California car wash company appeals decision awarding damages to ex-employee

Under section 98.2(b) of California’s Labor Code, if an employer wants to appeal a Labor Commissioner’s decision to the superior court, which would hear the appeal from the beginning, the employer should post a bond.

The case of Adanna Car Wash Corporation v. Gomez arose when a former employee filed a wage claim against Adanna Car Wash Corporation.

The Labor Commissioner ordered Adanna to pay its ex-worker overtime earnings, meal period premium pay, rest period premium pay, liquidated damages, interest, and waiting time penalties in the amount of $23,915.59. Adanna appealed.

The ex-employee filed a motion to dismiss the appeal because Adanna attached a copy of its car wash bond under section 2055 of the Labor Code instead of attaching the appeal bond required under section 98.2(b). He argued that the appeal bond was a jurisdictional requirement and that, without it, the trial court lacked jurisdiction to hear Adanna’s appeal.

The trial court granted the ex-worker’s motion and dismissed the appeal. Adanna took the case to the appellate court. The California Court of Appeal for the Second District affirmed the trial court’s decision.

Adanna lacks required section 98.2 bond

The Court of Appeal found that the trial court lacked jurisdiction over Adanna’s appeal. Thus, the trial court properly granted the ex-employee’s motion to dismiss the appeal, the appellate court said.

The appellate court distinguished between two types of bonds. According to the court, a section 98.2 appeal bond:

• was issued by a licensed surety
• was a streamlined method for enforcing an award of the Labor Commissioner in the employee’s favor
• would be immediately forfeited to the employee if the employer’s appeal failed or if the employer withdrew the appeal or failed to timely pay the award

On the other hand, a $150,000 car wash bond under section 2055:

• had nothing to do with litigation or with appellate proceedings
• was a prerequisite to operating a car wash in California
• was a condition that a car wash employer should satisfy to obtain a license or permit
• was in favor of and payable to the people of the State of California

In this case, the continuation certificate provided by Adanna was not the required section 98.2 appeal bond, the Court of Appeal said. The certificate expressly stated that the undertaking was a car wash bond that benefited the Department of Industrial Relations, the appellate court added.

The appellate court noted that Adanna admitted that the bond was issued under section 2055. Adanna was making a “sleight-of-hand” attempt to substitute the car wash bond for an appeal bond, the appellate court said.

Given that an employee would only be an indirect beneficiary of a section 2055 bond, allowing an employer to rely on a car wash bond instead of an appeal bond would disadvantage the employee, the Court of Appeal concluded.

The legislative history also supported that posting an appeal bond was essential for protecting employees in Labor Commissioner appeals filed by employers, the appellate court said.