Muñoz v. Regents of the University of California

Facts

Three bodies of law frame the dispute. On the federal side, section 1324a of the Immigration Reform and Control Act of 1986 (IRCA) makes it unlawful for “a person or other entity” to knowingly hire a person who is neither lawfully admitted for permanent residence nor authorized for employment under federal law, and it authorizes both civil and criminal enforcement. (Muñoz v. Regents of University of California (2025) 113 Cal.App.5th 466, 470.) A federal regulation defines “entity” to mean “any legal entity, including but not limited to, a corporation, partnership, joint venture, governmental body, agency, proprietorship, or association” (8 C.F.R. § 274a.1(b) (2023)), while the statute itself says only that “[f]or purposes of this section, the term ‘entity’ includes an entity in any branch of the Federal Government.” (Muñoz, supra, 113 Cal.App.5th at p. 470.) Whether IRCA reaches a state instrumentality like the University is a question that, as the University itself would tell the Supreme Court, “has never been directly addressed by any state or federal court.” (Id. at p. 472.)

On the state side, Government Code section 12940, subdivision (a) makes it unlawful “[f]or an employer, because of the … national origin, … of any person, to refuse to hire or employ the person.” (Muñoz, supra, 113 Cal.App.5th at p. 476.) In 2018, regulators adopted section 11028 of title 2 of the California Code of Regulations to expand and clarify “existing rules that interpret how the Fair Employment and Housing Act applies to the protected class of national origin in the employment context,” and two of its provisions do decisive work in this case. (Ibid.) Section 11028, subdivision (f)(3) of title 2 of the California Code of Regulations provides that it is “an unlawful practice for an employer or other covered entity to discriminate against an employee because of the employee’s or applicant’s immigration status, unless the employer has shown by clear and convincing evidence that it is required to do so in order to comply with federal immigration law.” (Id. at p. 470.) Subdivision (f)(1) makes “[a]ll provisions of the Act and these regulations apply to undocumented applicants and employees to the same extent that they apply to any other applicant or employee,” and section 11027.1, subdivision (c) defines an undocumented applicant or employee as one “who lacks legal authorization under federal law to be present and/or to work in the United States.” (Id. at pp. 476–477.)

The University’s long-standing employment policy prohibits it from employing undocumented students who do not have federal work authorization. (Muñoz, supra, 113 Cal.App.5th at pp. 469–470.) According to the University, thousands of undocumented students attend its campuses every year; it hires those enrolled in the Deferred Action for Childhood Arrivals (DACA) program, because DACA-eligible students can obtain temporary federal work authorization. But the federal government stopped accepting new DACA applications in 2018, so the population of undocumented students without work authorization “has grown significantly.” (Id. at p. 471.)

In May 2023, the University created a working group to assess whether it could offer paid employment to students regardless of federal work authorization — a proposal built on the academic legal theory that no federal law bars entities like the University from hiring undocumented students. In January 2024, the Regents voted to dissolve the working group without changing the policy. The meeting minutes explained that after consulting numerous law firms and legal experts and studying the potential risks, “[t]he University has concluded that the proposed legal pathway is not viable at this time and carries significant risk for the institution and those it serves.” (Muñoz, supra, 113 Cal.App.5th at p. 471.)

The Legislature responded by passing Assembly Bill No. 2586 (2023–2024 Reg. Sess.), which would have barred the University and other public postsecondary institutions from “disqualify[ing] a student from being hired for an employment position due to their failure to provide proof of federal work authorization,” except where “that proof is required by federal law” or required as a condition of a grant funding the position, and would have required those institutions to treat IRCA’s hiring prohibition “as inapplicable because that provision does not apply to any branch of state government.” (Muñoz, supra, 113 Cal.App.5th at pp. 471–472.) The Governor vetoed the bill, invoking “the gravity of the potential consequences of th[e] bill, which include potential criminal and civil liability for state employees.” (Id. at p. 472.)

Procedural history

In October 2024, petitioners Jeffry Umaña Muñoz and Iliana Perez filed a petition for writ of ordinary mandate seeking a “writ of mandate directing the Regents to abandon its unsound and unlawful policy” of refusing to hire undocumented students for on-campus work. They advanced two theories: that the policy is an abuse of discretion because it rests on a misinterpretation of IRCA, and that it violates FEHA by discriminating based on immigration status. They described the petition as presenting “a novel legal question” — whether IRCA applies to state government entities — that “does not require resolution of any factual disputes.” The Court of Appeal summarily denied the petition. (Muñoz, supra, 113 Cal.App.5th at p. 472.)

Petitioners sought review. Notably, the University’s answer in the Supreme Court appeared to welcome a merits ruling: it acknowledged the unresolved “uncertainty and risk as to both the scope of IRCA and the applicability of 8 C.F.R. § 274a.1(b),” and stated that “a court ruling addressing this uncertainty could provide value to all interested parties—specifically, a judicial declaration as to whether federal law permits the University to hire undocumented students without threat of civil or criminal penalties for doing so.” (Muñoz, supra, 113 Cal.App.5th at p. 472.) The Supreme Court granted review and transferred the matter back with instructions to issue an order to show cause, and the Court of Appeal directed the University to answer four questions about the legal basis for its policy and the independent effect, if any, of the federal regulation. (Id. at pp. 472–473 & fn. 2.)

In its return, however, “the University adopts a position at odds with the one it took before the California Supreme Court.” (Muñoz, supra, 113 Cal.App.5th at p. 473.) It now argued that a writ proceeding “cannot, by its nature, weigh the risks that the University must weigh when setting policy,” that those risks “do not rise and fall on a simple statutory analysis of IRCA,” that the policy does not discriminate on the basis of immigration status at all because the University hires undocumented students who hold DACA work authorization, and that “the credible threat of federal enforcement is a legitimate, non-discriminatory reason” providing “a complete defense to any FEHA claim.” It insisted the court “need not decide whether IRCA applies in order to deny the Petition.” (Ibid.) Petitioners replied that they sought an order directing the University to adopt a new policy assuming IRCA does not apply, and pressed four reasons the “risk” framing failed — including that a favorable ruling would dissipate the risk and that “‘litigation risk’ is not meaningfully distinct from taking a position on the merits of the underlying legal question.” (Id. at pp. 473–474.) The court noted that the transfer order did not itself signal that petitioners should win, only that extraordinary relief was the sole adequate avenue for review. (Id. at p. 474.)

Issue

As the court distilled it after stripping away the University’s threshold arguments: “the question before us is whether the continued use of a facially discriminatory policy can be justified solely by the University’s assessment of the risks posed by the termination of its policy.” (Muñoz, supra, 113 Cal.App.5th at p. 478.) Embedded in that question were two subsidiary disputes — whether a hiring policy keyed to federal work authorization discriminates “because of … immigration status” at all, and whether deferential traditional-mandamus review insulates a public entity’s risk-based, quasi-legislative policy choice from judicial correction when the policy conflicts with state law. (Id. at pp. 475–477.)

Holding

Reasoning

Traditional mandamus review is deferential — and risk-based policymaking ordinarily survives it. The court began from the settled standard: ordinary mandamus under Code of Civil Procedure section 1085 permits review of a public agency’s quasi-legislative acts, “but only if the action taken is so palpably unreasonable and arbitrary as to show an abuse of discretion as a matter of law,” meaning a decision that is “arbitrary, capricious, entirely lacking in evidentiary support, unlawful, or procedurally unfair.” (Muñoz, supra, 113 Cal.App.5th at p. 474, quoting Schwartz v. Poizner (2010) 187 Cal.App.4th 592, 596 and Alejo v. Torlakson (2013) 212 Cal.App.4th 768, 780.) The court accepted the University’s account of its own decision: the meeting minutes showed the Regents dissolved the working group based on an assessment of risk, not on a conclusion that IRCA barred the hiring, and “generally a quasi-legislative policy decision based on an assessment of risks falls within its sound discretion.” (Id. at p. 475.)

Most of petitioners’ attacks on risk-based reasoning failed. The court rejected, one by one, petitioners’ broader arguments. That a favorable ruling would eliminate the risk going forward “does not show that it was an abuse of discretion for the University to consider that risk when the policy decision was made.” (Muñoz, supra, 113 Cal.App.5th at p. 475.) The University’s fears were not shown to be fanciful: it cited “statements by government officials that, coupled with the federal regulation, support the conclusion that its concerns are not entirely unfounded.” (Ibid.) Nor would crediting litigation risk immunize everything from review — “[r]eliance on unfounded, arbitrary, or capricious fears of litigation to adopt a discretionary policy would amount to an abuse of discretion subject to correction by writ of mandate.” (Ibid.) And while the court agreed that “some assessment of the merits of the underlying legal issue is required” for risk-reliance to be reasonable, the University did not have to conclude IRCA actually applied; “[f]or purposes of traditional mandate, such an interpretation need only be reasonable—i.e., not arbitrary or capricious.” (Id. at pp. 475–476.)

The pivot: deference ends where state-law illegality begins. Had the case involved only the wisdom of risk-weighing, the University would have prevailed. But deferential review “does not resolve petitioners’ argument that the employment policy is not just arbitrary and capricious but also contrary to state law.” The court could find no authority “suggesting that the continued use of a policy that is unlawful under state law can be justified solely on a determination that discontinuing the policy might result in significant harm … based on perceived risks of potential federal law violations, even reasonable risks based on a careful assessment of what positions federal actors might take.” (Muñoz, supra, 113 Cal.App.5th at p. 476.)

The policy facially discriminates based on immigration status. The University argued its line was drawn at the unprotected classification of federal work authorization — after all, it hires DACA-enrolled undocumented students. The court held the distinction untenable under the regulations themselves: because section 11028, subdivision (f)(1) extends all of FEHA to undocumented applicants, and section 11027.1, subdivision (c) defines that class to include anyone lacking legal authorization “to be present and/or to work in the United States,” “refusing to hire undocumented students because they lack work authorization is discrimination based on immigration status.” (Muñoz, supra, 113 Cal.App.5th at pp. 476–477.) That triggered subdivision (f)(3): the policy is an unlawful practice “unless the University can show by clear and convincing evidence that its policy is required in order to comply with federal immigration law.” (Id. at p. 477.)

The University never attempted the only showing that could save the policy. The court acknowledged that “no court has considered how the ‘clear and convincing evidence’ standard applies in this unusual context,” observing that whether IRCA requires the discrimination “is not a matter of evidentiary proof. It is a question of statutory interpretation.” (Muñoz, supra, 113 Cal.App.5th at p. 477.) But on any construction, the University “has made no attempt to satisfy it”: it expressly declined to take a position on whether IRCA applies to state government entities, submitted no briefing on the merits of petitioners’ statutory argument, and — as it clarified at oral argument — took no position even on whether the federal regulation interprets IRCA to reach entities like itself. (Id. at p. 477 & fns. 8–9.) The question thus became whether risk alone could justify facial discrimination. (Id. at pp. 477–478.)

A “legitimate, nondiscriminatory” reason cannot substitute for the required showing — nor can a BFOQ. The University cast the threat of “potentially severe penalties and enforcement consequences” as a legitimate, nondiscriminatory reason for the policy. But none of its authority established “that an employer may engage in an ‘unlawful employment practice’—i.e., discriminate based on immigration status without a showing that such discrimination is required by federal law—based solely on concerns, however reasonable, that there may be significant consequences to adopting a contrary practice.” (Muñoz, supra, 113 Cal.App.5th at p. 478.) The bona fide occupational qualification defense (Cal. Code Regs., tit. 2, § 11010, subd. (a)) fared no better under the two-part test of Johnson Controls, Inc. v. Fair Employment & Housing Com. (1990) 218 Cal.App.3d 517, 540: “The University cannot claim that federal work authorization is a bona fide occupational qualification without showing that the federal law requiring work authorization applies to the University. A preference for employees with work authorization, so as to avoid the potential for enforcement proceedings, does not establish that the University’s policy is reasonably necessary to its normal business operations.” (Muñoz, at p. 478.)

The University’s case law was distinguished on a single axis: those employers proved federal law required their conduct. In Griffin v. Crossett School Dist., Inc. (W.D.Ark. 2008) and Cole v. Roadway Express, Inc. (W.D.N.Y. 2002) 218 F.Supp.2d 350, “the defendant employers were not liable for discrimination because they established that their conduct was required by federal law” — precisely what the University “has not argued, let alone proven.” (Muñoz, supra, 113 Cal.App.5th at p. 479.) Howe v. Bank of America N.A. (2009) 179 Cal.App.4th 1443 involved a bank applying identification minimums a federal regulation undisputedly imposed on its business; the court there “did not hold that discrimination could be justified by the desire to avoid litigation as to whether the discrimination is required by the regulation in the first instance.” (Muñoz, at p. 480.) Lee v. K Mart Corp. (D.Minn. 2011) 836 F.Supp.2d 841 involved termination for violating a hands-off policy, not a claim that an employer could shed a protected class “to avoid risks associated with litigation over the lawfulness of employing” its members — “the argument that would parallel the one offered by the University here.” (Muñoz, at p. 480.) Estes v. Vilsack (D.Colo. 2013) likewise turned on a pay disparity traceable to a litigation settlement, not sex. (Id. at pp. 480–481.)

The remaining statutory arguments failed for the same structural reason. The “safe harbor” characterization of subdivision (f)(3) went nowhere because “the University does not argue that its policy complies with a ‘directive’ from the federal government.” (Muñoz, supra, 113 Cal.App.5th at p. 481.) Vehicle Code section 12801.9, subdivision (g)(2)(B) — which preserves employer obligations under IRCA and provides that “[a]n action taken by an employer that is required by [section 1324a] is not a violation of law” — was “similarly misplaced” because the University asserted only “a credible fear that the federal government might determine that the policy is required by federal law,” never that it is. (Ibid.) The vetoed Assembly Bill No. 2586 proved nothing; unlike the regulation, the bill would have forced the University to treat IRCA as inapplicable, foreclosing the very showing subdivision (f)(3) invites. (Id. at p. 482.) And the parade-of-horribles argument — that no California employer “could safely rely on federal regulations … no matter how clear the risk of federal prosecution” — inverted the record: the University never claimed it relied on the requirements of any federal statute or regulation, “only on the risks associated with adopting a policy that the federal government might consider unlawful.” The court closed the analysis with its bottom line: “The policy is unlawful under FEHA unless federal law requires it, and neither the University nor anyone else has argued to us that it does. Without more, there is no basis for us to hold that the risk of federal prosecution alone justifies continuing it.” (Ibid.)

Relief calibrated to the defect: reconsideration, not abolition. Because the abuse of discretion consisted of reliance on improper criteria, the remedy was a writ compelling a lawful exercise of discretion — “‘[m]andamus may issue … to compel an official both to exercise his discretion … under a proper interpretation of the applicable law.’” (Muñoz, supra, 113 Cal.App.5th at pp. 482–483, quoting Alameda Health System v. Alameda County Employees’ Retirement Assn. (2024) 100 Cal.App.5th 1159, 1177.) The court separately held that petitioners’ broader claim — that the policy violates FEHA as a matter of law — failed on briefing grounds: their petition and opening brief never addressed 8 C.F.R. § 274a.1(b), and an argument first raised in a reply brief “comes too late.” (Id. at p. 483.) Rejecting the University’s plea that any writ would be “inequitable,” the court stressed the writ’s modesty: it “does not require the University to take any specific action,” leaves open the declaratory-judgment suit against the federal government the University itself had floated, and “merely require[s] that the University not rely on litigation risk alone as the justification for its facially discriminatory policy.” (Id. at p. 484.)

Significance

Muñoz gives operative effect to a provision that had gone untested in the courts — California Code of Regulations, title 2, section 11028, subdivision (f)(3), the immigration-status rule within the FEHA national-origin regulations; the panel itself observed that “no court has considered how the ‘clear and convincing evidence’ standard applies in this unusual context.” (Muñoz, supra, 113 Cal.App.5th at p. 477.) And it does so in a striking posture. The court did not hold that the University violated FEHA; it held that a facially discriminatory policy is presumptively an “unlawful practice” under the regulation, that the employer alone bears the burden of a clear-and-convincing “required by federal law” showing, and that a public entity’s refusal to engage that question while continuing the policy is an abuse of discretion correctable in traditional mandamus. (Muñoz, supra, 113 Cal.App.5th at pp. 477, 482.) The analytical sequence matters for public-sector practice: quasi-legislative policymaking ordinarily enjoys near-total deference, but Muñoz confirms — following Martinez v. City of Clovis (2023) 90 Cal.App.5th 193, which the court cited for using mandamus to test policies against FEHA — that “unlawful” is itself one of the abuse-of-discretion categories, so state-law illegality punctures the deference shield. (Id. at pp. 474–476.)

The decision also closes a rhetorical escape route that recurs across discrimination law: recasting a protected classification as a facially neutral proxy. The court refused to treat lack of work authorization as a classification distinct from immigration status, because the regulations define the protected class to include anyone lacking federal authorization to work — accepting, in substance, petitioners’ point that the “lack of federal work authorization is therefore not materially distinct from immigration status itself.” (Muñoz, supra, 113 Cal.App.5th at pp. 476–477.) And it cabined the litigation-avoidance line of cases — Howe, Lee, Estes — to records where federal law undisputedly governed the employer or the challenged reason was untethered to the protected trait. (Id. at pp. 479–481.) The limits are equally important. The panel assumed without deciding that the regulation validly interprets FEHA (the University never challenged it), expressly declined to construe IRCA or 8 C.F.R. § 274a.1(b), and left the University free, on reconsideration, to attempt the clear-and-convincing showing or to seek a federal declaratory judgment. (Id. at pp. 477, fn. 7, 483–484.) The Supreme Court denied review on October 29, 2025, leaving Muñoz as the controlling published guidance on immigration-status discrimination in employment.

Key quotes

“Thus, refusing to hire undocumented students because they lack work authorization is discrimination based on immigration status.” (Muñoz, supra, 113 Cal.App.5th at p. 477.)

“The policy is unlawful under FEHA unless federal law requires it, and neither the University nor anyone else has argued to us that it does. Without more, there is no basis for us to hold that the risk of federal prosecution alone justifies continuing it.” (Id. at p. 482.)

“We merely require that the University not rely on litigation risk alone as the justification for its facially discriminatory policy.” (Id. at p. 484.)

Read the full opinion (Justia) →

Practice pointer

Open questions

Muñoz resolves less than its subject matter suggests, and says so. The court expressly did not decide whether IRCA’s hiring prohibition applies to state government entities: “we have not offered an interpretation of Section 1324a or the related regulation.” (Muñoz, supra, 113 Cal.App.5th at p. 483.) It likewise declined — as untimely raised — the questions whether 8 C.F.R. § 274a.1(b) “clearly construe[s] IRCA to apply to government entities like the University” and whether an agency regulation can extend a statute to the states absent an unmistakably clear congressional statement. (Ibid.) It flagged, without resolving, how a “clear and convincing evidence” burden operates when the underlying question “is a question of statutory interpretation” rather than proof. (Id. at p. 477.) Because the University never challenged the regulation, the court only “assume[d] for purposes of this proceeding that the regulation is an enforceable interpretation of national origin discrimination under FEHA” — its validity remains open to attack in a future case. (Id. at p. 477, fn. 7.) The scope of relief leaves practical questions too: on reconsideration the University may attempt the clear-and-convincing showing, adopt a new justification, or sue the federal government for declaratory relief — the writ compels lawful process, not a particular outcome — and the court declined to address whether the federal government would be a necessary party to any order actually requiring a policy change. (Id. at p. 484 & fn. 10.) Finally, because the decision arose in mandamus against a public employer, courts have yet to apply subdivision (f)(3)’s burden structure in an ordinary FEHA damages action against a private employer.