A
that was a win for the employer involved, but it sets a confusing standard
other employers may want to take steps to avoid. Here’s a look at the case.
Labor Commissioner Rules
for Employee
Ron Parker was a sales
coordinator in
for both Progressive Concrete and Concrete Images International. He was paid on
commission for sales he obtained for each employer, based on an agreed
percentage depending on the amount of the sales contract. Parker filed a claim
with the labor commissioner seeking unpaid wages from both companies. The labor
commissioner issued an order against the employers awarding Parker $133,339 for
unpaid wages, interest, and penalties. Just before the labor commissioner
handed down the order, Parker settled with Concrete Images for $12,000.
Appeal Filed, But No
Bond Posted
A few weeks after the
order was issued, Progressive appealed the commissioner’s order to the San
Diego County Superior Court. The court gave Progressive one week to post an
undertaking—or bond—for $121,339 (the order amount less the $12,000
settlement), as Labor Code Section 98.2 requires when appealing labor
commissioner orders to a trial court.
Progressive, however,
never posted the bond. Parker then asked the court to dismiss the appeal
because the appeal bond wasn’t posted. However, the appeal proceeded, and after
a trial, the court entered judgment for Parker in the amount of $75,263, which
was significantly less than the original labor commissioner award.
Is Bond Mandatory or
Voluntary?
Then Parker appealed,
arguing that Progressive’s failure to post the bond meant that Progressive’s
original appeal had to be dismissed and that Progressive was on the hook for
the full amount of the labor commissioner’s award (minus the settlement
proceeds). Parker pointed out that the bond requirement in Labor Code Section
98.2 wasn’t merely optional, as the provision clearly states that an employer
filing an appeal “shall” post a bond in the amount of the commissioner’s award.
“Shall” Isn’t Obligatory
But now a
has disagreed with Parker’s position.1 The court conceded that the ordinary meaning of
the word “shall” is obligatory. However, the court said the term was used
ambiguously in Section 98.2, particularly because the statute doesn’t say that
an appeal must be dismissed absent a bond.
Based on a review of the
context in which the law was enacted and the reasons for it, the court
concluded that the bond requirement is not mandatory and doesn’t determine
whether an appeal can go forward—rather, said the court, the requirement is
merely “directory.” Thus, there is no consequence for an appealing employer’s failure
to abide by the bond requirement and an appeal can proceed, in a trial court’s
discretion, even when a bond hasn’t been posted.
Use Caution
This decision was a win
for Progressive Concrete and for employers that, in the future, decide not to
post a bond when appealing an adverse labor commissioner ruling. Yet employers
would be wise to not place too much stock in the ruling, as another court could
logically rule that “shall,” as used in Section 98.2, means what it says.
What’s more, even though
the employer here prevailed despite not following a technical requirement, it
is critical to follow all the rules when responding to a wage complaint filed
with the labor commissioner or similar proceedings.
One slip up can often
mean the difference between your side of the story being heard—or not. You can
link to the case online at www.courtinfo.ca.gov/opinions/.
_
1 Progressive Concrete
Inc. v. Parker,
Court of Appeal (Dist. 4) No. D045798, 2006
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