Fee-shifting on appeal from Berman Hearing is not applicable in dismissal for untimely appeal

I haven’t written about procedure on appeal from a “Berman hearing” — a wage claim heard by the Labor Commissioner — in a long time. Last Friday’s case of Arias v. Kardoulias, case no. B234263 (2d. Dist. July 27, 2012), gives me the opportunity to do so again because of the procedural question it raises, and also provides an opportunity to point out that not all appeals are the same.

You’ve read time and time again on this blog that appeals are very different from trials, but an appeal from a Berman hearing is not. An appeal from a Berman hearing is a trial, heard by the superior court (trial court) do novo — as if the hearing before the labor commissioner had never taken place. Indeed, a claimant can even add claims to the appeal that were never heard by the labor commissioner. This “new trial” posture provides the background for the court’s decision in Arias.

In Arias, the employee won an award before the labor commissioner. No doubt dissatisfied with the amount, she tried to appeal, but her appeal was dismissed due to the untimeliness of her notice of appeal.

At issue in the case was whether her employer was entitled to recover attorney fees and costs after obtaining dismissal of the appeal, pursuant to Labor Code section 98.2, subdivision (c), which provides:

If the party seeking review by filing an appeal to the superior court is unsuccessful in the appeal, the court shall determine the costs and reasonable attorney’s fees incurred by the other parties to the appeal, and assess that amount as a cost upon the party filing the appeal. An employee is successful if the court awards an amount greater than zero.

The Court of Appeal finds that the employer has no right to fees under these circumstances. Although a timely appeal would have nullified the initial award in favor of the employee, here the employee still had an enforceable award of wages because the untimeliness of her appeal meant that her initial award was never nullified. Thus, even though she recovered nothing on the appeal, she still had a recovery that prevented her employer from recovering fees for the appeal.

As you might expect, the court was careful to point out that its decision applies only to jurisdictional dismissals, and leaves open the question of whether fee shifting would apply when a timely appeal is dismissed on another ground.