California Supreme Court Says Neither Party Gets Attorney's Fees In Meal And Rest Period Suit
On Monday, the California Supreme Court held in Kirby v. Immoos Fire Protection, Inc. that neither plaintiffs nor defendants can recover attorney's fees in meal or rest break cases under statutes that provide attorney's fees in actions to recover "wages." The decision is largely favorable to employers as it decreases incentives for plaintiffs' lawyers to bring meal and rest period suits and lowers employers' potential exposure in such suits. Nonetheless, because prevailing party fees are not available to either party, employers cannot recover fees in meal and rest period cases, which may make it more difficult to combat some frivolous meal and rest period suits.
The California Supreme Court had previously held that the remedy for failing to provide a meal or rest break (an hour of pay) constitutes a "wage" rather than a "penalty" for purposes of triggering a longer statute of limitations. Thus, the argument went that meal and rest period cases qualified for attorney's fee awards as they were actions to recover wages. In Kirby, however, the Supreme Court finely parsed the attorney's fee statutes and held that, while the remedy for meal and rest break claims was a wage, the action itself was an action for a failure to provide a meal and rest period as opposed to an action to recover wages. Under this interpretation, meal and rest break claims do not qualify for recovery of attorney's fees under the statutes at issue.
In what is good news for employers, the Supreme Court held that a plaintiff cannot recover attorney's fees under California's one-way fee shifting statute (Labor Code § 1194), which authorizes an award of attorney's fees only to employees who prevail on their "minimum wage" or overtime" claims. In what appears to be an attempt at balancing the playing field for employees, however, the Supreme Court held that neither party (including a defendant employer) can recover attorney's fees under the two-way prevailing party statute (Labor Code § 218.5).
The Kirby decision, in combination with the Supreme Court's recent decision in Brinker, may have a chilling effect on meal and rest break actions in California. The unavailability of attorney's fees under these statutes may decrease the incentives for plaintiffs' attorneys to file individual or class action meal and rest break lawsuits. The inability of the employer to recover attorney's fees, however, decreases the risk plaintiffs' attorneys have in pursuing a meal or rest break case that is frivolous and limits the ability of the employer to recoup costs in such cases.