In Von Nothdurft v. Steck, ___ Cal.App.4th ___  (June 26, 2014), the California Court of Appeal (Fifth Appellate District) affirmed the judgment of the Fresno County Superior Court (Judge Cabrera) in favor of defendant after a bench trial de novo on plaintiff’s wage claims.

Plaintiff was employed as an apartment manager at a complex owned by defendant.  At the beginning of her employment, plaintiff signed a management agreement which provided that she would be compensated by, among other things, “[f]ree rent of a three bedroom apartment during the term as manager.”  Previously, as a tenant, plaintiff had paid $955 per month for the same apartment.  Roughly six months later, plaintiff filed a complaint against defendant with the California Labor Commissioner, alleging defendant had paid her minimum wages pursuant to California Wage Order No. 5. The Labor Commissioner found that defendant was entitled to a credit of $451.89 per month against plaintiff’s wages for the free apartment.  Therefore, plaintiff appealed the Labor Commissioner’s decision to Fresno County Superior Court, where a trial de novo was held. The trial court issued a decision and judgment in defendant’s favor, finding that it was clear both parties intended that the waiver of rent for the apartment was to be compensation for plaintiff’s work. Plaintiff appealed again, arguing that the agreement did not satisfy the requirements of Wage Order No. 5 because it did not mention the minimum wage, did not provide for recording of hours worked, and valued the apartment in excess of the maximum allowed by the wage order. Plaintiff also argued that the agreement was unconscionable.

The appellate court agreed with the trial court.  The sole issue to be determined on appeal was whether the written agreement between the parties satisfied the requirements of Wage Order No. 5, allowing defendant the maximum credit against plaintiff’s wages.  The court answered in the affirmative, finding that the language of the wage order was clear: “all that is required is that the employer and employee voluntarily agree to credit lodging against the employee’s wages.” Thus, the court refused to read into the Wage Order the additional requirements proposed by plaintiff.  Moreover, the court concluded that the agreement was not unconscionable, as the agreement was unambiguous and plaintiff was free to reject it.