As a young lawyer, I would attend Labor Commissioner proceedings that involved a few hundred or a few thousand dollars. In fact, some offices would not handle a case if the employee sought too much money. The Commissioner felt that the employee could find a lawyer to take his/her case.
Times have changed! Earlier this year one of my clients was named in a Labor Commissioner complaint. The former employee claimed that although he received a substantial salary and served as a manager in the corporation, he spent two-thirds of his time performing manual labor. The employee did not provide any documentary evidence. He did not provide corroborating testimony. There was absolutely nothing to support the employee’s position other than his own testimony.
My two witnesses testified that the majority of the plaintiff’s time was spent in managerial and administrative duties. My witnesses denied that the employee spent any significant time doing common laborer duties. Their testimony was spot-on and I felt as though we would prevail at the time.
Nevertheless, the hearing officer concluded that the former employee was not exempt, and therefore, was entitled to overtime, liquidated damages, missed meal and rest period penalties and waiting time penalties. The award exceeded $50,000.
We appealed the case to Superior Court. This time the employee hired a lawyer to represent him. He again testified that manual labor dominated his workdays. My two witnesses testified again, and presented the same information about the true nature of the manager’s job duties. The court concluded that the employee was exempt and as a result was entitled to nothing. (I loved hearing the judge say, “Plaintiff takes nothing.”)
I am nevertheless concerned in spite of the victory. I noticed that in the last four days the Labor Commissioner’s office in Fresno was involved in multiple cases in Superior Court with respect to hearing officer awards to employees. The amounts of the awards were for $32,000, $40,000, $40,000 and $58,000.
I don’t know whether this rash of adverse awards this is just a coincidence, or whether the Labor Commissioner is taking a new approach to these cases. What I do know, however, is that an employer must take Labor Commissioner cases seriously. These awards are substantial. And even if an employer appeals, if the employee prevails in Superior Court on any part of the claim, the employee’s attorney is entitled to fees.
I advise employers to seek legal counsel quickly to assist in settlement efforts (there is a settlement conference before each hearing) and to defend the company at the hearing with the Labor Commissioner. The consequences are too substantial!