Employees Cannot Be Required to Waive Labor Commissioner Hearing

October 13, 2011 by Beeson Tayer & Bodine

The California Supreme Court has ruled employers may not require an employee to waive the right to a Labor Commissioner hearing in favor of binding arbitration. (Sonic- Calabasas v. Moreno, (2011) 51 Cal.4th 659.)

Under California law, employees may file claims regarding Labor Code violations with the Labor Commissioner and request a hearing, referred to as a “Berman hearing,” to enforce rights regarding wages, breaks, and other rights guaranteed by the Labor Code. If an employee is successful in the Berman hearing, the decision is entered as a judgment with the Superior Court. The employer may appeal the decision but only after posting bond for the amount owed; additional provisions ensure the employer does not use the appeal process to evade the judgment.

The Court concluded that the structure of a Berman hearing provide advantages to employees over court hearings or arbitrations and that allowing waiver as a condition of employment would be contrary to public policy.

The Court held, nonetheless, that an employer may insist that an appeal of a Berman hearing decision be submitted to arbitration instead of court, provided the statutory protections included in Berman hearing still apply, including the requirement the post bond, the Labor Commissioner be allowed to represent the employee in the arbitration, and the employee be entitled to attorney fees if she prevails while not being subject to attorney fees if the employer prevails.

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