JKH Enterprises v. Dept. of Industrial Relations
Filed 8/22/06 JKH Enterprises v. Dept. of Industrial Relations CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
| JKH ENTERPRISES, INC., Plaintiff and Appellant, v. DEPARTMENT OF INDUSTRIAL RELATIONS, Defendant and Respondent. | H028762 (Santa Clara County Super.Ct.No. CV030955) |
This is an appeal by JKH Enterprises, Inc., doing business as AAA Courier, from the trial court's denial of its petition for a writ of administrative mandamus. JKH provides courier services to Bay Area businesses such as title companies and law firms. JKH filed the petition for writ in an effort to overturn the administrative stop work order issued and upheld by the Department of Industrial Relations, respondent here. The stop work order and penalty were based on the Department's conclusion that JKH's drivers who accomplish the actual delivery services on its behalf are properly classified as employees, as opposed to independent contractors as JKH had characterized them, and that JKH had failed to procure workers' compensation insurance for their benefit in violation of Labor Code section 3700. The penalty ultimately assessed by the Department under Labor Code section 3722 was $15,000--$1,000 for each working driver classified as an employee on the day that the stop work order was issued.
Based on the administrative record and the deferential standard of judicial review which governs our analysis, we conclude that JKH has not demonstrated that the Department abused its discretion and we accordingly affirm the trial court's order.
STATEMENT OF THE CASE
I. Factual Background[1]
JKH is a corporation. Its president is Joe K. Herrera. Herrera, as a sole proprietor, previously owned and operated a separate courier service business called VIP Courier. VIP also became subject to a similar stop order issued by the Department for the failure of that business to have procured workers' compensation insurance for its delivery drivers. VIP did not challenge the stop order but Herrera then incorporated as JKH, which then internally classified its drivers as independent contractors. But the nature of JKH's business--delivery services--was not different from that of VIP's.
Prior to their engagement by JKH, each of the drivers filled out a form entitled â€
