Labor Commissioner Appeal

Appealing Labor Commissioner Decisions – A Cautionary Tale

Gbolahan Sarumi probably thought it was a good idea to appeal the Labor Commissioner decision. He obviously believed the employee was not entitled to the money awarded, or at least that Gbolahan was not responsible for the payment. He filed his appeal to Superior Court, and several weeks later filed the required bond. He probably didn’t know that when the appeal was later dismissed–even if it is dismissed through settlement–he would forfeit his right to recover the bond.

In Chavez v. Sarumi, the court had to decide whether a late-filed bond could be returned to the person who posted the bond, or if it had to be turned over to the employee. Employers appealing an adverse Labor Commissioner decision must:

first post an undertaking with the reviewing court in the amount of the order, decision, or award. The undertaking shall consist of an appeal bond issued by a licensed surety or a cash deposit, with the court in the amount of the order, decision, or award.

Labor Code §98.2(b)

Some court clerks refuse to accept the appeal without the bond or cash deposit. Others allow the employer to file the appeal and leave it up to the parties and the court to fight it out. In Chavez v. Sarumi, the court made it clear that:

“…when the appeal is dismissed without a settlement, and the employer fails to pay the amount awarded by the Labor Commissioner within 10 days of dismissal, section 98.2, subdivision (b) expressly provides for forfeiture of the undertaking to the employee; it does not provide for the release of funds to individuals who posted the undertaking on behalf of the employer.”

Citing Tabarrejo v. Superior Court, (2014) 232 Cal.App.4th 849

The exact facts of this case are a bit murky. It seems there was also a corporate defendant at the Labor Commissioner, but since the corporation was suspended it could not participate in the appeal. I’m assuming Gbolahan was a managing agent or director of the corporation . It’s possible the hearing officer allowed the employee to “pierce the corporate veil,” but Gbolahan more likely was held liable under Labor Code section 558.1.

It also seems there may have been a settlement of some sort because the decision talks about a “stipulation” between the parties regarding attorneys’ fees. I suspect the employer agreed to pay the full amount of the award, and possibly some amount of attorneys’ fees, once the employer realized he would be responsible for the employee’s reasonable attorneys’ fees if the employee recovered any amount.

I cannot tell whether the employer was represented when he filed the appeal or when he resolved the case. If he was represented when the appeal was filed, then hopefully the attorney advised Gbolahan about the risks involved in appealing Labor Commissioner decisions.

I don’t know why the “stipulation” between the parties did not address the disposition of the bond. This could have been a critical error. When resolving claims, be sure to resolve all claims, and consider what and how the payment will be made.

Whether you are the employee or the employer, deciding whether to appeal a Labor Commissioner claim requires thinking through all the possible consequences of the appeal. Even if you are confident in your position, a court will not necessarily rule in your favor. Appealing the Labor Commissioner decision can have adverse consequences for the employer and the employee.

If you are considering an appeal from the Labor Commissioner, or if you need assistance with a Labor Commissioner claim, contact the Nuddleman Law Firm, P.C. We are happy to help you defend or prosecute your claim.

Original Article by Robert Nuddleman of the Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Using this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. Using the Internet or this blog to communicate with the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted on this blog.

The Nuddleman Law Firm, P.C. represents employers and employees in a wide range of employment law matters. Much of his practice focuses on wage and hour issues, such as unpaid overtime, meal and rest break violations, designing or enforcing commission plans, and other wage-related claims. He also advises employers on how to avoid harassment and wrongful termination claims, and represents employees who have been victims of unlawful discrimination, retaliation or harassment. The Nuddleman Law Firm, P.C. helps employers develop good employment policies, and helps employers and employees with disability accommodation issues.