Third Appellate District Remands So Trial Court Can Determine Reasonable Fees for Employer Who Successfully Defended Against Alleged Failure to Provide Rest Periods.

     The next case is all about entitlement to attorney’s fees under the Labor Code.  Kirby v. Immoos Fire Protection, Inc., No. C062306 (3rd District July 27, 2010) (published).

     On appeal, plaintiff/employee Kirby first challenged an award of fees under Labor Code section 218.5, a bilateral fee-shifting provision subject to a carve-out that is unilateral in favor of employees for any action for which fees are recoverable under section 1194.  “Section 218.5 provides for fee shifting in favor of the party that prevails on a claim for unpaid wages and specified benefits. . . . This section does not apply to any action for which attorney's fees are recoverable under Section 1194.”  Section 1194 relates to actions for minimum wages or overtime compensation.  Therefore, the question was whether the ambiguous word “action” applied to the entire lawsuit, or just to claims for minimum wages or overtime compensation.  The latter, said the Court.  Thus, if a cause of action is part of a larger lawsuit, for which the employer could recover for other causes of action under section 218.5, a prevailing employer can still do so – only the individual causes of action for minimum wages or overtime compensation result in unilateral fee shifting in favor of the employee.

     Second, Kirby argued that the unilateral fee-shifting provision in section 1194 barred recovery to the successful employer who defended against an alleged failure to provide rest periods.  Kirby analogized failure to provide rest periods to a claim of failure to provide minimum wages.  One who is denied a rest period isn’t being paid minimum wage for her time.  Nope, said the Court, the failure is to provide a rest period, not to provide a minimum wage.

     Third, the Court held that section 2810 is a unilateral fee-shifting statute that disallows an award of fees to defendant employers. By providing that “[a]n employee . . . may recover costs and reasonable attorney's fees” upon prevailing, section 2810 does not authorize fee shifting in favor of employers.”  Section 2810 provides (in part) that a person may not enter into a labor contract with a construction contractor, knowing that the contract does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided.

     Fourth, the Court explained that it is settled that the Unfair Practices Act does not provide for an award of attorney’s fees to any party.

     Fifth, the Court determined that defendant/respondent Immoos could only recover for the successful defense against the alleged wrongfully denied rest periods, requiring a remand and determination of reasonable fees.

     And the winner on appeal?  None.  It’s a mixed decision.  Each party bears its own costs and attorney’s fees on appeal.