The California Supreme Court has reversed an award of attorney’s fees to an employer that successfully defended a claim for failure to provide rest periods mandated under Section 226.7 of the California Labor Code. Kirby v. Immoos Fire Protection, Inc., No. S185827 (Cal. Apr. 30, 2012). In a seminal decision, the Court ruled the California Labor Code does not permit an attorney’s fee award to a prevailing party on such a claim. This ruling follows on the heels of the Court’s decision that employers need not ensure that their workers take meal periods required by California law, but only that workers are provided the meal periods. Brinker Restaurant Corp. v. Superior Court (Hohnbaum), No. S166350 (Calif. Apr. 12, 2012). For more on Brinker, see our article, California High Court Clarifies California Meal-and-Rest Rules.
Anthony Kirby and Rick Leech, Jr., sued Immoos Fire Protection, Inc. and others for violations of the California Labor Code, including a claim alleging that the company failed to provide required rest periods. The plaintiffs settled the case with other parties and ultimately dismissed the claim with prejudice against the company. The company subsequently sought an attorney’s fee award under California Labor Code Section 218.5. The trial court awarded attorney’s fees to the company, and the Court of Appeal affirmed. The Supreme Court granted review to address whether under the California Labor Code, a prevailing party in an action for meal or rest period violations is entitled to an attorney’s fee award.
Section 226.7 of the California Labor Code requires employers to provide their employees with a 10-minute rest break for every four hours (or fraction thereof) worked and a half-hour meal period if employees work more than five hours. The remedy for a violation of Section 226.7 is awarding the aggrieved employee one additional hour of pay for each workday that the rest period is not provided. In Brinker, the Supreme Court ruled California law requires employers to provide, but not to ensure, non-exempt employees take meal breaks.
Section 218.5 of the California Labor Code permits an attorney’s fee award to the prevailing party “[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions.” However, it “does not apply to any action for which attorney’s fees are recoverable under Section 1194.” Section 1194 provides that employees who prevail in an action for any unpaid “legal minimum wage or … legal overtime compensation” are entitled to recover attorney’s fees.
When interpreting statutes, the Court explained, California courts examine “the words of the statute because they generally provide the most reliable indicator of legislative intent.” If the language is clear and unambiguous, the courts presume that “the Legislature meant what it said and the plain meaning of the statute governs.” In reading statutes, the Court emphasized, “words are to be given their plain and commonsense meaning.”
Attorney’s Fee Award Rejected
To determine whether the company was entitled to an attorney’s fee award, the Court first considered whether attorney’s fees could be awarded to a prevailing employee under Section 1194 for a meal or rest period violation claim. If so, then the company could not recover fees under Section 218.5 because Section 1194 permits only prevailing employees to recover attorney’s fees, and Section 218.5 does not apply if Section 1194 does. If not, the Court would consider whether Section 218.5 authorizes an attorney’s fee award for a meal or rest period violation.
The plaintiffs argued Section 1194 includes meal or rest period violations because the break law imposed an obligation on employers and required premium pay for violations. The Court rejected this contention, stating: “The term ‘minimum wage’ ordinarily refers to the statutory or administrative floor below which an employee’s compensation may not fall.” The Court noted the text and history of the statute indicated the Legislature intended the “legal minimum wage” or the “legal overtime compensation” to refer to ordinary minimum wage and overtime obligations. Accordingly, the Court concluded Section 1194 did not authorize an attorney’s fee award to a prevailing employee in a claim for a meal or rest period violation.
On whether a claim for a meal or rest period violation constitutes an “action brought for the nonpayment of wages” under Section 218.5, the Court concluded it did not. The Section 226.7 break law is not aimed at protecting or providing employees’ wages, the Court pointed out. It applies only in those cases where the employer failed to provide required meal or rest periods, the Court explained; it does not encompass the nonpayment of wages. Accordingly, the Court found that a claim for a meal or rest period violation is not an action brought for nonpayment of wages; rather, it is an action brought for non-provision of meal or rest breaks. While the remedy for a meal or rest period violation is an “additional hour of pay,” it does not transform the violation into an action for “nonpayment of wages.” Thus, the Court held that parties who prevail on claims for meal or rest period violations are not entitled to recover attorney’s fees.
Neither employees nor employers can recover their attorney’s fees if they prevail in a lawsuit for meal or rest break payments under California law. Whether Kirby will stem the tide of class action lawsuits based on meal or rest break violations remains to be seen. The decision does not categorically foreclose all potential sources of attorney’s fees exposure under California law. Creative plaintiffs may seek attorney’s fees under other wage-hour theories of liability that expressly authorize the recovery of fees. Jackson Lewis attorneys are available to help employers address the intricacies of California wage-hour laws to minimize exposure to such litigation.
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