It is not legal to discriminate because of a previous Workers' Compensation injury. Labor Code Section 132(a) forbids any company from discriminating based on a workers comp injury/settlement. The remedy is a lawsuit filed at the workers compensation appeals board. There is also a part of the law that makes it a misdemeanor to discriminate against an injured worker but I have never seen it enforced.
The problem with the law is you have to prove that "but for the injury" they would have hired you. If the Employer has any other reason you were not hired it is very difficult to prove the discrimination. Although the law is on your side it is very difficult to prove unless you have it in writing from the employer that they would hire you if you had never been hurt.
This is just my personal experience, so I would recommend following up with a lawyer closer to your location to see if these types of lawsuits are easier in your local jurisdiction.
Do you have some proof? Of course you are most likely correct, but because the law does not require employers to cite any reason when they decline to make an offer of employment, it can be very difficult to prove the reason for being turned down for employment. If you have anything other than feelings to go on, by all means consult with a good work comp attorney. Refusal to hire on this basis is both unlawful and reprehensible.
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It is generally illegal for an employer to ask about your medical history prior to making a job offer to you. Then the offer can be conditional on your passing a pre-employment physical. The ADA and the FEHA prohibit discrimination on the basis of disability or perception of disability. If you have any evidence that a potential employer violated these laws, you might want to consult with an employment law attorney. You can find good ones on this site and at www.CELA.com, the organization for attorneys who handle employment law cases in California.
I believe the ADA prohibits an employer from asking about workers' comp history in the hiring process. So what they are doing may be violating federal law (but you still have to prove it!). Perhaps you should talk to a lawyer who handles employment law cases.
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