Legal Question in Employment Law in California

I was fired from my job two weeks before my two year review. The reason I was given was that I was not happy there. Two weeks before I was fired, I spoke with my boss regarding his policy of deducting pay from my check to cover honest mistakes that were made. For example, I made a shipping error which cost the company over $100. This $100 was taken out of my paycheck. A couple of months before this talk, I received a memo stating that $5 would be deducted from my pay check everytime the correct shipping currier was not selected when entering an order. I challenged my boss on this and he raised his voice at me and said that if I did not like the fact that I worked for a company that held its employees responsible for their mistakes, to go work somewhere else. My boss did not think this was illegal, when it is. I brought a copy of the CA labor law and proved it to him. I told him that I would appreciate the return of my pay. I also brought up that if I work a 6 hour shift, that I am required to take a half hour rest period. I was unable to leave for lunch. I explained to him that I could quit and file for unemployment and win by showing just cause. This was a very amicable conversation and neither of us got angry. We also discussed the future of the company and the customer service department since the one other rep had quit two days before. The following Monday, he began interviewing to fill the customer service position that just became open. He was offering $10-11 an hour. I was being paid $13.20 an hour with a raise coming up in two weeks. When I was fired, I was offered a $1,000 check and a recommendation letter if I had just signed the resignation letter that he had typed up. I refused to sign it because I knew why he was firing me. I filed for unemployment. The reason I stated for being fired was that I did not agree with my boss's policy of making employees pay for honest mistakes. I won. He appealed and is saying I was fired for always being late. He changed my hours from noon-5pm to 10am-4pm in March 2008. He knew I would not be able to come into work before 11am. Two weeks later I was given the option to come into work late and have to work for free the amount of time i came in after 10am. For example, if I came in at 11am, I would work one hour without pay. The hearing is in front a judge this Wednesday. I was given less than one week notice. What is my best course of action?

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