Post v. Palo/Haklar & Associates

• Decision Date: 03 August 2000
• Docket Number: No. S081910.,S081910.
• Citation: 23 Cal.4th 942,4 P.3d 928,98 Cal.Rptr.2d 671
• Court: California Supreme Court
• Parties: Jonathan Vos POST, Plaintiff and Respondent, v. PALO/HAKLAR & ASSOCIATES et al., Defendants and Appellants.

98 Cal.Rptr.2d 671

23 Cal.4th 942

4 P.3d 928

Jonathan Vos POST, Plaintiff and Respondent, v. PALO/HAKLAR & ASSOCIATES et al., Defendants and Appellants.

No. S081910.

Supreme Court of California.

August 3, 2000.

Law Offices of Robert R. Ronne, Robert R. Ronne, El Segundo; and Dennis W. Rihn, Los Angeles, for Defendants and Appellants.

Lloyd C. Ownbey, Jr., for Plaintiff and Respondent.

Cynthia L. Rice, Santa Rosa, for California Rural Legal Assistance and Jose Flores as Amici Curiae on behalf of Plaintiff and Respondent.

Michael T. Gaitley, San Francisco, and David P. Pogrel, Berkeley, for The Employment Law Center, A Project of the Legal Aid Society of San Francisco as Amicus Curiae on behalf of Plaintiff and Respondent.

Hina B. Shah for Asian Law Caucus as Amicus Curiae on behalf of Plaintiff and Respondent.

Marci Seville for Women's Employment Rights Clinic, Golden Gate University School of Law as Amicus Curiae on behalf of Plaintiff and Respondent.

Margaret Stevenson and Mary Novak for East San Jose Community Law Center as Amicus Curiae on behalf of Plaintiff and Respondent.

Virginia Villegas for La Raza Centro Legal, Inc., as Amicus Curiae on behalf of Plaintiff and Respondent.

MOSK, J.

After conducting an administrative hearing on a wage claim brought by respondent herein, Jonathan Vos Post (hereafter Post), the Labor Commissioner (hereafter commissioner) served the parties with a notice of dismissal, on the ground that "[a]n employer-employee relationship between parties was not conclusively established." Post appealed, and the superior court ruled that he was an employee and awarded him unpaid wages. We granted review to address the question whether such appeal was properly taken. For the reasons stated below, we conclude that the answer is yes.

I

In August 1995, Post filed a complaint before the commissioner, pursuant to Labor Code section 98, to recover unpaid wages and expenses from defendants Palo/Haklar & Associates and individuals Paul Palo and Peter Haklar (hereafter Palo/Haklar) for the period of August 1, 1994, through April 1, 1995. The commissioner set the matter for hearing, and the parties were duly served with notice thereof. After the hearing, which lasted 18 hours over a two-day period, the commissioner took the matter under submission.

In May 1997, the commissioner served the parties with a document entitled "Notice of Dismissal," stating as follows: "The above-entitled matter came before the Labor Commissioner of the State of California, pursuant to the provisions of Section 98 of the California Labor Code, and all parties were duly served with the Notice of Hearing. The complaint is dismissed for the following reasons: [¶] An employer-employee relationship between the parties was not conclusively established. The Labor Commissioner does not assert jurisdiction." Post filed a notice of appeal requesting that the cause be set for a hearing de novo in the superior court, in accordance with Labor Code section 98.2.

In August 1997, a hearing de novo was held in the superior court. Post presented evidence that he was employed by Palo/Haklar at a rate of $2,000 a month, plus travel and office expenses, to work on CD-ROM educational and entertainment projects. Paul Palo and Peter Haklar, appearing in propria persona, countered that Palo/Haklar had no employees and had never hired Post; instead, he had approached them with a proposal for obtaining financing and new clients with the possibility of eventual formation of a new business venture with him as a partner. The superior court found for Post, concluding that he had been employed by Palo/Haklar. It awarded him unpaid wages and travel and office expenses in the amount of $28,581.52. Palo/Haklar moved to strike costs and for relief from judgment and/or stay of enforcement; both motions were denied.

Palo/Haklar appealed on the ground, inter alia, that the commissioner's dismissal of the claim was not appealable pursuant to Labor Code section 98. The Court of Appeal requested additional briefing on the question whether there was a right of appeal to the superior court from the commissioner's dismissal of Post's wage claim. It reversed the judgment of the superior court, concluding that the superior court had no jurisdiction to review the commissioner's jurisdictional determination. Post's remedy was not to appeal the commissioner's decision to the superior court, but to file an original civil lawsuit.

We granted review of the question whether the commissioner's decision was appealable; we now reverse the judgment of the Court of Appeal and remand the matter for further proceedings.

II

As we explained in Cuadra v. Millan (1998) 17 Cal.4th 855, 859, 72 Cal. Rptr.2d 687, 952 P.2d 704, if an employer fails to pay wages in the amount, time, or manner required by contract or statute, the employee may seek administrative relief by filing a wage claim with the commissioner or, in the alternative, may seek judicial relief by filing an ordinary civil action for breach of contract and/or for the wages prescribed by statute.

Labor Code section 98 includes remedial procedures for adjudicating wage claims, enforced by the Division of Labor Standards Enforcement under the direction of the commissioner. It states that the commissioner "shall have the authority to investigate employee complaints." (Lab. Code, § 98, subd. (a).) The commissioner "may provide for a hearing in any action to recover wages, penalties, and other demands for compensation." (Ibid.)

The commissioner may investigate complaints; his or her powers include the right to make inspections, subpoena witnesses and documents, and conduct examinations of witnesses. (See Lab.Code, §§ 74, 92.) Within 30 days of the filing of a complaint, the commissioner must notify parties as to whether he or she will take further action. (Id., § 98, subd. (a).) The statute provides for three alternatives: the commissioner may either accept the matter and conduct an administrative hearing (see id., §§ 98-98.2), prosecute a civil action for the collection of wages and other money payable to employees arising out of an employment relationship (see id., § 98.3), or take no further action on the complaint. (Id., § 98, subd. (a).)

If the commissioner decides to accept the matter and conduct an administrative hearing — commonly known as a "Berman hearing" after the name of its sponsor, then Assemblyman Howard Berman — he or she must hold the hearing within 90 days, although he or she has discretion to "postpone or grant additional time before setting a hearing if the [commissioner] finds that it would lead to an equitable and just resolution of the dispute." (Lab. Code, § 98, subd. (a).)

Labor Code section 98, subdivision (a), expressly declares the legislative intent that hearings be conducted "in an informal setting preserving the right of the parties." The Berman hearing procedure is designed to provide a speedy, informal, and affordable method of resolving wage claims. (Cuadra v. Millan, supra, 17 Cal.4th at p. 858, 72 Cal.Rptr.2d 687, 952 P.2d 704.) As we explained in Cuadra, "the purpose of the Berman hearing procedure is to avoid recourse to costly and time-consuming judicial proceedings in all but the most complex of wage claims." (Id. at p. 869, 72 Cal.Rptr.2d 687, 952 P.2d 704.)

The commissioner is required to determine all matters arising under his or her jurisdiction, including questions concerning the employment status of the claimant. (Lab.Code, § 98, subd. (a); see also Resnik v. Anderson & Miles (1980) 109 Cal. App.3d 569, 572, 167 Cal.Rptr. 340 ["Labor Code sections 96 and 98, subdivision (a), expressly allow the [commissioner] to take assignment of employee claims with the authority to resolve all matters within its jurisdiction."].) Indeed, as a predicate for awarding a claim for unpaid wages, the commissioner must necessarily determine that the claimant was an employee. (1 Wilcox, Cal. Employment Law (2000) § 1.04[1][a], p. 1-9 ["An employment relationship must exist in order for the California wage orders or the provisions of the Labor Code governing wages ... to be applicable." (Fn. omitted)].)

Within 15 days after the Berman hearing is concluded, the commissioner must file a copy of his or her order, decision, or award and serve notice thereof on the parties. (Lab.Code, § 98.1.) The order, decision, or award must include a summary of the hearing and the reasons for the decision, and must advise the parties of their right to appeal. (Ibid.)

Within 10 days after service of notice, the parties may seek review by filing an appeal to the municipal or superior court "in accordance with the appropriate rules of jurisdiction, where the appeal shall be heard de novo." (Labor Code, § 98.2, subd. (a).) The timely filing of a notice of appeal forestalls the commissioner's decision, terminates his or her jurisdiction, and vests jurisdiction to conduct a hearing de novo in the appropriate court. (Pressler v. Donald L. Bren, Co. (1982) 32 Cal.3d 831, 835, 187 Cal.Rptr. 449, 654 P.2d 219.) If no party takes an appeal, the commissioner's decision will be deemed a judgment, final immediately and enforceable as a judgment in a civil action. (Lab.Code, § 98.2, subd. (a); see generally 1 Wilcox, Cal. Employment Law, supra, §§ 5.10 to 5.19, pp. 5-18 to 5-52.) Although denoted an "appeal," unlike a conventional appeal in a civil action, hearing under the Labor Code is de novo. (Lab.Code, § 98.2, subd. (a).) "`A hearing de novo [under Labor Code section 98.2] literally means a new hearing,' that is, a new trial." (Pressler v. Donald L. Bren Co., supra, 32 Cal.3d at p. 835, 187 Cal.Rptr. 449, 654 P.2d 219.) The decision of the commissioner is "entitled to no weight whatsoever, and the proceedings are truly `a trial anew in the fullest sense.'" (Sales Dimensions v. Superior Court (1979) 90 Cal.App.3d 757, 763, 153 Cal.Rptr. 690.) The decision of the trial court, after de novo hearing, is...