Over the years I have been asked numerous times why employers cannot get back their attorny fees when they win, especially when the claim was frivolous from the outset. Plaintiff attorneys normally work on a contingency fee arrangement therefore they have nothing to loose by filing a lawsuit. They take advantage of the fact that most employers feel it is “cheaper to settle.” That still may be true, depending on the circumstances and the amount in question, however, now there may be some light at the end of the tunnel.
In Kirby v. Immoos Fire, a California court held that attorneys’ fees were properly awarded to an employer who prevailed in a putative class action alleging missed rest breaks. The court relied on the bilateral fee-shifting provision of Labor Code section 218.5, which provides that the prevailing party in an action alleging violations of certain provisions of the Labor Code is entitled to recover its attorneys’ fees. Section 218.5′s fee-shifting provision excludes actions alleging claims for unpaid minimum wages or overtime wages covered by Labor Code section 1194 (which has a unilateral fee shifting provision allowing only a prevailing plaintiff to recover attorneys’ fees). In this case, the plaintiff alleged (among other things) a claim for unpaid overtime wages, as well as a claim for missed rest periods. The court held that the employer could not recover its fees incurred in defending the overtime claim, but could recover its fees incurred in defending the rest period claim.
This case presents a positive development for employers by providing precedent for an award of attorneys’ fees in actions alleging meal and rest period violations should the employer prevail. This does not mean that it may not be economically sound to try to resolve matters at the pre-litigation stage. Litigation is costly and is still a roll of the dice once the matter is presented to a jury. Hopefully the decision noted above will begin to give employers a more even playing field.