I would respectfully disagree with everything you said, including your assessment of facts and applicable law. I also cannot believe that you are discouraging an individual who is clearly seeking legal help from contacting a California attorney, many of whom (I might add) will charge very little, if anything, to talk to a potential client.
As far as the law ...
"Race" is interpreted broadly to mean classes of persons identifiable because of their ancestry or ethnic characteristics. Saint Francis College v. Al-Khazraji (1987) 481 U.S. 604, 612-613, 107 S.Ct. 2022, 2027-2028; Sandhu v. Lockheed Missiles & Space Co. (1994) 26 Cal.App.4th 846, 858, 31 Cal.Rptr.2d 617, 624. "Race" and "color" protections are not limited to groups that traditionally have been perceived to be minorities. Rather, Title VII prohibits discrimination against Whites as well as Blacks, Hispanics or Asians; and discrimination against males as well as females. Griggs v. Duke Power Co. (1971) 401 U.S. 424, 430-431, 91 S.Ct. 849, 853 ["Discriminatory preference for any group, minority or majority, is precisely and only what Congress has proscribed"]; McDonald v. Santa Fe Trail Transp. Co. (1976) 427 U.S. 273, 280, 96 S.Ct. 2574, 2579 ["Title VII prohibits racial discrimination against the white petitioners in this case upon the same standards as would be applicable were they [black] and (the black employee) white"].
Further, Title VII and the FEHA prohibit employment discrimination on the basis of an individual's "national origin." The FEHA also prohibits discrimination on the basis of "ancestry" (which usually means the same thing). 42 USCA § 2000e-2(a); Ca Govt § 12940(a). EEOC Guidelines: "National origin" is defined by the EEOC to include the birthplace of individuals or their ancestors, as well as display of the physical, cultural, or linguistic characteristics of a particular national group. 29 CFR §§ 1606.1-1606.8
There is a whole line of cases dealing with "English only" policies, which constitute national origin discrimination because it disadvantages employees whose primary language is other than English. See, Garcia v. Spun Steak Co. (9th Cir. 1993) 998 F.2d 1480, 1488. Such a rule may be upheld, however, where (i) justified by "business necessity" and (ii) the employees have adequate notice of the restriction. Ca Govt § 12951(a) (amended 2001); 29 CFR § 1606.7; see also, EEOC v. Synchro-Start Products, Inc. (ND IL 1999) 29 F.Supp.2d 911, 913. "Business necessity" has been found where necessary to safe and efficient operation of the business and no alternative practice will accomplish the business purpose equally as well with less discriminatory impact. Ca Govt § 12951(b)]; see also, 29 CFR § 1606.7 (work involving a high risk of injury or accidents or where necessary to enable English-speaking supervisors to monitor employee communications to ensure efficient work and appropriate behavior).
I would think that "Chinese only" policies may be just as problematic.
As far as the facts ... in employment cases, it is difficult to know how the story will develop. Just because an employer says they "eliminated" a position, only to create another with identical duties and hire a person of another race, does not mean this is true. It would be obtuse to think that employers do not do this type of legal maneuver on advice of lawyers (wishing to protect themselves from rightful discrimination claims ... e.g. because they wanted to hire a cousin from China). The full facts usually do not come out until later in litigation (during the discovery process, where depositions get taken and people have to tell the truth under penalty of perjury). I am not discounting that the employer may have a legitimate reason for hiring a Chinese speaker, or that the terminated employee may not be able to prove the discriminatory purpose/pretext. In such cases, there is probably no legal recourse.
Like I said before, many more facts need to be known about this situation, but it certainly sounds like an interesting one, and I continue to think one that could potentially have some legal merit. I would continue to suggest that the poster get more facts, try to investigate a bit more into what is going on, keep a diligent journal of everything that happens (and happened) and organize all documents (including computer data). Good employment cases tend to be where the employee kept good records. And I continue to think that talking to a California lawyer is a good idea. But that's just my 2 cents' worth.