JKH Enterprises, Inc. v. Department of Industrial Relations

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 (Department), 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 that governs our analysis, we conclude that JKH has not demonstrated that the Department…