Court Says No Attorneys’ Fees for Prevailing Employer in Wage Case
This week a California court held that an employer prevailing in a wage and hour case is not entitled to recover its attorneys’ fees under Labor Code section 218.5, notwithstanding the fact that section 218.5 expressly provides that the prevailing party is entitled to recover such fees. In McGann v. UPS, the plaintiff sued for alleged unpaid overtime, missed meal and rest period pay, and non-compliant wage statements. The employer prevailed on summary judgment on all claims except the overtime claim, which went to trial. At trial, the employer prevailed on that claim as well. Following trial, the employer requested an award of attorneys’ fees for the amounts incurred in defense of all claims except the overtime claim. The employer conceded that fees were not recoverable on the overtime claim because overtime claims are governed by Labor Code section 1194, which only allows for recovery of attorneys’ fees by a prevailing employee (not by a prevailing employer). The employer, however, argued that the remaining non-overtime claims were governed by Labor Code section 218.5, which on its face provides for the recovery of attorneys’ fees by “the prevailing party” (regardless of whether the prevailing party is the employee or the employer).
The court rejected the employer’s request for an award of attorneys’ fees, holding that because the plaintiff alleged an overtime claim, the entire action was governed by section 1194’s unilateral fee-shifting provision and that section 218.5 simply did not apply. Moral of the story? Employees should always allege a frivolous overtime claim in any wage-related lawsuit.
Employers may recall a recent decision this past year upholding an award of attorneys’ fees for the employer under section 218.5 after the employer prevailed in a meal and rest breakcase. That decision, Kirby v. Immoos, is currently before the California Supreme Court. (Our prior post on the Kirby case is here.) The Kirby decision should provideclear (and hopefully better) guidance on this issue for California employers.