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Employer Who Did Not Investigate DOJ Background Check Discrepancy Violated Labor Code Section 432.7
Tracey Molina applied for a position with Premier Automotive Imports of CA, LLC (Premier) in 2014. Molina did not disclose a 2010 conviction for misdemeanor grand theft on her job application because the conviction was dismissed in 2013. In not disclosing the dismissed conviction, Molina was exercising her rights under Labor Code Section 432.7, which prohibits an employer from asking a job applicant to disclose any conviction that has been judicially dismissed and bars an employer from using any record of a dismissed conviction as a factor in the termination of employment.
Molina passed Premier’s criminal background check and Premier hired her. After working for Premier for four weeks, a subsequent background check conducted by the Department of Motor Vehicles (DMV) needed for Molina’s position mistakenly reported to Premier that Molina had an active criminal conviction. During her four weeks on the job, Molina appeared qualified and there had been no complaints about Molina’s work performance. Without investigating or inquiring further, Premier terminated Molina for “falsification of job application” despite Molina’s explanation to her superiors that her conviction had been dismissed by court order. Three weeks later, the DMV issued a corrected notice, but Premier did not rehire Molina.
Molina filed a retaliation complaint with the Labor Commissioner (Commissioner) for her termination. The Commissioner determined that Premier unlawfully discharged Molina and ordered Premier to reinstate her to her former or a similar position, reimburse her for lost wages plus interest, and pay a civil penalty. Premier appealed to the Director of the Department of Industrial Relations, lost the appeal, and then refused to comply with the Commissioner’s orders.
The Commissioner then filed an enforcement action against Premier for violation of Labor Code Sections 432.7 and 98.6, alleging that Premier unlawfully retaliated against Molina for exercising her right to omit disclosure of the dismissed conviction on her job application, and relied on a dismissed conviction as a factor in terminating her employment. The trial court, however, dismissed the Commissioner’s enforcement action, finding that the Commissioner failed to produce sufficient evidence to support its claim. The Commissioner appealed.
On appeal, the appeals court analyzed whether the Commissioner provided sufficient evidence to support its claim.
First, to establish a violation of Labor Code Section 432.7, the Commissioner was required to show that Premier utilized a record concerning a conviction that had been judicially dismissed as a factor in terminating Molina’s employment. The appeals court determined that the Commissioner presented sufficient evidence to make this showing, namely that Premier knew about Molina’s dismissed conviction and misused that information to terminate her in violation of Labor Code Section 432.7. In reaching that conclusion, the appeals court noted that Molina passed her first criminal background check, which should have suggested to Premier that the DMV check was incorrect or incomplete. However, Premier took no steps to contact the DMV, speak with Molina, or investigate the discrepancy between the two background checks. Instead, Premier decided to terminate Molina and then followed through on the termination despite learning from Molina that the conviction on her record had been dismissed. Premier should have evaluated the situation to determine whether it was proceeding in a lawful manner and should have considered Molina’s disclosure that her conviction was dismissed before proceeding with the termination. Moreover, three weeks later, after the DMV confirmed it had made a mistake, Premier did not rehire Molina.
Second, to establish a prima facie violation of Labor Code Section 98.6, the Commissioner was required to demonstrate that Molina engaged in protected activity, that Premier subjected her to an adverse employment action, and that Molina’s protected activity substantially motivated Premier’s adverse employment action. The appeals court determined that the Labor Commissioner produced sufficient evidence to meet this burden. First, it was undisputed that Molina engaged in protected activity when she exercised her right under Labor Code Section 432.7 by not disclosing her dismissed conviction on her job application. It was also undisputed that Premier subjected Molina to an adverse employment action when it terminated her employment. The key issue was whether the Commissioner produced sufficient evidence that Molina’s protected activity substantially motivated Premier’s adverse employment action. The appeals court held the Commissioner had produced such sufficient evidence. Premier received conflicting criminal background checks and rushed to fire Molina without investigating further or contacting Molina or the DMV. Molina told Premier when they informed her of her termination that the conviction had been dismissed. Further, when the DMV corrected its mistake three weeks later, Premier took no steps to rehire Molina. Accordingly, the appeals court found these factors supported a reasonable inference that Molina’s failure to disclose the dismissed conviction was a substantial motivating factor in Premier’s decision to terminate Molina’s employment.
The appeals court reversed the decision of the trial court and remanded the case back to the trial court for a new trial.
Garcia-Brower v. Premier Automotive Imports of CA, LLC (Cal. Ct. App., Oct. 15, 2020, No. A156985) 2020 WL 6074454.
Employers should take steps to investigate discrepancies in the results of background checks. (The employee repeatedly told her supervisors her conviction had been dismissed, and the employee was not interviewed prior to her termination or given an opportunity to prove to her superiors that she was telling the truth.)