You are correct in identifying the arrest question as illegal. Your questions goes to "what next".
The violation in California is investigated and enforced the Commissioner of Labor, and I think you should consider filing a formal complaint with them. Most agencies ore fairly well modernized. Do a search for that agency on the internet, and you can probably file online.
From a practical standpoint, the job opportunity is gone. The biggest hurdle is not whether the violation occurred but proving, except for you mentioning the violation, the company would have hired you. The company will point to all of the great attributes of the applicant pool, that several candidates were considered, etc.
From this point, you have to decide what you will accept in terms of treatment. In almost any interview, violations occur. The degree of abuse should be your guide. The market is tight.
I hope this helps.
Take Care,
Len
Just talked to the Labor Commissioner and he says he does not handle matters such as this but did acknowledge the question as illegal according to California Labor Code section 432.7
I need to know who to file the complaint with
I ran across two reports from 2001 and 2002 in the Labor Commissioner reported 16 an 17 complaints acted upon for violations of 432.7. So, I'm not sure who you talked to. However, going down the chain, you could also try calling the Department of Industrial Relations, and the Division of Labor Standards Enfrcement. Those two agencies have overlapping authority to some extent.
And, yes, 432.7(c) does provide for a private remedy:
(c) In any case where a person violates this section, or Article 6(commencing with Section 11140) of Chapter 1 of Title 1 of Part 4 ofthe Penal Code, the applicant may bring an action to recover fromthat person actual damages or two hundred dollars ($200), whicheveris greater, plus costs, and reasonable attorney's fees. Anintentional violation of this section shall entitle the applicant totreble actual damages, or five hundred dollars ($500), whichever isgreater, plus costs, and reasonable attorney's fees. An intentionalviolation of this section is a misdemeanor punishable by a fine notto exceed five hundred dollars ($500).
Since it has a provision for attorney fees, you should definitely contact a local employment lawyer. It's not much of a monetary recovery, but it will definitely get the company;s attention.
Good Luck to You,
Lawyer
15 years experience in employment and criminal Law.