Nor-Cal Venture Group, Inc. (Nor-Cal) operates fast food restaurants in the Sacramento area. In 2017, a former employee accused Nor-Cal of wrongfully denying overtime pay. As part of the investigation into those allegations, a deputy of the California Labor Commissioner issued subpoenas to Nor-Cal seeking business records. Nor-Cal produced the relevant documents, and the deputy labor commissioner ultimately issued a wage citation for unpaid overtime wages and $900,000 in penalties. Nor-Cal requested an “informal hearing” to contest the citation.
Prior to the informal hearing, the Labor Commissioner issued a deposition subpoena to Nor-Cal’s “Person Most Knowledgeable” on multiple topics related to the issues at the informal hearing. Nor-Cal, however, argued the deposition subpoena was improper. The hearing officer granted the Commissioner’s request to postpone the informal hearing to allow the parties to litigate the validity of the deposition subpoena and issued a petition to compel Nor-Cal to comply with the subpoena. Nor-Cal opposed it, arguing that it was an improper use of the Commissioner’s investigatory power because the investigation into Nor-Cal’s business practices ended, and a wage citation had already been issued. The trial court ruled in the Commissioner’s favor, and Nor-Cal appealed.
The California Court of Appeal reversed. The law does not grant the Commissioner the power to issue deposition subpoenas for an informal hearing. Instead, the statute explicitly limits subpoena power for informal hearings to documents only. The Court remanded the case with instructions to deny the Commissioner’s petition to compel a deposition.
Garcia-Brower v. Nor-Cal Venture Group, 2023 WL 2421824 (Cal. Court of Appeal).