California Procedure,  Labor & Employment

De Novo Appeal from California Labor Commissioner “Berman Hearing” Can Include New Claims

An employee may bring a wage claim in superior court or before the Labor Commissioner. Where he does the latter, a “Berman hearing” is held and “the parties may seek review [of the labor commission order] by filing an appeal to the superior court, where the appeal shall be heard de novo.” Labor Code § 98.2(a).

In Murphy v. Kenneth Cole Productions, Inc., __ Cal.4th ___, 56 Cal.Rptr.3d 880, 155 P.3d 284 (April 16, 2007), the California Supreme Court unanimously holds that in a section 98.2 de novo appeal from a Berman order, the superior court may also hear claims not raised by the employee in the Berman proceedings. Taking into consideration (1) the nature of de novo review, (2) a trial court’s inherent discretion in adjudicating claims at trial, (3) the legislative policy of encouraging employees to use the Berman process, and (4) the legislature’s intent to discourage frivolous or unmeritorious appeals from orders after a Berman hearing, the court determines that it is within the discretion of the trial court to determine the scope of claims, including new claims, to be heard in the de novo trial.

Regarding the fourth factor, the court describes the risks of any appeal, not just frivolous appeals:

A party who appeals a Labor Commissioner award does so at its own peril. If the employer appeals, and the employee obtains representation, it is likely that the employee’s attorneys will uncover additional, related facts and claims not thoroughly examined at the administrative level when the claimant was unrepresented. Just as an employer is not bound by the defenses it raised in the Berman process, but rather is entitled to abandon, change, or add defenses not brought before the Labor Commissioner, [citation] , so may an employee raise additional wage-related claims in the de novo trial.

The employee always has the option of filing a new claim with the Labor Commissioner or in a superior court action, so the threat of additional claims is always there in any event. The court’s decision, however, makes it easier for the employee to consolidate the additional claims into a single proceeding with the existing claim, and it also suggests additional claims are more likely to lapse in the absence of an appeal.