Calblog

Kafkaesque

We represent a startup business that we claim had no employees. One stockholder is now claiming they were an employee. That's all you really need to know to appreciate this story.

The employee filed a claim with the Labor Commissioner claiming back wages. The Labor Commissioner determined that they were not an employee and no back wages were due.

Then there was a claim for unemployment benefits. We received a call from the tax department of the EDD and at their request sent the Labor Commissioner decision. We heard nothing more for a while.

Here's what happened while we were not hearing:

The tax dept rule the claimant was not an employee and not entitled to unemployment benefits. The claimant appealed. We received no notice and the Administrative Judge, without hearing from those of us with no knowledge of what was going on, ruled claimant was an employee. Not only that, even though claimant was not paid any wages, they were entitled to unemployment insurance because they were entitled to back wages.

Now, no matter which side is right, this is, shall we say, odd. We have two departments of the state of California. If you're the employer, you can't believe you're in trouble for not paying unemployment taxes on back wages that another department says are not due. If you're the employee, you can't believe that you can't collect the back wages that another department says are due.

But it gets better.

We learn of all this when we receive notice of a second hearing to determine whether the employer is to pay for the unemployment benefits that are now due. At the second hearing, we inform the administrative judge of the history. Administrative judge continues the hearing to another day and allows us to make a motion to reopen the first decision and get a copy of the file.

We read the file before getting copies and find that the first decision was made because claimant testified personally and the employers position was only supported by hearsay. Ok, now we learn that we didn't get notice to be there and then lost because we weren't there. That should be easy enough to fix.

Two days later, we get a call from someone's assistant who says we can't reopen the first file and we can't get copies because we weren't a party to that first case. The ruling was adverse to us but we weren't a party? And the ruling was adverse because we did not testify because we had no notice because we weren't a party? Am I the only one who finds this odd? Due process, anyone?

So we sit in the middle of the mess and try to figure out the way through without spending thousands of dollars. That's why it's the "practice" of law.

Posted by Justene Adamec at February 27, 2003 12:26 PM