As we wrote in our previous post, here, the courts are not fans of appeals of Labor Commissioner decisions. So, when the legislature makes it harder to appeal, the courts are pleased to enforce these laws strictly. The latest example is Burkes v. Robertson, opinion here.
When the Labor Commissioner / DLSE issues a decision (called an Order, Decision and Award or ODA), in favor of an employee, the employer has the right to appeal within 10 days of the date (plus five days if the order is sent via mail). The “appeal” means that a superior court judge will re-try the claim “de novo” or as a full “do over.” As the Court points out, though, that appeal has to be timely or it’s forfeited.
The time for filing a notice of appeal from the Commissioner’s decision is “mandatory and jurisdictional,” and a late filing may not be excused on the grounds of mistake, inadvertence, or excusable neglect.
During that 15 day maximum period to appeal, however, the employer also must post a bond (from a surety company) or cash in the amount of the entire ODA. To obtain the bond, the employer has to find a company to do so, and must pay the premium (possibly 10% or more of the ODA). Even winning the appeal at the superior court therefore results in the loss of the premium.
As of a 2010 change in the law, the timely filing of the bond aka “undertaking” is mandatory and jurisdictional. The court has no discretion to excuse late filing, just as it has no discretion to excuse a late appeal.
In the Robertson case, the employer was a small outfit, and the ODA was for more than $80,000. The employer – Robertson – could not afford to file the undertaking. But rather than seek a waiver, Robertson simply did not file. Once the superior court issued an order to show cause why the case should not be dismissed for Robertson’s failure to post the bond, Robertson explained to the superior court it was indigent and asked for a waiver. The superior court denied the waiver and dismissed the appeal. The employer then appealed to the Court of Appeal.
The Court of Appeal ruled that an indigent employer has the right to seek a waiver of the bond requirement. However, the employer must make a motion to the superior court for the waiver on or before the last day to file the undertaking.
nonindigent employers must meet the same deadline to actually post an undertaking, and an indigent employer is only required to seek a waiver within the time provided.
The Court also addressed what it takes to prevail on a motion for a waiver:
“[T]he applicant should, at a minimum, submit (1) the certificate of his counsel, declaring that he is familiar with the facts underlying the action or appeal, that in his opinion his client’s contentions have merit, and that the action or appeal is brought in good faith and not for purposes of delay or harassment, and (2) the declaration of the applicant, executed under penalty of perjury, stating that he is unable to pay the requisite filing fee without depriving himself or his dependents of the necessaries of life, and briefly setting forth the facts which disclose his indigence.” (Ferguson v. Keays, supra, 4 Cal.3d at p. 658, fns. omitted.)
So, to obtain a waiver from the bond requirement, the employer not only has to show actual indigence, but also must establish that the appeal has merit. The court still has discretion to deny the waiver though. Although many Labor Commissioner awards are for waiting time penalties, double damages, meal and rest period premiums, which simply are not part of the employee’s total compensation, the Court of Appeal here says the superior court should factor in:
The nature of wage claims requires the trial court to also consider section 98.2(b)’s “overriding goal” of ensuring expeditious collection of wages which are due but unpaid (Pressler v. Donald L. Bren Co., supra, 32 Cal.3d at p. 837), as well as the legislative policies of discouraging frivolous appeals for purposes of delay and minimizing the time in which an employer might hide assets. (Palagin, supra, 222 Cal.App.4th at p. 137.) In considering potential harm to the employee beneficiary, the court must keep in mind that “ ‘[d]elay of payment or loss of wages results in deprivation of the necessities of life, suffering inability to meet just obligations to others, and in many cases may make the wage-earner a charge upon the public.’ ”
As we discussed in my previous post, the courts want to discourage Labor Commissioner appeals. And they’re not shy about saying so. I’m not just being cynical, again. The Court here said:
“even if the jurisdictional undertaking requirement did affect the availability of the trial de novo process for employers, by no means does it deprive the employer of a full and fair opportunity to be heard on the employee’s wage claim. The primary process for deciding wage claims is not the trial de novo reflected in section 98.2, but the administrative procedure reflected in section 98; requiring a timely [undertaking] for a trial de novo does nothing to minimize the employer’s ability to make its case during the administrative process. A jurisdictional undertaking requirement therefore poses no barrier to a fair adjudication of the wage claim, but merely conditions the availability of a further trial de novo process that the Legislature does not have to provide at all.” (Palagin, supra, 222 Cal.App.4th at p. 138.)
So, to sum up, employers who want to fight an adverse Labor Commissioner ruling have the right to an appeal de novo in Superior Court. Employers should consider whether it’s worth doing so, because if the employee wins even a reduced award, the employee can recover hugely disproportionate attorney’s fees. Posting a bond costs money, as does attorney representation at the de novo trial. Finally, employers must carefully adhere to the rules regarding how to appeal, appeal timely, and post the required bond or seek a waiver.