The opinion
Filed 3/2/26
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO
MICHAEL EHRENKRANZ,
Plaintiff and Appellant,
A171527
v.
SAN FRANCISCO ZEN CENTER et (City & County of San Francisco
al., Super. Ct. No. CGC-22-602048)
Defendants and Respondents.
Plaintiff Michael Ehrenkranz filed claims with the Labor
Commissioner against San Francisco Zen Center (Center), Linda Galijan, and
Mike Smith (when referred to collectively, defendants) for wage-and-hour
violations. The Labor Commissioner ruled in favor of Ehrenkranz, and
defendants appealed the decision, resulting in a de novo action in the trial
court.
Ehrenkranz moved to dismiss the appeals of Galijan and Smith on the
ground they failed to post an undertaking as required by Labor Code section
98.2, subdivision (b). 1 The trial court denied that motion. Defendants then
moved for summary judgment, arguing that Ehrenkranz’s claims were barred
by the ministerial exception of the First Amendment, an affirmative defense.
The court granted that motion and entered judgment for defendants.
1 Further undesignated statutory references are to the Labor Code.
1
Ehrenkranz appeals that judgment, asserting two main arguments ,
that the trial court erred (1) in granting summary judgment because there is
no evidence that his wage claims raised an ecclesiastical concern and thus
that his claims violated the Religion Clauses of the First Amendment, and (2)
in denying his motion to dismiss the appeals of Galijan and Smith because its
finding that they satisfied the undertaking requirement in section 98.2 was
based on a misinterpretation of the statute.
Months ago, our colleagues in Division Five filed an opinion involving
facts strikingly similar to those present here, in an appeal arising in the
same setting as here, which raised the identical issues presented here, and
involved the same arguments Ehrenkranz makes here. That case is Lorenzo
v. San Francisco Zen Center et al. (Nov. 21, 2025, A171659) 116 Cal.App.5th
258, review granted February 11, 2026, S294565 (Lorenzo), and in it Division
Five ruled for Lorenzo all the way. Thereafter, our Supreme Court granted
review of the ministerial exception issue.2 Pending guidance from the
Supreme Court, we agree with the reasoning of Lorenzo as to the Religion
Clauses analysis and adopt the same conclusions here, and thus hold that the
trial court erred in finding that the ministerial exception barred
Ehrenkranz’s wage-and-hour claims because defendants presented no
evidence that his claims raised an ecclesiastical concern. We therefore
reverse the summary judgment.
But we part company with our colleagues on the second issue and
2 The question currently pending review is: “Does the ministerial
exception arising under the Religion Clauses of the First Amendment to the
United States Constitution categorically preclude wage and hour claims by a
minister against a religious organization without any inquiry into whether
the claim touches upon any ecclesiastical concern?” (Lorenzo, review granted
Feb. 11, 2026, S294565.)
2
conclude that the trial court did not err in denying Ehrenkranz’s motion to
dismiss the appeals of Galijan and Smith.
BACKGROUND
The Facts
The Center
The Center is a nonprofit religious corporation founded in 1962 and is
one of the largest Sōtō Zen Buddhist churches in North America. Its “specific
and primary purpose” is to “encourage the practice of Zen Buddhism by
operating one or more religious practice facilities and educating the public
about Zen Buddhism.” The Center consists of three temples: City Center,
Tassajara Mountain Center (Tassajara), and Green Gulch Farm. The Center
has residential training programs at all three of its temples. Smith is the
former City Center director. Galijan is the former president of the Center.
The Center generates income by renting out rooms at all three temples
to overnight guests who are not members, as well as conference and event
space at Green Gulch Farm to companies including Google and Facebook.
Tassajara is open to the public and guests staying there go to “the hot
springs” or “baths” and do not have to practice Buddhism. Between 2015 and
2019, the Center’s “primary source of income” came from the summer guest
season at Tassajara.
The Center offers three residential programs, each of which requires
having participated in the preceding program. First, an individual can be a
“guest student” who lives at the temple for two to six weeks. After at least a
two-week stay, a guest student may apply to the “Work Practice Apprentice”
(WPA) program, an entry-level, full-time “Zen training program that lasts 2
years and must be completed within 3” years. “WPAs follow a strict practice
schedule of formal and work practice.” Formal practice includes morning and
3
evening zazen (meditation), service (sutra chanting and bowing), soji (temple
cleaning), dharma talks, and special ceremonies. Work practice is “[a]n
integral part of Zen Buddhist practice.” It consists of tasks such as cooking,
dishwashing, cleaning, as well as ceremonial tasks that “support the formal
practice, such as ringing bells, cleaning altars, [and] watching the door
during zazen [meditations].” “WPAs are expected to take part [in] 30–35
hours of work practice, as well as talks, discussions, and classes on work
practice, and 20 hours per week of meditation and curriculum.”
After completing training as a WPA, an individual may apply for a staff
position at the Center, “which is a continuation of Zen training.” Staff
members must “live at the practice center where they work in order to
accomplish both their practice obligations and their specific work practice
responsibilities.” The Center provides WPAs and low-level staff with modest
monthly stipends as well as room and board.
Ehrenkranz’s Time at the Center
In June 2016, after participating as a guest student of the Center,
Ehrenkranz became a WPA. From June to September 2016, he worked in the
guest program crew, where he was assigned guest housekeeping and
maintenance work tasks by a senior staff member. Ehrenkranz worked
mainly in the guest house, which was reserved for paying overnight guests.
His tasks included cleaning and preparing guest rooms and guest bathrooms,
cleaning the common spaces of the guest houses, chopping firewood for the
fireplaces, building fires for the guests, mowing the lawn, preparing
conference spaces for guests, and preparing drinks and snacks.
Ehrenkranz took a leave of absence from the end of December 2016
through the end of January 2017. When he returned to the Center, he was
assigned to the kitchen crew. His responsibilities included chopping
4
vegetables and preparing meals for other residents of the center as well as
paying overnight and conference guests. Between April and September 2017,
Ehrenkranz was asked to perform childcare for some of the Center’s senior
staff in addition to working in the kitchen crew.
On September 26, 2017, Ehrenkranz moved to the Tassajara location.
During one winter practice period there, he worked in the garden crew, which
required him to maintain the grounds. During another winter practice
period, he worked again in the kitchen crew, helping prepare meals for other
residents.
In April 2018, Ehrenkranz became a Tassajara guest cook for the
summer guest season, and his stipend increased from $175 to $245 per
month. As a guest cook, he was responsible for creating menus, preparing
orders of the ingredients necessary for meals, writing instructions for the
general kitchen crew, preparing guest meals, and coordinating menu and
service details with the dining room waitstaff crew.
In July 2018, Ehrenkranz became a staff member. When the Tassajara
summer guest season ended on September 25, 2018, he was assigned to be a
teacher’s assistant. Ehrenkranz asked the Center not to give him the
teacher’s assistant position because he wanted to remain in the kitchen crew,
but the Center denied his request. His stipend decreased to $200 per month.
In November 2018, Ehrenkranz left the Center.
Proceedings Before the Labor Commissioner and Appeal
In August 2020, Ehrenkranz filed a claim with the Labor
Commissioner for wage-and-hour violations. 3 His complaint alleged that he
3 “The Labor Code provides an administrative procedure for recovery of
unpaid wages. When an employer does not pay wages as required, the
employee may either: (1) file a civil action in court, or (2) file a wage claim
5
was owed regular and overtime wages, split-shift premium wages, liquidated
damages for the work he performed at the Center, unreimbursed business
expenses, and waiting time penalties.
Following a hearing, the Labor Commissioner issued an “Order,
Decision, or Award” on September 2, 2023, and on September 16 an amended
order, in Ehrenkranz’s favor against all three defendants (Order or Labor
Commissioner Order). As to Galijan and Smith, the Commissioner found
that they were individually liable under section 558.1 because they “were in
charge of all three facilities at some point and made decisions as to how the
facilities were r[u]n.” The total amount awarded against defendants was
$81,170.23, which consisted of unpaid minimum wages, unpaid overtime
wages, split shift premiums, liquidated damages, interest, and waiting time
penalties. The Labor Commissioner found that the Center was “liable for the
full amount” and that Galijan and Smith were liable for $78,857.58 of the full
amount.
On September 22, defendants appealed the Order, resulting in a de
novo action in the trial court pursuant to section 98.2. 4 The notice of appeal
attached a copy of a “Undertaking of Corporate Surety” stating, “Whereas,
with the Labor Commissioner under sections 98 to 98.8. The administrative
option was added in 1976 . . . and is commonly known as a Berman hearing,”
named after the sponsor of the legislation. (OTO, L.L.C. v. Kho (2019) 8
Cal.5th 111, 121 & fn. 6.)
4 “This de novo appeal ‘ “ ‘is neither a conventional appeal nor review of
the Labor Commissioner’s decision, but is rather a de novo trial of the wage
dispute’ ” [citation], and the [trial] court “ ‘ “hears the matter, not as an
appellate court, but as a court of original jurisdiction, with full power to hear
and determine it as if it had never been before the labor commissioner” ’ ”
[citation].’ [Citation.]” (Lorenzo, supra, 116 Cal.App.5th at p. 268, fn. 2,
quoting Martinez v. Combs (2010) 49 Cal.4th 35, 65–66 (Martinez), italics
omitted.)
6
San Francisco Zen Center, as Principal, desire to give an undertaking for an
appeal as provided by Labor Code Section 98.2,” and then indicating that
such undertaking in the amount of $81,170.23 was posted through a licensed
surety. Thus, under its terms, the undertaking did not include Galijan or
Smith.
On January 5, 2024, Ehrenkranz filed an amended motion to dismiss
the appeals of Smith and Galijan on the ground they failed to post the
undertaking mandated by section 98.2. The trial court denied the motion,
finding that Ehrenkranz’s “putative employer posted the required
undertaking,” adding, “The fact that Smith and Galijan are individuals that
allegedly acted on behalf of the employer and can also be liable as the
employer does not mean that they too needed to file duplicative
undertakings.”
Defendants’ Motion for Summary Judgment
On April 12, defendants filed a motion for summary judgment or,
alternatively, summary adjudication, “on the ground that the action has no
merit because the ministerial exception of the First Amendment of the U.S.
Constitution applies to and bars all of [Ehrenkranz’s] claims.” Defendants
relied largely on Alcazar v. Corp. of Catholic Archbishop of Seattle (9th Cir.
2010) 598 F.3d 668 (Alcazar I), affirmed in part and vacated in part in
Alcazar v. Corp. of the Catholic Archbishop of Seattle (9th Cir. 2010) 627 F.3d
1288 (Alcazar II), a case in which the Ninth Circuit held that the ministerial
exception barred a minister’s minimum wage claims against his employer, a
church.
Ehrenkranz opposed the motion. He argued that the ministerial
exception did not apply to his claims because under two United States
Supreme Court cases—Hosanna-Tabor Evangelical Lutheran Church and
7
School v. E.E.O.C. (2012) 565 U.S. 171 (Hosanna-Tabor) and Our Lady of
Guadalupe School v. Morrissey-Berru (2020) 591 U.S. 732 (Our Lady)—the
exception exempts religious organizations only from “antidiscrimination laws
in the context of hiring and firing their ministers,” which he did not allege
here. Ehrenkranz also relied on Tony and Susan Alamo Foundation v.
Secretary of Labor (1985) 471 U.S. 290 (Alamo), in which the United States
Supreme Court held that the First Amendment’s Religion Clauses did not
exempt a religious organization engaged in commercial activities from wage-
and-hour laws.
On August 6, the trial court issued a written order granting the motion,
concluding that the ministerial exception applied to Ehrenkranz’s wage-and-
hour claims. And although the court acknowledged that “both Hosanna-
Tabor and [Our Lady] implicated wrongful termination claims against
religious employers,” it believed that “applying wage-and-hour laws to WPAs
would create the same judicial entanglement in religious issues the Supreme
Court sought to avoid.”
On September 24, the court entered judgment in favor of defendants.
Ehrenkranz appealed.
DISCUSSION
Ehrenkranz argues that the trial court erred in granting summary
judgment to defendants on the basis of the ministerial exception.
Specifically, he contends that neither that exception nor the church autonomy
doctrine (also known as the ecclesiastical doctrine)—defenses grounded in the
First Amendment—apply to his wage claims. Ehrenkranz further argues the
trial court erred in denying his motion to dismiss the purported appeals of
Galijan and Smith because they did not post the undertaking required by
section 98.2.
8
While this appeal was pending, Lorenzo, supra, 116 Cal.App.5th 258, a
companion case assigned to Division Five of our First District, was decided.
Although the two cases are otherwise separate, the plaintiffs are both former
WPAs and staff members of the Center; they both asserted wage-and-hour
claims; the defendants are the same in both cases; the parties are
represented by the same attorneys; and the briefs in both appeals are almost
identical. Lorenzo resolved all of the issues in favor of the employee in that
case. As now explained, we agree with the analysis of Lorenzo on the issue of
the Religion Clauses. However, we part ways with our colleagues on the
issue whether the individual defendants were required to post the
undertaking under section 98.2.
The Trial Court Erred in Granting Summary Judgment
Summary Judgment Law and Standard of Review
Code of Civil Procedure section 437c, subdivision (c) provides that
summary judgment is properly granted when there is no triable issue of
material fact and the moving party is entitled to judgment as a matter of law.
A moving defendant can meet its burden by demonstrating that “a cause of
action has no merit,” which it can do by showing either: (1) one or more
elements of the plaintiff’s cause of action cannot be established; or (2) there is
a complete affirmative defense to that cause of action. (Code Civ. Proc.,
§ 437c, subds. (o)(1), (2), (p)(2).) Once the defendant meets this burden, the
burden shifts to the plaintiff to show the existence of a triable issue of
material fact. (Id., subd. (p)(2).)
“The burden on a defendant moving for summary judgment based upon
the assertion of an affirmative defense is heavier than the burden to show
one or more elements of the plaintiff’s cause of action cannot be established.
Instead of merely submitting evidence to negate a single element of the
plaintiff’s cause of action, . . . ‘the defendant has the initial burden to show
9
that undisputed facts support each element of the affirmative defense’
[citations]. The defendant must demonstrate that under no hypothesis is
there a material factual issue requiring trial. [Citation.] If the defendant
does not meet this burden, the motion must be denied.” (Anderson v.
Metalclad Insulation Corp. (1999) 72 Cal.App.4th 284, 289–290.)
“On appeal ‘[w]e review a grant of summary judgment de novo; we
must decide independently whether the facts not subject to triable dispute
warrant judgment for the moving party as a matter of law. [Citations.]’
(Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1348.) Put another way, we
exercise our independent judgment, and decide whether undisputed facts
have been established that negate plaintiff’s claims. (Romano v. Rockwell
Internat., Inc. [(1996)] 14 Cal.4th [479,] 487.) . . . [¶]
“ ‘[W]e accept as true the facts . . . in the evidence of the party opposing
summary judgment and the reasonable inferences that can be drawn from
them.’ [Citation.] And we must ‘ “view the evidence in the light most
favorable to plaintiff[] as the losing part[y]” . . . . ’ ” (Nazir v. United Airlines
Inc. (2009) 178 Cal.App.4th 243, 253–254.)
The Ministerial Exception
Legal Background
“The First Amendment provides, in part, that ‘Congress shall make no
law respecting an establishment of religion, or prohibiting the free exercise
thereof.’ . . . Both Religion Clauses bar the government from interfering with
the decision of a religious group to fire one of its ministers.” (Hosanna-Tabor,
supra, 565 U.S. at p. 181.) This rule acquired the label “ministerial
exception.” (Our Lady, supra, 591 at p. 746; Lorenzo, supra, 116 Cal.App.5th
at p. 269.)
The United States Supreme Court first recognized the ministerial
exception in Hosanna-Tabor, supra, 565 U.S. at p. 171. At issue there was a
10
church school’s termination of a teacher who sued the church for disability
discrimination. (Id. at p. 178.) The high court characterized the exception as
grounded in the Religion Clauses of the First Amendment (id. at p. 188) and
explained: “The members of a religious group put their faith in the hands of
their ministers. Requiring a church to accept or retain an unwanted
minister, or punishing a church for failing to do so, intrudes upon more than
a mere employment decision. Such action interferes with the internal
governance of the church, depriving the church of control over the selection of
those who will personify its beliefs. By imposing an unwanted minister, the
state infringes the Free Exercise Clause, which protects a religious group’s
right to shape its own faith and mission through its appointments. According
the state the power to determine which individuals will minister to the
faithful also violates the Establishment Clause, which prohibits government
involvement in such ecclesiastical decisions.” (Id. at pp. 188–189.)
The Supreme Court then held that the ministerial exception barred the
teacher’s discrimination claims. (Hosanna-Tabor, supra, 565 U.S. at p. 190.)
It analyzed whether she was a “minister” covered by the exception,
concluding she was. (Ibid.) The court also addressed, and rejected, the
teacher’s suggestion that the asserted religious reason for firing her was
pretextual. (Id. at p. 194.) “That suggestion misses the point of the
ministerial exception. The purpose of the exception is not to safeguard a
church’s decision to fire a minister only when it is made for a religious
reason. The exception instead ensures that the authority to select and
control who will minister to the faithful—a matter ‘strictly ecclesiastical,’
[citation]—is the church’s alone.” (Id. at pp. 194–195.)
Importantly, Hosanna-Tabor limited its holding to “an employment
discrimination suit brought on behalf of a minister, challenging her church’s
11
decision to fire her.” (Hosanna-Tabor, supra, 565 U.S. at p. 196.) In doing so,
it “express[ed] no view on whether the exception bars other types of suits,
including actions by employees alleging breach of contract or tortious conduct
by their religious employers.” (Ibid.)
Nearly a decade later, in Our Lady, supra, 591 U.S. 732, the United
States Supreme Court considered whether the ministerial exception applied
to two Catholic elementary school teachers, both of whom lacked the title of
minister and had only limited religious training. The high court found the
teachers qualified as ministers because there was “abundant record evidence
that they both performed vital religious duties.” (Id. at p. 756.) Thus, the
court held that the teachers’ employment discrimination claims against their
religious school employers were barred by the ministerial exception. (Id. at
pp. 738, 742, 745.)
The court reiterated the “constitutional foundation” of its prior holding
in Hosanna-Tabor, which was “the general principle of church
autonomy[:] . . . independence in matters of faith and doctrine and in closely
linked matters of internal government.” (Our Lady, supra, 591 U.S. at p.
747.) “This does not mean that religious institutions enjoy a general
immunity from secular laws,” the court explained. (Id. at p. 746.) “[B]ut it
does protect their autonomy with respect to internal management decisions
that are essential to the institution’s central mission.” (Ibid.) And one
“component of this autonomy is the selection of the individuals who play
certain key roles.” (Ibid.)
Analysis
Ehrenkranz contends that the trial court erred in applying the
ministerial exception to bar his wage-and-hour claims because the United
States Supreme Court has only applied the exception to bar a minister’s
employment discrimination and wrongful termination claims and his wage
12
claims do “not implicate [the Center’s] ability to hire or fire its ministers.” He
claims his case is instead about unpaid minimum wages and does not concern
any ecclesiastical matter.
As an initial matter, Ehrenkranz concedes that the Center is a religious
organization and that he was a minister for purposes of the ministerial
exception. 5 “The only question then, is whether the exception bars [his]
wage-and-hour claims despite the lack of any evidence that [his] claims raise
an ecclesiastical concern.” (Lorenzo, supra, 116 Cal.App.5th at p. 272.)
Based on the reasoning of Lorenzo and its comprehensive analysis of the law,
we conclude it does not—and we reverse the summary judgment.
In Lorenzo, the plaintiff, Annette Lorenzo, lived and worked at the
Center between 2015 and 2019, first as a guest student, then a WPA, and
eventually a staff member. As a WPA, Lorenzo cleaned guest rooms at the
City Center location, and later worked in the bathhouse and kitchen at
Tassajara. Like Ehrenkranz, she was a member of the kitchen crew at one
point. She then became a staff member, during which time she served as
assistant to the executive chef at Tassajara and a librarian. Eventually
Lorenzo was asked to leave the Center. (Lorenzo, supra, 116 Cal.App.5th at
p. 267.)
Lorenzo filed claims with the Labor Commissioner against the Center,
Galijan, and Smith for wage-and-hour violations and prevailed. (Lorenzo,
5 For this reason, the Center’s reliance on Behrend v. San Francisco Zen
Center, Inc. (9th Cir. 2024) 108 F.4th 765 is unavailing. In that case, the
plaintiff was a WPA and filed a claim for disability discrimination after the
Center terminated his employment. As a result, the only issue before the
Ninth Circuit was whether he qualified as a minister for purposes of the
ministerial exception. (Id. at pp. 767–768.) Behrend also did not involve any
wage-and-hour claims. (See Lorenzo, supra, 116 Cal.App.5th at p. 272, fn. 3.)
13
supra, 116 Cal.App.5th at p. 267.) Defendants appealed to the trial court and
moved for summary judgment on the basis of the ministerial exception. The
trial court granted the motion. (Id. at p. 268.) On appeal from the ensuing
judgment, Lorenzo challenged the grant of summary judgment on the same
grounds asserted by Ehrenkranz here. (See id at p. 272.) Division Five
reversed, holding that the ministerial exception does not bar claims under
California’s minimum wage and overtime laws in the absence of “evidence
that those claims would interfere ‘with an internal church decision that
affects the faith and the mission of the church itself.’ ” (Id. at pp. 265, 275.)
In reaching that conclusion, Lorenzo provided the following analysis.
“From Hosanna-Tabor and Our Lady, the only two high court decisions
that have addressed the ministerial exception, we can glean the following
principles that will guide us here. Not every employment claim raised by a
minister is barred by the exception. (See Our Lady, supra, 591 U.S. at p. 747
[ministerial exception bars only ‘certain employment discrimination claims’].)
Instead, ‘the scope of the ministerial exception . . . is limited to what is
necessary to comply with the First Amendment.’ (Bollard v. California
Province of the Society of Jesus (9th Cir. 1999) 196 F.3d 940, 947 (Bollard).)
And barring a minister’s employment claim without any evidence that the
claim would raise an ecclesiastical concern is necessary to comply with the
First Amendment only if that claim will inevitably ‘thrust the secular courts
into the constitutionally untenable position of passing judgment on questions
of religious faith or doctrine.’ (Bollard, at p. 947.) Thus, the ministerial
exception only bars employment claims that require inquiries into matters
that are ‘ “ strictly a matter of ecclesiastical government’ ” (Hosanna-Tabor,
supra, 565 U.S. at p. 186, italics added), such as ‘the authority to select,
supervise, and . . . remove a minister’ (Our Lady, at p. 747). It does not bar
14
employment claims that ‘will have no significant impact on’ a church’s
‘religious beliefs or doctrines.’ (Bollard, at p. 947.)” (Lorenzo, supra, 116
Cal.App.5th at pp. 271–272.)
Lorenzo found instructive Alamo, supra, 471 U.S. 290, a case cited by
Lorenzo there—and Ehrenkranz here. (See Lorenzo, supra, 5 Cal.App.5th at
pp. 272–273.) In Alamo, the high court considered whether applying
minimum wage and recordkeeping laws to workers engaged in a religious
entity’s commercial activities violated the entity’s right “to be free of
excessive government entanglement in its affairs.” (Alamo, at p. 303.) The
court held that it did not, concluding that the entity’s commercial activities
“are not beyond the reach of the Fair Labor Standards Act.” (Id. at p. 306.)
In reaching this conclusion, the court observed, “It is virtually self-evident
that the Free Exercise Clause does not require an exemption from a
governmental program unless, at a minimum, inclusion in the program
actually burdens the claimant’s freedom to exercise religious rights.” (Id. at
p. 303.) The court concluded that the minimum wage and recordkeeping
requirements “have no impact on [the entity’s] own evangelical activities” and
would not “pose an intolerable risk of government entanglement with
religion.” (Id. at p. 305.)
Lorenzo then explained:
“Neither Hosanna-Tabor nor Our Lady overruled Alamo. Nonetheless,
the Center contends that Alamo did not add any burden requirement to the
ministerial exception. The Center is correct because the ministerial
exception was not at issue in Alamo. But the high court in Alamo did
consider whether the enforcement of minimum wage laws against a religious
entity engaged in commercial activities would result in excessive government
entanglement with religion under the church autonomy doctrine and
15
concluded that it would not. (Alamo, supra, 471 U.S. at pp. 304–305.)
“Like the plaintiffs in Alamo, Lorenzo only challenges the Center’s
failure to pay her a minimum wage and overtime wages for work that she has
already performed as part of the Center’s commercial activities. She does not
challenge the Center’s decision to terminate her employment or seek
reinstatement. Despite this, the Center asserts that the enforcement of
California’s wage-and-hour laws would inevitably result in excessive
entanglement with religion in violation of the Religion Clauses solely because
Lorenzo is a minister. But the Center does not explain why, and its omission
is telling.
“As Justice Edmon explained in her concurring opinion in Su v.
Stephen S. Wise Temple (2019) 32 Cal.App.5th 1159, 1175 (Su), the
ministerial exception does not bar an employment claim ‘simply because the
person on whose behalf a suit is brought is a minister . . . .’ [Citation.] This is
because ‘the aspect of the church-minister employment relationship that
warrants heightened constitutional protection—a church’s freedom to choose
its representatives’—is not ‘present’ in every employment claim. (Ibid.) For
example, not every aspect of a minister’s compensation is ‘an internal church
decision that affects the faith and mission of the church itself.’ (Hosanna-
Tabor, supra, 565 U.S. at p. 190.) Indeed, ‘[t]he constitutional rationale for
protecting some of a church’s [autonomy to choose its
representatives] . . . [Citation]. . . . does not apply . . . where what is at issue
is not who the [church] will select to educate its youngest students, but only
whether it will provide the people it has chosen with meal breaks, rest
breaks, and overtime pay.’ (Su, at p. 1175.) Thus, the ministerial
exception—which only protects decisions that are ‘ “strictly a matter of
ecclesiastical government” ’ (Hosanna-Tabor, at p. 186, italics added)—cannot
16
bar every claim over a minister’s compensation.
“A contrary conclusion would be problematic to say the least. For
example, religious leaders who have fraudulently compensated themselves at
their church’s expense should not get a free pass through the ministerial
exception. As Judge Bress observed in his concurring opinion in Huntsman v.
Corp. of the President of the Church of Jesus Christ of Latter-Day Saints (9th
Cir. 2025) 127 F.4th 784, 798, footnote 2 (Huntsman), ‘the church autonomy
doctrine would not immunize religious leaders from fraudulently enriching
themselves under the guise of religion.’ Likewise, a minister’s claim for
unpaid wages pursuant to an employment contract should not be barred
without any evidence of a ‘religious justification for’ the breach (Bollard,
supra, 196 F.3d at p. 947) because her religious employer already approved
those wages when it agreed to the contract (see Second Episcopal Dist.
African Methodist Episcopal Church v. Prioleau (D.C. 2012) 49 A.3d 812, 817
. . . . [¶] . . . [¶]
“Thus, the ministerial exception does not bar every employment claim
for lost or unpaid wages. Instead, it only bars those claims that necessarily
require an inquiry into matters of a religious entity’s ‘internal government’
that are ‘closely linked’ to the entity’s ‘faith and doctrine.’ [Citation.] The
Center does not argue that, much less explain how, Lorenzo’s wage-and-hour
claims—which only seek lost or unpaid wages for her work in the Church’s
commercial activities—require such an inquiry. [Citation.] Instead, the
Center concedes in its opening brief that Lorenzo ‘is correct that
“[a]djudication of this case does not require the Court to resolve any
ecclesiastical questions.” ’ We therefore conclude that the exception does not
bar Lorenzo’s claims.” (Lorenzo, supra, 116 Cal.App.5th at pp. 273–275.)
Likewise here.
17
Like Lorenzo’s, Ehrenkranz’s wage-and-hour claims seek only lost or
unpaid wages for his work as part of the Center’s commercial activities. Also,
as it did in Lorenzo, the Center here concedes “that ‘[a]djudication of this case
does not require the Court to resolve any ecclesiastical questions.’ ” We
therefore conclude that the ministerial exception does not apply to
Ehrenkranz’s claims in the absence of evidence of an ecclesiastical concern.
We are not convinced otherwise by Markel v. Union of Orthodox Jewish
Congregations of America (9th Cir. 2024) 124 F.4th 796 (Markel)—which
defendants assert is “dispositive to Ehrenkranz’s claims”—or other Ninth
Circuit cases that have held the ministerial exception applies to wage claims.
The cases are, of course, not binding (see Lorenzo, supra, 116 Cal.App.5th at
p. 276), as we ourselves have noted in People v. Mackey (2015) 233
Cal.App.4th 32, 87: “ ‘we disagree with the Ninth Circuit’s test and are not
bound to follow it, even on constitutional questions.’ ” Beyond that, we agree
with Lorenzo that the cases “provided little or no analysis to support [their]
overly broad interpretation of the ministerial exception.” (Lorenzo, at p. 276.)
In Markel, the Ninth Circuit held that the ministerial exception
“encompasses all adverse personnel or tangible employment actions between
religious institutions and their employees and disallows lawsuits for damages
based on lost or reduced pay.” (Markel, supra, 124 F.4th at p. 803, italics
added.) However, in support, the Ninth Circuit proffered no explanation for
its broad interpretation of the exception. Instead, it simply cited to its prior
en banc decision in Alcazar II, supra, 627 F.3d 1288. (Markel, at p. 803; see
Lorenzo, supra, 116 Cal.App.5th at p. 276.)
And in Alcazar II, the Ninth Circuit merely adopted, “in
all . . . respects,” the portion of the three-judge panel’s decision “holding that
the [ministerial] exception applies to the minimum-wage claim at issue.”
18
(Alcazar II, supra, 627 F.3d at p. 1290.) But the panel’s decision, in turn,
relied primarily on a quote from McClure v. Salvation Army (5th Cir. 1972)
460 F.2d 553 (McClure) to justify its application of the exception to bar the
plaintiff’s minimum wage claim: “Just as the initial function of selecting a
minister is a matter of church administration and government, so are the
functions which accompany such a selection[, including] the determination of
a minister’s salary.” (Alcazar I, supra, 598 F.3d at p. 674, quoting McClure,
at p. 559.) As Lorenzo explained, that reliance on McClure was misplaced.
“McClure, like Hosanna-Tabor and Our-Lady, involved only claims for
employment discrimination and wrongful termination.” (Lorenzo, supra, 116
Cal.App.5th at p. 276.) The plaintiff in McClure, a minister employed by the
Salvation Army, filed a Title VII action against the organization, alleging
that “[she] had received less salary and fewer benefits than that accorded
similarly situated male officers” and was “discharged because of her
complaints to her superiors and the Equal Employment Opportunity
Commission.” (McClure, supra, 460 F.2d at p. 555.) “She sought
reinstatement, an injunction against further discriminatory practices, and a
judgment for the alleged deficiency in compensation paid to her as compared
to male Salvation Army officers whose responsibilities were equivalent to
those she performed.” (Ibid.) In barring the plaintiff’s claims under the
Religion Clauses, the Fifth Circuit first reasoned that the Salvation Army’s
selection of its ministers “is a matter of church administration and
government” and is “of prime ecclesiastical concern.” (Id. at p. 559.) It then
extended that reasoning to “functions which accompany such a selection,”
including “the determination of a minister’s salary” (ibid., italics added.)—the
statement quoted in Alcazar I. (Alcazar I, supra, 598 F.3d at p. 674.)
As explained in Lorenzo, McClure does not establish that claims for
19
minimum and overtime wages are barred by the ministerial exception.
(Lorenzo, supra, 116 Cal.App.5th at p. 277.) For one, McClure did not involve
any wage-and-hour claims. Further, the resolution of McClure’s claim for lost
or unpaid wages “would require a review of the Salvation Army’s differential
treatment of its male and female ministers, including any differing duties
and responsibilities. This would, in turn, require a review of ‘internal
management decisions that are essential to the [religious] institution’s
central mission.’ ” (Lorenzo, at p. 277.) “The same is not true of
[Ehrenkranz’s] minimum wage claims.” (Id. at p. 277 & fn. 4.)
Likewise misplaced is Alcazar I’s reliance on Elvig v. Calvin
Presbyterian Church (9th Cir. 2004) 375 F.3d 951 (Elvig). (See Alcazar I,
supra, 598 F.3d at p. 674.) In Elvig, the Ninth Circuit held the ministerial
exception barred the plaintiff’s claims for sexual harassment and retaliation
against her church employer after it fired her, reasoning that because “the
termination of [the plaintiff’s] ministry and her inability to find other
pastoral employment are consequences of protected employment
decisions. . . . , a damage award based on lost or reduced pay [she] may have
suffered from those employment decisions would necessarily trench on the
Church’s protected ministerial decisions.” (Elvig, at pp. 965–966.) Here, in
contrast, “[Ehkrenkranz’s] wage-and-hour claims are not tied to [any]
decision to terminate [his] employment” (indeed, he was not terminated by
the Center), and “do not invade the Center’s autonomy in the selection of its
ministers.” (Lorenzo, supra, 116 Cal.App.5th at p. 278.)
For these reasons, we decline to follow Markel’s broad holding that the
ministerial exception bars “all adverse personnel or tangible employment
actions between religious institutions and their employees.” (Markel, supra,
124 F.4th at p. 803, italics added.)
20
In sum and in short, the trial court erred in granting summary
judgment to defendants. 6 However, “our ruling here today does not foreclose
the Center from presenting evidence at trial that applying wage-and-hour
laws to ministers like [Ehrenkranz] raises an ecclesiastical concern and
should therefore be barred under the Religion Clauses.” (Lorenzo, supra, 116
Cal.App.5th at p. 280.)
The Trial Court Did Not Err in Denying the Motion to Dismiss
the Appeals of Galijan and Smith
Ehrenkranz’s second argument contends that the trial court erred in
denying his motion to dismiss the de novo appeals of Smith and Galijan. He
asserts the court incorrectly interpreted section 98.2, subdivision (b) (section
98.2(b)) to require only the Center to post an undertaking in the amount of
the Labor Commissioner’s award. In Ehrenkranz’s view, the statute also
required Galijan and Smith to post the undertaking, which they failed to do.
We disagree.
Ehrenkranz’s claims, which require the proper interpretation of a
statute, and its application to undisputed facts of this case, present questions
of law subject to de novo review. (Estate of Kampen (2011) 201 Cal.App.4th
971, 985.) “In construing a statute, our task is to ascertain the intent of the
Legislature so as to effectuate the purpose of the enactment. [Citation.] We
look first to the words of the statute, which are the most reliable indications
of the Legislature’s intent. [Citation.] We construe the words of a statute in
6 Because we are reversing the summary judgment based on the
ministerial exception, we need not address Ehrenkranz’s additional
argument that the court should have considered whether his claims were
barred under the “ecclesiastical abstention” doctrine (or church autonomy
doctrine), another defense grounded in the Religion Clauses of the First
Amendment. (See Lorenzo, supra, 116 Cal.App.5th at p. 279.)
21
context, and harmonize the various parts of an enactment by considering the
provision at issue in the context of the statutory framework as a whole.”
(Cummins, Inc. v. Superior Court (2005) 36 Cal.4th 478, 487.) “ ‘If the
language is unambiguous, “then the Legislature is presumed to have meant
what it said, and the plain meaning of the language governs.” ’ ”
(Niedermeier v. FCA US LLC (2024) 15 Cal.5th 792, 804.)
Under section 98.2, a party may appeal an award of the Labor
Commissioner to the superior court “where the appeal shall be heard de
novo.” (§ 98.2, subd. (a).) If no notice of appeal is timely filed, the order is
deemed the final order. (§ 98.2, subd. (d).) And as relevant here, section
98.2(b) provides in part: “As a condition to filing an appeal pursuant to this
section, an employer shall first post an undertaking with the reviewing court
in the amount of the order, decision, or award.” (Italics added.) 7
7 In its entirety, section 98.2(b) states: “As a condition to filing an appeal
pursuant to this section, an employer shall first post an undertaking with the
reviewing court in the amount of the order, decision, or award. The
undertaking shall consist of an appeal bond issued by a licensed surety or a
cash deposit with the court in the amount of the order, decision, or award.
The employer shall provide written notification to the other parties and the
Labor Commissioner of the posting of the undertaking. The undertaking
shall be on the condition that, if any judgment is entered in favor of the
employee, the employer shall pay the amount owed pursuant to the judgment,
and if the appeal is withdrawn or dismissed without entry of judgment, the
employer shall pay the amount owed pursuant to the order, decision, or
award of the Labor Commissioner unless the parties have executed a
settlement agreement for payment of some other amount, in which case the
employer shall pay the amount that the employer is obligated to pay under
the terms of the settlement agreement. If the employer fails to pay the
amount owed within 10 days of entry of the judgment, dismissal, or
withdrawal of the appeal, or the execution of a settlement agreement, a
portion of the undertaking equal to the amount owed, or the entire
undertaking if the amount owed exceeds the undertaking, is forfeited to the
employee.” (Italics added.)
22
This undertaking requirement is “mandatory and jurisdictional.”
(Palagin v. Paniagua Construction, Inc. (2013) 222 Cal.App.4th 124, 140
(Palagin).) Its “immediate purpose . . . is to provide assurance that a
judgment in favor of the employee will be satisfied.” (Id. at p. 130.) The
“broader purpose of this provision . . . . is to ‘discourage employers from filing
frivolous appeals and from hiding assets in order to avoid enforcement of the
judgment.’ ” (Ibid.)
The parties disagree on who was required to post the undertaking
under section 98.2(b). Ehrenkranz contends that each of the three
defendants was required to do so. Defendants counter that the trial court
correctly determined that only the Center was required to post the
undertaking, because it was Ehrenkranz’s “putative employer.” Thus, the
question before us turns on the meaning of the term “employer” in the
statute.
As an initial matter, Ehrenkranz does not assert that either Galijan or
Smith was his employer. To the contrary, Ehrenkranz conceded below he
“never was employed by, worked at or paid by . . . Galijan . . . or . . . Smith.”
However, as we understand it, Ehrenkranz’s proposed interpretation of
section 98.2(b) does not depend on a definition of the word “employer” in and
of itself. Instead, his argument appears to rest primarily on inferences drawn
from another Labor Code provision, section 558.1.
Section 558.1, subdivision (a) states: “Any employer or other person
acting on behalf of an employer, who violates, or causes to be violated, any
provision regulating minimum wages or hours and days of work in any order
of the Industrial Welfare Commission, or violates, or causes to be violated,
Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the
employer for such violation.” (Italics added.) Section 558.1, subdivision (b)
23
provides that “For purposes of this section, the term ‘other person acting on
behalf of an employer’ is limited to a natural person who is an owner,
director, officer, or managing agent of the employer, and the term ‘managing
agent’ has the same meaning as in subdivision (b) of Section 3294 of the Civil
Code.”
According to Ehrenkranz, “[t]he plain meaning of [section 558.1,
subdivision (a)] is that such individuals must carry the liability obligations of
the employer. One such obligation, under . . . section 98.2, subdivision (b), is
that any wage claim defendant the Labor Commissioner finds liable as ‘an
employer’ must post a bond to file an appeal of the Labor Commissioner’s
decision. . . .” As noted above, here the Labor Commissioner found that
Smith and Galijan “were in charge of all three facilities at some point and
made decisions as to how the facilities were ran” and, “[a]ccordingly,
pursuant to . . . [section] 558.1, [Smith and Galijan] are liable as individuals,
for Plaintiff’s unpaid minimum wages, liquidated damages and waiting time
penalties.” 8 Defendants do not challenge those findings on appeal. Hence,
8 The Labor Commissioner did not make an express finding as to
whether Galijan and Smith each qualified as an “other person acting on
behalf of an employer” under section 558.1, subdivision (a), in that each was
“an owner, director, officer, or managing agent of the employer” (§ 558.1,
subd. (b)). Nor did the Commissioner find whether Galijan or Smith
“violate[d], or cause[d] to be violated, any provision regulating minimum
wages or hours and days of work in any order of the Industrial Welfare
Commission, or . . . the [enumerated Labor Code sections].” (§ 558.1, subd.
(a); see Usher v. White (2021) 64 Cal.App.5th 883, 896–897 [concluding that
to be held liable under section 558.1, an owner, director, officer, or managing
agent “must either have been personally involved in the purported violation
of one or more of the enumerated provisions; or, absent such personal
involvement, had sufficient participation in the activities of the employer,
including, for example, over those responsible for the alleged wage and hour
24
Ehrenkranz argues that “under the plain language of . . . sections 558.1 and
98.2, subdivision (b), both Defendants Galijan and Smith were required to
post a bond ‘as the employer’ to file an appeal of the Labor Commissioner’s
[Order].”
To sum it up, it appears that Ehrenkranz is impliedly asserting that
Galijan and Smith each qualified as an “other person acting on behalf of an
employer” under section 558.1, subdivision (b). And because they were found
liable “as the employer” under section 558.1, subdivision (a), Ehrenkranz
argues they were subject to all the obligations and liabilities of the employer,
including the undertaking requirement in section 98.2(b).
A similar argument was made in Lorenzo, with which argument the
appellate court agreed. (Lorenzo, supra, 116 Cal.App.5th at p. 282.) In
construing section 98.2(b), Lorenzo began “by noting that section 98.2,
subdivision (b), by its express terms, requires that each ‘employer’ post an
undertaking ‘[a]s a condition to filing an appeal’ from a Labor Commissioner’s
order. Thus, if Galijan and Smith are each deemed ‘an employer’ for
purposes of section 98.2, subdivision (b), then they each had to post an
undertaking covering the amount of the award in order to appeal from the
portion of the Order adverse to them.” (Lorenzo, at p. 281.) Lorenzo then
noted that the Labor Commissioner found Galijan and Smith individually
liable for the full amount awarded to Lorenzo under section 558.1, a finding
that defendants did not dispute on appeal. (Lorenzo, at p. 282.) As such,
Lorenzo concluded defendant “forfeited any argument that Galijan and Smith
were not ‘employer[s]’ for purposes of their wage-and-hour violations.” (Ibid.)
Lorenzo went on to hold that “[b]ecause Galijan and Smith were each
violations, such that the [owner, director, officer, or managing agent] may be
deemed to have contributed to, and thus . . . ‘cause[d]’ a violation.”].)
25
found liable as ‘the employer’ under section 558.1, they each should logically
be deemed ‘an employer’ for purposes of section 98.2, subdivision (b).”
(Lorenzo, 116 Cal.App.5th at p. 282.) In so holding, Lorenzo relied on the rule
of construction that “ ‘ “ ‘ “ ‘identical words used in different parts of the same
act are intended to have the same meaning.’ ” ’ ” ’ ” (Ibid., quoting People v.
Roberge (2003) 29 Cal.4th 979, 987.)
In their respondents’ brief, defendants do not specifically respond to
Ehrenkranz’s arguments based on section 558.1. During oral argument,
however, counsel for defendants asserted that while the Labor Commissioner
found that Galijan and Smith were “liable as the employer” under section
558.1, that does not mean they were the “employer” for purposes of the
undertaking requirement in section 98.2(b). Defendants also argue that
Ehrenkranz’s interpretation of the statute should be rejected because it
would lead to the “absurd” result of mandating that the undertaking should
“somehow be three times the amount of” the Labor Commissioner’s award.
(Italics omitted.)
Taking up the arguments in reverse order, defendants’ second assertion
based on “absurd” results is unavailing. As Ehrenkranz explains in his
briefing, he has never argued that defendants were required to post “three
times the amount” of the Labor Commissioner’s award; instead, his argument
is that the Center, Galijan, and Smith “could have posted a single, joint bond
in the amount of the Labor Commissioner’s Award . . . , which would have
been sufficient to support all three of their appeals”—a position his counsel
expressly acknowledged at oral argument.
That said, defendants’ counsel’s challenge to Ehrenkranz’s reliance on
section 558.1 is well taken. As we now explain, the plain language of section
98.2(b) does not support Ehrenkranz’s—and thus Lorenzo’s—interpretation of
26
the statute.
First, we do not start from the same premise as Lorenzo that, as the
court put it, section 98.2(b) “by its express terms, require[ ] that each
‘employer’ post an undertaking ‘[a]s a condition to filing an appeal’ from a
Labor Commissioner’s order.” (Lorenzo, supra, 116 Cal.App.5th at p. 282.)
Section 98.2(b) does not state that “each employer” shall post the
undertaking; it only states that “an employer” shall post the undertaking.
(Italics added.)
Beyond that, we do not find any language in section 98.2 that supports
Ehrenkranz’s interpretation. Section 98.2 makes no reference to section
558.1. Nor does section 98.2 include any language indicating an intent to
require any person other than “an employer”—such as any “other person
acting on behalf of an employer” held liable under section 558.1 or an owner,
director, officer, or agent of the employer—to post the undertaking. 9 As we
have put it, “a cardinal rule of statutory construction[ ] [is] that it is not a
judicial function to read into statutes language the Legislature might have
used or might have intended. [Citations.] In other words, courts do not
rewrite statutes.” (Podiatric Medical Bd. of California v. Superior Court
(2021) 62 Cal.App.5th 657, 674–675.) That seems to be what Ehrenkranz is
asking us to do here. If the Legislature desired to require any “other person
acting on behalf of an employer” found “liable as the employer” under section
558.1 to post the undertaking in section 98.2(b), “it could have easily said so.”
9 Section 98.2(b) was added to the Labor Code in 2000 (Assem. Bill No.
2509 (1999–2000 Reg. Sess.); Stats. 2000, ch. 876, § 2), and amended in 2010
to state as it now reads (Assem. Bill No. 2772 (2009–2010 Reg. Sess.); Stats.
2010, ch. 102, § 1)—which events occurred before section 558.1 was added to
the Labor Code. (Senate Bill No. 588 (2015–2016 Reg. Sess.), effective Jan. 1,
2016.)
27
(Riverside County Sheriff’s Dept. v. Stiglitz (2014) 60 Cal.4th 624, 632.) For
example, it could have defined “employer” to “include” such individuals. (See,
e.g., Gov. Code, § 12926, subd. (d) [for purposes of the Fair Employment and
Housing Act, the term “ ‘[e]mployer’ includes any person regularly employing
five or more persons, or any person acting as an agent of an employer, directly
or indirectly,” italics added].) The Legislature did not do so.
Our conclusion that the plain language does not support Ehrenkranz’s
interpretation finds further support when considering that in a neighboring
provision, section 98, there is a specific reference to section 558.1 and the
phrase “other person acting on behalf of an employer,” but no such reference
in section 98.2. Effective January 1, 2016, Senate Bill No. 588 (Reg. Sess.
2015–2016) added section 558.1 to the Labor Code and amended other
sections of the Labor Code, including section 98, which describes the Berman
hearing process. (Stats. 2015, ch. 803, §§ 3, 10.) The bill amended section 98
to additionally state that “[t]he Labor Commissioner may also provide for a
hearing to recover civil penalties due pursuant to Section 558 against any
employer or other person acting on behalf of an employer, including, but not
limited to, an individual liable pursuant to Section 558.1.”10 (Stats. 2015, ch.
803, § 3, italics added.) That the Legislature amended section 98 to expressly
refer to section 558.1 and the phrase “other person acting on behalf of the
employer” while leaving section 98.2 silent on that front strongly suggests
that it intended not to require anyone other than the “employer” to post the
appeal bond in section 98.2. (See, e.g., Krug v. Board of Trustees of California
10 Section 558, subdivision (a) states: “Any employer or other person
acting on behalf of an employer who violates, or causes to be violated, a
section of this chapter or any provision regulating hours and days of work in
any order of the Industrial Welfare Commission shall be subject to a civil
penalty . . . .”
28
State University (2025) 110 Cal.App.5th 234, 243–244 [holding that section
2802, which requires “an employer” to cover “necessary expenditures” for a
job, did not include public employers, based in part on the fact that the
Legislature had added or amended several neighboring statutes to make
them expressly applicable to both public and private employers, “while
leaving section 2802 silent on that front.”].)
For the above reasons, we do not find apt the rule of construction
applied by Lorenzo that “ ‘ “ ‘ “ ‘identical words used in different parts of the
same act are intended to have the same meaning.’ ” ’ ” ’ ” (Lorenzo, supra,
116 Cal.App.5th at p. 282, quoting People v. Roberge, supra, 29 Cal.4th at p.
987.) “ ‘[T]he presumption that “identical words used in different parts of the
same act are intended to have the same meaning . . . readily yields whenever
there is such various in the connection in which the words are used as
reasonably to warrant the conclusion that they were employed in different
parts of the act within different intent.” ’ ” (Reilly v. Marin Housing
Authority (2020) 10 Cal.5th 583, 591, quoting Roberts v. Sea-Land Services,
Inc. (2012) 566 U.S. 93, 108; see, e.g., United States v. Cleveland Indians
Baseball Co. (2001) 532 U.S. 200, 213 [phrase “wages paid” means different
things in different parts of Title 26 of the United States Code]; Robinson v.
Shell Oil Co. (1997) 519 U.S. 337, 343–344 [term “employee” means different
things in different parts of Title VII].)
Here, sections 98.2(b) and 558.1 do not contain “identical words”; there
is a variation in the connection in which the word “employer” is used in each
statute. Section 98.2(b) uses the terms “an employer” and “the employer.”
Section 558.1 distinguishes between “employer” and “other person acting on
behalf of an employer” in subdivision (a), and then sets forth a specific
definition of the latter phrase in subdivision (b). While the latter person
29
“may be held liable as the employer” for certain Labor Code violations
(§ 558.1, subd. (a), italics added), the inclusion of a definition of “other person
acting on behalf of an employer” (id., subd. (b)) indicates such a person is
intended to be distinct from the “employer” itself. Thus, we do not believe
that the presumption based on “identical words” is applicable when
comparing sections 98.2(b) and section 558.1.
In short, we conclude that the plain language of section 98.2(b) does not
support Ehrenkranz’s position that an individual held “liable as the
employer” under section 558.1 is required to post the undertaking in section
98.2(b).
Having determined what “employer” in section 98.2(b) does not mean,
we proceed to determine what it does mean.
Section 98.2 does not define the term “employer.” Neither does the
Labor Code. (McClean v. State of California (2016) 1 Cal.5th 615, 627.) But
all of the currently applicable Industrial Welfare Commission’s wage orders 11
use the same definition of the terms “employer” and “employ.” (Vazquez v.
Jan-Pro Franchising International, Inc. (2021) 10 Cal.5th 944, 950.) For
example, Wage Order No. 5-2001—which concerns the public housekeeping
industry and which Ehrenkranz alleges was violated here—provides that
“ ‘[e]mployer’ means any person as defined in Section 18 of the Labor Code,
who directly or indirectly, or through an agent or any other person, employs
or exercises control over the wages, hours, or working conditions of any
person.” (Cal. Code Regs., tit. 8, § 11050, subd. 2(E).) The referenced section
11 The wage orders fix the minimum wage (Dynamex Operations West,
Inc. v. Superior Court (2018) 4 Cal.5th 903, 936, fn. 14 (Dynamex)) and “are
constitutionally authorized, quasi-legislative regulations that have the force
of law” (id., at p. 914, fn. 3). Although the Legislature defunded the
Commission in 2004, its wage orders remain in effect. (Id. at p. 936, fn. 14.)
30
18, in turn, defines “person” as “any person, association, organization,
partnership, business trust, limited liability company, or corporation.” And
the Wage Order further states that “ ‘[e]mploy’ means to engage, suffer, or
permit to work.” (Cal. Code Regs., tit. 8, § 11050, subd. 2(F).) Our Supreme
Court has interpreted this standard to consist of three alternatives: “(a) to
exercise control over the wages, hours or working conditions, or (b) to suffer
or permit to work, or (c) to engage, thereby creating a common law
employment relationship.” (Martinez, supra, 49 Cal.4th at p. 64
[interpretating Wage Order No. 14-2001, which contains the same definitions
of “employ” and “employer” as Wage Order No. 5-2001 (Cal. Code Regs., tit. 8,
§ 11140, subds. 2(C) & (F)].)
The first standard is self-explanatory. (Medina v. Equilon Enterprises,
LLC (2021) 68 Cal.App.5th 868, 874.) The second standard, to suffer or
permit to work, is broad; it is triggered when an employer merely
“ ‘permit[s]’ ” unlawful labor “ ‘by acquiescence’ ” or suffers the unlawful labor
by “ ‘fail[ing] to hinder’ ” it. (Martinez, supra, 49 Cal.4th at p. 58; Dynamex,
supra, 4 Cal.5th at p. 953.) Put differently, “the basis of liability is the
defendant’s knowledge of and failure to prevent the work from occurring.”
(Martinez, supra, at p. 69.) The third standard, to engage, means to “creat[e]
a common law employment relationship.” (Martinez, at p. 64.) “The essence
of the common law employment test ‘is the “control of details”—that is,
whether the principal has the right to control the manner and means by
which the worker accomplishes the work.” (Curry v. Equilon Enterprises,
LLC (2018) 23 Cal.App.5th 289, 304.) 12
12 “[T]here are a number of additional factors in the modern equation [of
this test], including (1) whether the worker is engaged in a distinct
occupation or business, (2) whether, considering the kind of occupation and
31
As noted above, section 98.2 authorizes a party to appeal from the
Labor Commissioner’s order, award, or decision made pursuant to section
98.1. (§ 98.2, subd. (a).) And such decision is made pursuant to section 98,
which authorizes the Labor Commissioner to investigate complaints and hold
a hearing “in any action to recover wages, penalties, and other demands for
compensation, including liquidated damages if the complaint alleges payment
of a wage less than the minimum wage fixed by an order of the Industrial
Welfare Commission or by statute, properly before the division or the Labor
Commissioner, including orders of the Industrial Welfare Commission, and
shall determine all matters arising under his or her jurisdiction.” (§ 98, subd.
(a).) When reading section 98.2 together with its neighboring provisions, we
conclude that the definition of “employer” provided in the wage orders applies
to the term “employer” in section 98.2(b).
Here, the parties apparently agree that the Center was Ehrenkranz’s
“employer.” As noted above, Ehrenkranz does not allege that Galijan or
Smith was his employer. Thus, applying the plain meaning of section 98.2(b)
to this case, only the Center was required to post the undertaking, which it
did. Accordingly, the trial court correctly determined that Galijan and Smith
did not also have to post an undertaking in order to appeal the Labor
Commissioner’s award.
Ehrenkranz’s counterarguments do not persuade us to depart from the
locality, the work is usually done under the principal’s direction or by a
specialist without supervision, (3) the skill required, (4) whether the principal
or worker supplies the instrumentalities, tools, and place of work, (5) the
length of time for which the services are to be performed, (6) the method of
payment, whether by time or by job, (7) whether the work is part of the
principal’s regular business, and (8) whether the parties believe they are
creating an employer-employee relationship. [Citations.]” (Curry v. Equilon
Enterprises, LLC, supra, 23 Cal.App.5th at pp. 304–305.)
32
plain language of section 98.2(b). He argues that “the trial court’s finding—
that individuals found liable ‘as the employer’—have no appeal bond
obligation—is unworkable and runs directly counter to the Legislature’s
intent of ensuring workers recover their wages.” He goes on: “Under the
trial court’s rule, an employee could be dragged through an appeal without
any collection assurance. This is exactly the situation the legislature sought
to avoid by enacting Labor Code sections 558.1 and 98.2, subdivision (b), both
of which were intended to help workers collect wages found owed to them.”
In essence, Ehrenkranz asserts that accepting the trial court’s
interpretation of section 98.2(b) would contravene the legislative purposes of
both statutes and/or lead to absurd results. To avoid that outcome, he argues
that we should construe section 98.2(b) to require not just employers, but also
individuals held liable “as the employer” under section 558.1, to post the
undertaking in order to appeal a Labor Commissioner’s award.
Similar concerns were expressed in Lorenzo, which concluded that
accepting an interpretation like the trial court’s here “would frustrate the
objectives of both [sections 98.2 and 558.1].” (Lorenzo, supra, 116
Cal.App.5th at p. 283.) It illustrated this point by presenting a hypothetical:
“if individuals found liable under section 558.1 are not subject to the
undertaking requirement, then there may be an appeal . . . with no bond to
cover the employer’s potential liability because the employing entity may be
judgment proof and therefore choose not to appeal. In that situation, the
appeal would increase the costs for vulnerable workers without any
repercussions for the individuals already found liable under section 558.1.
Moreover, the risk of nonrecovery by those workers would increase
dramatically because those individuals would have greater opportunity to
hide their assets during the appeal.” (Lorenzo, at p. 283.)
33
It is true that “[w]e need not follow the plain meaning of a statute when
to do so would ‘frustrate[ ] the manifest purposes of the legislation as a whole
or [lead] to absurd results.’ ” (California School Employees Assn. v. Governing
Board (1994) 8 Cal.4th 333, 340; see also In re D.B. (2014) 58 Cal.4th 941,
948 [“To justify departing from a literal reading of a clearly worded statute,
the results produced must be so unreasonable the Legislature could not have
intended them.”].) While Ehrenkranz and the court in Lorenzo have
identified concerns as to the potential impacts of the plain meaning
interpretation of section 98.2, we believe they fall short of showing that we
should effectively rewrite the statute by construing it to include a
requirement that the Legislature did not put there.
For one, the outcome Ehrenkranz posits does not necessarily follow
from the trial court’s interpretation of section 98.2. This very case presents a
counterexample. Here, the employer has posted an undertaking in the entire
amount of the judgment awarded to the employee. Thus, even if the
individuals who had been found liable under section 558.1 were not required
to, and did not, post the undertaking, the employee has received the
assurance that the judgment will be satisfied. In other words, upholding the
trial court’s interpretation here is consistent with the legislative purposes of
section 98.2.
We do not doubt that requiring individuals found liable under section
558.1 to also post the undertaking in section 98.2(b) could enhance the
deterrence of intentional wage nonpayment. However, it is plausible that
when the Legislature enacted section 98.2(b), it believed that such goal could
be accomplished by imposing the undertaking requirement on employers,
rather than individuals acting on the employers’ behalf.
The Legislature enacted section 98.2(b) in response to California’s
34
“large and growing ‘underground economy’ of employers who are chronic
violators of wage and hour, safety, and tax laws.” (Sen. Rules Com., Off. of
Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 2509 (1999–2000
Reg. Sess.).) “Such employers pay cash under the table or with checks that
bounce, fail to report and pay employment taxes, work their employees long
hours without rest breaks, and avoid paying wage judgments issued against
them.” (Ibid.) As explained in legislative history materials for the 2010
amendment of section 98.2(b), section 98.2(b) was enacted in 2000 in response
to “unscrupulous employers, particularly those in the underground economy,
[that] were filing ‘frivolous’ appeals of [Labor Commissioner] decisions with
the superior court in an effort to drag out litigation and hide assets so that
workers would not be able to collect on judgments, even if ultimately
successful on appeal.” (Assem. Com. on Labor and Employment, Analysis of
Assem. Bill No. 2772 (2009–2010 Reg. Sess.), as amended on April 8, 2010.)
The Legislature’s apparent solution to this problem was to require
employers, as opposed to individuals acting on the employers’ behalf, to bear
the obligation of posting an undertaking in order to appeal a Labor
Commissioner’s decision. The Legislature could have reasonably presumed
that when an employer engages in the improper manipulation of assets
described above, the employing entity itself is properly charged with that
misconduct. (See Curci Investments, LLC v. Baldwin (2017) 14 Cal.App.5th
214, 851 [corporate entities are presumed to have existences separate from
their stockholders, officers, and directors; the same is true of a limited
liability company and its members and managers].) The Legislature also
could have believed that the normally deep-pocketed employer would likely
have more resources at its disposal, and thus be in a better position, to post
the bond (a) in the entire amount of the award, so as to cover itself and any
35
jointly and severally liable individual defendants, and (b) in the short 10-day
time frame to do so (see Palagin, supra, 222 Cal.App.4th at p. 131; § 98.2,
subd. (a))—and therefore to provide the assurance that a judgment in favor of
the employee would be satisfied. Moreover, the Legislature could have also
thought that in the usual case, the plaintiff-employee’s primary target
remains the employer, even though the employee may in certain
circumstances enforce personal liability on individuals acting on behalf of the
employer for wage violations. Considering these circumstances, it is at least
plausible the Legislature thought it best that the employer should bear the
obligation of posting the undertaking requirement in section 98.2(b).
Finally, we observe that accepting Ehrenkranz’s interpretation would
produce an incongruous result in this particular case. As Ehrenkranz’s
counsel explained during oral argument, a reversal of the denial of
Ehrenkranz’s motion to dismiss Galijan’s and Smith’s appeals would
invalidate those appeals and render the Labor Commissioner’s award against
them final. Meanwhile, the Center would be able to proceed with the appeal
and, if necessary, proceed to trial, during which it could present evidence to
establish the ministerial exception applies to bar Ehrenkranz’s wage claims.
Thus, the Center would have the opportunity to pursue and establish a
complete defense to liability for the wage violations, while the individual
defendants would not, despite having been found “liable as the employer” for
the same wage violations.
In sum, under the plain language of section 98.2(b), the Center, and not
Galijan and Smith, was required to post the undertaking. Because the
Center did so, the trial court properly concluded the undertaking
requirement was met. Therefore, it properly denied Ehrenkranz’s motion to
dismiss the appeals of Galijan and Smith.
36
DISPOSITION
We reverse the judgment and the trial court’s order granting summary
judgment for defendants. In all other respects, the judgment is affirmed.
The parties shall bear their own costs on appeal.
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RICHMAN, ACTING P.J.
We concur.
MILLER, J.
DESAUTELS, J.
(A171527P)
38
San Francisco County Superior Court
Honorable Rochelle East
Counsel:
Theresa Bichsel for Plaintiff and Appellant.
Clarkson Law Firm, Glenn A. Danas and Brent A. Robinson for California
Employment Lawyers Association and National Employment Law Project
as Amici Curiae on behalf of Appellant.
Foley & Lardner, Eileen R. Ridley, Evan L. Hamling, Jack R. Doti and Sara
Alexis Levine Abarbanel for Defendants and Respondents.
39