                 FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

GIANCARLO INCALZA,                       No. 04-57119
                Plaintiff-Appellee,         D.C. No.
               v.                        CV-03-06720-
FENDI NORTH AMERICA, INC.,                   MMM
             Defendant-Appellant.
                                          OPINION

       Appeal from the United States District Court
          for the Central District of California
      Margaret M. Morrow, District Judge, Presiding

                Argued and Submitted
         December 7, 2006—Pasadena, California

                   Filed March 6, 2007

      Before: Stephen Reinhardt, Melvin Brunetti, and
               Alex Kozinski, Circuit Judges.

                Opinion by Judge Reinhardt




                           2511
2514           INCALZA v. FENDI NORTH AMERICA


                         COUNSEL

Gene C. Schaerr, Winston & Strawn LLP, Washington, D.C.
and Laura R. Petroff and Jennifer Rappoport, Winston &
Strawn LLP, Los Angeles, California, for the appellant.

Carney R. Shegerian and Donald Conway, Shegerian & Asso-
ciates, Inc., Beverly Hills, California, for the appellee.


                         OPINION

REINHARDT, Circuit Judge:

   We consider whether, in this case, the Immigration Reform
and Control Act of 1986 (IRCA) preempts California labor
laws that forbid employers from firing an employee without
good cause. We also consider whether the district court
abused its discretion in denying defendant’s motion for a new
trial. In both instances, our answer is No.

I.   FACTUAL AND PROCEDURAL HISTORY

   In June of 1990, Giancarlo Incalza, a native and citizen of
Italy with two years of business education, began working as
               INCALZA v. FENDI NORTH AMERICA             2515
a sales associate for Fendi in Rome. Approximately six
months after his employment started, Fendi offered him a
sales position in its New York City store. Paola Fendi, the
head of the company, assured him that his employment would
be secure as long as he continued to perform well. Incalza
accepted the offer and moved to the United States on an E-1
visa secured with Fendi’s assistance.

   Incalza worked at Fendi’s New York store from 1990 until
2000. During this period, the company renewed his visa sev-
eral times. Management also made further assurances to him
regarding his job security.

  In August, 2000, Incalza was promoted to manager of
Fendi’s Beverly Hills store. During his tenure in Beverly
Hills, he consistently received positive performance reviews.
There was considerable evidence, however, that his supervi-
sor, Robert King, did not like him and would have liked to
replace him.

   In mid-2002, French nationals purchased a majority interest
in Fendi. In January, 2003, Fendi’s immigration counsel,
Andrew Lerner, advised his client that, because the company
was now French-owned, the E-1 visas issued to Italian nation-
als were no longer valid. Lerner explained that this affected
two employees: Incalza and Mauricio Graziani. He also
informed Fendi that H1-B visas were probably available to
both Graziani and Incalza. He told the company that Graziani
and Incalza were essentially in the same situation, although he
thought that Graziani might have a slightly easier time obtain-
ing an H1-B visa because he had some post-secondary educa-
tion and had previously received an H1-B visa. Lerner was
unaware at the time that Incalza also had two years of post-
secondary education. In any event, he explained that, for a
fee, the company could get a determination within fifteen
days regarding whether the two employees would be able to
qualify for H1-B visas. Lerner did not provide any advice
2516              INCALZA v. FENDI NORTH AMERICA
regarding whether or not to terminate either Incalza or Gra-
ziani.

  Although Lerner offered to investigate further, Fendi did
not accept his offer. Instead, it requested that he file an H1-B
petition on behalf of Graziani, but not Incalza. Graziani was
granted an H1-B visa, and remained on Fendi’s payroll with-
out interruption.

   King, in the presence of the human resources director, fired
Incalza on January 20, 2003, telling him, falsely, that nothing
could be done to remedy his visa problems. Incalza then
requested that he be allowed to take an unpaid leave of
absence. He explained that he was planning to marry his fian-
cée, an American citizen, the following month and would be
eligible for a green card. King, however, repeated that the
immigration problem could not be resolved, and that a leave
of absence was not an option.

   Incalza then wrote Fendi a letter on February 28, 2003, ask-
ing that it give him back his former job once his visa issue
was resolved. In a follow-up phone conversation, the human
resources director told Incalza that Fendi would not re-hire
him. Incalza then married his fiancée on March 27, 2003 and
received work authorization as the spouse of an American cit-
izen in April. At the time of his marriage, Fendi still had not
filled his position. In early April, Fendi hired Grace Varella,
a non-Italian, as manager of the Beverly Hills store.

  Incalza filed an action in California Superior Court claim-
ing that he was wrongfully terminated 1) in violation of an
implied contract that he would be fired only for good cause,
and 2) because of his Italian heritage, in violation of the Fair
Employment and Housing Act, CAL. GOV’T CODE §§ 12900-
12960.1 Fendi removed the case to federal court on the basis
  1
   Incalza also raised a number of other claims, but all were dismissed or
voluntarily withdrawn prior to trial and are not at issue in this action.
                INCALZA v. FENDI NORTH AMERICA              2517
of diversity jurisdiction, and filed a motion for summary judg-
ment. It argued that Incalza’s claims lacked merit because it
was compelled by IRCA to terminate him when it discovered
that his E-1 visa was no longer valid. It further argued that
California law, to the extent it required a different result, was
preempted. The district court denied the motion.

   At the trial, Incalza introduced evidence that 1) Fendi’s pol-
icy is not to terminate employees without good cause, 2) the
custom of the fashion industry is not to terminate employees
without good cause, 3) Incalza was employed at Fendi for
thirteen years, and 4) Fendi management gave Incalza oral
assurances of continued employment.

   A four-day jury trial followed. The jury found for Incalza
on the implied contract claim, but for Fendi on the discrimina-
tion claim. It awarded Incalza $1,088,440. The jury was
instructed that Fendi could discharge an employee in good
faith and for a fair reason, but that it should find for Incalza
if it found that the stated reason was simply a pretext. Fendi
moved for a new trial, and the district court denied the
motion. Fendi appealed.

II.   DISCUSSION

A.    Conflict Preemption

   [1] California law provides remedies to workers who are
terminated in violation of an express or implied agreement
that they will not be discharged without good cause. Guz v.
Bechtel Nat’l, Inc., 8 P.3d 1089, 1100-01 (Cal. 2000). The
California legislature has made clear that this rule applies to
illegal immigrants as well as other employees. Under Califor-
nia law, “[a]ll protections, rights, and remedies available
under state law, except any reinstatement remedy prohibited
by federal law, are available to all individuals regardless of
immigration status who have applied for employment, or who
are or who have been employed, in this state.” CAL. CIV. CODE
2518               INCALZA v. FENDI NORTH AMERICA
§ 3339(a); CAL. LAB. CODE § 1171.5(a); CAL. GOV’T CODE
§ 7285(a). Additionally, California law provides 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, and in proceedings or dis-
covery undertaken to enforce those state laws no inquiry shall
be permitted into a person’s immigration status except where
the person seeking to make this inquiry has shown by clear
and convincing evidence that this inquiry is necessary in order
to comply with federal immigration law.” CAL. CIV. CODE
§ 3339(b); CAL. LAB. CODE § 1171.5(b); CAL. GOV’T CODE
§ 7285(b).

   [2] Federal law, however, forbids employers from know-
ingly employing unauthorized aliens. Specifically, under
IRCA, it is “unlawful for a person or other entity, after hiring
an alien for employment in accordance with [the Act], to con-
tinue to employ the alien in the United States knowing the
alien is (or has become) an unauthorized alien with respect to
such employment.” 8 U.S.C. § 1324a(a)(2).

   [3] Conflict preemption2 occurs when either 1) it is not
“possible to comply with the state law without triggering fed-
eral enforcement action,” Jones v. Rath Packing Co., 430 U.S.
519, 540 (1977), or 2) state law “stands as an obstacle to the
accomplishment and execution of the full purposes and objec-
tives of Congress,” Volt Info. Science, Inc. v. Bd. of Trs. of the
Leland Stanford Junior Univ., 489 U.S. 468, 477 (1989)
(quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)). Ten-
  2
    “Preemption can occur in one of three ways: express preemption by
statute, occupation of the field, or conflict between state and federal regu-
lation.” U.S. v. 4,432 Mastercases of Cigarettes, More Or Less, 448 F.3d
1168, 1189 (9th Cir. 2006) (quoting Air Conditioning & Refrigeration
Inst. v. Energy Res. Conservation & Dev. Comm’n, 410 F.3d 492, 495 (9th
Cir. 2005), cert. denied, 126 S. Ct. 2887 (2006)). Neither party suggests
that IRCA expressly preempts state labor laws protecting undocumented
employees. Nor do the parties argue that field preemption applies. Thus,
conflict preemption is the only type of preemption at issue in this case.
               INCALZA v. FENDI NORTH AMERICA              2519
sion between federal and state law is not enough to establish
conflict preemption. Silkwood v. Kerr-McGee Corp., 464 U.S.
238, 256 (1984). We find preemption only in “those situations
where conflicts will necessarily arise.” Goldstein v.
California, 412 U.S. 546, 554 (1973). A “hypothetical con-
flict is not a sufficient basis for preemption.” Total TV v.
Palmer Communications, Inc., 69 F.3d 298, 304 (9th Cir.
1995).

   The parties agree that there is no conflict between Califor-
nia law and IRCA as applied to an employer who is required
to terminate an employee by IRCA and does so in order to
comply with that statute. Under such circumstances, the
employer can obey both laws because compliance with IRCA
provides good cause, as defined by California law, for termi-
nating unauthorized aliens. The point of contention that pri-
marily divides the parties is whether federal and state law
conflict when an employer who is required by federal law to
terminate an unlawful alien does so, not because of IRCA, but
for reasons that are unlawful under state law, and is required
to pay damages for the violation of state law. The district
court agreed with Incalza and held that state and federal law
do not conflict under such circumstances because California
law requires only that the employer pay damages for the vio-
lation of state law, not that it employ an alien in violation of
federal law. Thus, the district court ruled, the employer can
obey both laws by terminating the employee, as required by
federal law, and, where the motive for the termination is con-
trary to state law, paying damages, as required by such law.

   [4] We need not reach the question decided by the district
court, however. There is no conflict in the case before us for
a narrower reason. Here, not only was Incalza not discharged
because of his unauthorized employment status, but Fendi
could lawfully have taken action other than discharge, and
been in compliance with IRCA. That Fendi itself recognized
that discharge was not required is evidenced by its decision to
2520              INCALZA v. FENDI NORTH AMERICA
continue to employ Graziani while obtaining an H1-B visa for
him.

   [5] It was possible for Fendi to obey federal law in this case
without creating a conflict with state law because there were
remedies short of discharge that were permissible under fed-
eral law. Fendi could have granted Incalza’s request for tem-
porary, unpaid leave so that he could resolve his work
authorization problems.3 IRCA requires that an employer not
“continue to employ” workers if it discovers that they are
unauthorized, but does not bar an employer from suspending
an employee or placing him on unpaid leave for a reasonable
period while he remedies the deficiency in his status. We read
the IRCA implementing regulations as deeming an individual
“employed” only if he is performing work and receiving
remuneration for that work. The regulations define employ-
ment as “any service or labor performed by an employee for
an employer within the United States.”4 8 C.F.R. § 274a.1(h).
An employee is defined as “an individual who provides ser-
vices or labor for an employer for wages or other remunera-
tion.” 8 C.F.R. § 274a.1(f). Thus, an entity does not “continue
to employ” an alien in violation of 8 U.S.C. § 1324a(a)(2)
  3
     Fendi suggests that a loss of work authorization by Incalza could not
be considered temporary because “[a]s a factual matter, Incalza’s ‘tempo-
rary’ lack of work authorization lasted five months beyond the date he was
terminated, and was [remedied] based on his marriage.” This argument is
disingenuous. Had Fendi applied for an H1-B visa on Incalza’s behalf, his
visa problem might well have been largely resolved within 15 days. Even
without Fendi’s assistance, Incalza would have obtained a work permit
earlier had he not been terminated. Incalza was compelled to delay his
wedding as a result of his termination. Thus, Fendi’s actions were respon-
sible for the duration of the break in Incalza’s work authorization. Had
Fendi taken immediate action, it is possible that it could have obtained
work authorization for Incalza so quickly that it would not even have been
required to put him on leave. See New El Rey Sausage Co. v. INS, 925
F.2d 1153, 1156-57 (9th Cir. 1991). This is precisely what happened with
Graziani, for whom Fendi obtained an H1-B visa.
   4
     The regulation also includes some exceptions, which are not relevant
here.
                  INCALZA v. FENDI NORTH AMERICA                      2521
unless that individual is continuing to perform a service or
labor for the employer for which it is providing remuneration.
The employment status of an employee placed on leave with-
out pay is, in effect, suspended during the period that he is
neither working nor receiving pay.5 8 U.S.C. § 1342a(a)(2).

   [6] Placing employees on unpaid leave for a reasonable
period is consistent with the purpose of IRCA, as reflected in
the implementing regulations. Cf. Volt Info. Science, Inc., 489
U.S. at 477. In passing IRCA, Congress wished to stop pay-
ments of wages to unauthorized workers, which act as a
“magnet . . . attract[ing] aliens here illegally,” and to prevent
those workers from taking jobs that would otherwise go to cit-
izens. P.L. 99-603, IMMIGRATION REFORM AND CON-
TROL ACT OF 1986 H.R. REP. 99-682(I), at 46, as
reprinted in 1986 U.S.C.C.A.N. at 5650. If an alien is not
working and is not being paid, IRCA’s purposes are not con-
travened.

   Moreover, allowing employers to place employees on
unpaid leave furthers Congress’s secondary purpose of pro-
tecting the rights of lawful alien workers. It affords employers
a means of preserving the seniority and other benefits of law-
ful workers whose work authorization has been questioned or
who lack adequate documentation. Concern with protecting
such workers from discrimination based on national origin
engendered by IRCA’s employer sanctions was repeatedly
expressed by members of Congress.6 See, e.g., 132 CONG.
  5
     Fendi relies on the definition of the term “employ” in the implementing
regulations of the Family Medical Leave Act (FMLA) to argue that
employees on leave remain employed. That definition is irrelevant, how-
ever, because the definition of “employ” can vary from statute to statute.
See Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318, 1349-50 (1992)
(differentiating between the definition of “employ” under ERISA and
under the Fair Labor Standards Act). The “textual asymmetry between the
two statutes precludes reliance” on FMLA to interpret the term in IRCA.
Id. at 1350.
   6
     So great was Congress’s concern that it wrote protections against dis-
crimination for lawful aliens into IRCA and created an Office of Special
2522              INCALZA v. FENDI NORTH AMERICA
REC. 31640 (1986) (statement of Rep. Bryant) (“Many Ameri-
cans are concerned that employer sanctions will lead to
increased discrimination against Hispanics and other Ameri-
cans who are legally here and entitled to work. I am very sen-
sitive to that concern. And I have worked hard to put the
maximum protections against discrimination into the bill.”).
Allowing employers to place employees on leave without pay
while problems or concerns with their immigration status are
resolved protects lawful employees from discharges by
employers who, concerned with liability under IRCA, would
otherwise terminate those employees first and ask questions
later. See New El Rey Sausage Co. v. INS, 925 F.2d 1153,
1157 (9th Cir. 1991) (noting that a requirement that employ-
ers immediately terminate employees without allowing the
employees time to gather documents to prove their immigra-
tion status might raise constitutional concerns). Unpaid leave
also permits individuals to obtain a different form of work
permit to meet changed conditions or renew a permit that has
expired as a result of the employer or employee’s inadvertent
failure to file for renewal in sufficient time or as the result of
the agency’s failure to act promptly upon an application due
to the overwhelming backlog it frequently confronts.

   Fendi also argues that Hoffman Plastic Compounds v.
NLRB, 535 U.S. 137 (2002), requires that it terminate Incalza
immediately, regardless of the circumstances. Hoffman
describes IRCA as requiring that “if an employer unknow-
ingly hires an unauthorized alien, or if the alien becomes
unauthorized while employed, the employer is compelled to
discharge the worker upon discovery of the worker’s undocu-
mented status.” Id. at 148. Fendi argues that the Court in Hoff-

Counsel in the Justice Department “for the purpose of investigat[ing] and
prosecuting any charges of discrimination due to an unlawful
immigration-related employment practice.” 132 CONG. REC. 31632 (1986);
see also 8 U.S.C. § 1324b (detailing the duties of the “Special Counsel for
Immigration-Related Unfair Employment Practices”).
               INCALZA v. FENDI NORTH AMERICA             2523
man held that the phrase “continue to employ” in 8 U.S.C.
§ 1324a means “compelled to discharge immediately.” Hoff-
man, however, did not address the question of terminating
employees whose work authorization problems could be
expeditiously resolved by renewing an expired application or
changing the form of an existing permit. To the contrary, it
dealt with undocumented aliens working in a factory without
any basis for, or prospect of, obtaining legal status. Unpaid
leave would have accomplished absolutely no purpose in their
cases. We read Hoffman as instructing that, as a general rule,
individuals who are indisputably not authorized to work must
be discharged immediately. An individual who has an oppor-
tunity to switch from an E-1 visa to an H1-B visa, or some
other form of work authorization, is, however, another matter,
as is an individual whose status is either unclear or disputed.
Hoffman did not consider the question whether employees
who are able to resolve their work authorization problems
within a short time may be suspended or granted leave with-
out pay for the interim period. We conclude, for the reasons
stated above, that such a practice is fully consistent with
IRCA. See also Zamora v. Elite Logistics, Inc., 449 F.3d
1106, 1114-15 (10th Cir. 2006) (finding that an employer who
placed an employee on leave without pay while his immigra-
tion status was being clarified could defend itself in a subse-
quent Title VII suit on the basis that it did so to comply with
IRCA).

   Finally, Fendi argues that, under Hoffman, IRCA preempts
California law to the extent that the state law authorizes the
payment of damages to aliens who are not authorized to work
in this country. We need not decide here what damages would
be available to a worker who is not authorized to work.
Incalza, except for a short period principally resulting from
his employer’s actions, has been authorized to work at all
times. He is currently working in the United States lawfully,
although he is earning much less money than he did at Fendi.
Under these circumstances, damages, even damages for lost
2524              INCALZA v. FENDI NORTH AMERICA
wages, do not create a conflict between immigration law and
California law.7

   [7] In sum, we hold that Fendi was not required by IRCA
to terminate Incalza because it could have suspended him or
placed him on leave without pay for a reasonable period while
he was obtaining a change in work authorization to which he
was entitled. Thus, in this case, California law does not con-
flict with federal law; it was possible to comply with and sat-
isfy the purposes of both. Accordingly, we affirm the district
court’s conclusion that California labor laws, as applied to
Incalza, are not preempted by IRCA.

B.     Sufficiency of the Evidence

   Fendi argues that the jury’s decision that it lacked good
cause to discharge Incalza is not supported by the evidence.
In Fendi’s view, Incalza must both show cause to think
Fendi’s explanation for terminating him was false and prove
that it fired him for some other particular reason. Fendi fur-
ther argues that, because the jury found for it on the discrimi-
nation claim, Incalza did not prove that it had a particular
unlawful reason, and, thus, did not demonstrate pretext.

   [8] Under California law, an employer has good cause to
terminate an employee if it has “fair and honest reasons, regu-
lated by good faith on the part of the employer, that are not
trivial, arbitrary or capricious, unrelated to business needs or
goals, or pretextual.” Cotran v. Rollins Hudig Hall Int’l, 948
P.2d 412, 422 (Cal. 1998). The district court concluded that
there was sufficient evidence from which the jury could have
decided that Incalza was fired because of King’s personal ani-
  7
    To the extent that a small part of the damages awarded by the jury may
cover a period for which Incalza might have been placed on leave without
pay, and for which recovery may be questionable, no separate issue is
raised by Fendi, and, thus, we need not review the record to determine that
specific amount.
                INCALZA v. FENDI NORTH AMERICA              2525
mosity towards him or because King otherwise generally
wished to replace him as manager of the Beverly Hills store.

   A district court’s decision to deny a motion for a new trial
is reviewed for abuse of discretion. Browning-Ferris Indus. of
Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 278 (1989).
Such motion may be granted on insufficiency of evidence
grounds “only if the verdict is against the ‘great weight’ of the
evidence, or ‘it is quite clear that the jury has reached a seri-
ously erroneous result.’ ” Venegas v. Wagner, 831 F.2d 1514,
1519 (9th Cir. 1987) (quoting Digidyne Corp. v. Data Gen.
Corp., 734 F.2d 1336, 1347 (9th Cir. 1984)).

   [9] The district court summarized the evidence demonstrat-
ing that Incalza’s manager, King, wanted to get rid of Incalza.
Specifically, King had recommended against promoting
Incalza to manage the Beverly Hills store in the first place.
King also testified that he had concerns regarding Incalza’s
“negativity” and regarding the impact of Incalza’s attitude on
the store and the staff. Additionally, King testified that
Incalza did not show initiative. King’s testimony was directly
contradicted by the testimony of Incalza’s prior manager and
by Incalza’s consistently high performance reviews. King also
insisted that Incalza’s visa problems could not be remedied,
even after Incalza reminded him that he would soon be eligi-
ble for a green card due to his upcoming marriage, and even
though Fendi did, without difficulty, resolve the status of a
similarly situated employee, Graziani. As such, the district
court held that the “jury could have concluded that King did
not favor installing Incalza as Beverly Hills store manager in
the first place, and that he was looking for an excuse to
remove him from the position.” In light of the evidence in the
record regarding King’s dislike of Incalza and Fendi’s dispa-
rate treatment of Graziani, we hold that the district court did
not abuse its discretion in denying Fendi’s motion for a new
trial.
2526           INCALZA v. FENDI NORTH AMERICA
III.   CONCLUSION

  We hold that California law, as applied in this case, is not
preempted by IRCA. We also hold that the district court did
not abuse its discretion in finding that the jury’s verdict was
supported by sufficient evidence because Incalza met his bur-
den of proving pretext.

  AFFIRMED.
