California generally follows the rule that each side pays its own attorney's fees. But many statutes entitle the prevailing party to recover reasonable attorney's fees from the losing party. One such statute, Labor Code section 218.5, entitles the prevailing party to recover attorney's fees in any action brought "for the nonpayment of wages." By a special exception, Section 218.5 does not apply to actions for minimum wages or for overtime premium pay; in those actions only the prevailing employee can recover.
The question would arise, then, whether a prevailing employer can use Section 218.5 to recover attorney's fees in cases alleging a denial of meal or rest breaks. One would think the answer would be yes, because the money employers owe for denying meal and rest breaks has been held to be "wages" instead of "penalties." But the California Supreme Court recently held otherwise in Kirby v. Immoos Fire Protection, Inc. The Court ruled that a claim for meal or rest pay is not a claim for "the nonpayment of wages" but is instead a claim for the denial of meal and rest breaks, where the remedy just happens to be in the form of a wage. Accordingly, neither the plaintiff nor the defendant in a claim for denied meal or rest breaks is entitled to attorney's fees for winning the case.
The Proceedings in the Trial Court And The Court of Appeal
Anthony Kirby sued his former employer, Immoos Fire Protection, Inc. for various Labor Code violations as well as violation of the Unfair Competition Law (Business and Professions Code Section 17200 et seq.). After Immoos prevailed against the claim alleging missed meal and rest breaks, the trial court awarded attorney's fees to Immoos. The Court of Appeal affirmed that award, and rejected Kirby's claim that an exception to Section 218.5 applied because Kirby was also suing for unpaid minimum or overtime wages.
The California Supreme Court granted review to consider whether a party who prevails on a Labor Code section 226.7 claim for an alleged failure to provide meal or rest breaks may be awarded attorney's fees under section 218.5.
The Supreme Court Decision
The Supreme Court first examined whether a Section 226.7 claim for an alleged failure to provide meal or rest breaks amounts to a claim for unpaid minimum or overtime wages, and therefore qualifies as a claim under Labor Code section 1194, which provides that only a prevailing employee can recover attorney's fees. On this issue the Court ruled against Kirby, concluding that Section 1194 claims for unpaid minimum wages or overtime pay do not include claims for failure to provide meal or rest breaks.
The Court next considered whether Section 218.5, which authorizes attorney's fees for a party prevailing in an "action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions," applies to a meal or rest break claim under Section 226.7. The Court concluded that Section 218.5 does not apply, because such a claim is not a claim for "nonpayment of wages." Instead the section is "primarily concerned with ensuring the health and welfare of employees by requiring that employers provide meal or rest periods" as mandated by law.
The words "nonpayment of wages" refer to an alleged legal violation and not a desired remedy. As such, whether or not a wage has been paid is irrelevant to whether Section 226.7 was violated, and payment of the extra hour of pay does not excuse a violation. Instead, the failure to provide required meal or rest breaks is what triggers the violation of Section 226.7. Accordingly, the Court concluded that a Section 226.7 claim is not an action brought for nonpayment of wages under Section 218.5, meaning that Section 218.5 does not authorize an award of attorney's fees to any prevailing party, whether employee or employer.
What Kirby Means For Employers
The good news for employers is that employees are not entitled to attorney's fees in actions alleging missed meal or rest breaks. The bad news is that employers are now deprived of an incentive they once had to discourage employees from bringing weak claims for missed breaks.