lepe v. Luft Enterprises, Calif. Ct. App., No. E067382 (May 10, 2018).
In support of their contention, defendants rely on the holding in Salas v. Sierra Chemical Co. (2014) 59 Cal.4th 407, 414, 424-425 (Salas). The Court of Appeal found such reliance to be misplaced.
In Salas, the plaintiff sued his former employer under the California Fair Employment and Housing Act (FEHA) alleging defendant employer failed to reasonably accommodate his physical disability and refused to rehire him in retaliation for filing a worker’s compensation claim. After the complaint was filed in Salas, the defendant learned that the plaintiff may have used another man’s Social Security number in order to gain employment. Defendant successfully moved for summary judgment.
The California Supreme Court reversed, holding that the federal Immigration Reform and Control Act of 1986 (8 U.S.C. § 1101 et seq.) did not preempt application of the antidiscrimination provisions of California’s FEHA to workers who are unauthorized aliens, but that “federal preemption does bar an award of lost pay damages under the FEHA for any period of time after an employer’s discovery of the employee’s ineligibility under federal law to work in the United States.”
In reaching this holding, the Salas court noted that its “preemption analysis for the postdiscovery period is limited to employers who discover the plaintiff employee’s unauthorized status after the employee has been discharged or not rehired. . . . Because imposing full liability for lost wages would provide a disincentive for such immigration law violations, thereby furthering the goals of federal immigration law, in these situations arguably federal law would not preempt lost wages remedies for violations of state laws like California’s FEHA.”
Here, defendants concede knowledge of plaintiffs’ unauthorized work status during the “agreed-upon claim period in this case.”
“Since defendants were aware of plaintiffs’ unauthorized work status during the time of their employment, defendants actively joined in the violation of federal immigration law. Under this circumstance, the Salas court holding does not apply, and plaintiffs are not barred from recovering their lost wages.”