Former hotel employee claims 14 years of wage theft

A hotel employee filed with the California Labor Commissioner’s office a 2015 wage claim alleging that those who owned and/or operated the hotel paid him below minimum wage and engaged in other forms of wage theft for 14 years.

Balubhai Patel, DTWO & E, Inc., and Stuart Union, LLC – the appellants in the case of Patel et al. v. Chavez et al. – owned and/or operated the hotel. From 2002 to 2016, the respondent worked as an on-site property manager of the hotel.

In response to the employee’s wage claim, the appellants filed with the Los Angeles County Superior Court a lawsuit seeking $10 million from him. They claimed that the respondent was an independent contractor who stole hotel rental money. But the appellants dismissed the suit the day before the trial.

In 2017, the labor commissioner’s office issued two orders requiring the appellants to pay the respondent a total of over $235,000 in unpaid wages, penalties, and interest.

The appellants did not appeal from the labor commissioner’s orders under section 98.2 of California’s Labor Code but instead filed another complaint alleging that the respondent gave false testimony at the hearing before the labor commissioner. This lawsuit demanded a hearing from the beginning.

The respondent filed two motions under the law against strategic lawsuits against public participation. These motions wanted to entirely strike the appellants’ complaint and amended complaint. The trial court granted the two anti-SLAPP motions.

The labor commissioner filed its two orders in the Los Angeles County Superior Court. The superior court’s clerk thus issued judgments in the respondent’s favor. The appellants appealed from the clerk’s judgments. The appellate court dismissed this appeal.

The respondent filed a motion asking the court to release to him certain bonds that the appellants posted in an unsuccessful attempt to challenge the labor commissioner’s orders.

The superior court granted this motion upon finding that the bonds were forfeited to the respondent after the appellants failed to pay the clerk’s judgments in his favor. The superior court awarded the respondent the following amounts:

• $202,294.10, for which Patel and DTWO were liable as bond principals and for which the Philadelphia Indemnity Insurance Company (PIIC) was liable as surety
• $38,585.88, for which Stuart Union was liable as bond principal and for which PIIC was liable as surety

The appellants filed an appeal. They argued that the superior court lacked the jurisdiction to order the release of the bonds or to issue judgment against them as bond principals.

The California Court of Appeal for the Second District disagreed with the appellants’ argument and upheld the superior court’s decision.

First, the Court of Appeal ruled that the trial court did not lack jurisdiction based on the fact that related appeals were pending in the appellate court. The bonds that the appellants posted were for the exact amount that they owed under the labor commissioner’s orders. Therefore, these bonds were insufficient to stay the actions based on the pendency of an appeal with the appellate court.

Second, the Court of Appeal found that section 98.2’s language required forfeiture of the bonds to the respondent to satisfy the clerk’s judgments and the labor commissioner’s orders upon which they were based. This was because the appellants failed to pay the clerk’s judgments based on the labor commissioner’s orders for more than 10 days by the time that the court issued the challenged order and judgment, the appellate court explained.