Labor Board Judgments

August 12, 2023

What if you have a state labor board judgment, can that judgment be recovered? The short answer is it depends on the current status of your previous employer.

One of many judgment articles: I am a judgment broker, not a lawyer, and this article is my opinion based on my experience, please consult with a lawyer if you need legal advice.

There are three potential problems with labor board judgments. The first potential problem (especially these days) is the company that owed you money may now be out of business. If it is out of business and the judgment is small, you are probably out of luck.

The second potential problem is the labor board must register their award with a state court to get a judgment. (In California, this is the DLSE.) Usually, they do this automatically. However, sometimes you have to remind them.

The third potential problem (especially if the judgment amount is small) is that labor boards rarely make the owner(s) of the business liable on their awards. That means it is rarely possible to collect from the company owners personally.

Occasionally, a labor board will help with “alter-ego” situations and add company owners to the award and judgment, however you will probably lose any accrued interest, and must ask the state court for a new judgment with a new case number. Also, the board will ask you to assign your previous judgment to them.

If a labor board award is filed with a court, it will be filed at a civil court, never at a small claims court, no matter how small the amount is.

In California, Labor Board Code 1194.3 states that an ex-employee creditor can recover attorney’s fees and the costs incurred to enforce a judgment for unpaid wages, however only against the named company. If the company is now out of business, usually it is game over.

How do you know if your labor board award has been entered in a state court? Look up your name or their name on the court’s records, perhaps using the court’s website. If your name is not in the court’s register of actions, it probably is not lodged at that court. The court can confirm this, and so can your labor board.

How do you know if the company that owes you money is still in business? Besides doing a drive-by, you can check your secretary of state’s website and see if they are still active.

Labor boards make their decisions as arbitration awards, and then the awards are usually sent to a civil court, and given a court case number. After it becomes a final judgment, then it can be enforced.

The state courts used to take about three weeks to two months to process labor board judgments, however with recent court cutbacks, it may now take longer.

For judgment enforcers; the labor boards will not talk to anyone except the ex-employee creditor, so if there is a question whether an award was entered in a state court, have the original ex-employee creditor ask them.

Also for judgment enforcers, one thing to watch out for are assignments to the state franchise tax board for collection. In this case, make sure that the original ex-employee gets a re-assignment back to them, before you take an assignment of their judgment. Otherwise, the judgment creditor lacks the authority to assign you their judgment.

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