Berman Hearings are administrative hearings conducted by the California Labor Commissioner to determine the legitimacy and extent of an employee wage claim against an employer. The Berman Hearing was named after Howard Berman, the member of the California State Assembly who instituted it. It is designed to provide a speedy, informal, and affordable method for employees and employers to resolve a wage claim.
The Berman Hearing is just one component of an extensive Division of Labor Standards and Enforcement (“DLSE”) wage claim dispute resolution process. First, the employee must elect to pursue a wage claim through the DLSE rather than pursuing a lawsuit. “An employee pursuing a wage-related claim „ “has two principal options. The employee may seek judicial relief by filing an ordinary civil action against the employer for breach of contract and/or for the wages prescribed by statute. Or the employee may seek administrative relief by filing a wage claim with the [labor commissioner] pursuant to a special statutory scheme codified in sections 98 to 98.8…” (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1115.) The whole purpose of this wage claim procedure is “to avoid recourse to costly and time-consuming judicial proceedings in all but the most complex of wage claims.‟ ” (Smith v. Rae-Venter Law Group (2002), s29 Cal.4th 345, 355-357, superseded by 2003 amend. to Labor Code § 98.2(c) as stated in Sonic-Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th 659, 673-674, fn. 2, judgment vacated on other grounds.)
Once the complaint is filed, the DLSE must then notify both parties as to whether the agency will take further action within thirty (30) days. At this point, the Labor Code gives the DLSE three alternatives:
- Accept the matter as an adjudicative body;
- Prosecute a civil action for the collection of wages and other money payable to employees arising out of an employment relationship; or,
- Take no action on the complaint.
Unless the wage claim provides evidence of serious and extensive violations of the Labor Code or is wholly inadequate in describing the nature of the claim, DLSE gives the employer written notice of a wage claim filed by the employee (claimant) with an opportunity to respond in writing. At that juncture, the employer generally can terminate the action by paying the amount set forth in the claim or choose to contest the claim.
If the employer disputes the claim or does not respond, the DLSE generally will schedule and host a conciliation conference for one of its Deputy Labor Commissioners at one of the local DLSE offices. This is like a pre-hearing settlement conference in administrative law, where both parties are given an opportunity to assert their positions and have a neutral arbiter provide an assessment of the validity of the claim or strength of the defense.
If the employer does not appear, generally the matter will be set for a formal hearing if the employee’s claim has arguable merit. If the employee does not appear at the conference, or if the claim appears to be frivolous, the claim will be dismissed without prejudice. If the parties appear and the claim appears to have some potential merit, the Deputy Labor Commissioner then attempts to broker a settlement with a release document.
If the conciliation conference is unsuccessful, the case will then be set for the Berman hearing, pursuant to Labor Code section 98(a). Both parties are given the opportunity to present their positions through this mini-trial. They can present testimony, witnesses, and documents. They are not entitled to pre-hearing discovery, depositions, or witness lists and the formal rules of evidence do not apply. Further formalities are often dependent upon the hearing officer, which can be either an administrative law judge or another Deputy Labor Commissioner. oreover, parties do not need to be represented by a lawyer, but lawyers are regularly present to assist in presenting the evidence. Testimony is under the penalty of perjury and the deputy labor commissioner records the hearing.
The hearing officer is supposed to issue an order, decision, or award setting forth the rational for his or her decision within 15 days of the Berman hearing.
Right of Appeal
Within 10 days after service of notice, either of the parties may seek review by filing an appeal to Superior Court. The appeal will be heard de novo, meaning, a new trial, as if the Berman Hearing never took place. In fact, the claimant can even add new claims. There is also a fee shifting provision, where the non-appealing party can recover costs and attorney fees in the event they prevail at court.
Assuming no appeal, the Berman Hearing decision or award is binding on both parties, and is an enforceable judgment in Superior Court.