Determining when employers must forfeit bonds in a wage claim

Did an employer’s failure to file a valid notice of appeal from the California Labor Commissioner’s orders bar the trial court from awarding the bonds they posted?

Background

From 2002 to 2016, Manuel Chavez worked as an on-site property manager at a hotel. In 2015, he filed a wage claim with the California Labor Commissioner’s office alleging that, for 14 years, the hotel’s owners paid him less than minimum wage and engaged in other forms of wage theft.

The owners responded by filing a lawsuit in the Los Angeles County Superior Court seeking $10 million from Chavez, alleging he was an independent contractor who’d stolen hotel rental moneys. They dropped the suit the day before trial.

In 2017, the labor commissioner’s office issued two ODAs (order decision or award) requiring the owners to pay Chavez a total of over $235,000 in unpaid wages, penalties, and interest. They were told of their right to challenge the ODAs under Labor Code section 98.2, which states the procedures by which a party to a proceeding before the labor commissioner resulting in an ODA may seek review. In essence, they must file an appeal to the superior court.

The section also contains specific requirements for properly noticing such an appeal and requires the party seeking review to post a bond or cash deposit with the superior court in the amount owed under the ODA. These two requirements are prerequisites to the superior court having jurisdiction to hear such an appeal.

Owners didn’t appeal but instead filed another lawsuit