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August 7, 2014

The California Labor Commissioner has long been regarded as an employee-friendly forum, and in recent years the rules have been tightened to make it more difficult for an employer to appeal a loss to the reviewing court — the California Superior Court.

10 DAYS TO APPEAL: If any party wishes to appeal, the appeal must be filed to the Superior Court within 10 days following service of notice of an order, decision, or award of the Labor Commissioner, where the appeal will be a new trial. (Cal. Lab. Code, § 98.2, subd. (a).)

EMPLOYER UNDERTAKING REQUIRED: An employer appealing an order, decision, or award must first post an undertaking with the Superior Court — an appeal bond issued by a licensed surety or a cash undertaking in the full amount of the order. (Cal. Lab. Code, § 98.2, subd. (b).) The only exception is a finding that the employer is indigent. (Cal. Code Civ. Proc., § 995.240.)

AN EMPLOYER’S FAILURE TO FIRST POST THE UNDERTAKING WILL RESULT IN DISMISSAL OF THE APPEAL: The failure to first post an undertaking will result in dismissal of the appeal, unless the court is persuaded that the employer is indigent. (Palagin v. Paniagua Construction, Inc. (2013) 222 Cal.App.4th 124, mod. and rehg. den. (2014) 222 Cal.App.4th 944.) The Palagin decision changed the law. Under former law, failure to post an undertaking was not fatal to an employer’s appeal. Courts generally would require an undertaking to be posted by a date certain and only dismiss the appeal for noncompliance. (Progressive Concrete, Inc. v. Parker (2006) 136 Cal.App.4th 540.)

For Employers: Take employee claims filed with Labor Commissioner seriously. There may be severe financial consequences if you don’t. If there is a substantial wage claim (including wages, liquidated damages, and statutory penalties payable to the employee or the state of California), I recommend retaining counsel as soon as you receive notice of the claim.

NOTE: This alert is designed to provide an overview of the required undertaking for an employer appeal from a Labor Commissioner order, decision or award. It does not cover all aspects of such appeals or offer solutions to individual problems. Employers and employees with specific questions should consult legal counsel.

Kenneth J. Sargoy, Esq., provides assistance and representation in connection with employment matters. Questions involving Labor Commissioner appeals as well as other employment issues may be directed to me, telephone 310-208-1003 or , or email me. THIS EMPLOYMENT ALERT IS CLASSIFIED AS A NEWSLETTER AND CONSTITUTES ADVERTISING MATERIAL UNDER APPLICABLE RULES OF PROFESSIONAL CONDUCT.